# EDGAR Filing Document

**Accession Number:** 0000833444
**File Stem:** 0000833444-23-000005
**Filing Date:** 2023-2
**Character Count:** 303549
**Document Hash:** 94a4009fe0b9a7de13b5bbc718059708
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000833444-23-000005.hdr.sgml**: 20230201

**ACCESSION NUMBER**: 0000833444-23-000005

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 109

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230201

**DATE AS OF CHANGE**: 20230201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Johnson Controls International plc
- **CENTRAL INDEX KEY:** 0000833444
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** L2
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-13836
- **FILM NUMBER:** 23575468

**BUSINESS ADDRESS:**
- **STREET 1:** ONE ALBERT QUAY
- **STREET 2:** ALBERT QUAY
- **CITY:** CORK
- **STATE:** L2
- **ZIP:** 00000
- **BUSINESS PHONE:** 414-524-1200

**MAIL ADDRESS:**
- **STREET 1:** 5757 N. GREEN BAY AVENUE
- **STREET 2:** P.O. BOX 591
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53201

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TYCO INTERNATIONAL plc
- **DATE OF NAME CHANGE:** 20141117

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TYCO INTERNATIONAL LTD
- **DATE OF NAME CHANGE:** 20100408

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TYCO INTERNATIONAL LTD /BER/
- **DATE OF NAME CHANGE:** 19970715

?xml version="1.0" ? jci-20221231

    

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-Q** 

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended December 31, 2022** 

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the Transition Period From _____ To _____**

**Commission File Number: 001-13836** 

    

**JOHNSON CONTROLS INTERNATIONAL PLC** 

(Exact name of registrant as specified in its charter)

    

---

| | |
|:---|:---|
| **Ireland** | **98-0390500** |
| (Jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |
| **One Albert Quay, Cork, Ireland, T12 X8N6** | **(353) 21-423-5000** |
| (Address of Principal Executive Offices and Postal Code) | (Registrant's Telephone Number) |

---

Securities Registered Pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **<u>Title of Each Class</u>** | **<u>Trading Symbol</u>** | **<u>Name of Each Exchange on Which Registered</u>** |
| Ordinary Shares, Par Value $0.01 | JCI | New York Stock Exchange |
| 1.000% Senior Notes due 2023 | JCI23A | New York Stock Exchange |
| 3.625% Senior Notes due 2024 | JCI24A | New York Stock Exchange |
| 1.375% Notes due 2025 | JCI25A | New York Stock Exchange |
| 3.900% Notes due 2026 | JCI26A | New York Stock Exchange |
| 0.375% Senior Notes due 2027 | JCI27 | New York Stock Exchange |
| 3.000% Senior Notes due 2028 | JCI28 | New York Stock Exchange |
| 1.750% Senior Notes due 2030 | JCI30 | New York Stock Exchange |
| 2.000% Sustainability-Linked Senior Notes due 2031 | JCI31 | New York Stock Exchange |
| 1.000% Senior Notes due 2032 | JCI32 | New York Stock Exchange |
| 4.900% Senior Notes due 2032 | JCI32A | New York Stock Exchange |
| 6.000% Notes due 2036 | JCI36A | New York Stock Exchange |
| 5.70% Senior Notes due 2041 | JCI41B | New York Stock Exchange |
| 5.250% Senior Notes due 2041 | JCI41C | New York Stock Exchange |
| 4.625% Senior Notes due 2044 | JCI44A | New York Stock Exchange |
| 5.125% Notes due 2045 | JCI45B | New York Stock Exchange |
| 6.950% Debentures due December 1, 2045 | JCI45A | New York Stock Exchange |
| 4.500% Senior Notes due 2047 | JCI47 | New York Stock Exchange |
| 4.950% Senior Notes due 2064 | JCI64A | New York Stock Exchange |

---

    

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗹&nbsp;&nbsp;&nbsp;&nbsp;No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗹&nbsp;&nbsp;&nbsp;&nbsp;No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Large accelerated filer | 🗹 | Accelerated filer | ☐ | Smaller reporting company | ☐ |
| Non-accelerated filer | ◻ | | | Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ◻ |

---

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No 🗹

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

---

| | |
|:---|:---|
| Class | Ordinary Shares Outstanding at December 31, 2022 |
| Ordinary Shares, $0.01 par value per share | 687231016 |

---

    

------

**JOHNSON CONTROLS INTERNATIONAL PLC**

**FORM 10-Q**

**<u>Report Index</u>**

---

| | |
|:---|:---|
|  | <u>Page</u> |
| **Part I. Financial Information** | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1. Financial Statements (unaudited) | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Income for the Three Month Periods Ended December 31, 2022 and 2021 | [3](#i76c368a7ac1d478a9d40237ec87ffe83_19) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Comprehensive Income for the Three Month Periods Ended December 31, 2022 and 2021 | [4](#i76c368a7ac1d478a9d40237ec87ffe83_22) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Financial Position at December 31, 2022 and September 30, 2022 | [5](#i76c368a7ac1d478a9d40237ec87ffe83_16) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Cash Flows for the Three Month Periods Ended December 31, 2022 and 2021 | [6](#i76c368a7ac1d478a9d40237ec87ffe83_25) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Shareholders' Equity for the <br>&nbsp;&nbsp;&nbsp;&nbsp; Three Month Periods Ended December 31, 2022 and 2021 | [7](#i76c368a7ac1d478a9d40237ec87ffe83_28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Consolidated Financial Statements | [8](#i76c368a7ac1d478a9d40237ec87ffe83_34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | [37](#i76c368a7ac1d478a9d40237ec87ffe83_115) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 3. Quantitative and Qualitative Disclosures About Market Risk | [49](#i76c368a7ac1d478a9d40237ec87ffe83_187) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 4. Controls and Procedures | [49](#i76c368a7ac1d478a9d40237ec87ffe83_190) |
| **Part II. Other Information** | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1. Legal Proceedings | [49](#i76c368a7ac1d478a9d40237ec87ffe83_196) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1A. Risk Factors | [50](#i76c368a7ac1d478a9d40237ec87ffe83_199) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | [50](#i76c368a7ac1d478a9d40237ec87ffe83_202) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 6. Exhibits | [51](#i76c368a7ac1d478a9d40237ec87ffe83_205) |
| **Signatures** | [52](#i76c368a7ac1d478a9d40237ec87ffe83_208) |

---

------

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**Johnson Controls International plc**

**Consolidated Statements of Income**

(in millions, except per share data; unaudited)

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Net sales |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Products and systems | $4556 | $4420 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services | 1512 | 1442 |
|  | 6068 | 5862 |
| Cost of sales |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Products and systems | 3113 | 3153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services | 864 | 818 |
|  | 3977 | 3971 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 2091 | 1891 |
| Selling, general and administrative expenses | (1571) | (1369) |
| Restructuring and impairment costs | (345) | (49) |
| Net financing charges | (67) | (53) |
| Equity income | 62 | 70 |
| Income before income taxes | 170 | 490 |
| Income tax provision | 14 | 71 |
| Net income | 156 | 419 |
| Income attributable to noncontrolling interests | 38 | 38 |
| Net income attributable to Johnson Controls | $118 | $381 |
| Earnings per share attributable to Johnson Controls |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.17 | $0.54 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.17 | $0.54 |

---

**The accompanying notes are an integral part of the consolidated financial statements.**

------

**Johnson Controls International plc**

**Consolidated Statements of Comprehensive Income**

(in millions; unaudited)

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Net income | $156 | $419 |
| Other comprehensive income, net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 90 | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized and unrealized gains (losses) on derivatives | (17) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement plans | (1) | (1) |
| Other comprehensive income | 72 | 92 |
| Total comprehensive income | 228 | 511 |
| Comprehensive income attributable to noncontrolling interests: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | 38 | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income, net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 31 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized and unrealized gains (losses) on derivatives | (6) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income | 25 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income attributable to noncontrolling interests | 63 | 43 |
| Comprehensive income attributable to Johnson Controls | $165 | $468 |

---

**The accompanying notes are an integral part of the consolidated financial statements.**

------

**Johnson Controls International plc**

**Consolidated Statements of Financial Position**

(in millions, except par value; unaudited)

---

| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| **Assets** |  |  |
| Cash and cash equivalents | $1509 | $2031 |
| Accounts receivable, less allowance for <br>&nbsp;&nbsp;&nbsp;&nbsp; expected credit losses of $74 and $62, respectively | 5722 | 5528 |
| Inventories | 2895 | 2510 |
| Current assets held for sale | 418 | 387 |
| Other current assets | 1293 | 1229 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current assets | 11837 | 11685 |
| Property, plant and equipment - net | 3098 | 3042 |
| Goodwill | 17684 | 17328 |
| Other intangible assets - net | 4673 | 4641 |
| Investments in partially-owned affiliates | 1053 | 963 |
| Noncurrent assets held for sale | 588 | 751 |
| Other noncurrent assets | 3864 | 3748 |
| Total assets | $42797 | $42158 |
| **Liabilities and Equity** |  |  |
| Short-term debt | $1026 | $669 |
| Current portion of long-term debt | 937 | 865 |
| Accounts payable | 4138 | 4241 |
| Accrued compensation and benefits | 912 | 978 |
| Deferred revenue | 1774 | 1768 |
| Current liabilities held for sale | 310 | 236 |
| Other current liabilities | 2466 | 2482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current liabilities | 11563 | 11239 |
| Long-term debt | 7784 | 7426 |
| Pension and postretirement benefits | 354 | 358 |
| Noncurrent liabilities held for sale | 62 | 62 |
| Other noncurrent liabilities | 5791 | 5671 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term liabilities | 13991 | 13517 |
| Commitments and contingencies (Note 21) |  |  |
| Ordinary shares, $0.01 par value | 7 | 7 |
| Ordinary A shares, €1.00 par value |  |  |
| Preferred shares, $0.01 par value |  |  |
| Ordinary shares held in treasury, at cost | (1233) | (1203) |
| Capital in excess of par value | 17262 | 17224 |
| Retained earnings | 874 | 1151 |
| Accumulated other comprehensive loss | (864) | (911) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders' equity attributable to Johnson Controls | 16046 | 16268 |
| Noncontrolling interests | 1197 | 1134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 17243 | 17402 |
| Total liabilities and equity | $42797 | $42158 |

---

**The accompanying notes are an integral part of the consolidated financial statements.**

------

**Johnson Controls International plc**

**Consolidated Statements of Cash Flows**

(in millions; unaudited)

---

| | | |
|:---|:---|:---|
| | Three Months Ended December 31, | Three Months Ended December 31, |
| | 2022 | 2021 |
| **Operating Activities of Continuing Operations** |  |  |
| Net income attributable to Johnson Controls | $118 | $381 |
| Income attributable to noncontrolling interests | 38 | 38 |
| Net income | 156 | 419 |
| Adjustments to reconcile net income to cash provided (used) by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 203 | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement benefit income | (6) | (82) |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement contributions | (9) | (41) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in earnings of partially-owned affiliates, net of dividends received | (56) | (18) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (92) | (32) |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncash restructuring and impairment charges | 294 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation | 30 | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other - net | (27) | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities, excluding acquisitions and divestitures: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (88) | (75) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (348) | (376) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (68) | (63) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring reserves | 14 | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (338) | 333 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes | 39 | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided (used) by operating activities from continuing operations | (296) | 392 |
| **Investing Activities of Continuing Operations** |  |  |
| Capital expenditures | (134) | (135) |
| Sale of property, plant and equipment | 27 | 7 |
| Acquisition of businesses, net of cash acquired | (79) | (108) |
| Business divestitures, net of cash divested |  | 16 |
| Changes in long-term investments | (3) | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used by investing activities from continuing operations | (189) | (218) |
| **Financing Activities of Continuing Operations** |  |  |
| Increase in short-term debt - net | 267 | 394 |
| Increase in long-term debt | 154 |  |
| Stock repurchases and retirements | (154) | (526) |
| Payment of cash dividends | (241) | (191) |
| Employee equity-based compensation withholding taxes | (30) | (47) |
| Other - net | 13 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided (used) by financing activities from continuing operations | 9 | (357) |
| **Discontinued Operations** |  |  |
| Cash used by operating activities |  | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used by discontinued operations |  | (4) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14) | 67 |
| **Decrease in cash, cash equivalents and restricted cash** | (490) | (120) |
| Cash, cash equivalents and restricted cash at beginning of period | 2066 | 1342 |
| Cash, cash equivalents and restricted cash at end of period | 1576 | 1222 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Restricted cash | 67 | 15 |
| **Cash and cash equivalents at end of period** | $1509 | $1207 |

---

**The accompanying notes are an integral part of the consolidated financial statements.**

------

**Johnson Controls International plc**

**Consolidated Statements of Shareholders' Equity**

(in millions, except per share data; unaudited)

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| **Shareholders' Equity Attributable to Johnson Controls** |  |  |
| &nbsp;&nbsp;Beginning Balance | $16268 | $17562 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Ordinary Shares** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | 7 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending balance | 7 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Ordinary Shares Held in Treasury, at Cost** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | (1203) | (1152) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee equity-based compensation withholding taxes | (30) | (47) |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending balance | (1233) | (1199) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Capital in Excess of Par Value** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | 17224 | 17116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense | 19 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, including options exercised | 19 | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending balance | 17262 | 17150 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Retained Earnings** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | 1151 | 2025 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income attributable to Johnson Controls | 118 | 381 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash dividends declared | (241) | (242) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchases and retirements of ordinary shares | (154) | (526) |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending balance | 874 | 1638 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated Other Comprehensive Income (Loss)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | (911) | (434) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income | 47 | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending balance | (864) | (347) |
| &nbsp;&nbsp;Ending Balance | 16046 | 17249 |
| **Shareholders' Equity Attributable to Noncontrolling Interests** |  |  |
| &nbsp;&nbsp;Beginning Balance | 1134 | 1191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income attributable to noncontrolling interests | 63 | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in noncontrolling interest share |  | 7 |
| &nbsp;&nbsp;Ending Balance | 1197 | 1241 |
| **Total Shareholders' Equity** | $17243 | $18490 |
| **Cash Dividends Declared per Ordinary Share** | $0.35 | $0.34 |

---

**The accompanying notes are an integral part of the consolidated financial statements.**

------

**Johnson Controls International plc**

**Notes to Consolidated Financial Statements** 

**December 31, 2022**

**(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, 2022 filed with the SEC on November 15, 2022. The results of operations for the three month period ended December 31, 2022 are not necessarily indicative of results for the Company's 2023 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 buildings.

*Principles of Consolidation*

The consolidated financial statements include the consolidated accounts of Johnson Controls International plc and its subsidiaries that are consolidated in conformity with U.S. GAAP. All significant intercompany transactions have been eliminated. The results of companies acquired or disposed of during the reporting period are included in the consolidated financial statements from the effective date of acquisition or up to the date of disposal. Investments in partially-owned affiliates are accounted for by the equity method when the Company exercises significant influence, which typically occurs when its ownership interest exceeds 20%, and the Company does not have a controlling interest.

The Company consolidates variable interest entities ("VIE") when it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant. The Company did not have any material consolidated or nonconsolidated VIE's for the presented reporting periods.

*Restricted Cash*

Restricted cash relates to amounts restricted for payment of asbestos liabilities and certain litigation and environmental matters. Restricted cash is recorded within other current assets in the consolidated statements of financial position and totaled $67 million and $35 million at December 31, 2022 and September 30, 2022, respectively.

------

**Johnson Controls International plc**

**Notes to Consolidated Financial Statements** 

**December 31, 2022**

**(unaudited)** 

**2. &nbsp;&nbsp;&nbsp;&nbsp;New Accounting Standards**

*Recently Issued Accounting Pronouncements*

In September 2022, the FASB issued ASU 2022-04, "Disclosure of Supplier Finance Program Obligations", which is intended to enhance the transparency surrounding the use of supplier finance programs. Supplier finance programs may 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 expects to adopt the new disclosures, other than the rollforward disclosure, as required at the beginning of fiscal 2024. The rollforward disclosures will be adopted as required at the beginning of fiscal 2025.

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

**3. Acquisitions and Divestitures**

During the first quarter of fiscal 2023, the Company completed certain acquisitions for a combined purchase price, net of cash acquired, of $105 million, of which $79 million was paid as of December 31, 2022. In connection with the acquisitions, the Company recorded goodwill of $53 million within the Global Products segment and $2 million within the Building Solutions EMEA/LA segment.

The Company completed no divestitures during the first quarter of fiscal 2023.

During the first quarter of fiscal 2022, the Company completed certain acquisitions for a combined purchase price, net of cash acquired, of $142 million, of which $108 million was paid as of December 31, 2021. In connection with the acquisitions, the Company recorded goodwill of $45 million within the Building Solutions Asia Pacific segment, $20 million within the Building Solutions North America segment, $19 million within the Building Solutions EMEA/LA segment and $10 million within the Global Products segment.

During the first quarter of fiscal 2022, the Company completed a divestiture within the Buildings Solutions EMEA/LA segment. The selling price, net of cash divested, was $18 million, of which $16 million was received as of December 31, 2021. In connection with the divestiture, the Company reduced goodwill by $5 million.

Acquisitions and divestitures were not material individually or in the aggregate in the first quarter of fiscal 2023 or 2022.

**4. &nbsp;&nbsp;&nbsp;&nbsp;Assets and Liabilities Held for Sale**

During fiscal 2022, the Company determined that its Global Retail business within its Building Solutions North America, Building Solutions Asia Pacific and Building Solutions EMEA/LA segments and a business within the Building Solutions Asia Pacific segment both met the criteria to be classified as held for sale. The assets and liabilities of both businesses are presented as held for sale in the consolidated statements of financial position as of December 31, 2022 and September 30, 2022. Assets and liabilities held for sale are recorded at the lower of carrying value or fair value, less costs to sell in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived Assets". The carrying amount of any assets, including goodwill, that are part of the disposal group, but not in the scope of ASC 360-10, are tested for impairment under the relevant guidance prior to measuring the disposal group at fair value, less cost to sell.

During the three months ended December 31, 2022, the Company recorded impairment charges primarily due to reductions in the estimated fair values for the Global Retail business of $228 million and for the business in the Building Solutions Asia Pacific of $60 million. All of the impairments were recorded within restructuring and impairment costs in the consolidated statements of income.

------

**Johnson Controls International plc**

**Notes to Consolidated Financial Statements** 

**December 31, 2022**

**(unaudited)** 

The divestiture of the businesses held for sale could result in a gain or loss on sale to the extent the ultimate selling prices differ from the current carrying value of the net assets recorded, which could be material. The businesses did not meet the criteria to be classified as discontinued operations as neither divestiture represents a strategic shift that will have a major effect on the Company's operations and financial results. Both divestitures are expected to be finalized in fiscal 2023.

The following table summarizes the carrying value of the Global Retail assets and liabilities held for sale (in millions):

---

| | | |
|:---|:---|:---|
|  | December 31, 2022 | September 30, 2022 |
| Accounts receivable - net | $220 | $199 |
| Inventories | 157 | 155 |
| Other current assets | 28 | 21 |
| Current assets held for sale | $405 | $375 |
| Property, plant and equipment - net | $191 | $89 |
| Goodwill |  | 22 |
| Other intangible assets - net | 322 | 514 |
| Other noncurrent assets | 72 | 72 |
| Noncurrent assets held for sale | $585 | $697 |
| Accounts payable | $129 | $127 |
| Accrued compensation and benefits | 16 | 25 |
| Deferred revenue | 38 | 36 |
| Other current liabilities | 116 | 33 |
| Current liabilities held for sale | $299 | $221 |
| Other noncurrent liabilities | $61 | $61 |
| Noncurrent liabilities held for sale | $61 | $61 |

---

**5. &nbsp;&nbsp;&nbsp;&nbsp;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 December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, |
| | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 |
| | Products & Systems | Services | Total | Products & Systems | Services | Total |
| Building Solutions North America | $1451 | $916 | $2367 | $1299 | $853 | $2152 |
| Building Solutions EMEA/LA | 552 | 423 | 975 | 544 | 415 | 959 |
| Building Solutions Asia Pacific | 473 | 173 | 646 | 501 | 174 | 675 |
| Global Products | 2080 |  | 2080 | 2076 |  | 2076 |
| Total | $4556 | $1512 | $6068 | $4420 | $1442 | $5862 |

---

------

**Johnson Controls International plc**

**Notes to Consolidated Financial Statements** 

**December 31, 2022**

**(unaudited)** 

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

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| HVAC | $1440 | $1483 |
| Fire & Security | 570 | 544 |
| Industrial Refrigeration | 70 | 49 |
| Total | $2080 | $2076 |

---

*Contract Balances*

Contract assets relate to the Company's right to consideration for performance obligations satisfied but not billed and consist of unbilled receivables and costs in excess of billings. 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 | December 31, 2022 | September 30, 2022 |
| Contract assets - current | Accounts receivable - net | $2019 | $2020 |
| Contract assets - noncurrent | Other noncurrent assets | 83 | 79 |
| Contract liabilities - current | Deferred revenue | (1774) | (1768) |
| Contract liabilities - noncurrent | Other noncurrent liabilities | (293) | (282) |

---

For the three months ended December 31, 2022 and 2021, the Company recognized revenue of $846 million and $751 million, respectively, that was included in the beginning of period contract liability balance.

*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 contract is accounted for as a single performance obligation. For any contracts with multiple performance obligations, the contract's transaction price is allocated to each performance obligation based on the estimated relative standalone selling price of each distinct good or service in the contract. For product sales, each product sold to a customer typically represents a distinct performance obligation.

Performance obligations are satisfied at a point in time or over time. The timing of satisfying the performance obligation is typically stipulated by the terms of the contract. As of December 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $18.4 billion, of which approximately 65% is expected to be recognized as revenue over the next two years. The remaining performance obligations expected to be recognized in revenue beyond two years primarily relate to large, multi-purpose contracts to construct hospitals, schools and other governmental buildings, which include services to be performed over the building's lifetime, with initial contract terms of 25 to 35 years. Future contract modifications could affect both the timing and the amount of the remaining performance obligations. The Company excludes the value of remaining performance obligations for contracts with an original expected duration of one year or less.

------

**Johnson Controls International plc**

**Notes to Consolidated Financial Statements** 

**December 31, 2022**

**(unaudited)** 

*Costs to Obtain or Fulfill a Contract*

The Company recognizes the incremental costs incurred to obtain or fulfill a contract with a customer as an asset when these costs are recoverable. These costs consist primarily of sales commissions and design costs that relate to a contract or an anticipated contract that we expect to recover. Costs to obtain or fulfill a contract are capitalized and amortized over the period of contract performance.

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):

---

| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Other current assets | $148 | $139 |
| Other noncurrent assets | 191 | 174 |
| Total | $339 | $313 |

---

For the three months ended December 31, 2022 and 2021, the Company recognized amortization expense of $61 million, and $50 million related to costs to obtain or fulfill a contract. There were no impairment losses recognized in the three months ended December 31, 2022 and 2021.

**6.&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable**

The Company enters into various factoring agreements to sell certain accounts receivable to third-party financial institutions. For the majority of these agreements, for ease of administration, the Company collects customer payments related to the factored receivables on behalf of the financial institutions but otherwise maintains no continuing involvement with respect to the factored receivables. Sales of accounts receivable are reflected as a reduction of accounts receivable in the consolidated statements of financial position and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. The Company sold $409 million and $134 million of accounts receivable under these factoring agreements during the three months ended December 31, 2022 and 2021, respectively. The cost of factoring such receivables was not material. Previously sold receivables still outstanding were $384 million and $476 million as of December 31, 2022 and September 30, 2022, respectively.

**7. &nbsp;&nbsp;&nbsp;&nbsp;Inventories**

Inventories consisted of the following (in millions):

---

| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Raw materials and supplies | $1162 | $1009 |
| Work-in-process | 215 | 196 |
| Finished goods | 1518 | 1305 |
| Inventories | $2895 | $2510 |

---

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**8.&nbsp;&nbsp;&nbsp;&nbsp;Goodwill and Other Intangible Assets**

The changes in the carrying amount of goodwill in each of the Company's reportable segments were as follows (in millions):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2022 |
| | Building Solutions North America | Building Solutions EMEA/LA | Building Solutions Asia Pacific | Global Products | Total |
| Goodwill | $9630 | $1772 | $1116 | $5591 | 18109 |
| Accumulated impairment loss | (659) | (47) |  | (75) | (781) |
| Balance at beginning of period | 8971 | 1725 | 1116 | 5516 | 17328 |
| &nbsp;&nbsp;Acquisitions |  | 2 |  | 53 | 55 |
| &nbsp;&nbsp;Foreign currency translation and other | 8 | 139 | 62 | 92 | 301 |
| Balance at end of period | $8979 | $1866 | $1178 | $5661 | $17684 |

---

The Company tests goodwill for impairment annually as of July 31 or more frequently if events or changes in circumstances indicate the asset might be impaired. There were no triggering events requiring an impairment assessment be conducted in the three months ended December 31, 2022. However, it is possible that future changes in circumstances would require the Company to record additional non-cash impairment charges.

The Company's other intangible assets, primarily from business acquisitions, consisted of (in millions):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | December 31, 2022 | December 31, 2022 | December 31, 2022 | September 30, 2022 | September 30, 2022 | September 30, 2022 |
| | Gross<br>Carrying<br>Amount | Accumulated<br>Amortization | Net | Gross<br>Carrying<br>Amount | Accumulated<br>Amortization | Net |
| Definite-lived intangible assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technology | $1415 | $(699) | $716 | $1353 | $(658) | $695 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer relationships | 2793 | (1330) | 1463 | 2742 | (1254) | 1488 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous | 780 | (407) | 373 | 756 | (386) | 370 |
|  | 4988 | (2436) | 2552 | 4851 | (2298) | 2553 |
| Indefinite-lived intangible assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trademarks/trade names | 2121 |  | 2121 | 2088 |  | 2088 |
|  | 2121 |  | 2121 | 2088 |  | 2088 |
| Total intangible assets | $7109 | $(2436) | $4673 | $6939 | $(2298) | $4641 |

---

Amortization of other intangible assets included within continuing operations for the three-month periods ended December 31, 2022 and 2021 was $104 million and $118 million, respectively.

The Company tests indefinite-lived intangible assets for impairment annually as of July 31 or more frequently if events or changes in circumstances indicate the asset might be impaired. There were no triggering events requiring that an impairment assessment be conducted in the three months ended December 31, 2022. However, it is possible that future changes in circumstances would require the Company to record additional non-cash impairment charges.

------

**9.&nbsp;&nbsp;&nbsp;&nbsp;Leases**

The following table presents supplemental consolidated statement of financial position information (in millions):

---

| | | | |
|:---|:---|:---|:---|
| | Location of lease balances | December 31, 2022 | September 30, 2022 |
| Operating lease right-of-use assets | &nbsp;&nbsp;&nbsp;Other noncurrent assets | $1311 | $1271 |
| Operating lease liabilities - current | &nbsp;&nbsp;&nbsp;Other current liabilities | 290 | 280 |
| Operating lease liabilities - noncurrent | &nbsp;&nbsp;&nbsp;Other noncurrent liabilities | 1018 | 987 |

---

The following table presents supplemental noncash operating lease activity, excluding leases acquired in business combinations (in millions):

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Right-of-use assets obtained in exchange for operating lease liabilities | $110 | $55 |

---

**10.&nbsp;&nbsp;&nbsp;&nbsp;Debt and Financing Arrangements**

As of December 31, 2022, the Company had a syndicated $2.5 billion committed revolving credit facility, which is scheduled to expire in December 2024, and a syndicated $500 million committed revolving credit facility, which is scheduled to expire in November 2023. As of December 31, 2022, there were no draws on the facilities.

In October 2022, the Company repaid a €200 million ($196 million as of September 30, 2022) term loan with an interest rate of EURIBOR plus 0.5% and entered into a €150 million ($161 million as of December 31, 2022) term loan with an interest rate of EURIBOR plus 0.7% which is due in April 2024.

The Company had $715 million and $172 million of commercial paper outstanding as of December 31, 2022 and September 30, 2022, respectively.

*Net Financing Charges*

Net financing charges consisted of the following (in millions):

---

| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Interest expense, net of capitalized interest costs | $69 | $55 |
| Other financing charges | 10 | 5 |
| Interest income | (4) | (2) |
| Net foreign exchange results for financing activities | (8) | (5) |
| Net financing charges | $67 | $53 |

---

------

 **11.&nbsp;&nbsp;&nbsp;&nbsp;Derivative Instruments and Hedging Activities**

The Company selectively uses derivative instruments to reduce market risk associated with changes in foreign currency, commodities and interest rates. Under Company policy, the use of derivatives is restricted to those intended for hedging purposes; the use of any derivative instrument for speculative purposes is strictly prohibited. A description of each type of derivative utilized by the Company to manage risk is included in the following paragraphs. In addition, refer to Note 12, "Fair Value Measurements," of the notes to the consolidated financial statements for information related to the fair value measurements and valuation methods utilized by the Company for each derivative type.

*Cash Flow Hedges*

The Company has global operations and participates in foreign exchange markets to minimize its risk of loss from fluctuations in foreign currency exchange rates. The Company selectively hedges anticipated transactions that are subject to foreign exchange rate risk primarily using foreign currency exchange forward contracts. The Company hedges 70% to 90% of the notional amount of each of its known foreign exchange transactional exposures.

The Company selectively hedges anticipated transactions that are subject to commodity price risk, primarily using commodity hedge contracts, to minimize overall price risk associated with the Company's purchases of copper and aluminum in cases where commodity price risk cannot be naturally offset or hedged through supply base fixed price contracts. Commodity risks are systematically managed pursuant to policy guidelines. The maturities of the commodity hedge contracts coincide with the expected purchase of the commodities.

As cash flow hedges under ASC 815, "Derivatives and Hedging," hedge gains or losses due to changes in fair value are initially recorded as a component of accumulated other comprehensive income (loss) ("AOCI") and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings. These contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates during the three months ended December 31, 2022 and 2021.

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

---

| | | |
|:---|:---|:---|
| | Volume Outstanding as of | Volume Outstanding as of |
| Commodity | December 31, 2022 | September 30, 2022 |
| Copper | 4,218 | 3,629 |
| Aluminum | 10,362 | 6,758 |

---

*Net Investment Hedges*

The Company enters into foreign currency denominated debt obligations to selectively hedge portions of its net investment in non-U.S. subsidiaries. The currency effects of the debt obligations are reflected in AOCI attributable to Johnson Controls ordinary shareholders where they offset currency gains and losses recorded on the Company's net investments globally.

The following table summarizes net investment hedges (in billions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | December 31, | December 31, | September 30, | September 30, |
| | 2022 | 2022 | 2022 | 2022 |
| Euro-denominated bonds designated as net investment hedges in Europe | € | 2.9 | € | 2.9 |
| Yen-denominated debt designated as a net investment hedge in Japan | ¥ | 30 | ¥ | 30 |

---

------

*Derivatives Not Designated as Hedging Instruments*

The Company holds certain foreign currency forward contracts not designated as hedging instruments under ASC 815 to hedge foreign currency exposure resulting from monetary assets and liabilities denominated in nonfunctional currencies. The changes in fair value of these foreign currency forward exchange derivatives are recorded in the consolidated statements of income where they offset foreign currency transactional gains and losses on the nonfunctional currency denominated assets and liabilities being hedged.

*Fair Value of Derivative Instruments*

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

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Derivatives and Hedging Activities <br>Designated as Hedging Instruments under ASC 815 | Derivatives and Hedging Activities <br>Designated as Hedging Instruments under ASC 815 | Derivatives and Hedging Activities Not<br>Designated as Hedging Instruments under ASC 815 | Derivatives and Hedging Activities Not<br>Designated as Hedging Instruments under ASC 815 |
| | December 31,<br>2022 | September 30,<br>2022 | December 31,<br>2022 | September 30,<br>2022 |
| Other current assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $26 | $30 | $— | $24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives | 2 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $28 | $30 | $— | $24 |
| Other current liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $50 | $24 | $14 | $27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives | 2 | 10 |  |  |
| Long-term debt |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency denominated debt | 3346 | 3077 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $3398 | $3111 | $14 | $27 |

---

*Counterparty Credit Risk*

The use of derivative financial instruments exposes the Company to counterparty credit risk. The Company has established policies and procedures to limit the potential for counterparty credit risk, including establishing limits for credit exposure and continually assessing the creditworthiness of counterparties. As a matter of practice, the Company deals with major banks worldwide having strong investment grade long-term credit ratings. To further reduce the risk of loss, the Company generally enters into International Swaps and Derivatives Association ("ISDA") master netting agreements with substantially all of its counterparties. The Company enters into ISDA master netting agreements with counterparties that permit the net settlement of amounts owed under the derivative contracts. The master netting agreements generally provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. The Company has not elected to offset the fair value positions of the derivative contracts recorded in the consolidated statements of financial position.

The Company's derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by the Company or the counterparties. The Company's exposure to credit risk associated with its derivative instruments is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. The Company does not anticipate any non-performance by any of its counterparties, and the concentration of risk with financial institutions does not present significant credit risk to the Company.

------

The gross and net amounts of derivative assets and liabilities were as follows (in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Fair Value of Assets | Fair Value of Assets | Fair Value of Liabilities | Fair Value of Liabilities |
| | December 31,<br>2022 | September 30,<br>2022 | December 31,<br>2022 | September 30,<br>2022 |
| Gross amount recognized | $28 | $54 | $3412 | $3138 |
| Gross amount eligible for offsetting | (17) | (42) | (17) | (42) |
| Net amount | $11 | $12 | $3395 | $3096 |

---

*Derivatives Impact on the Statements of Income and Statements of Comprehensive Income*

The following table presents the pre-tax gains (losses) recorded in other comprehensive income (loss) related to cash flow hedges (in millions):&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| Derivatives in ASC 815 Cash Flow<br> Hedging Relationships | Three Months Ended December 31, | Three Months Ended December 31, |
| Derivatives in ASC 815 Cash Flow<br> Hedging Relationships | 2022 | 2021 |
| Foreign currency exchange derivatives | $(21) | $13 |
| Commodity derivatives | 4 | (2) |
| Total | $(17) | $11 |

---

The following table presents the location and amount of the pre-tax gains (losses) on cash flow hedges reclassified from AOCI into the Company's consolidated statements of income (in millions):

---

| | | | |
|:---|:---|:---|:---|
| Derivatives in ASC 815 Cash Flow Hedging Relationships | Location of Gain (Loss) Reclassified from AOCI into Income | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| Derivatives in ASC 815 Cash Flow Hedging Relationships | Location of Gain (Loss) Reclassified from AOCI into Income | 2022 | 2021 |
| Foreign currency exchange derivatives | Cost of sales | $9 | $5 |
| Commodity derivatives | Cost of sales | (6) | (4) |
| Interest rate swaps | Net financing charges |  | (1) |
| Total |  | $3 | $— |

---

The following table presents the location and amount of pre-tax gains on derivatives not designated as hedging instruments recognized in the Company's consolidated statements of income (in millions):

---

| | | | |
|:---|:---|:---|:---|
| Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of Gain<br>Recognized in Income on Derivative | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of Gain<br>Recognized in Income on Derivative | 2022 | 2021 |
| Foreign currency exchange derivatives | Cost of sales | $2 | $10 |
| Foreign currency exchange derivatives | Net financing charges | 79 | 87 |
| Equity swap | Selling, general and administrative |  | 5 |
| Total |  | $81 | $102 |

---

Pre-tax gains (losses) on net investment hedges recorded as foreign currency translation adjustments ("CTA") within other comprehensive income (loss) were $(269) and $73 million for the three months ended December 31, 2022 and 2021, respectively. No gains or losses were reclassified from CTA into income during the three months ended December 31, 2022 and 2021.

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**12.&nbsp;&nbsp;&nbsp;&nbsp;Fair Value Measurements**

ASC 820, "Fair Value Measurement," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

*Level 1:* Observable inputs such as quoted prices in active markets for identical assets or liabilities;

*Level 2:* Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

*Level 3:* Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

*Recurring Fair Value Measurements*

The following tables present the Company's fair value hierarchy for those assets and liabilities measured at fair value (in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Fair Value Measurements Using: | Fair Value Measurements Using: | Fair Value Measurements Using: | Fair Value Measurements Using: |
| | Total as of <br>December 31, 2022 | Quoted Prices<br>in Active<br>Markets<br>(Level 1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level 2) | Significant<br>Unobservable<br>Inputs<br>(Level 3) |
| Other current assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $26 | $— | $26 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp; Exchange traded funds (fixed income)<sup>1</sup> | 23 | 23 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Commodity derivatives | 2 |  | 2 |  |
| Other noncurrent assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation plan assets | 49 | 49 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds (fixed income)<sup>1</sup> | 82 | 82 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds (equity)<sup>1</sup> | 139 | 139 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $321 | $293 | $28 | $— |
| Other current liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $64 | $— | $64 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives | 2 |  | 2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent earn-out liabilities | 49 |  |  | 49 |
| Other noncurrent liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent earn-out liabilities | 34 |  |  | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $149 | $— | $66 | $83 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | Fair Value Measurements Using: | Fair Value Measurements Using: | Fair Value Measurements Using: | Fair Value Measurements Using: |
| | Total as of September 30, 2022 | Quoted Prices<br>in Active<br>Markets<br>(Level 1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level 2) | Significant<br>Unobservable<br>Inputs<br>(Level 3) |
| Other current assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $54 | $— | $54 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds (fixed income)<sup>1</sup> | 22 | 22 |  |  |
| Other noncurrent assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation plan assets | 46 | 46 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds (fixed income)<sup>1</sup> | 86 | 86 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange traded funds (equity)<sup>1</sup> | 131 | 131 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $339 | $285 | $54 | $— |
| Other current liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange derivatives | $51 | $— | $51 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives | 10 |  | 10 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent earn-out liabilities | 30 |  |  | 30 |
| Other noncurrent liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent earn-out liabilities | 30 |  |  | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $121 | $— | $61 | $60 |

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<sup>1</sup> Classified as restricted investments for payment of asbestos liabilities. See Note 21, "Commitments and Contingencies," of the notes to the consolidated financial statements for further details.

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

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at September 30, 2022 | $60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currency translation | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at December 31, 2022 | $83 |

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*Valuation Methods*

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

*Commodity derivatives*: The commodity derivatives are valued under a market approach using publicized prices, where available, or dealer quotes.

*Deferred compensation plan assets*: Assets held in the deferred compensation plans will be used to pay benefits under certain of the Company's non-qualified deferred compensation plans. The investments primarily consist of mutual funds which are publicly traded on stock exchanges and are valued using a market approach based on the quoted market prices. Unrealized gains (losses) on the deferred compensation plan assets are recognized in the consolidated statements of income where they offset unrealized gains and losses on the related deferred compensation plan liability.

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*Investments in exchange traded funds*: Investments in exchange traded funds are valued using a market approach based on quoted market prices, where available, or broker/dealer quotes of identical or comparable instruments. Refer to Note 21, "Commitments and Contingencies," of the notes to the consolidated financial statements for further information.

*Contingent earn-out liabilities*: The contingent earn-out liabilities were established using a Monte Carlo simulation based on the forecasted operating results and the earn-out formula specified in the purchase agreements.

The following table presents the portion of unrealized gains recognized in the consolidated statements of income that relate to equity securities still held at December 31, 2022 and 2021 (in millions):

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| | | |
|:---|:---|:---|
| | Three Months Ended December 31, | Three Months Ended December 31, |
| | 2022 | 2021 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred compensation plan assets | $3 | $3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments in exchange traded funds | 11 | 14 |

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All of the gains on investments in exchange traded funds related to restricted investments.

The fair values of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values. At December 31, 2022, the fair value of long-term debt was $7.9 billion, including public debt of $7.5 billion and other long-term debt of $0.4 billion. At September 30, 2022, the fair value of long-term debt was $7.3 billion, including public debt of $7.1 billion and other long-term debt of $0.2 billion. The fair value of public debt was determined primarily using market quotes which are classified as Level 1 inputs within the ASC 820 fair value hierarchy. The fair value of other long-term debt was determined using quoted market prices for similar instruments and are classified as Level 2 inputs within the ASC 820 fair value hierarchy.

**13.&nbsp;&nbsp;&nbsp;&nbsp;Stock-Based Compensation**

On March 10, 2021, the shareholders of the Company approved the Johnson Controls International plc 2021 Equity and Incentive Plan (the "Plan"). The Plan authorizes stock options, stock appreciation rights, restricted (non-vested) stock/units, performance share units and other stock-based awards. The Compensation and Talent Development Committee of the Company's Board of Directors determines the types of awards to be granted to individual participants and the terms and conditions of the awards. Awards are typically granted annually in the Company's fiscal first quarter.

A summary of the stock-based awards granted is presented below:

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| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, |
| | 2022 | 2022 | 2021 | 2021 |
| | Number Granted | Weighted Average Grant Date Fair Value | Number Granted | Weighted Average Grant Date Fair Value |
| Restricted stock/units | 1614493 | $66.73 | 1170634 | $79.54 |
| Performance shares | 339191 | 79.54 | 438476 | 84.27 |
| Stock options | 570140 | 18.21 | 548398 | 18.59 |

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*Performance Share Awards*

The following table summarizes the assumptions used in determining the fair value of performance share units granted:

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| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Risk-free interest rate | 4.04% | 0.99% |
| Expected volatility of the Company's stock | 33.5% | 30.0% |

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*Stock Options*

The following table summarizes the assumptions used in determining the fair value of stock options granted:

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| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Expected life of option (years) | 5.8 | 6.0 |
| Risk-free interest rate | 3.59% | 1.35% |
| Expected volatility of the Company's stock | 29.4% | 27.8% |
| Expected dividend yield on the Company's stock | 2.10% | 1.71% |

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&nbsp;&nbsp;&nbsp;&nbsp;**14. Earnings Per Share**

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share (in millions):

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| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| **Income Available to Ordinary Shareholders** |  |  |
| Basic and diluted income available to<br> shareholders | $118 | $381 |
| **Weighted Average Shares Outstanding** |  |  |
| Basic weighted average shares outstanding | 687.0 | 704.3 |
| Effect of dilutive securities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock options, unvested restricted stock and<br>&nbsp;&nbsp;&nbsp;&nbsp; unvested performance share awards | 3.3 | 5.2 |
| Diluted weighted average shares outstanding | 690.3 | 709.5 |
| **Antidilutive Securities** |  |  |
| Stock options and unvested restricted stock | 0.3 |  |

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**15.&nbsp;&nbsp;&nbsp;&nbsp;Equity** 

*Share repurchase program*

For the three months ended December 31, 2022 and 2021, the Company repurchased and immediately retired $154 million and $526 million of its ordinary shares, respectively. As of December 31, 2022, approximately $3.5 billion remains available under the Company's share repurchase program, which was approved by the Company's Board of Directors in March 2021. The share repurchase program does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.

*Accumulated Other Comprehensive Income (Loss)*

The following schedules present changes in AOCI attributable to Johnson Controls (in millions, net of tax):

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| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| **Foreign currency translation adjustments** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at beginning of period | $(901) | $(421) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aggregate adjustment for the period (net of tax effect of $0 and $0) | 59 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at end of period | (842) | (337) |
| **Realized and unrealized gains (losses) on derivatives** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at beginning of period | (11) | (17) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current period changes in fair value (net of tax effect of $(2) and $3) | (9) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification to income (net of tax effect of $(1) and $0) \* | (2) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at end of period | (22) | (13) |
| **Pension and postretirement plans** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at beginning of period | 1 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification to income (net of tax effect of $0 and $0) | (1) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at end of period |  | 3 |
| Accumulated other comprehensive loss, end of period | $(864) | $(347) |

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\* Refer to Note 11, "Derivative Instruments and Hedging Activities," of the notes to the consolidated financial statements for disclosure of the line items in the consolidated statements of income affected by reclassifications from AOCI into income related to derivatives.

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**16.&nbsp;&nbsp;&nbsp;&nbsp;Pension and Postretirement Plans**

The components of the Company's net periodic benefit costs from continuing operations associated with its defined benefit pension and postretirement plans, which are primarily recorded in selling, general and administrative expenses in the consolidated statements of income, are shown in the tables below in accordance with ASC 715, "Compensation – Retirement Benefits" (in millions):

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| | | |
|:---|:---|:---|
| | U.S. Pension Plans | U.S. Pension Plans |
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Interest cost | $21 | $10 |
| Expected return on plan assets | (34) | (41) |
| Net actuarial loss (gain) | 8 | (42) |
| Settlement gain |  | (1) |
| Net periodic benefit credit | $(5) | $(74) |

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| | | |
|:---|:---|:---|
| | Non-U.S. Pension Plans | Non-U.S. Pension Plans |
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Service cost | $3 | $6 |
| Interest cost | 16 | 10 |
| Expected return on plan assets | (18) | (21) |
| Net periodic benefit cost (credit) | $1 | $(5) |

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| | | |
|:---|:---|:---|
| | Postretirement Benefits | Postretirement Benefits |
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Interest cost | $1 | $— |
| Expected return on plan assets | (2) | (2) |
| Amortization of prior service credit | (1) | (1) |
| Net periodic benefit credit | $(2) | $(3) |

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During the three months ended December 31, 2022, the amount of cumulative fiscal 2023 lump sum payouts triggered a remeasurement event for certain U.S. pension plans resulting in the recognition of net actuarial losses of $8 million, primarily due to decreases in discount rates, partially offset by favorable plan asset performance.

During the three months ended December 31, 2021, the amount of cumulative fiscal 2022 lump sum payouts triggered a remeasurement event for certain U.S. pension plans resulting in the recognition of net actuarial gains of $42 million, primarily due to favorable plan asset performance.

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**17.&nbsp;&nbsp;&nbsp;&nbsp;Significant Restructuring and Impairment Costs**

To better align its resources with its growth strategies and reduce the cost structure of its global operations in certain underlying markets, the Company commits to various restructuring activities as necessary. Restructuring activities generally result in charges for workforce reductions, plant closures, asset impairments and other related costs which are reported as restructuring and impairment costs in the Company's consolidated statements of income. The other related costs consist primarily of consulting costs incurred as a direct result of the restructuring activities. The Company expects the restructuring activities to reduce cost of sales and SG&A due to reduced employee-related costs, depreciation and amortization expense.

During the three months ended December 31, 2022, the Company recorded $57 million of restructuring and impairment costs in the consolidated statements of income. These charges relate to restructuring plans within the segments and at Corporate to reduce and optimize our cost structure. Refer to Note 4, "Assets and Liabilities Held for Sale" of the notes to the consolidated financial statements for disclosure of other impairment costs.

In fiscal 2021, the Company committed to a significant multi-year restructuring plan ("2021 Plan"). The restructuring actions were substantially completed in fiscal 2022 and final payments, which are not material, will be made in fiscal 2023.

The following table summarizes restructuring and impairment costs (in millions):

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| | |
|:---|:---|
| | Three Months Ended December 31, 2022 |
| Building Solutions North America | $2 |
| Building Solutions EMEA/LA | 21 |
| Building Solutions Asia Pacific | 5 |
| Global Products | 23 |
| Corporate | 6 |
| Total | $57 |

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The following table summarizes changes in the restructuring reserve, which is included within other current liabilities in the consolidated statements of financial position, for new restructuring actions taken in the three months ended December 31, 2022 (in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
| | Employee Severance and Termination Benefits | Long-Lived Asset Impairments | Other | Total |
| Original reserve | $30 | $6 | $21 | $57 |
| &nbsp;&nbsp;&nbsp;Utilized—cash | (3) |  | (5) | (8) |
| &nbsp;&nbsp;&nbsp;Utilized—noncash |  | (6) |  | (6) |
| Balance at December 31, 2022 | $27 | $— | $16 | $43 |

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**18.&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes**

In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the actual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

The statutory tax rate in Ireland is being used as a comparison since the Company is domiciled in Ireland. For the three months ended December 31, 2022, the Company's effective tax rate for continuing operations was 8.2% and was lower than the statutory tax rate of 12.5% primarily due to impairment and restructuring charges and the benefits of continuing global tax planning initiatives, partially offset by tax rate differentials. For the three months ended December 31, 2021, the Company's effective tax rate for continuing operations was 14.5% and was higher than the statutory tax rate of 12.5% primarily due to the income tax effects of mark-to-market adjustments and tax rate differentials, partially offset by the benefits of continuing global tax planning initiatives.

*Valuation Allowance*

The Company reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. Since future financial results may differ from previous estimates, periodic adjustments to the Company's valuation allowances may be necessary.

*Uncertain Tax Positions*

At September 30, 2022, the Company had gross tax-effected unrecognized tax benefits of $2,537 million, of which $1,973 million, if recognized, would impact the effective tax rate. Accrued interest, net at September 30, 2022 was approximately $284 million (net of tax benefit). Interest accrued during the three months ended December 31, 2022 and 2021 was approximately $26 million (net of tax benefit) and approximately $17 million (net of tax benefit), respectively. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

In the U.S., fiscal years 2017 through 2018 are currently under exam by the Internal Revenue Service ("IRS") for certain legal entities. Additionally, the Company is currently under exam in the following major non-U.S. jurisdictions for continuing operations:

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| | |
|:---|:---|
| Tax Jurisdiction | Tax Years Covered |
| Belgium | 2015 - 2021 |
| Germany | 2007 - 2018 |
| Luxembourg | 2017 - 2018 |
| Mexico | 2015 - 2017 |
| United Kingdom | 2014 - 2015, 2017 - 2018; 2020 |

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It is reasonably possible that tax examinations and/or tax litigation will conclude within the next twelve months, which could have a material impact on tax expense. Based upon the circumstances surrounding these examinations, the impact is not currently quantifiable.

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*Other Tax Matters*

The Company recorded restructuring and impairment costs of $345 million, which generated a $52 million tax benefit, during the three months ended December 31, 2022 and $49 million, which generated a $7 million tax benefit, during the three months ended December 31, 2021,

Tax expenses and benefits for the above transactions reflect the Company's current tax positions in the impacted jurisdictions. Refer to Note 17, "Significant Restructuring and Impairment Costs," of the notes to the consolidated financial statements for additional information.

*Impacts of Tax Legislation*

During the three months ended December 31, 2022 and 2021, tax legislation was adopted in various jurisdictions. These law changes did not have a material impact on the Company's consolidated financial statements.

**19. Segment Information**

ASC 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, the Company has determined that it has four reportable segments for financial reporting purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Building Solutions North America:* Building Solutions North America designs, sells, installs, and services HVAC, controls, building management, refrigeration, integrated electronic security, and integrated fire detection and suppression systems for commercial, industrial, retail, small business, institutional and governmental customers in the United States and Canada. Building Solutions North America also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, as well as data-driven "smart building" solutions, to non-residential building and industrial applications in the United States and Canadian marketplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Building Solutions EMEA/LA:* Building Solutions EMEA/LA designs, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services, including data-driven "smart building" solutions, to markets in Europe, the Middle East, Africa and Latin America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Building Solutions Asia Pacific:* Building Solutions Asia Pacific designs, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security, integrated fire-detection and suppression systems, and provides technical services, including data-driven "smart building" solutions, in the Asia Pacific marketplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Global Products:* Global Products designs, manufactures and sells HVAC equipment, controls software and software services for residential and commercial applications to commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide. In addition, Global Products designs, manufactures and sells refrigeration equipment and controls globally. The Global Products business also designs, manufactures and sells fire protection, fire suppression and security products, including intrusion security, anti-theft devices, access control, and video surveillance and management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide. Global Products also includes the Johnson Controls-Hitachi joint venture.

Management evaluates the performance of its business segments primarily on segment earnings before interest, taxes and amortization ("EBITA"), which represents income from continuing operations before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset amortization, net financing charges, restructuring and impairment costs, and the net mark-to-market adjustments related to pension and postretirement plans and restricted asbestos investments.

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

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| | | |
|:---|:---|:---|
| | Net Sales | Net Sales |
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Building Solutions North America | $2367 | $2152 |
| Building Solutions EMEA/LA | 975 | 959 |
| Building Solutions Asia Pacific | 646 | 675 |
| Global Products | 2080 | 2076 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | $6068 | $5862 |

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| | | |
|:---|:---|:---|
| | Segment EBITA | Segment EBITA |
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Building Solutions North America | $267 | $250 |
| Building Solutions EMEA/LA | 75 | 104 |
| Building Solutions Asia Pacific | 68 | 68 |
| Global Products | 382 | 301 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total segment EBITA | 792 | 723 |
| Corporate expenses | (109) | (70) |
| Amortization of intangible assets | (104) | (118) |
| Restructuring and impairment costs | (345) | (49) |
| Net mark-to-market adjustments | 3 | 57 |
| Net financing charges | (67) | (53) |
| Income from continuing operations before income taxes | $170 | $490 |

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**20.&nbsp;&nbsp;&nbsp;&nbsp;Guarantees**

Certain of the Company's subsidiaries at the business segment level have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions and would typically be triggered in the event of nonperformance. Performance under the guarantees, if required, would not have a material effect on the Company's financial position, results of operations or cash flows.

The Company offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement. A typical warranty program requires that the Company replace defective products within a specified time period from the date of sale. The Company records an estimate for future warranty-related costs based on actual historical return rates and other known factors. Based on analysis of return rates and other factors, the Company's warranty provisions are adjusted as necessary. The Company monitors its warranty activity and adjusts its reserve estimates when it is probable that future warranty costs will be different than those estimates.

The Company's product warranty liability is recorded in the consolidated statements of financial position in other current liabilities if the warranty is less than one year and in other non-current liabilities if the warranty extends longer than one year.

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

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| | | |
|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, |
| | 2022 | 2021 |
| Balance at beginning of period | $179 | $192 |
| Accruals for warranties issued during the period | 29 | 22 |
| Accruals from acquisition and divestitures | (1) |  |
| Settlements made (in cash or in kind) during the period | (29) | (29) |
| Currency translation | 3 | (1) |
| Balance at end of period | $181 | $184 |

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 **21.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies**

*Environmental Matters*

The Company accrues for potential environmental liabilities when it is probable a liability has been incurred and the amount of the liability is reasonably estimable. The following table presents the location and amount of reserves for environmental liabilities in the Company's consolidated statements of financial position (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Other current liabilities | $48 | $66 |
| Other noncurrent liabilities | 227 | 220 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total reserves for environmental liabilities | $275 | $286 |

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The Company periodically examines whether the contingent liabilities related to the environmental matters described below are probable and reasonably estimable based on experience and ongoing developments in those matters, including continued study and analysis of ongoing remediation obligations. During the three months ended September 30, 2022, with the assistance of independent environmental consultants and taking into consideration investigation and remediation actions previously completed, new information available to the Company during the fourth quarter of fiscal 2022 and ongoing discussions with the Wisconsin Department of Natural Resources ("WDNR"), the Company completed a comprehensive long-term analysis and cost assessment related to the Company's ongoing environmental remediation obligations. As a result of this analysis, the Company increased its accrual for environmental liabilities by $228 million, which are recorded on an undiscounted basis. The Company expects that it will pay the amounts recorded over an estimated period of up to 20 years. The Company is not able to estimate a possible loss or range of loss, if any, in excess of the established accruals for environmental liabilities at this time.

A substantial portion of the increase to the Company's environmental reserves relates to ongoing long-term remediation efforts to address contamination relating to fire-fighting foams containing perfluorooctane sulfonate ("PFOS"), perfluorooctanoic acid ("PFOA"), and/or other per- and poly-fluoroalkyl substances ("PFAS") at or near the Tyco Fire Products L.P. ("Tyco Fire Products") Fire Technology Center ("FTC") located in Marinette, Wisconsin and surrounding areas in the City of Marinette and Town of Peshtigo, Wisconsin, as well as the continued remediation of PFAS, arsenic and other contaminants at the Tyco Fire Products Stanton Street manufacturing facility also located in Marinette, Wisconsin (the "Stanton Street Facility"). The increase in reserves was recorded as a result of several events that occurred in the three months ended September 30, 2022, including the completion and testing of the Groundwater Extraction and Treatment System ("GETS") at the FTC (as further discussed below), the completion of resident surveys in Peshtigo regarding long-term drinking water solutions, correspondence with regulators on planned remediation activities, finalization of cost estimates for system upgrades and related long-term run rate costs in response to new permit requirements at the Stanton Street Facility, and the development of additional information through ongoing investigation and analysis. These events allowed the Company to develop estimates of costs associated with the long-term remediation actions expected to be

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performed over an estimated period of up to 20 years, including the continued operation of the GETS, the implementation of long-term drinking water solutions, continued monitoring and testing of the wells, the operation and wind-down of other legacy remediation and treatment systems and the completion of ongoing investigation obligations.

The use of fire-fighting foams at the FTC was primarily for training and testing purposes to ensure that such products sold by the Company's affiliates, Chemguard, Inc. ("Chemguard") and Tyco Fire Products, were effective at suppressing high intensity fires that may occur at military installations, airports, or elsewhere. In May 2021, as part of Tyco Fire Products' ongoing investigation and remediation program, the WDNR approved Tyco Fire Products' proposed GETS, a permanent groundwater remediation system that will extract groundwater that contains PFAS, treat it using advanced filtration systems, and return the treated water to the environment. Tyco Fire Products has completed construction of the GETS, which is now in operation. Tyco Fire Products is also in the process of completing the removal and disposal of PFAS-affected soil from the FTC. In December 2022, Tyco Fire Products also began implementation of a long-term drinking water solution for some Peshtigo residents with the installation of the first deep aquifer private drinking wells.

Tyco Fire Products has been engaged in remediation activities at the Stanton Street Facility since 1990. Its corporate predecessor, Ansul Incorporated ("Ansul"), manufactured arsenic-based agricultural herbicides at the Stanton Street Facility, which resulted in significant arsenic contamination of soil and groundwater on the site and in parts of the adjoining Menominee River. In 2009, Ansul entered into an Administrative Consent Order (the "Consent Order") with the U.S. Environmental Protection Agency ("EPA") to address the presence of arsenic at the site. Under this agreement, Tyco Fire Products' principal obligations are to contain the arsenic contamination on the site, pump and treat on-site groundwater, dredge, treat and properly dispose of contaminated sediments in the adjoining river areas, and monitor contamination levels on an ongoing basis. Activities completed under the Consent Order since 2009 include the installation of a subsurface barrier wall around the facility to contain contaminated groundwater, the installation of a groundwater extraction and treatment system and the dredging and offsite disposal of treated river sediment. In addition to ongoing remediation activities, the Company is also working with the WDNR to investigate and remediate the presence of PFAS at or near the Stanton Street Facility as part of the evaluation and remediation of PFAS in the Marinette region.

PFOA, PFOS, and other PFAS compounds are being studied by EPA and other environmental and health agencies and researchers. EPA has not issued binding regulatory limits, but had initially stated that it would propose regulatory standards for PFOS and PFOA in drinking water by the end of 2019, in accordance with its PFAS Action Plan released in February 2019, and issued interim recommendations for addressing PFOA and PFOS in groundwater in December 2019. In March 2021, EPA published its final determination to regulate PFOS and PFOA in drinking water. While those studies continue, EPA issued in June 2022 an updated set of interim health advisory levels for PFOA and PFOS in drinking water, as well as final health advisory levels for two other types of PFAS (PFBS and GenX chemicals). In November 2022, EPA added a class definition of PFAS to the final version of EPA's fifth Contaminant Candidate List (CCL 5), which is a list of substances not currently subject to national drinking water regulation, but which EPA believes may require future regulation.

In October 2021, EPA released its "PFAS Strategic Roadmap: EPA's Commitments to Action 2021-2024." The 2021-2024 Roadmap sets timelines by which EPA plans to take specific actions, including, among other items, publishing a national PFAS testing strategy, proposing to designate PFOA and PFOS as Comprehensive Environmental Response, Compensation and Liability Act hazardous substances, restricting PFAS discharges from industrial sources through Effluent Limitations Guidelines, publishing the final toxicity assessment for five additional PFAS, requiring water systems to test for 29 PFAS under the Safe Drinking Water Act, and publishing improved analytical methods in eight different environmental matrices to monitor 40 PFAS present in wastewater and stormwater discharges. Both PFOA and PFOS are types of synthetic chemical compounds that have been present in firefighting foam. However, both are also present in many existing consumer products. According to EPA, PFOA and PFOS have been used to make carpets, clothing, fabrics for furniture, paper packaging for food and other materials (e.g., cookware) that are resistant to water, grease or stains. In August 2022, EPA published a proposed rule that would designate PFOA and PFOS as "hazardous substances" under CERCLA.

It is difficult to estimate the Company's ultimate level of liability at many remediation sites due to the large number of other parties that may be involved, the complexity of determining the relative liability among those parties, the financial viability of other potentially responsible parties and third-party indemnitors, the uncertainty as to the nature and scope of

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the investigations and remediation to be conducted, changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods over which eventual remediation may occur. It is possible that technological, regulatory or enforcement developments, the results of additional environmental studies or other factors could change the Company's expectations with respect to future charges and cash outlays, and such changes could be material to the Company's future results of operations, financial condition or cash flows. Nevertheless, the Company does not currently believe that any claims, penalties or costs in addition to the amounts accrued will have a material adverse effect on the Company's financial position, results of operations or cash flows.

In addition, the Company has identified asset retirement obligations for environmental matters that are expected to be addressed at the retirement, disposal, removal or abandonment of existing owned facilities. Conditional asset retirement obligations were $17 million at both December 31, 2022 and September 30, 2022.

*FTC-Related Remediation and Litigation* 

On June 21, 2019, the WDNR announced that it had received from the Wisconsin Department of Health Services ("WDHS") a recommendation for groundwater quality standards as to, among other compounds, PFOA and PFOS. The WDHS recommended a groundwater enforcement standard for PFOA and PFOS of 20 parts per trillion. Although Wisconsin recently approved final regulatory standards for PFOA and PFOS in drinking water and surface water, the Wisconsin Natural Resources Board did not approve WDNR's proposed standards for PFOA and PFOS in groundwater. In September 2022, the Governor of Wisconsin signed a scope statement setting out parameters for the WDNR to draft a final rule regarding groundwater quality standards for PFOA and PFOS, among other compounds. The WDNR is now in the process of drafting the rule.

In July 2019, the Company received a letter from the WDNR directing the expansion of the evaluation of PFAS in the Marinette region to include (1) biosolids sludge produced by the City of Marinette Waste Water Treatment Plant and spread on certain fields in the area and (2) the Menominee and Peshtigo Rivers. Tyco Fire Products responded to the WDNR's letter by requesting additional necessary information. On October 16, 2019, the WDNR issued a "Notice of Noncompliance" to Tyco Fire Products and Johnson Controls, Inc. regarding the WDNR's July 3, 2019 letter. The WDNR issued a further letter regarding the issue on November 4, 2019. In February 2020, the WDNR sent a letter to Tyco Fire Products and Johnson Controls, Inc. further directing the expansion of the evaluation of PFAS in the Marinette region to include investigation activities south and west of the previously defined FTC study area. In September 2021, the WDNR sent an additional "Notice of Noncompliance" to Tyco Fire Products and Johnson Controls, Inc. concerning land-applied biosolids, which reviewed and responded to the Company's biosolids investigation conducted to date. Tyco Fire Products responded to the WDNR's September 2021 notice by the December 27, 2021 deadline set by WDNR and submitted a Land Applied Biosolids Interim Site Status Update Report to WDNR on October 25, 2022. Tyco Fire Products and Johnson Controls, Inc. believe that they have complied with all applicable environmental laws and regulations. The Company cannot predict what regulatory or enforcement actions, if any, might result from the WDNR's actions, or the consequences of any such actions.

In March 2022, the Wisconsin Department of Justice ("WDOJ") filed a civil enforcement action against Johnson Controls Inc. and Tyco Fire Products in Wisconsin state court relating to environmental matters at the FTC (*State of Wisconsin v. Tyco Fire Products, LP and Johnson Controls, Inc.*, Case No. 22-CX-1 (filed March 14, 2022 in Circuit Court in Marinette County, Wisconsin)). The WDOJ alleges that the Company failed to timely report the presence of PFAS chemicals at the FTC, and that the Company has not sufficiently investigated or remediated PFAS at or near the FTC. The WDOJ seeks monetary penalties and an injunction ordering these two subsidiaries to complete a site investigation and cleanup of PFAS contamination in accordance with the WDNR's requests. The lawsuit is presently at the beginning stages of litigation: Tyco Fire Products and Johnson Controls, Inc. each filed Answers to the Complaint on April 4, 2022 and the parties are proceeding with initial fact discovery. The Company is vigorously defending this civil enforcement action and believes that it has meritorious defenses, but the Company is presently unable to predict the duration, scope, or outcome of this action.

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In October 2022, the Town of Peshtigo filed a tort action in Wisconsin state court against Tyco Fire Products, Johnson Controls Inc., Chemguard, Inc., and ChemDesign, Inc. relating to environmental matters at the FTC (*Town of Peshtigo v. Tyco Fire Products L.P. et al.*, Case No. 2022CV000234 (filed October 18, 2022 in Circuit Court in Marinette County, Wisconsin)). The Town alleges that use of AFFF products at the FTC caused contamination of water supplies in Peshtigo. The Town seeks monetary penalties and an injunction ordering abatement of PFAS contamination in Peshtigo. The case has been removed to federal court and transferred to a multi-district litigation ("MDL") before the United States District Court for the District of South Carolina. The Company plans to vigorously defend against this case and believes that it has meritorious defenses, but the Company is presently unable to predict the duration, scope, or outcome of this action.

In November 2022, individuals filed six actions in Dane County, Wisconsin alleging personal injury and/or property damage against Tyco Fire Products, Johnson Controls Inc., Chemguard, Inc., and other unaffiliated defendants related to environmental matters at the FTC. Plaintiffs allege that use of AFFF products at the FTC and activities by third parties unrelated to the Company contaminated nearby drinking water sources, surface waters, and other natural resources and properties, including their personal properties. The individuals seek monetary damages for their personal injury and/or property damage. These lawsuits were removed to federal court on December 21, 2022, and were tagged to the MDL on December 22, 2022. The Plaintiffs have opposed removal and transfer to the MDL. These lawsuits are presently at the beginning stages of litigation. The Company is vigorously defending these cases and believes that it has meritorious defenses, but the Company is presently unable to predict the duration, scope, or outcome of this action.

*Aqueous Film-Forming Foam ("AFFF") Litigation*

Two of the Company's subsidiaries, Chemguard and Tyco Fire Products, have been named, along with other defendant manufacturers, suppliers and distributors, and, in some cases, certain subsidiaries of the Company affiliated with Chemguard and Tyco Fire Products, in a number of class action and other lawsuits relating to the use of fire-fighting foam products by the U.S. Department of Defense (the "DOD") and others for fire suppression purposes and related training exercises. Plaintiffs generally allege that the firefighting foam products contain or break down into the chemicals PFOS and PFOA and/or other PFAS compounds and that the use of these products by others at various airbases, airports and other sites resulted in the release of these chemicals into the environment and ultimately into communities' drinking water supplies neighboring those airports, airbases and other sites. Plaintiffs generally seek compensatory damages, including damages for alleged personal injuries, medical monitoring, diminution in property values, investigation and remediation costs, and natural resources damages, and also seek punitive damages and injunctive relief to address remediation of the alleged contamination.

In September 2018, Tyco Fire Products and Chemguard filed a Petition for Multidistrict Litigation with the United States Judicial Panel on Multidistrict Litigation ("JPML") seeking to consolidate all existing and future federal cases into one jurisdiction. On December 7, 2018, the JPML issued an order transferring various AFFF cases to the MDL. Additional cases have been identified for transfer to or are being directly filed in the MDL.

*AFFF Putative Class Actions* 

Chemguard and Tyco Fire Products are named in 34 pending putative class actions in federal courts originating from 15 states and territories. All but one of these cases have been direct-filed in or transferred to the MDL and it is anticipated that the remaining case will be transferred to the MDL.

*AFFF Individual or Mass Actions* 

There are more than 3,100 individual or "mass" actions pending that were filed in state or federal courts originating from 51 states and territories against Chemguard and Tyco Fire Products and other defendants in which the plaintiffs generally seek compensatory damages, including damages for alleged personal injuries, medical monitoring, and alleged diminution in property values. The cases involve plaintiffs from various states including approximately 7,000 plaintiffs in Colorado and more than 3,100 other plaintiffs. The vast majority of these matters have been tagged for transfer to, transferred to, or directly-filed in the MDL, and it is anticipated that several newly filed state court actions will be similarly tagged and transferred. There are several matters that are proceeding in state courts, including actions in Arizona and Illinois.

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

*AFFF Municipal and Water Provider Cases* 

Chemguard and Tyco Fire Products have been named as defendants in more than 290 cases involving municipal or water provider plaintiffs that were filed in state or federal courts originating from 27 states. The vast majority of these cases have been transferred to or were directly filed in the MDL, and it is anticipated that the remaining cases will be transferred to the MDL. These municipal and water provider plaintiffs generally allege that the use of the defendants' fire-fighting foam products at fire training academies, municipal airports, Air National Guard bases, or Navy or Air Force bases released PFOS and PFOA into public water supply wells and/or other public property, allegedly requiring remediation. The MDL Court has set the first case for trial on June 4, 2023, (*City of Stuart (Florida) v. 3M Co. et al.*) and has ordered the parties to conduct mediation of the water provider cases pending in the MDL.

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

*State or U.S. Territory Attorneys General Litigation related to AFFF* 

In June 2018, the State of New York filed a lawsuit in New York state court (*State of New York v. The 3M Company et al* No. 904029-18 (N.Y. Sup. Ct., Albany County)) against a number of manufacturers, including affiliates of the Company, with respect to alleged PFOS and PFOA contamination purportedly resulting from firefighting foams used at locations across New York, including Stewart Air National Guard Base in Newburgh and Gabreski Air National Guard Base in Southampton, Plattsburgh Air Force Base in Plattsburgh, Griffiss Air Force Base in Rome, and unspecified "other" sites throughout the State. The lawsuit seeks to recover costs and natural resource damages associated with contamination at these sites. This suit has been removed to the United States District Court for the Northern District of New York and transferred to the MDL.

In February 2019, the State of New York filed a second lawsuit in New York state court (*State of New York v. The 3M Company et al* (N.Y. Sup. Ct., Albany County)), against a number of manufacturers, including affiliates of the Company, with respect to alleged PFOS and PFOA contamination purportedly resulting from firefighting foams used at additional locations across New York. This suit has been removed to the United States District Court for the Northern District of New York and transferred to the MDL. In July 2019, the State of New York filed a third lawsuit in New York state court (*State of New York v. The 3M Company et al* (N.Y. Sup. Ct., Albany County)), against a number of manufacturers, including affiliates of the Company, with respect to alleged PFOS and PFOA contamination purportedly resulting from firefighting foams used at further additional locations across New York. This suit has been removed to the United States District Court for the Northern District of New York and transferred to the MDL. In November 2019, the State of New York filed a fourth lawsuit in New York state court (*State of New York v. The 3M Company et al* (N.Y. Sup. Ct., Albany County)), against a number of manufacturers, including affiliates of the Company, with respect to alleged PFOS and PFOA contamination purportedly resulting from firefighting foams used at further additional locations across New York. This suit has been removed to federal court and transferred to the MDL.

In January 2019, the State of Ohio filed a lawsuit in Ohio state court (*State of Ohio v. The 3M Company et al.*, No. G-4801-CI-021804752-000 (Court of Common Pleas of Lucas County, Ohio)) against a number of manufacturers, including affiliates of the Company, with respect to PFOS and PFOA contamination allegedly resulting from the use of firefighting foams at various specified and unspecified locations across Ohio. The lawsuit seeks to recover costs and natural resource damages associated with the contamination. This lawsuit has been removed to the United States District Court for the Northern District of Ohio and transferred to the MDL.

In addition, in May and June 2019, three other states filed lawsuits in their respective state courts against a number of manufacturers, including affiliates of the Company, with respect to PFOS and PFOA contamination allegedly resulting from the use of firefighting foams at various specified and unspecified locations across their jurisdictions (*State of New Hampshire v. The 3M Company et al.*; *State of Vermont v. The 3M Company et al*.; *State of New Jersey v. The 3M Company et al*.). All three of these suits have been removed to federal court and transferred to the MDL.

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In September 2019, the government of Guam filed a lawsuit in the superior court of Guam against a number of manufacturers, including affiliates of the Company, with respect to PFOS and PFOA contamination allegedly resulting from the use of firefighting foams at various locations within its jurisdiction. This complaint has been removed to federal court and transferred to the MDL.

In November 2019, the government of the Commonwealth of the Northern Mariana Islands filed a lawsuit in the superior court of the Northern Mariana Islands against a number of manufacturers, including affiliates of the Company, with respect to PFOS and PFOA contamination allegedly resulting from the use of firefighting foams at various locations within its jurisdiction. This complaint has been removed to federal court and transferred to the MDL.

In August 2020, Attorney General of the State of Michigan filed two substantially similar lawsuits—one in federal court and one in state court—against a number of manufacturers, including affiliates of the Company, with respect to PFOS and PFOA contamination allegedly resulting from the use of firefighting foams at various locations within the State. The federal action has been transferred to the MDL, and the state court action has been removed to federal court and transferred to the MDL.

In December 2020, the State of Mississippi filed a lawsuit against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's land and natural resources allegedly resulting from the use of firefighting foams at various locations throughout the State. This complaint was direct-filed in the MDL in South Carolina.

In April 2021, the State of Alaska filed a lawsuit in the superior court of the State of Alaska against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's land and natural resources allegedly resulting from the use of firefighting foams at various locations throughout the State. The State's case has been removed to federal court and transferred to the MDL. The State of Alaska has also named a number of manufacturers and other defendants, including affiliates of the Company, as third-party defendants in two cases brought by individuals against the State. These two cases have also been transferred to the MDL.

In early November 2021, the Attorney General of the State of North Carolina filed four individual lawsuits in the superior courts of the State of North Carolina against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's land, natural resources, and property allegedly resulting from the use of firefighting foams at four separate locations throughout the State. These four cases have been removed to federal court and transferred to the MDL. In October 2022, the Attorney General filed two similar lawsuits in the superior courts of the State of North Carolina regarding alleged PFAS damages at two additional locations. It is anticipated that these two cases will be removed to federal court and transferred to the MDL.

In February 2022, the Attorney General of the State of Colorado filed a lawsuit in Colorado state court against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's land and natural resources, public health, and State property allegedly resulting from the use of firefighting foams at various locations throughout the State. This complaint has been removed to federal court and transferred to the MDL.

In April 2022, the Attorney General of the State of Florida filed a lawsuit in Florida state court against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage to the State's natural resources and public health allegedly resulting from the use of firefighting foams at various locations throughout the State. It is anticipated that this complaint will be removed to federal court and transferred to the MDL.

In May 2022, the Attorney General of the Commonwealth of Massachusetts filed a lawsuit against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's natural resources, property, residents, and consumers allegedly resulting from the use of firefighting foams at various locations throughout the State. This complaint was direct-filed in the MDL in South Carolina.

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In July 2022, the Attorney General of the State of Wisconsin filed a lawsuit in Wisconsin state court against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFAS damage to the State's natural resources and public health allegedly resulting, in part, from the use of firefighting foams at various locations throughout the State. This complaint has been removed to federal court and transferred to the MDL.

In November 2022, the Attorney General of the State of California filed a lawsuit in California state court against a number of manufacturers and other defendants, including affiliates of the Company, with respect to PFOS and PFOA damage of the State's land and natural resources allegedly resulting from the manufacture, use, marketing, or sale of PFAS-containing products, including firefighting foams, at various locations throughout the State. On December 20, 2022, the case was removed to federal court and tagged to the MDL. The Attorney General has opposed removal and transfer.

*Other AFFF Related Matters* 

In March 2020, the Kalispel Tribe of Indians (a federally recognized Tribe) and two tribal corporations filed a lawsuit in the United States District Court for the Eastern District of Washington against a number of manufacturers, including affiliates of the Company, and the United States with respect to PFAS contamination allegedly resulting from the use and disposal of AFFF by the United States Air Force at and around Fairchild Air Force Base in eastern Washington. This case has been transferred to the MDL.

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

The Company is vigorously defending the above matters and believes that it has meritorious defenses to class certification and the claims asserted, including statutes of limitations, the government contractor defense, various medical and scientific defenses, and other factual and legal defenses. The government contractor defense is a form of immunity available to government contractors that produced products for the United States government pursuant to the government's specifications. In September 2022, the AFFF MDL Court declined to grant summary judgment on the government contractor defense, ruling that various factual issues relevant to the defense must be decided by a jury rather than the Court. Tyco and Chemguard have insurance that has been in place for many years and the Company is pursuing this coverage for these matters. However, there are numerous factual and legal issues to be resolved in connection with these claims, and it is extremely difficult to predict the outcome or ultimate financial exposure, if any, represented by these matters, and there can be no assurance that any such exposure will not be material.

*Asbestos Matters*

The Company and certain of its subsidiaries, along with numerous other third parties, are named as defendants in personal injury lawsuits based on alleged exposure to asbestos containing materials. These cases have typically involved product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were used with asbestos containing components.

The Company estimates the asbestos-related liability for pending and future claims and related defense costs on a discounted basis. In connection with the recognition of liabilities for asbestos-related matters, the Company records asbestos-related insurance recoveries that are probable.

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The following table presents the location and amount of asbestos-related assets and liabilities in the Company's consolidated statements of financial position (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| &nbsp;&nbsp;Other current liabilities | $58 | $58 |
| &nbsp;&nbsp;Other noncurrent liabilities | 375 | 380 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total asbestos-related liabilities | 433 | 438 |
| &nbsp;&nbsp;Other current assets | 39 | 37 |
| &nbsp;&nbsp;Other noncurrent assets | 267 | 263 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total asbestos-related assets | 306 | 300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net asbestos-related liabilities | $127 | $138 |

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The following table presents the components of asbestos-related assets (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Restricted |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $8 | $6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments | 244 | 239 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total restricted assets | 252 | 245 |
| Insurance receivables for asbestos-related liabilities | 54 | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total asbestos-related assets | $306 | $300 |

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The Company's estimate of the liability and corresponding insurance recovery for pending and future claims and defense costs is based on the Company's historical claim experience, and estimates of the number and resolution cost of potential future claims that may be filed and is discounted to present value from 2068 (which is the Company's reasonable best estimate of the actuarially determined time period through which asbestos-related claims will be paid by Company affiliates). Estimated asbestos-related defense costs are included in the asbestos liability. The Company's legal strategy for resolving claims also impacts these estimates. The Company considers various trends and developments in evaluating the period of time (the look-back period) over which historical claim and settlement experience is used to estimate and value claims reasonably projected to be paid through 2068. Annually, the Company assesses the sufficiency of its estimated liability for pending and future claims and defense costs by evaluating actual experience regarding claims filed, settled and dismissed, and amounts paid in settlements. In addition to claims and settlement experience, the Company considers additional quantitative and qualitative factors such as changes in legislation, the legal environment, and the Company's defense strategy. The Company also evaluates the recoverability of its insurance receivable on an annual basis. The Company evaluates all of these factors and determines whether a change in the estimate of its liability for pending and future claims and defense costs or insurance receivable is warranted.

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on the Company's strategies for resolving its asbestos claims, currently available information, and a number of estimates and assumptions. Key variables and assumptions include the number and type of new claims that are filed each year, the average cost of resolution of claims, the identity of defendants, the resolution of coverage issues with insurance carriers, amount of insurance, and the solvency risk with respect to the Company's insurance carriers. Many of these factors are closely linked, such that a change in one variable or assumption may impact one or more of the others, and no single variable or assumption predominately influences the determination of the Company's asbestos-related liabilities and insurance-related assets. Furthermore, predictions with respect to these variables are subject to greater uncertainty in the later portion of the projection period. Other factors that may affect the Company's liability and cash payments for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries. As a result, actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Company's calculations vary significantly from actual results.

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*Self-Insured Liabilities*

The Company records liabilities for its workers' compensation, product, general, and auto liabilities. The determination of these liabilities and related expenses is dependent on claims experience. For most of these liabilities, claims incurred but not yet reported are estimated by utilizing actuarial valuations based upon historical claims experience. The Company maintains captive insurance companies to manage its self-insured liabilities.

The following table presents the location and amount of self-insured liabilities in the Company's consolidated statements of financial position (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Other current liabilities | $112 | $89 |
| Accrued compensation and benefits | 22 | 22 |
| Other noncurrent liabilities | 230 | 230 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total self-insured liabilities | $364 | $341 |

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The following table presents the location and amount of insurance receivables in the Company's consolidated statements of financial position (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Other current assets | $10 | $10 |
| Other noncurrent assets | 20 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total insurance receivables | $30 | $30 |

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*Other Matters* 

The Company is involved in various lawsuits, claims and proceedings incident to the operation of its businesses, including those pertaining to product liability, environmental, safety and health, intellectual property, employment, commercial and contractual matters, and various other casualty matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, it is management's opinion that none of these will have a material adverse effect on the Company's financial position, results of operations or cash flows. Costs related to such matters were not material to the periods presented.

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**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 Company's ability to manage general economic, business and capital market conditions, including the impact of recessions and economic downturns; the ability to manage macroeconomic and geopolitical volatility, including global price inflation, shortages impacting the availability of raw materials and component products and the conflict between Russia and Ukraine; the ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable regulatory requirements; the strength of the U.S. or other economies; 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; changes to laws or policies governing foreign trade, including economic sanctions, tariffs or trade restrictions; 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; the outcome of litigation and governmental proceedings; the risk of infringement or expiration of intellectual property rights; the Company's ability to manage the impacts of natural disasters, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as the COVID-19 pandemic; the ability of the Company to drive organizational improvement; any delay or inability of the Company to realize the expected benefits and synergies of recent portfolio transactions; the ability to hire and retain senior management and other key personnel; 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, 2022 filed with the United States Securities and Exchange Commission ("SEC") on November 15, 2022, which is available at www.sec.gov and www.johnsoncontrols.com under the "Investors" tab. 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, 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 buildings.

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its direct channel service and solutions capabilities, to deliver outcome-based solutions across the lifecycle of a building that address customers' needs to improve energy efficiency, enhance security, create healthy environments and reduce greenhouse gas emissions.

The following information should be read in conjunction with the September 30, 2022 consolidated financial statements and notes thereto, along with management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended September 30, 2022 filed with the SEC on November 15, 2022. References in the following discussion and analysis to "Three Months" (or similar language) refer to the three months ended December 31, 2022 compared to the three months ended December 31, 2021.

**Macroeconomic Trends**

Much of the demand for installation of the Company's products and solutions is driven by commercial and residential construction and industrial facility expansion and maintenance projects. Commercial and residential construction projects are heavily dependent on general economic conditions, localized demand for commercial and residential real estate and availability of credit. Positive or negative fluctuations in commercial and residential construction, industrial facility expansion and maintenance projects and other capital investments in buildings could have a corresponding impact on the Company's financial condition, results of operations and cash flows.

As a result of the Company's global presence, a significant portion of its revenues and expenses is denominated in currencies other than the U.S. dollar. The Company is therefore subject to non-U.S. currency risks and non-U.S. 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, the currency exposure from the translation of non-U.S. dollar functional currency subsidiaries are not able to 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. During the three months ended December 31, 2022, revenue and profits were adversely impacted due to the strengthening of the U.S. dollar against foreign currencies. The continued strength of the U.S. dollar could continue to adversely impact the Company's results.

The Company continues to observe trends demonstrating increased interest and demand for its products and services that enable smart, safe, efficient and sustainable buildings. This demand is 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 U.S. Climate Smart Buildings Initiative, 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 drive growth by developing and delivering technologies and solutions to create smart, sustainable and healthy buildings. The Company is investing in new digital and product capabilities, including its OpenBlue platform, to enable it to deliver 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.

The Company has experienced, and expects to continue to 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 increased global demand, the conflict between Russia and Ukraine, government-mandated actions in response to COVID-19, particularly in China, and labor shortages. Actions taken by the Company to mitigate supply chain disruptions and inflation, including expanding and redistributing its supplier network, supplier financing, price increases and productivity improvements, have generally been successful in offsetting some, but not all, of the impact of these trends. The collective impact of these trends has been favorable to revenue due to increased demand and price increases to offset inflation, while negatively impacting margins due to supply chain disruptions and cost pressures. However, the Company is beginning to observe improved margins as supply chain disruptions ease and higher priced backlog is converted to sales. Although the Company has experienced recent improvement in its supply chain, the Company could experience further disruptions, shortages and cost increases in the future, the effect of which will depend on the Company's ability to successfully mitigate and offset the impact of these events.

During the second quarter of fiscal 2022, the Company suspended its operations in Russia in response to the conflict between Russia and Ukraine, with existing contractual obligations being fulfilled in a manner that fully complies with all sanctions and

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trade controls. The Company has subsequently reduced its business presence and operations in Russia. Although these actions have not had and are not expected to have a material impact on the Company's operating results, the broader consequences of this conflict, including heightened supply chain disruption, inflation, economic instability and other factors have and could continue to adversely impact the Company's results of operations.

**Impact of COVID-19 Pandemic**

The COVID-19 pandemic continues to impact aspects of the Company's operations and results. Recently, the Company's facilities have generally operated at normal levels. As a result of the pandemic, the Company has seen an increase in demand for its products and solutions that promote building health and optimize customers' infrastructure.

However, the Company continues to be influenced by COVID-19-related trends impacting site access and the labor force, which have and may continue to negatively impact the Company's revenues and margins. Challenges in reaching sufficient vaccination levels and the introduction of new variants of COVID-19 have caused some governments to extend or reinstitute lockdowns and similar restrictive measures, which, in some cases, have limited the Company's ability to access customer sites to install and maintain its products and deliver services. In addition, the Company has experienced and continues to experience labor shortages at certain facilities as the Company expands its production capacity to meet increased customer demand. Although the Company is mitigating these shortages through focused recruitment efforts and competitive compensation packages, the Company could continue to experience such shortages in the future.

The extent to which the COVID-19 pandemic continues to impact the Company's results of operations and financial condition will depend on future 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, 2022 filed with the United States Securities and Exchange Commission ("SEC") on November 15, 2022 for additional discussion of risks related to COVID-19.

**Net Sales**

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| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Net sales | $6068 | $5862 | 4% |

---

The increase in consolidated net sales for the three months ended December 31, 2022 was due to higher organic sales ($497 million) and incremental sales from acquisitions ($27 million), partially offset by the unfavorable impact of foreign currency translation ($300 million) and lower sales due to business divestitures ($18 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, consolidated net sales increased 9% as compared to the prior year, attributable to increased pricing in response to inflation pressures. Refer to the "Segment Analysis" below within this Item 2 for a discussion of net sales by segment.

&nbsp;&nbsp;&nbsp;&nbsp;

**Cost of Sales / Gross Profit**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Cost of sales | $3977 | $3971 | —% |
| Gross profit | 2091 | 1891 | 11% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of sales | 34.5% | 32.3% |  |

---

Cost of sales and gross profit increased for the three-month period ended December 31, 2022, and gross profit as a percentage of sales increased by 220 basis points. Gross profit increased due to sales growth and favorable price/cost, partially offset by unfavorable foreign currency translation ($94 million) and the unfavorable year-over-year impact of net mark-to-market adjustments. Gross profit as a percentage of sales increased primarily due to favorable price/cost. Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment earnings before interest, taxes and amortization ("EBITA").

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**Selling, General and Administrative Expenses**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Selling, general and administrative expenses | $1571 | $1369 | 15% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of sales | 25.9% | 23.4% |  |

---

Selling, general and administrative expenses ("SG&A") for the three-month period ended December 31, 2022 increased $202 million, and SG&A as a percentage of sales increased by 250 basis points. The increase in SG&A was primarily due to the unfavorable year-over-year impact of net mark-to-market adjustments, a loss associated with a fire at a leased warehouse facility, certain investments to support growth and one-time transaction and separation costs, partially offset by favorable foreign currency translation ($65 million). Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment EBITA.

**Restructuring and Impairment Costs**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Restructuring and impairment costs | $345 | $49 | \* |

---

\* Measure not meaningful

Restructuring and impairment costs for the three-month period ended December 31, 2022 included $288 million of impairment costs related to businesses classified as held-for-sale, $30 million in severance and $27 million in other long-lived asset impairments and restructuring costs.

Restructuring and impairment costs for the three-month period ended December 31, 2021 included primarily severance and other cash related items.

Refer to Note 4, "Assets and Liabilities Held for Sale" and Note 17, "Significant Restructuring and Impairment Costs," of the notes to the consolidated financial statements for further disclosure related to the Company's restructuring plans and impairment costs.

**Net Financing Charges**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Net financing charges | $67 | $53 | 26% |

---

Refer to Note 10, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for further disclosure related to the Company's net financing charges.

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**Equity Income**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Equity income | $62 | $70 | (11)% |

---

The decrease in equity income for the three months ended December 31, 2022 was primarily due to lower income at certain partially-owned affiliates of Johnson Controls within the Building Solutions EMEA/LA segment. Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment EBITA.

**Income Tax Provision**

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| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Income tax provision | $14 | $71 | (80)% |
| Effective tax rate | 8.2% | 14.5% |  |

---

In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the actual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

The statutory tax rate in Ireland is being used as a comparison since the Company is domiciled in Ireland. For the three months ended December 31, 2022, the Company's effective tax rate for continuing operations was 8.2% and was lower than the statutory tax rate of 12.5% primarily due to impairment and restructuring charges and the benefits of continuing global tax planning initiatives, partially offset by tax rate differentials. For the three months ended December 31, 2021, the Company's effective tax rate for continuing operations was 14.5% and was higher than the statutory tax rate of 12.5% primarily due to the income tax effects of mark-to-market adjustments and tax rate differentials, partially offset by the benefits of continuing global tax planning initiatives. The effective tax rate for the three months ended December 31, 2022 decreased as compared to the three months ended December 31, 2021 primarily due to the discrete tax items. Refer to Note 18, "Income Taxes," of the notes to the consolidated financial statements for further detail.

**Income Attributable to Noncontrolling Interests**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Income from continuing operations attributable to noncontrolling interests | $38 | $38 | —% |

---

------

**Net Income Attributable to Johnson Controls**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Net income attributable to Johnson Controls | $118 | $381 | (69)% |

---

The decrease in net income attributable to Johnson Controls for the three months ended December 31, 2022 was primarily due to higher restructuring and impairment costs and higher SG&A, partially offset by higher gross profit, all of which are discussed above.

Diluted earnings per share attributable to Johnson Controls for the three months ended December 31, 2022 was $0.17 compared to $0.54 for the three months ended December 31, 2021.

**Comprehensive Income Attributable to Johnson Controls**

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Comprehensive income attributable to Johnson Controls | $165 | $468 | (65)% |

---

The decrease in comprehensive income attributable to Johnson Controls for the three months ended December 31, 2022 was due to lower net income attributable to Johnson Controls ($263 million) and a decrease in other comprehensive income attributable to Johnson Controls ($40 million) resulting from currency translation adjustments and realized and unrealized losses on derivatives.

**Segment Analysis**

Management evaluates the performance of its business units based primarily on segment EBITA, which represents income from continuing operations before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset amortization, net financing charges, restructuring and impairment costs, and net mark-to-market adjustments related to pension and postretirement plans and restricted asbestos investments.

***Net Sales***

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Building Solutions North America | $2367 | $2152 | 10% |
| Building Solutions EMEA/LA | 975 | 959 | 2% |
| Building Solutions Asia Pacific | 646 | 675 | (4)% |
| Global Products | 2080 | 2076 | —% |
|  | $6068 | $5862 | 4% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The increase in Building Solutions North America was due to higher prices and volumes ($223 million) and incremental sales related to business acquisitions ($7 million), partially offset by the unfavorable impact of foreign currency translation ($15 million). Sales growth was led by continued growth in the project-based business, including low double-digit growth in new construction.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The increase in Building Solutions EMEA/LA was due to higher prices ($103 million) and incremental sales related to business acquisitions ($20 million), partially offset by the unfavorable impact of foreign currency translation ($89 million) and business divestitures ($18 million). Excluding the impacts of foreign currency translation and business acquisitions and divestitures, sales growth was led by mid-teens growth in the service-based business and low double-digit growth in Fire & Security. By region, there was strong organic growth in Europe, Latin America and the Middle East.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The decrease in Building Solutions Asia Pacific was due to the unfavorable impact of foreign currency translation ($71 million), partially offset by the net impact of higher prices and lower volumes ($42 million). Excluding the impacts of foreign currency translation, sales growth was led by strong demand for HVAC & Controls. By region, sales in China grew 1% in the quarter, as strong service execution offset a decline in the project-based business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The increase in Global Products was due to the net impact of higher prices and lower volumes ($129 million), partially offset by the unfavorable impact of foreign currency translation ($125 million). Excluding the impacts of foreign currency translation, sales growth was driven by strong price realization and continued growth in Applied and Fire Detection products.

***Segment EBITA***

---

| | | | |
|:---|:---|:---|:---|
| | Three Months Ended <br>December 31, | Three Months Ended <br>December 31, | |
| (in millions) | 2022 | 2021 | Change |
| Building Solutions North America | $267 | $250 | 7% |
| Building Solutions EMEA/LA | 75 | 104 | (28)% |
| Building Solutions Asia Pacific | 68 | 68 | 0% |
| Global Products | 382 | 301 | 27% |
|  | $792 | $723 | 10% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The increase in Building Solutions North America was primarily due to favorable price/cost and productivity savings, partially offset by unfavorable project mix.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The decrease in Building Solutions EMEA/LA was primarily due to unfavorable project mix and the unfavorable impact of foreign currency translation ($9 million), partially offset by favorable volume leverage and productivity savings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Building Solutions Asia Pacific remained flat as favorable price/cost and productivity savings were offset by the unfavorable impact of foreign currency translation ($10 million) and lower volumes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The increase in Global Products was primarily due to favorable price/cost and productivity savings, partially offset by an uninsured loss associated with a fire at a leased warehouse facility in ($40 million) and the unfavorable impact of foreign currency translation ($15 million).

**Backlog**

The Company's backlog is applicable to its sales of systems and services. At December 31, 2022, the backlog was $12.7 billion, of which $11.3 billion was attributable to the field business. The backlog amount outstanding at any given time is not necessarily indicative of the amount of revenue to be earned in the upcoming fiscal year.

At December 31, 2022, remaining performance obligations were $18.4 billion, which is $5.7 billion higher than the Company's backlog of $12.7 billion. Differences between the Company's remaining performance obligations and backlog are primarily due to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

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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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Remaining performance obligations exclude certain customer contracts with a term of one year or less or contracts that are cancellable without substantial penalty versus backlog which includes short-term and cancellable contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

The Company reports backlog as it believes it is a useful measure of evaluating the Company's operational performance and relationship to total orders.

**Liquidity and Capital Resources**

***Working Capital***

---

| | | | |
|:---|:---|:---|:---|
| | December 31, | September 30, | |
| (in millions) | 2022 | 2022 | Change |
| Current assets | $11837 | $11685 |  |
| Current liabilities | (11563) | (11239) |  |
|  | 274 | 446 | (39)% |
| Less: Cash and cash equivalents | (1509) | (2031) |  |
| Add: Short-term debt | 1026 | 669 |  |
| Add: Current portion of long-term debt | 937 | 865 |  |
| Less: Current assets held for sale | (418) | (387) |  |
| Add: Current liabilities held for sale | 310 | 236 |  |
| Working capital (as defined) | $620 | $(202) | \* |
| Accounts receivable - net | $5722 | $5528 | 4% |
| Inventories | 2895 | 2510 | 15% |
| Accounts payable | 4138 | 4241 | (2)% |

---

\* Measure not meaningful

• Working capital is a non-GAAP financial measure. The Company defines working capital as current assets less current liabilities, excluding cash, short-term debt, the current portion of long-term debt, and current assets and liabilities held for sale. Management believes that this measure of working capital, which excludes financing-related items and businesses to be divested, provides a more useful measurement of the Company's operating performance.

• The increase in working capital at December 31, 2022 as compared to September 30, 2022, was primarily due to an increase in inventory due to supply chain disruptions, an increase in accounts receivable and a decrease in accounts payable.

• The Company's days sales in accounts receivable at December 31, 2022 and September 30, 2022 were 60 days and 51 days, respectively. There has been no significant adverse changes in the level of overdue receivables or significant changes in revenue recognition methods.

• The Company's inventory turns for the three months ended December 31, 2022 were lower than the comparable period ended September 30, 2022 primarily due to supply chain disruptions.

• Days in accounts payable at December 31, 2022 were 93 days, higher than 85 days at the comparable period ended September 30, 2022, primarily due to timing of payments.

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***Cash Flows From Continuing Operations***

---

| | | |
|:---|:---|:---|
| | Three Months Ended December 31, | Three Months Ended December 31, |
| (in millions) | 2022 | 2021 |
| Cash provided (used) by operating activities | $(296) | $392 |
| Cash used by investing activities | (189) | (218) |
| Cash provided (used) by financing activities | 9 | (357) |

---

• The increase in cash used by operating activities was primarily due to the timing of accounts payable and accrued liabilities payments.

• The decrease in cash used by investing activities was primarily due to lower cash payments made for acquisitions and increased sales of property, plant and equipment, partially offset by prior year divestitures.

• The increase in cash provided by financing activities was primarily due to lower stock repurchases.

***Capitalization***

---

| | | | |
|:---|:---|:---|:---|
| | December 31, | September 30, | |
| (in millions) | 2022 | 2022 | Change |
| Short-term debt | $1026 | $669 |  |
| Current portion of long-term debt | 937 | 865 |  |
| Long-term debt | 7784 | 7426 |  |
| Total debt | 9747 | 8960 | 9% |
| Less: Cash and cash equivalents | 1509 | 2031 |  |
| Total net debt | 8238 | 6929 | 19% |
| Shareholders' equity attributable to Johnson Controls&nbsp;&nbsp;&nbsp;&nbsp;ordinary shareholders | 16046 | 16268 | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capitalization | $24284 | $23197 | 5% |
| Total net debt as a % of total capitalization | 33.9% | 29.9% |  |

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• Net debt and net debt as a percentage of total capitalization are non-GAAP financial measures. The Company believes the percentage of total net debt to total 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.

• The Company's material cash requirements primarily consist of working capital requirements, repayments of long-term debt and related interest, operating leases, dividends, capital expenditures, potential acquisitions and share repurchases.

• As of December 31, 2022, approximately $3.5 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 $0.35 per common share in the quarter ended December 31, 2022 and intends to continue paying dividends throughout fiscal 2023.

• The Company believes its capital resources and liquidity position, including cash and cash equivalents of $1.5 billion at December 31, 2022, are adequate to fund operations and meet its obligations for the foreseeable future. The Company expects requirements for working capital, capital expenditures, dividends, minimum pension contributions, debt maturities

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and any potential acquisitions or stock repurchases in the remainder of fiscal 2023 will be funded from operations, supplemented by short- and long-term borrowings, if required.

***–***The Company manages its short-term debt position in the U.S. and euro commercial paper and bank loan markets. The Company had $715 million and $172 million of commercial paper outstanding as of December 31, 2022 and September 30, 2022, respectively.

–The Company expects to file a new 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 expires in December 2024 or its $0.5 billion 364-day revolving credit facility which expires in November 2023. There were no draws on the revolving credit facilities as of December 31, 2022 and September 30, 2022.

• 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 December 31, 2022, the Company's credit ratings and outlook were as follows:

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

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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 requires 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 December 31, 2022, 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 key financial assumptions used in calculating the Company's pension liability are determined annually, or whenever plan assets and liabilities are re-measured as required under accounting principles generally accepted in the U.S., including the expected rate of return on its plan assets. In fiscal 2023, the Company believes the long-term rate of return will approximate 8.25%, 3.70% and 6.65% for U.S. pension, non-U.S. pension and postretirement plans, respectively. During the first three months of fiscal 2023, the Company made approximately $9 million in total pension and postretirement contributions. In total, the Company expects to contribute approximately $38 million in cash to its defined benefit pension plans in fiscal 2023. The Company expects to contribute $3 million in cash to its postretirement plans in fiscal 2023.

• 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 fiscal 2022, 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 subsidiaries as a result of the planned divestitures. 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

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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 10, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for additional information on 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 (i) $625 million aggregate principal amount of 1.750% Senior Notes due 2030 (the "2030 Notes"), (ii) €500 million aggregate principal amount of 0.375% Senior Notes due 2027 (the "2027 Notes"), (iii) €500 million aggregate principal amount of 1.000% Senior Notes due 2032 (the "2032 Notes"), (iv) $500 million aggregate principal amount of 2.000% Sustainability-Linked Senior Notes due 2031 (the "2031 Notes"), (v) €600 million aggregate principal amount of 3.000% Senior Notes due 2028 (the "2028 Notes") and (vi) $400 million aggregate principal amount of 4.900% Senior Notes due 2032 (the "2032 Notes 2" and together with the 2032 Notes, the 2030 Notes, the 2028 Notes and the 2027 Notes, the "Notes"), each issued by Johnson Controls International plc ("Parent Company") and Tyco Fire & Security Finance S.C.A. ("TFSCA"), a corporate partnership limited by shares (*société en commandite par actions*) incorporated and organized under the laws of the Grand Duchy of Luxembourg ("Luxembourg").

TFSCA 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 Notes are the Parent Company's and TFSCA's unsecured, unsubordinated obligations. The Parent Company is incorporated and organized under the laws of Ireland and 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 tables set forth summarized financial information of the Parent Company and TFSCA (collectively, the "Obligor Group") on a combined basis after intercompany transactions have been eliminated, including adjustments to remove the receivable and payable balances, investment in, and equity in earnings from, those subsidiaries of the Parent Company other than TFSCA (collectively, the "Non-Obligor Subsidiaries").

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The following table presents summarized income statement information (in millions):

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| | | |
|:---|:---|:---|
| | Three Months Ended December 31, 2022 | Year Ended<br>September 30, 2022 |
| Net sales | $— | $— |
| Gross profit |  |  |
| Loss from continuing operations | (94) | (268) |
| Net loss | (94) | (268) |
| Income attributable to noncontrolling interests |  |  |
| Net loss attributable to the entity | (94) | (268) |

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Excluded from the table above are intercompany transactions between the Obligor Group and Non-Obligor Subsidiaries as follows (in millions):

---

| | | |
|:---|:---|:---|
| | Three Months Ended December 31, 2022 | Year Ended<br>September 30, 2022 |
| Net sales | $— | $— |
| Gross profit |  |  |
| Income from continuing operations | 3 | 92 |
| Net income | 3 | 92 |
| Income attributable to noncontrolling interests |  |  |
| Net income attributable to the entity | 3 | 92 |

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The following table presents summarized balance sheet information as of December 31, 2022 and September 30, 2022 (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Current assets | $714 | $1231 |
| Noncurrent assets | 243 | 243 |
| Current liabilities | 6856 | 5463 |
| Noncurrent liabilities | 7527 | 7176 |
| Noncontrolling interests |  |  |

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Excluded from the table above are intercompany balances between the Obligor Group and Non-Obligor Subsidiaries as follows (in millions):

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| | | |
|:---|:---|:---|
| | December 31, 2022 | September 30, 2022 |
| Current assets | $342 | $455 |
| Noncurrent assets | 3543 | 2952 |
| Current liabilities | 7218 | 2538 |
| Noncurrent liabilities | 6331 | 6228 |
| Noncontrolling interests |  |  |

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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, 2022 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information presented above.

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**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, 2022. 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.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As of December 31, 2022, the Company had not experienced any adverse changes in market risk exposures that materially affected the quantitative and qualitative disclosures presented in the Company's Annual Report on Form 10-K for the year ended September 30, 2022.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"). Based upon their evaluation of these disclosure controls and procedures, the principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of December 31, 2022 to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding disclosure.

**Changes in Internal Control Over Financial Reporting**

There have been no significant changes in the Company's internal control over financial reporting during the three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II. OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

<u>Gumm v. Molinaroli, et al.</u>

On August 16, 2016, a putative class action lawsuit, *Gumm v. Molinaroli, et al.*, Case No. 16-cv-1093, was filed in the United States District Court for the Eastern District of Wisconsin, naming Johnson Controls, Inc., the individual members of its board of directors at the time of the merger with the Company's merger subsidiary and certain of its officers, the Company and the Company's merger subsidiary as defendants. The complaint asserted various causes of action under the federal securities laws, state law and the Taxpayer Bill of Rights, including that the individual defendants allegedly breached their fiduciary duties and unjustly enriched themselves by structuring the merger among the Company, Tyco and the merger subsidiary in a manner that would result in a United States federal income tax realization event for the putative class of certain Johnson Controls, Inc. shareholders and allegedly result in certain benefits to the defendants, as well as related claims regarding alleged misstatements in the proxy statement/prospectus distributed to the Johnson Controls, Inc. shareholders, conversion and breach of contract. The complaint also asserted that Johnson Controls, Inc., the Company and the Company's merger subsidiary aided and abetted the

------

individual defendants in their breach of fiduciary duties and unjust enrichment. The complaint seeks, among other things, disgorgement of profits and damages. Plaintiffs filed an amended complaint on February 15, 2017. On November 3, 2021, the court granted the Company's motion to dismiss the amended complaint. Plaintiffs have appealed to the United States Court of Appeals for the Seventh Circuit. Briefing on the appeal is completed. Oral argument has yet to be scheduled by the court.

Refer to Note 21, "Commitments and Contingencies," of the notes to the consolidated financial statements for discussion of environmental, asbestos, self-insured liabilities and other litigation matters, which is incorporated by reference herein and is considered an integral part of Part II, Item 1, "Legal Proceedings."

**ITEM 1A. RISK FACTORS**

There have been no material changes to the disclosure regarding risk factors presented in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended September 30, 2022.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

In March 2021, the Company's Board of Directors approved a $4.0 billion increase to the Company's share repurchase authorization, adding to the $2.0 billion remaining as of December 31, 2020 under the prior share repurchase authorization approved in 2019. The share repurchase authorization does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice. During the three months ended December 31, 2022, the Company repurchased approximately $0.2 billion of its ordinary shares on an open market. As of December 31, 2022, approximately $3.5 billion remains available under the share repurchase authorization.

The following table presents information regarding the repurchase of the Company's ordinary shares by the Company as part of its publicly announced program during the three months ended December 31, 2022.

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| | | | | |
|:---|:---|:---|:---|:---|
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of the Publicly Announced Program | Approximate Dollar Value of Shares that May Yet be Purchased under the Programs |
| 10/1/22 - 10/31/22 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases by Company | 2242486 | $52.68 | 2242486 | $3496266553 |
| 11/1/22 - 11/30/22 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases by Company | 601650 | 59.32 | 601650 | 3460577478 |
| 12/1/22 - 12/31/22 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases by Company |  |  |  |  |

---

During the three months ended December 31, 2022, acquisitions of shares by the Company from certain employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares were not material.

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**ITEM 6. EXHIBITS**

**<u>INDEX TO EXHIBITS</u>**

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| | |
|:---|:---|
| <u>Exhibit No.</u> | <u>Description</u> |
| 10.1 | <u>[Form of terms and conditions for Option / SAR Awards, Restricted Stock / Unit Awards, Performance Share Awards under the Johnson Controls International plc 2021 Equity and Incentive Plan for fiscal 2023 (filed herewith)](q1ex101fy2310-q.htm)</u> \* |
| 31.1 | <u>[Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](q1ex311fy2310-q.htm)[(filed he](q1ex311fy2310-q.htm)[rew](q1ex311fy2310-q.htm)[ith)](q1ex311fy2310-q.htm)</u> |
| 31.2 | <u>[Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)](q1ex312fy2310-q.htm)</u> |
| 32.1 | <u>[Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)](q1ex32fy2310-q.htm)</u>  |
| 101 | The following materials from Johnson Controls International plc's Quarterly Report on Form 10-Q for the quarter ended December 31, 2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Position, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity and (vi) Notes to Consolidated Financial Statements. |
| 104 | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) |
| \* | Management contract or compensatory plan |

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<u>SIGNATURES</u>

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
| | JOHNSON CONTROLS INTERNATIONAL PLC | JOHNSON CONTROLS INTERNATIONAL PLC |
| Date: February 1, 2023 | By: | */s/ Olivier Leonetti* |
|  |  | Olivier Leonetti |
|  |  | Executive Vice President and<br>Chief Financial Officer |

---

## Exhibit 10.1

Exhibit 10.1

![image_0a.jpg](image_0a.jpg)

**JOHNSON CONTROLS INTERNATIONAL PLC**

**2021 EQUITY AND INCENTIVE PLAN (THE "PLAN")**

**OPTION OR SHARE APPRECIATION RIGHT AWARD AGREEMENT**

**<u>Terms for FY2023 Nonqualified Share Options and Share Appreciation Rights</u>**

**Definitions**. Certain capitalized terms used in this Award Agreement have the meanings set forth below. Other capitalized terms used but not defined in this Award Agreement have the same meaning as in the Plan.

(a)"Award" means this grant of Options and/or an SAR.

(b)"Award Notice" means the Award notification delivered or made available to the Participant (in either paper or electronic form).

(c)"Grant Date" is the date the Award was made to the Participant, as specified in the Award Notice.

(d)"Inimical Conduct" means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, non-competition, non-solicitation, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

(e)"Option" means this nonqualified share option representing the right to purchase Shares at a stated price for a specified period of time.

(f)"Plan" means the Johnson Controls International plc 2021 Equity and Incentive Plan as amended from time to time.

(g)"Retirement" means Termination of Employment (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Affiliates (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

(h)"SAR" is an Award of Share Appreciation Rights which will be settled in cash. The Participant will receive the economic equivalent of the excess of the Fair Market Value on the exercise date over the Exercise Price.

(i) "Termination of Employment" means, subject to the terms of any Attachment hereto, the date of cessation of the Participant's employment relationship with the Company and its Affiliates for any reason, with or without Cause, as determined by the Company.

The parties agree as follows:

1.**Grant of Award**. Subject to the terms and conditions of the Plan, a copy of which has been made available to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an Award of Options or an SAR, as specified in the Award Notice.

2.**Exercise Price.** The purchase price payable upon exercise of the Options or used to determine the value of the SARs shall be the Exercise Price per Share stated in the Award Notice.

3.**Exercise of Vested Portion of Award.** The Award may be exercised by the Participant, in whole or in part, from time to time, to the extent the Award is vested and prior to the Expiration Date stated in the Award Notice. The vesting schedule of the Award is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;Fifty Percent (50%) of the Award shall vest on the second anniversary of the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Fifty Percent (50%) of the Award shall vest on the third anniversary of the Grant Date.

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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The Award shall expire ten years from the Grant Date.

4.**Exercise Procedure.** The Award may only be exercised through the Company's Option/SAR execution service provider following the procedures established by the Committee.

5.**Rights as Shareholder.** The Participant shall not be deemed for any purposes to be a shareholder of the Company with respect to any Shares which may be acquired hereunder except to the extent that the Option shall have been exercised with respect thereto and Shares issued therefor.

6.**No Reinstatement of Award.** After this Award or any portion thereof expires, is cancelled or otherwise terminates for any reason, the Award or such portion shall not be reinstated, extended or otherwise continued.

7.**Alienation of Award.** The Participant (or beneficiary) shall not have any right to assign, transfer, sell, pledge or otherwise encumber this Award, other than pursuant to the laws of descent and distribution. For clarity, this Award may only be exercised by the Participant during the Participant's lifetime.

8.**Termination of Employment**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. In the event a Participant's employment with the Company or any of its Affiliates is terminated for any reason, except Retirement, death, Disability, Disposition of Assets (as defined below), Disposition of a Subsidiary (as defined below), Outsourcing Agreement (as defined below) or Cause, a Participant may exercise this Award (to the extent vested and exercisable as of the date of the Participant's Termination of Employment) for a period of ninety (90) days after the date of the Participant's Termination of Employment, but not later than the Award's expiration date. Thereafter, all rights to exercise the Award shall terminate. Any portion of this Award that is not, or does not become, vested and exercisable as of the date of the Participant's Termination of Employment shall automatically be forfeited as of the date of such Termination of Employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Retirement</u>. If the Participant ceases to be an employee of the Company or any Affiliate by reason of Retirement at a time when the Participant's employment could not have been terminated for Cause, then the Award shall vest and become exercisable with respect to a pro rata portion of the Award and will remain exercisable (to the extent vested upon Retirement) until its expiration date. The pro rata portion of the Award that shall vest upon the Participant's Retirement shall be calculated as follows: (i) the total number of Options or SARs subject to this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Award's original vesting period and the denominator of which equals the total number of months in the Award's original vesting period, less (iii) the number of Options or SARs that previously vested in the normal course as of the Participant's Termination of Employment. For the avoidance of doubt, any portion of this Award that is not, or does not become, vested and exercisable as of the date of the Participant's Retirement shall automatically be forfeited as of the date of such Retirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Death or Disability</u>. If the Participant ceases to be an employee of the Company or any Affiliate by reason of death or Disability at a time when the Participant could not be terminated for Cause, then the Award shall become exercisable in full without regard to any vesting requirements, and may be exercised by the Participant at any time within three (3) years after the Participant's Termination of Employment, but not later than the Award's expiration date. In the case of the Participant's death, the Award may be exercised by the person to whom the Award is transferred by will or by applicable laws of descent and distribution. In the event of the death of a Participant who has had a Retirement or ceased to be an employee by reason of Disability, the Award may be exercised by the person to whom the Option is transferred, by will or by applicable laws of descent and distribution, as if the Participant had remained living under Section 8(b) or this Section 8(c), as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Divestiture or Outsourcing</u>. If the Participant's employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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(each as defined below) at a time when the Participant could not have been terminated for Cause, then, except to the extent this Award has been assumed or replaced pursuant to Section 9, the Award shall become exercisable with respect to a pro rata portion of the Award and will remain exercisable (to the extent vested upon the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement) until the earlier of three (3) years after the date of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement and the Award's expiration date. The pro rata portion of the Award that shall vest upon the Participant's Termination of Employment shall be calculated as follows: (i) the total number of Options or SARs subject to this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Award's original vesting period and the denominator of which equals the total number of months in the Award's original vesting period, less (iii) the number of Options or SARs that previously vested in the normal course as of the Participant's Termination of Employment. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (A) the Participant's Termination of Employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the "Applicable Employment Date"), and (B) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date. For the avoidance of doubt, any portion of this Award that is not, or does not become, vested and exercisable as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited as of the date of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable.

For purposes of this Section 8(d), "Comparable Employment" shall mean employment (x) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to the Participant's Termination of Employment and (y) that is at a geographic location no more than 50 miles from the Participant's principal place of employment in effect immediately prior to the Participant's Termination of Employment; "Disposition of Assets" shall mean the disposition by the Company or an Affiliate of all or a portion of the assets used by the Company or Affiliate in a trade or business to an unrelated corporation or entity; "Disposition of a Subsidiary" shall mean the disposition by the Company or an Affiliate of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and "Outsourcing Agreement" shall mean a written agreement between the Company or an Affiliate and an unrelated third party ("Outsourcing Agent") pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Affiliate to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Termination for Cause</u>. If the Participant's Termination of Employment is due to Cause, then such termination shall cause the immediate cancellation and forfeiture of any Award, regardless of vesting; and any pending exercises shall be cancelled on the date of termination.

9.**Impact of Disposition of Assets or Subsidiary or Outsourcing Agreement**. In connection with a Disposition of Assets, a Disposition of a Subsidiary or an Outsourcing Agreement (any of the foregoing, a "Transaction"), the Committee may authorize the assumption or replacement, in part or in whole, of this Award by (a) the subsidiary, controlled entity or other organizational unit being sold or otherwise disposed of, or any affiliate thereof or successor thereto, or (b) the entity that employs the Participant following the Transaction or any affiliate thereof, or (c) the entity that directly or indirectly acquires or controls (or any affiliate thereof) the disposed-of assets, facility, subsidiary, controlled entity or other organizational unit following the Transaction. Such assumption or replacement may be on such terms and conditions as the Committee may authorize in its sole and absolute discretion, and may, without limitation, be carried out through the substitution of different award types or awards with different terms and conditions from this

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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Award; provided that, immediately following such assumption or replacement, the assumed or replaced award must have a vesting schedule and performance conditions, if any, no less favorable to the Participant than those provided by this Award, and substantially equivalent or better economic value compared with this Award, immediately prior to such assumption or replacement, in each case as determined by the Committee in its discretion. This Award shall be terminated, without any obligation of the Company to issue Shares or other payment hereunder, to the extent and on the date the Award is assumed or replaced as provided in this Section 9. Any Shares subject to any portion of this Award that is so terminated shall be recredited to the Plan's reserve in accordance with Section 6(c) of the Plan.

10.**Inimical Conduct.** Notwithstanding anything herein to the contrary, if the Committee determines at any time that a Participant has engaged in Inimical Conduct, whether before or after Termination of Employment, the Award shall be cancelled, regardless of vesting; and any pending exercises shall be cancelled on that date. In addition, the Committee or the Company may suspend any exercise of the Option or SAR pending the determination of whether the Participant has engaged in Inimical Conduct.

11.**Withholding**. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant's FICA tax obligation) required by law to be withheld with respect to the issuance of Shares under this Award, the vesting of this Award or the payment of cash under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. Alternatively, the Company can withhold Shares no longer restricted, or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction. Notwithstanding the foregoing, with respect to a Participant who is a Section 16 Participant, if payment hereunder is to be made in the form of Shares, then any withholding obligations shall be satisfied by the Company withholding Shares otherwise issuable under this Award unless the Committee approves an alternative method by which the Participant shall pay such withholding taxes.

12.**No Claim for Forfeiture.** Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant's normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. In no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant's employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

13.**Electronic Delivery.** The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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14.**Securities Compliance.** The Participant agrees for himself/herself and the Participant's heirs, legatees, and legal representatives, with respect to all Shares acquired pursuant to this Award (or any Shares issued pursuant to a share dividend or share split thereon or any securities issued in lieu of or in substitution or exchange for such Shares) that the Participant and the Participant's heirs, legatees, and legal representatives will not sell or otherwise dispose of such shares except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or except in a transaction which, in the opinion of counsel for the Company, is exempt from registration under such act.

15.**Successors**. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant, and his or her heirs, executors, administrators or legal representatives.

16.**Legal Compliance**. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

17.**Governing Law; Arbitration.** This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Any disputes regarding this Award or any other matter relating to the Participant's employment will be subject to the Company's arbitration policy, as described in Section 20(i) of the Plan.

18.**Data Privacy and Sharing**. As a requirement of the Award, it is necessary for some of the Participant's personal identifiable information to be provided to certain employees of the Company, the third-party data processor that administers the Plan and the Company's designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests and in accordance with the "legitimate interest" provisions of the EU General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679 and the implementing legislation of the Participant's home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant's personal identifiable information described in the preceding sentences and consents to the Company collecting and transferring to the Company's independent benefit plan administrator and third-party broker, the Participant's personal data that are necessary to administer the Award and the Plan. The Participant understands that his or her personal information may be transferred, processed and stored outside of the Participant's home country in a country that may not have the same data protection laws as his or her home country, for the purposes mentioned in this Award.

The provision of personal data is a requirement for the performance of this Award Agreement and the terms of the Award. Refusing or withdrawing the Participant's consent to share the Participant's data may affect the Participant's ability to participate in the Plan.

The provisions below apply only to participants in the EUROPEAN UNION ("EU") / EUROPEAN ECONOMIC AREA ("EEA") AND THE UNITED KINGDOM:

In compliance with the GDPR:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant may request to receive (a) the contact details of the controller of the Participant's data (usually the administrator and/or the Company) and, where applicable, of the controller's representative; (b) the contact details of the Company's data protection officer, where applicable; (c) the recipients, or categories of recipients, of the Participant's personal data; and (d) the period for

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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which the personal data will be stored, or if that is not possible, the criteria used to determine that period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The purposes of the processing of personal data is for the grant, administration and vesting of the Award and the legal basis for the processing is that this is required for the performance of this Award Agreement and for compliance with its terms and the Award or to cover the legitimate interests of the data controller and the data processor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The controller intends to transfer personal data to a third country or international organization subject to the existence of an adequacy decision by the European Commission, or reference to the appropriate or suitable safeguards (reliance on the US/EU Privacy Shield or adoption of the EU Model Clauses). The Participant may obtain a copy of these or details of where they are made available on the administrator's portal, upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has the right to request from the controller access to and rectification or erasure, in certain circumstances but this could impact the Award, of personal data or restriction of processing concerning the data subject or to object to processing as well as the right to data portability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has a right to lodge a complaint with a supervisory authority.

19.**Restrictive Covenants.** In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement, Participant agrees to be bound by the restrictive covenants in Attachment A. For the sake of clarity, by accepting this Award, Participant agrees to be bound by such restrictive covenants even if Participant ultimately forfeits this Award or otherwise fails to receive any benefits under this Award Agreement.

20.**Recoupment.** This Award, and any Shares issued or cash paid pursuant to this Award, shall be subject to the Company's Executive Compensation Incentive Recoupment Policy.

21.**No Restrictions on Certain Actions.** The existence of the Award shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred, or prior preference shares ahead of or affecting the Shares or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

This Award Agreement, the Award Notice, and any other documents expressly referenced in this Award Agreement contain all of the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

**Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant's IMMEDIATE AND AUTOMATIC acceptance of this Award and the terms and conditions of the Plan and this Award Agreement, including the non-competition and non-solicitation provisions contained herein.** 

The Company has caused this Award to be executed by one of its authorized officers as of the Grant Date.

**JOHNSON CONTROLS INTERNATIONAL PLC** 

/s/ John Donofrio

John Donofrio

Executive Vice President and General Counsel

Terms for FY2023 Share Option and Share Appreciation Rights – 2021 Plan

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**Attachment A**

**Johnson Controls International plc** 

**Restrictive Covenants for Award Agreements** 

In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant), and except as prohibited by law, the Participant agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Competition</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of one (1) year following the Participant's Termination of Employment for any reason, or such longer period of non-competition as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that (i) conducts or is planning to conduct a business in competition with any business conducted or planned by the Company or any of its Subsidiaries (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's termination, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's termination, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's termination; or (ii) designs, develops, produces, offers for sale or sells a product or service that can be used as a substitute for, or is generally intended to satisfy the same customer needs for, any one or more products or services designed, developed, manufactured, produced or offered for sale or sold by any of the Company's business (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's termination, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's termination, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Customers</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another (i) solicit, aid or induce any customer of the Company or any of its Subsidiaries that Participant was responsible for, including supervised, managed or directed by Participant, to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other person or entity in identifying or soliciting any such customer, or (ii) solicit, aid or induce any customer that was pursued by the Company and with which Participant had contact, participated in the contact, or about which Participant had knowledge of Confidential Information by reason of Participant's relationship with the Company within the twenty-four (24) month period preceding Participant's termination if that sale or service would be located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Employees</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another solicit, recruit, aid or induce employees of the Company or any of its Subsidiaries (a) with whom Participant has had material contact with during the twelve (12) months period preceding Participant's termination and who had access to Confidential Information, trade secrets or customer relationships; or (b) who were directly managed by or reported to Participant as of the date of Participant's termination to leave their employment with the Company or its Subsidiaries in order to accept employment with or render services to

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another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**&nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>**.&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant) and for the Company's and its Subsidiaries' promise to provide Participant with confidential and competitively sensitive information from time to time concerning, among other things, the Company and its Subsidiaries strategies, objectives, performance and business prospects, the Participant agrees that during his or her employment with the Company or its Subsidiaries, and until such time thereafter as the Confidential Information is no longer confidential through no fault of the Participant, the Participant shall not use or disclose any Confidential Information except for the benefit of the Company or its Subsidiaries in the course of the Participant's employment, and shall not use or disclose any Confidential Information in competition with or to the detriment of the Company or its Subsidiaries, or for the benefit of the Participant or anyone else other than the Company or its Subsidiaries. Notwithstanding the foregoing, nothing herein shall prohibit the Participant from reporting or otherwise disclosing possible violations of state, local or federal law or regulation to any governmental agency or entity, or making other disclosures that, in each case, are protected under whistleblower provisions of local, state or federal law or regulation. Nothing in this Agreement is intended to discourage or restrict Employee from reporting any theft of trade secrets pursuant to the Defend Trade Secrets Act of 2016 ("DTSA") or other applicable state or federal law. The DTSA provides: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to any attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation or law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to an attorney for the individual and use the trade secret information in the court proceeding, if the individual (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

"Confidential Information" means any information that is not generally known outside the Company and its Subsidiaries, relating to any phase of business of the Company or any Affiliate, whether existing or foreseeable, including information conceived, discovered or developed by the Participant. Confidential Information includes, but is not limited to: project files, product designs, drawings, sketches and processes; production characteristics; testing procedures and results thereof; manufacturing methods, processes, techniques and test results; plant layouts, tooling, engineering evaluations and reports; business plans, financial statements and projections; operating forms (including contracts) and procedures; payroll and personnel records; non-public marketing materials, plans and proposals; customer lists and information, and target lists for new clients and information relating to potential clients; software codes and computer programs; training manuals; policy and procedure manuals; raw materials sources, price and cost information; administrative techniques and documents; and any information received by the Company under an obligation of confidentiality to a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Non-Disparagement</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Participant and the Company and its Subsidiaries (for purposes hereof, the Company and its Subsidiaries shall mean only the officers and directors thereof and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company or its Subsidiaries, their respective Subsidiaries, employees, officers, directors, products or services. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to the limitations in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Remedies</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant's covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant's

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unvested, or vested but unexercised, Options or SARs shall be immediately rescinded and the Participant will forfeit any rights he or she has with respect thereto. Furthermore, by acknowledging this Award, and not declining the Award, in the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) or the amount of cash the Participant received upon the exercise of the Options or SARs that occurred any time from and after the earlier of (i) the date of the breach or (ii) six months prior to the Participant's termination of employment. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this Attachment, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

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![image_1a.jpg](image_1a.jpg)

**JOHNSON CONTROLS INTERNATIONAL PLC**

**2021 EQUITY AND INCENTIVE PLAN (THE "PLAN")**

**RESTRICTED SHARE OR RESTRICTED SHARE UNIT AWARD AGREEMENT**

**<u>Terms for FY2023 Award of Restricted Share or Restricted Share Units</u>**

**Definitions**. Certain capitalized terms used in this Award Agreement have the meanings set forth below. Other capitalized terms used but not defined in this Award Agreement have the same meaning as in the Plan.

(a)"Award" means this grant of Restricted Shares and/or Restricted Share Units.

(b)"Award Notice" means the Award notification delivered or made available to the Participant (in either paper or electronic form).

(c)"Inimical Conduct" means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, non-competition, non-solicitation, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

(d)"Plan" means the Johnson Controls International plc 2021 Equity and Incentive Plan as amended from time to time.

(e)"Restriction Period" means the length of time indicated in the Award Notice during which the Award is subject to vesting. During the Restriction Period, the Participant cannot sell, transfer, pledge, assign or otherwise encumber the Restricted Shares or Restricted Share Units (or a portion thereof) subject to this Award.

(f)"Restricted Share" means a Share that is subject to a risk of forfeiture and the Restriction Period.

(g)"Restricted Share Unit" means the right to receive one Share or a cash payment equal to the Fair Market Value of one Share, that is subject to a risk of forfeiture and the Restriction Period.

(h)"Retirement" means Termination of Employment (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Affiliates (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

(i) "Termination of Employment" means, subject to the terms of any Attachment hereto, the date of cessation of the Participant's employment relationship with the Company and its Affiliates for any reason, with or without Cause, as determined by the Company.

The parties agree as follows:

1.**Grant of Award**. Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an award of Restricted Shares or Restricted Share Units, as specified in the Award Notice, on the date and with respect to the number of Shares specified in the Award Notice.

2.**Restricted Shares**. If the Award is in the form of Restricted Shares, the Shares are subject to the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Restriction Period</u>**.** The Company will hold the Shares in escrow for the Restriction Period. During this period, the Shares shall be subject to forfeiture as provided in Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Removal of Restrictions</u>. Subject to any applicable deferral election under the Johnson Controls International plc Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 below, Shares that have not been

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forfeited shall become available to the Participant after the last day of the Restriction Period upon payment in full of all taxes due with respect to such Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Voting Rights</u>. During the Restriction Period, the Participant may exercise full voting rights with respect to the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Dividends and Other Distributions</u>. Any cash dividends or other distributions paid or delivered with respect to Restricted Shares for which the record date occurs on or before the last day of the Restriction Period will be credited to a bookkeeping account for the benefit of the Participant. For U.S. domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period; for all other Participants, the account will be paid to the Participant in cash at the end of the applicable Restriction Period. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Shares to which the dividends or other distributions relate.

3.**Restricted Share Units.** If the Award is in the form of Restricted Share Units**,** the Restricted Share Units are subject to the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Restriction Period</u>. During the Restriction Period, the Restricted Share Units shall be subject to forfeiture as provided in Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Settlement of Restricted Share Units</u>. Subject to any applicable deferral election under the Johnson Controls International plc Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 and Section 5 below, the Restricted Share Units shall be settled by, (a) for U.S. and United Kingdom domestic Participants, the Company's issuance of a number of Shares to the Participant equal to the number of whole Units that have been earned; or (b) for all other Participants, payment of a cash sum to the Participant by the local entity equal to the Fair Market Value of one Share (determined as of the vesting date) multiplied by the number of whole Units that have been earned. The Shares or the cash payment shall be issued or paid in each case within forty-five (45) days after the last day of the Restriction Period (subject to a six-month delay to the extent required to comply with Code Section 409A).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Dividend Equivalent Units</u>. Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the Restriction Period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Restricted Share Units had such Shares been outstanding. For U.S. and United Kingdom domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period; for all other Participants, the account will be paid to the Participant in cash or, at the discretion of the Company, converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Share Units to which the dividends or other distributions relate.

4.**Termination of Employment – Risk of Forfeiture.** 

&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Retirement</u>. If the Participant terminates employment from the Company and its Affiliates due to Retirement at a time when the Participant's employment could not have been terminated for Cause, then the Participant shall become vested in, and the Restriction Period shall lapse with respect to, a pro rata portion of the total number of Restricted Shares or Restricted Share Units subject to this Award. Such pro rata portion that shall vest upon Retirement shall be calculated as follows: (i) the total number of Restricted Shares or Restricted Share Units granted under this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Restriction Period as of the Participant's Termination of Employment and the denominator of which equals the total number of months in the Restriction Period, less (iii) any Restricted Shares or Restricted Share Units that previously vested in the normal course as of the Participant's Termination of Employment. Any Restricted Shares or Restricted Share Units subject to

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this Award that do not become vested under this paragraph upon the Participant's Retirement shall automatically be forfeited and returned to the Company as of the date of his Retirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Death</u>. If the Participant's employment with the Company and its Affiliates terminates because of death at a time when the Participant could not have been terminated for Cause, then, effective as of the date the Company determines the Participant's employment terminated due to death (provided such determination is made no later than the end of the calendar year following the calendar year in which death occurs), the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Disability</u>. If the Participant's employment with the Company and its Affiliates terminates because of Disability at a time when the Participant could not have been terminated for Cause, then the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse as of the date of such Termination of Employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Divestiture or Outsourcing</u>. If the Participant's employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), at a time when the Participant could not have been terminated for Cause, then, except to the extent this Award has been assumed or replaced pursuant to Section 5, the Participant shall become vested in a pro rata portion of the total number of Restricted Shares or Restricted Share Units subject to this Award. Such pro rata portion shall be calculated as follows: (i) the total number of Restricted Shares or Restricted Share Units granted under this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Restriction Period as of the Participant's Termination of Employment and the denominator of which equals the total number of months in the Restriction Period, less (iii) any Restricted Shares or Restricted Share Units that previously vested in the normal course as of the Participant's Termination of Employment; provided that, if such Termination of Employment does not constitute a "separation from service" within the meaning of Code Section 409A, then any remaining Restriction Period shall continue with respect to the vested Shares or Restricted Share Units as if the Participant continued in active employment to the extent required for compliance with Code Section 409A. Any Restricted Shares or Restricted Share Units subject to this Award that do not become vested under this paragraph as a result of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited and returned to the Company as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (A) the Participant's Termination of Employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the "Applicable Employment Date"), and (B) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date.

For purposes of this Section 4(d), "Comparable Employment" shall mean employment (x) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to the Participant's Termination of Employment and (y) that is at a geographic location no more than 50 miles from the Participant's principal place of employment in effect immediately prior to the Participant's Termination of Employment; "Disposition of Assets" shall mean the disposition by the Company or an Affiliate of all or a portion of the assets used by the Company or Affiliate in a trade or business to an unrelated corporation or entity; "Disposition of a Subsidiary" shall mean the disposition by the Company or an Affiliate of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and "Outsourcing Agreement" shall mean a written agreement between the Company or an Affiliate and an unrelated third party ("Outsourcing Agent") pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Affiliate to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated

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to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.<u>Other Termination.</u> If the Participant's employment terminates for any reason not described above (including for Cause), then any Restricted Shares or any Restricted Share Units (and all deferred dividends paid or credited thereon) still subject to the Restriction Period as of Participant's Termination of Employment shall automatically be forfeited and returned to the Company. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee's determination of whether the Participant was or should have been terminated for Cause.

5.**Impact of Disposition of Assets or Subsidiary or Outsourcing Agreement**. In connection with a Disposition of Assets, a Disposition of a Subsidiary or an Outsourcing Agreement (any of the foregoing, a "Transaction"), the Committee may authorize the assumption or replacement, in part or in whole, of this Award by (a) the subsidiary, controlled entity or other organizational unit being sold or otherwise disposed of, or any affiliate thereof or successor thereto, or (b) the entity that employs the Participant following the Transaction or any affiliate thereof, or (c) the entity that directly or indirectly acquires or controls (or any affiliate thereof) the disposed-of assets, facility, subsidiary, controlled entity or other organizational unit following the Transaction. Such assumption or replacement may be on such terms and conditions as the Committee may authorize in its sole and absolute discretion, and may, without limitation, be carried out through the substitution of different award types or awards with different terms and conditions from this Award; provided that, immediately following such assumption or replacement, the assumed or replaced award must have a vesting schedule and performance conditions, if any, no less favorable to the Participant than those provided by this Award, and substantially equivalent or better economic value compared with this Award, immediately prior to such assumption or replacement, in each case as determined by the Committee in its discretion. This Award shall be terminated, without any obligation of the Company to issue Shares or other payment hereunder, to the extent and on the date the Award is assumed or replaced as provided in this Section 5. Any Shares subject to any portion of this Award that is so terminated shall be recredited to the Plan's reserve in accordance with Section 6(c) of the Plan.

6.**Inimical Conduct.** Notwithstanding anything herein to the contrary, if the Committee determines at any time that a Participant has engaged in Inimical Conduct, whether before or after Termination of Employment, the Award shall be cancelled, regardless of vesting. In addition, the Committee or the Company may suspend any vesting, payment of cash or issuance of Shares hereunder pending the determination of whether the Participant has engaged in Inimical Conduct.

7.**Withholding**. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant's FICA tax obligation) required by law to be withheld with respect to the issuance of Shares under this Award, the vesting of this Award or the payment of cash under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. Alternatively, the Company can withhold Shares no longer restricted, or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction. Notwithstanding the foregoing, with respect to a Participant who is a Section 16 Participant, if payment hereunder is to be made in the form of Shares, then any withholding obligations shall be satisfied by the Company withholding Shares otherwise issuable under this Award unless the Committee approves an alternative method by which the Participant shall pay such withholding taxes.

8.**No Claim for Forfeiture**. Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant's normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-

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of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. Notwithstanding anything to the contrary in this Award, in no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant's employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

9.**Electronic Delivery**. The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

10.**Securities Compliance.** The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue "stop transfer" instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state or other country securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.

11.**Successors**. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant, and his or her heirs, executors, administrators or legal representatives.

12.**Legal Compliance**. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

13.**Governing Law; Arbitration**. This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Any disputes regarding this Award or any other matter relating to the Participant's employment will be subject to the Company's arbitration policy, as described in Section 20(i) of the Plan.

14.**Data Privacy and Sharing**. As a requirement of the Award, it is necessary for some of the Participant's personal identifiable information to be provided to certain employees of the Company, the third-party data processor that administers the Plan and the Company's designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests and in accordance with the "legitimate interest" provisions of the EU General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679 and the implementing legislation of the Participant's home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant's personal identifiable information described in the preceding sentences and consents to the Company collecting and transferring to the Company's independent benefit plan administrator and third-party broker, the Participant's personal data that are necessary to administer the Award and the Plan. The Participant understands that his or her personal information may be transferred, processed and stored outside of the Participant's home country in a country that may not have the same data protection laws as his or her home country, for the purposes mentioned in this Award.

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The provision of personal data is a requirement for the performance of this Award Agreement and the terms of the Award. Refusing or withdrawing the Participant's consent to share the Participant's data may affect the Participant's ability to participate in the Plan.

The provisions below apply only to participants in the EUROPEAN UNION ("EU") / EUROPEAN ECONOMIC AREA ("EEA") AND THE UNITED KINGDOM:

In compliance with the GDPR:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant may request to receive (a) the contact details of the controller of the Participant's data (usually the administrator and/or the Company) and, where applicable, of the controller's representative; (b) the contact details of the Company's data protection officer, where applicable; (c) the recipients, or categories of recipients, of the Participant's personal data; and (d) the period for which the personal data will be stored, or if that is not possible, the criteria used to determine that period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The purposes of the processing of personal data is for the grant, administration and vesting of the Award and the legal basis for the processing is that this is required for the performance of this Award Agreement and for compliance with its terms and the Award or to cover the legitimate interests of the data controller and the data processor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The controller intends to transfer personal data to a third country or international organization subject to the existence of an adequacy decision by the European Commission, or reference to the appropriate or suitable safeguards (reliance on the US/EU Privacy Shield or adoption of the EU Model Clauses). The Participant may obtain a copy of these or details of where they are made available on the administrator's portal, upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has the right to request from the controller access to and rectification or erasure, in certain circumstances but this could impact the Award, of personal data or restriction of processing concerning the data subject or to object to processing as well as the right to data portability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has a right to lodge a complaint with a supervisory authority.

15.**Restrictive Covenants.** In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement, Participant agrees to be bound by the restrictive covenants in Attachment A. For the sake of clarity, by accepting this Award, Participant agrees to be bound by such restrictive covenants even if Participant ultimately forfeits this Award or otherwise fails to receive any benefits under this Award Agreement.

16.**Recoupment.** This Award, and any Shares issued or cash paid pursuant to this Award, shall be subject to the Company's Executive Compensation Incentive Recoupment Policy.

17.**No Restrictions on Certain Actions.** The existence of the Award shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred, or prior preference shares ahead of or affecting the Shares or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

This Award Agreement, the Award Notice and any other documents expressly referenced in this Award Agreement contain all of the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

**Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant's IMMEDIATE AND AUTOMATIC acceptance** 

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**of this Award and the terms and conditions of the Plan and this Award Agreement, including the non-competition and non-solicitation provisions contained herein.** 

The Company has caused this Award to be executed by one of its authorized officers as of the date of grant.

**JOHNSON CONTROLS INTERNATIONAL PLC** 

/s/ John Donofrio

John Donofrio

Executive Vice President and General Counsel

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**Attachment A** 

**Johnson Controls International plc** 

**Restrictive Covenants for Award Agreements** 

In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant), and except as prohibited by law, the Participant agrees as follows:

1.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Competition</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of one (1) year following the Participant's Termination of Employment for any reason, or such longer period of non-competition as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that (i) conducts or is planning to conduct a business in competition with any business conducted or planned by the Company or any of its Subsidiaries (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's Termination of Employment, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's Termination of Employment, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's Termination of Employment; or (ii) designs, develops, produces, offers for sale or sells a product or service that can be used as a substitute for, or is generally intended to satisfy the same customer needs for, any one or more products or services designed, developed, manufactured, produced or offered for sale or sold by any of the Company's business (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's Termination of Employment, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's Termination of Employment, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's Termination of Employment.

2.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Customers</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another (i) solicit, aid or induce any customer of the Company or any of its Subsidiaries that Participant was responsible for, including supervised, managed or directed by Participant, to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other person or entity in identifying or soliciting any such customer, or (ii) solicit, aid or induce any customer that was pursued by the Company and with which Participant had contact, participated in the contact, or about which Participant had knowledge of Confidential Information by reason of Participant's relationship with the Company within the twenty-four (24) month period preceding Participant's Termination of Employment if that sale or service would be located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Subsidiaries.

3.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Employees</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another solicit, recruit, aid or induce employees of the Company or any of its Subsidiaries (a) with whom Participant has had material contact with during the twelve (12) months period preceding Participant's Termination of Employment and who had access to Confidential Information, trade secrets or customer relationships; or (b) who were directly managed by or reported to Participant as of the date of Participant's Termination of Employment to leave their employment with the Company or its Subsidiaries in order to accept employment with or render services to another person

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or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee.&nbsp;&nbsp;&nbsp;&nbsp;

4.**&nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>**.&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant) and for the Company's and its Subsidiaries' promise to provide Participant with confidential and competitively sensitive information from time to time concerning, among other things, the Company and its Subsidiaries strategies, objectives, performance and business prospects, the Participant agrees that during his or her employment with the Company or its Subsidiaries, and until such time thereafter as the Confidential Information is no longer confidential through no fault of the Participant, the Participant shall not use or disclose any Confidential Information except for the benefit of the Company or its Subsidiaries in the course of the Participant's employment, and shall not use or disclose any Confidential Information in competition with or to the detriment of the Company or its Subsidiaries, or for the benefit of the Participant or anyone else other than the Company or its Subsidiaries. Notwithstanding the foregoing, nothing herein shall prohibit the Participant from reporting or otherwise disclosing possible violations of state, local or federal law or regulation to any governmental agency or entity, or making other disclosures that, in each case, are protected under whistleblower provisions of local, state or federal law or regulation. Nothing in this Agreement is intended to discourage or restrict Employee from reporting any theft of trade secrets pursuant to the Defend Trade Secrets Act of 2016 ("DTSA") or other applicable state or federal law. The DTSA provides: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to any attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation or law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to an attorney for the individual and use the trade secret information in the court proceeding, if the individual (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

"Confidential Information" means any information that is not generally known outside the Company and its Subsidiaries, relating to any phase of business of the Company or any Affiliate, whether existing or foreseeable, including information conceived, discovered or developed by the Participant. Confidential Information includes, but is not limited to: project files, product designs, drawings, sketches and processes; production characteristics; testing procedures and results thereof; manufacturing methods, processes, techniques and test results; plant layouts, tooling, engineering evaluations and reports; business plans, financial statements and projections; operating forms (including contracts) and procedures; payroll and personnel records; non-public marketing materials, plans and proposals; customer lists and information, and target lists for new clients and information relating to potential clients; software codes and computer programs; training manuals; policy and procedure manuals; raw materials sources, price and cost information; administrative techniques and documents; and any information received by the Company under an obligation of confidentiality to a third party.

5.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Disparagement</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Participant and the Company and its Affiliates (for purposes hereof, the Company and its Subsidiaries shall mean only the officers and directors thereof and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company or its Subsidiaries, their respective Subsidiaries, employees, officers, directors, products or services. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to the limitations in this paragraph.

6.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Remedies</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant's covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant's unvested Restricted Shares

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or Restricted Share Units shall be immediately rescinded and the Participant will forfeit any rights he or she has with respect thereto. Furthermore, by acknowledging this Award, and not declining the Award, in the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) the Participant received for Restricted Share Units that vested or were delivered at any time from and after the earlier of (i) the date of the breach or (ii) six months prior to the Participant's Termination of Employment. In the event the Shares subject to repayment are, at the time of the Company's demand, allocated to a deferred compensation plan, the Company may forfeit such Shares and the Participant will forfeit any rights he or she has with respect thereto. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this Attachment, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

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![image_2a.jpg](image_2a.jpg)

**JOHNSON CONTROLS INTERNATIONAL PLC**

**2021 EQUITY AND INCENTIVE PLAN (THE "PLAN")**

**PERFORMANCE SHARE UNIT AWARD AGREEMENT**

**<u>Terms for FY2023 Award of Performance Share Units</u>**

**Definitions**. Certain capitalized terms used in this Award Agreement have the meanings set forth below. Other capitalized terms used but not defined in this Award Agreement have the same meaning as in the Plan.

(a)"Award" means this grant of Performance Units.

(b)"Award Notice" means the Award notification delivered or made available to the Participant (in either paper or electronic form).

(c) "Inimical Conduct" means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, non-competition, non-solicitation, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

(d)"Performance Unit" or "Unit" means the right to receive one Share or a cash payment equal to the Fair Market Value of one Share, to the extent the Performance Goals specified in the Summary of Terms and Conditions delivered to the Participant are achieved.

(e)"Plan" means the Johnson Controls International plc 2021 Equity and Incentive Plan as amended from time to time.

(f)"Retirement" means Termination of Employment (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

(g) "Termination of Employment" means, subject to the terms of any Attachment hereto, the date of cessation of the Participant's employment relationship with the Company and its Affiliates for any reason, with or without Cause, as determined by the Company.

The parties agree as follows:

1.**Grant of Award**. Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award, the Company grants to the Participant an award of Performance Units on the date and with respect to the number of Units specified in the Award Notice.

2.**Units Earned**. At the end of the performance period indicated in the Award Notice, the number of Units earned by the Participant shall be determined, in the sole discretion of the Committee, as set forth in the Summary of Terms and Conditions delivered to the Participant.

3.**Dividend Equivalent Units**. Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the settlement of the Performance Units under Section 4 below will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares

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subject to the Performance Units had such Shares been outstanding. For U.S. domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the same time as the Performance Units are settled under Section 4 below; for any other Participants, the account will be paid to the Participant in cash at such time. Such account will be subject to the same terms and conditions (including Performance Goals and risk of forfeiture) as the Performance Units to which the dividends or other distributions relate.

4.**Settlement of Units**. Subject to any applicable deferral election under Johnson Controls International plc Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to the provisions of Section 7 and Section 8 below, the Performance Units shall be settled by (a) for U.S. domestic Participants, the issuance of a number of Shares to the Participant by the Company equal to the number of whole Units that have been earned; or (b) for all other Participants, payment of a cash sum to the Participant by the local entity in an amount equal to the Fair Market Value of one Share (determined as of the vesting date) multiplied by the number of whole Units that have been earned. The Shares or the cash payment shall be issued or paid within 90 days following the end of the performance period (for U.S. domestic Participants, subject to a six-month delay to the extent required to comply with Code Section 409A).

5.**Alienation of Award**. The Participant (or beneficiary) shall not have any right to assign, transfer, sell, pledge or otherwise encumber this Award.

6.**No Voting Rights**. The Participant shall not have any voting rights with respect to the number of Shares underlying the Units until such Shares have been earned and issued.

7.**Termination of Employment – Risk of Forfeiture.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Retirement</u>. If, prior to the settlement of the Units, the Participant terminates employment from the Company and its Affiliates due to Retirement at a time when the Participant's employment could not have been terminated for Cause, then the Participant shall be eligible to earn a pro rata number of Units at the end of the performance period based on actual performance. The pro rata number of Units that the Participant shall be eligible to earn following Retirement (subject to the achievement of the Performance Goals) shall be calculated as follows: (i) the total number of Units subject to this Award multiplied by (ii) a fraction, the numerator of which equals the number of full months that the Participant was employed during the performance period and the denominator of which equals the total number of months in the performance period. Any Units subject to this Award that do not become vested under this paragraph as a result of such Retirement and actual performance shall automatically be forfeited and returned to the Company as of the date on which actual performance is determined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Death or Disability</u>. If, prior to the settlement of the Units, the Participant terminates employment from the Company and its Affiliates due to death or Disability at a time when the Participant's employment could not have been terminated for Cause, then the Participant shall be eligible to earn the Units at the end of the performance period based on actual performance and without pro ration for the number of months of employment during the performance period. Any Units subject to this Award that do not become vested under this paragraph as a result of such Termination of Employment due to death or Disability and actual performance shall automatically be forfeited and returned to the Company as of the date on which actual performance is determined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Divestiture or Outsourcing</u>. If the Participant's employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below) at a time when the Participant could not have been terminated for Cause, then, except to the extent this Award has been assumed or replaced pursuant to Section 8, the Participant shall become vested in a pro rata portion of the target number of Units subject to this Award, which shall be calculated by multiplying the target number of Units times a fraction, the numerator of which is the number of full months of that the Participant was employed during the performance period prior to such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement and the denominator of which is the total number of full months in the performance period. Any Units subject to this Award that do not become vested under this paragraph as a result of such

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Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited and returned to the Company as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (i) the Participant's Termination of Employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the "Applicable Employment Date"), and (ii) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date.

For purposes of this Section 7(c), "Comparable Employment" shall mean employment (x) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to the Participant's Termination of Employment and (y) that is at a geographic location no more than 50 miles from the Participant's principal place of employment in effect immediately prior to the Participant's Termination of Employment; "Disposition of Assets" shall mean the disposition by the Company or an Affiliate of all or a portion of the assets used by the Company or Affiliate in a trade or business to an unrelated corporation or entity; "Disposition of a Subsidiary" shall mean the disposition by the Company or an Affiliate of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and "Outsourcing Agreement" shall mean a written agreement between the Company or an Affiliate and an unrelated third party ("Outsourcing Agent") pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Affiliate to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Other Termination.</u> If the Participant's employment terminates for any reason not described above (including for Cause) prior to the settlement of the Units, then this Award shall automatically be forfeited in its entirety immediately upon such Termination of Employment. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee's determination of whether the Participant was or should have been terminated for Cause.

8.**Impact of Disposition of Assets or Subsidiary or Outsourcing Agreement**. In connection with a Disposition of Assets, a Disposition of a Subsidiary or an Outsourcing Agreement (any of the foregoing, a "Transaction"), the Committee may authorize the assumption or replacement, in part or in whole, of this Award by (a) the subsidiary, controlled entity or other organizational unit being sold or otherwise disposed of, or any affiliate thereof or successor thereto, or (b) the entity that employs the Participant following the Transaction or any affiliate thereof, or (c) the entity that directly or indirectly acquires or controls (or any affiliate thereof) the disposed-of assets, facility, subsidiary, controlled entity or other organizational unit following the Transaction. Such assumption or replacement may be on such terms and conditions as the Committee may authorize in its sole and absolute discretion, and may, without limitation, be carried out through the substitution of different award types or awards with different terms and conditions from this Award; provided that, immediately following such assumption or replacement, the assumed or replaced award must have a vesting schedule and performance conditions, if any, no less favorable to the Participant than those provided by this Award, and substantially equivalent or better economic value compared with this Award, immediately prior to such assumption or replacement, in each case as determined by the Committee in its discretion. This Award shall be terminated, without any obligation of the Company to issue Shares or other payment hereunder, to the extent and on the date the Award is assumed or replaced as provided in this Section 8. Any Shares subject to any portion of this Award that is so terminated shall be recredited to the Plan's reserve in accordance with Section 6(c) of the Plan.

9.**Inimical Conduct.** Notwithstanding anything herein to the contrary, if the Committee determines at any time that a Participant has engaged in Inimical Conduct, whether before or after Termination of

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Employment, the Award shall be cancelled, regardless of vesting. In addition, the Committee or the Company may suspend any vesting, payment of cash or issuance of Shares hereunder pending the determination of whether the Participant has engaged in Inimical Conduct.

10.**Withholding.** The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant's FICA tax obligation) required by law to be withheld with respect to the Units or the issuance of Shares under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. The Company can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction. Notwithstanding the foregoing, with respect to a Participant who is a Section 16 Participant, if payment hereunder is to be made in the form of Shares, then any withholding obligations shall be satisfied by the Company withholding Shares otherwise issuable under this Award unless the Committee approves an alternative method by which the Participant shall pay such withholding taxes.

11.**No Claim for Forfeiture**. Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant's normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. Notwithstanding anything to the contrary in this Award, in no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate, nor shall the Participant have at any time a legally binding right to compensation under this Award unless and until the Committee approves, in its discretion, the number of Units earned at the completion of the performance period. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant's employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

12.**Electronic Delivery**. The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

13.**Securities Compliance.** The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue "stop transfer" instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state or other country securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.

14.**Successors.** All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant and his or her heirs, executors, administrators or legal representatives.

15.**Legal Compliance.** The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

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16.**Governing Law; Arbitration.** This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Any disputes regarding this Award or any other matter relating to the Participant's employment will be subject to the Company's arbitration policy, as described in Section 20(i) of the Plan.

17.**Data Privacy and Sharing**. As a requirement of the Award, it is necessary for some of the Participant's personal identifiable information to be provided to certain employees of the Company, the third-party data processor that administers the Plan and the Company's designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests and in accordance with the "legitimate interest" provisions of the EU General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679 and the implementing legislation of the Participant's home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant's personal identifiable information described in the preceding sentences and consents to the Company collecting and transferring to the Company's independent benefit plan administrator and third-party broker, the Participant's personal data that are necessary to administer the Award and the Plan. The Participant understands that his or her personal information may be transferred, processed and stored outside of the Participant's home country in a country that may not have the same data protection laws as his or her home country, for the purposes mentioned in this Award.

The provision of personal data is a requirement for the performance of this Award Agreement and the terms of the Award. Refusing or withdrawing the Participant's consent to share the Participant's data may affect the Participant's ability to participate in the Plan.

The provisions below apply only to participants in the EUROPEAN UNION ("EU") / EUROPEAN ECONOMIC AREA ("EEA") AND THE UNITED KINGDOM:

In compliance with the GDPR:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant may request to receive (a) the contact details of the controller of the Participant's data (usually the administrator and/or the Company) and, where applicable, of the controller's representative; (b) the contact details of the Company's data protection officer, where applicable; (c) the recipients, or categories of recipients, of the Participant's personal data; and (d) the period for which the personal data will be stored, or if that is not possible, the criteria used to determine that period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The purposes of the processing of personal data is for the grant, administration and vesting of the Award and the legal basis for the processing is that this is required for the performance of this Award Agreement and for compliance with its terms and the Award or to cover the legitimate interests of the data controller and the data processor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The controller intends to transfer personal data to a third country or international organization subject to the existence of an adequacy decision by the European Commission, or reference to the appropriate or suitable safeguards (reliance on the US/EU Privacy Shield or adoption of the EU Model Clauses). The Participant may obtain a copy of these or details of where they are made available on the administrator's portal, upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has the right to request from the controller access to and rectification or erasure, in certain circumstances but this could impact the Award, of personal data or restriction of processing concerning the data subject or to object to processing as well as the right to data portability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Participant has a right to lodge a complaint with a supervisory authority.

18.**Restrictive Covenants.** In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement, Participant agrees to be bound by the restrictive covenants in Attachment A. For the sake of clarity, by accepting this Award, Participant agrees to be bound by such restrictive covenants even

Terms for FY2023 Performance Share Units – 2021 Plan

------

if Participant ultimately forfeits this Award or otherwise fails to receive any benefits under this Award Agreement.

19.**Recoupment.** This Award, and any Shares issued or cash paid pursuant to this Award, shall be subject to the Company's Executive Compensation Incentive Recoupment Policy.

This Award Agreement, the Award Notice, the Summary of Terms and Conditions delivered to the Participant and any other documents expressly referenced in this Award Agreement contain all of the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

**Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant's IMMEDIATE AND AUTOMATIC acceptance of this Award and the terms and conditions of the Plan and this Award Agreement, including the non-competition and non-solicitation provisions contained herein.**

The Company has caused this Award to be executed by one of its authorized officers as of the date of grant.

**JOHNSON CONTROLS INTERNATIONAL PLC** 

/s/ John Donofrio

John Donofrio

Executive Vice President and General Counsel

Terms for FY2023 Performance Share Units – 2021 Plan

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**Attachment A** 

**Johnson Controls International plc** 

**Restrictive Covenants for Award Agreements** 

In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant), and except as prohibited by law, the Participant agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Competition</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of one (1) year following the Participant's Termination of Employment for any reason, or such longer period of non-competition as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that (i) conducts or is planning to conduct a business in competition with any business conducted or planned by the Company or any of its Subsidiaries (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's termination, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's Termination of Employment, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's Termination of Employment; or (ii) designs, develops, produces, offers for sale or sells a product or service that can be used as a substitute for, or is generally intended to satisfy the same customer needs for, any one or more products or services designed, developed, manufactured, produced or offered for sale or sold by any of the Company's business (1) that is located in a region in which Participant had substantial responsibilities during the twenty-four (24) month period preceding Participant's Termination of Employment, and (2) for which Participant (A) was materially involved in during the twenty-four (24) month period preceding Participant's Termination of Employment, or (B) had knowledge of operations or substantial exposure to during the twenty-four (24) month period preceding Participant's Termination of Employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Customers</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another (i) solicit, aid or induce any customer of the Company or any of its Subsidiaries that Participant was responsible for, including supervised, managed or directed by Participant, to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other person or entity in identifying or soliciting any such customer, or (ii) solicit, aid or induce any customer that was pursued by the Company and with which Participant had contact, participated in the contact, or about which Participant had knowledge of Confidential Information by reason of Participant's relationship with the Company within the twenty-four (24) month period preceding Participant's Termination of Employment if that sale or service would be located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Non-Solicitation of Employees</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Participant agrees that during his or her employment with the Company or its Subsidiaries, and for the period of two (2) years following the Participant's Termination of Employment for any reason, or such longer period of non-solicitation as is included in any offer letter or any other agreement between Participant and the Company or its Subsidiaries or Affiliates, the Participant will not, directly or indirectly, on his or her own behalf or on behalf of another solicit, recruit, aid or induce employees of the Company or any of its Subsidiaries (a) with whom Participant has had material contact with during the twelve (12) months period preceding Participant's Termination of Employment and who had access to Confidential Information, trade secrets or customer relationships; or (b) who were directly managed by or reported to Participant as of the date of Participant's Termination of Employment to leave their employment with the Company or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee.

Terms for FY2023 Performance Share Units – 2021 Plan

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**&nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>**.&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Participant's opportunity to earn the benefits provided in this Award Agreement (regardless of whether benefits under this Award Agreement are actually realized by the Participant) and for the Company's and its Subsidiaries' promise to provide Participant with confidential and competitively sensitive information from time to time concerning, among other things, the Company and its Subsidiaries strategies, objectives, performance and business prospects, the Participant agrees that during his or her employment with the Company or its Subsidiaries, and until such time thereafter as the Confidential Information is no longer confidential through no fault of the Participant, the Participant shall not use or disclose any Confidential Information except for the benefit of the Company or its Subsidiaries in the course of the Participant's employment, and shall not use or disclose any Confidential Information in competition with or to the detriment of the Company or its Subsidiaries, or for the benefit of the Participant or anyone else other than the Company or its Subsidiaries. Notwithstanding the foregoing, nothing herein shall prohibit the Participant from reporting or otherwise disclosing possible violations of state, local or federal law or regulation to any governmental agency or entity, or making other disclosures that, in each case, are protected under whistleblower provisions of local, state or federal law or regulation. Nothing in this Agreement is intended to discourage or restrict Employee from reporting any theft of trade secrets pursuant to the Defend Trade Secrets Act of 2016 ("DTSA") or other applicable state or federal law. The DTSA provides: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to any attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation or law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to an attorney for the individual and use the trade secret information in the court proceeding, if the individual (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

"Confidential Information" means any information that is not generally known outside the Company and its Subsidiaries, relating to any phase of business of the Company or any Subsidiary, whether existing or foreseeable, including information conceived, discovered or developed by the Participant. Confidential Information includes, but is not limited to: project files, product designs, drawings, sketches and processes; production characteristics; testing procedures and results thereof; manufacturing methods, processes, techniques and test results; plant layouts, tooling, engineering evaluations and reports; business plans, financial statements and projections; operating forms (including contracts) and procedures; payroll and personnel records; non-public marketing materials, plans and proposals; customer lists and information, and target lists for new clients and information relating to potential clients; software codes and computer programs; training manuals; policy and procedure manuals; raw materials sources, price and cost information; administrative techniques and documents; and any information received by the Company under an obligation of confidentiality to a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Non-Disparagement</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Participant and the Company and its Subsidiaries (for purposes hereof, the Company and its Subsidiaries shall mean only the officers and directors thereof and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company or its Subsidiaries, their respective Subsidiaries, employees, officers, directors, products or services. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to the limitations in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Remedies</u>**.&nbsp;&nbsp;&nbsp;&nbsp;Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant's covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant's unvested Performance Units shall be immediately rescinded and the Participant will forfeit any rights he or she has with respect thereto. Furthermore, by acknowledging this Award, and not declining the Award, in the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) the Participant received for

Terms for FY2023 Performance Share Units – 2021 Plan

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Performance Units that vested or were delivered at any time from and after the earlier of (i) the date of the breach or (ii) six months prior to the Participant's Termination of Employment. In the event the Shares subject to repayment are, at the time of the Company's demand, allocated to a deferred compensation plan, the Company may forfeit such Shares and the Participant will forfeit any rights he or she has with respect thereto. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this Attachment, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

Terms for FY2023 Performance Share Units – 2021 Plan

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS**

I, George R. Oliver, of Johnson Controls International plc, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Johnson Controls International plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 1, 2023

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| |
|:---|
| */s/ George R. Oliver* |
| George R. Oliver<br>Chairman and Chief Executive Officer |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS**

I, Olivier Leonetti, of Johnson Controls International plc, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Johnson Controls International plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 1, 2023&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| |
|:---|
| */s/ Olivier Leonetti* |
| Olivier Leonetti<br>Executive Vice President and<br>Chief Financial Officer |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF PERIODIC FINANCIAL REPORTS**

We, George R. Oliver and Olivier Leonetti, of Johnson Controls International plc, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 (Periodic Report) to which this statement is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

2. information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Johnson Controls International plc.

Date: February 1, 2023

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| |
|:---|
| */s/ George R. Oliver* |
| George R. Oliver<br>Chairman and Chief Executive Officer |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| |
|:---|
| */s/ Olivier Leonetti* |
| Olivier Leonetti<br>Executive Vice President and<br>Chief Financial Officer |

---

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