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 June 30, 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:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Ordinary Shares, Par Value $0.01	JCI	New York Stock Exchange
4.625% Notes due 2023	JCI23	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
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
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.    Yes  þ    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).    Yes  þ    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	þ	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.					¨

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

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 June 30, 2022
Ordinary Shares, $0.01 par value per share	688,810,297

JOHNSON CONTROLS INTERNATIONAL PLC

FORM 10-Q

Report Index

	Page
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Statements of Financial Position at June 30, 2022 and September 30, 2021	3
Consolidated Statements of Income for the Three and Nine Month Periods Ended June 30, 2022 and 2021	4
Consolidated Statements of Comprehensive Income for the Three and Nine Month Periods Ended June 30, 2022 and 2021	5
Consolidated Statements of Cash Flows for the Nine Month Periods Ended June 30, 2022 and 2021	6
Consolidated Statements of Shareholders' Equity for the        Three and Nine Month Periods Ended June 30, 2022 and 2021	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3. Quantitative and Qualitative Disclosures About Market Risk	59
Item 4. Controls and Procedures	59
Part II. Other Information
Item 1. Legal Proceedings	60
Item 1A. Risk Factors	60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 6. Exhibits	64
Signatures	65

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Johnson Controls International plc

Consolidated Statements of Financial Position

(in millions, except par value; unaudited)

	June 30, 2022		September 30, 2021
Assets
Cash and cash equivalents	$	1,506	$	1,336
Accounts receivable - net	5,850		5,613
Inventories	2,574		2,057
Current assets held for sale	394		—
Other current assets	1,235		992
Current assets	11,559		9,998
Property, plant and equipment - net	2,962		3,228
Goodwill	17,725		18,335
Other intangible assets - net	4,764		5,549
Investments in partially-owned affiliates	1,070		1,066
Noncurrent assets held for sale	892		156
Other noncurrent assets	3,352		3,558
Total assets	$	42,324	$	41,890
Liabilities and Equity
Short-term debt	$	2,081	$	8
Current portion of long-term debt	217		226
Accounts payable	4,125		3,746
Accrued compensation and benefits	874		1,008
Deferred revenue	1,846		1,637
Current liabilities held for sale	261		—
Other current liabilities	2,479		2,473
Current liabilities	11,883		9,098
Long-term debt	7,194		7,506
Pension and postretirement benefits	532		628
Noncurrent liabilities held for sale	49		—
Other noncurrent liabilities	5,523		5,905
Long-term liabilities	13,298		14,039
Commitments and contingencies (Note 22)
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	(1,201)		(1,152)
Capital in excess of par value	17,199		17,116
Retained earnings	645		2,025
Accumulated other comprehensive loss	(662)		(434)
Shareholders’ equity attributable to Johnson Controls	15,988		17,562
Noncontrolling interests	1,155		1,191
Total equity	17,143		18,753
Total liabilities and equity	$	42,324	$	41,890

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

3

Johnson Controls International plc

Consolidated Statements of Income

(in millions, except per share data; unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
Net sales
Products and systems	$	5,082	$	4,700	$	14,119	$	12,531
Services	1,532		1,641		4,455		4,745
	6,614		6,341		18,574		17,276
Cost of sales
Products and systems	3,549		3,185		9,996		8,655
Services	865		959		2,530		2,753
	4,414		4,144		12,526		11,408
Gross profit	2,200		2,197		6,048		5,868
Selling, general and administrative expenses	(1,589)		(1,367)		(4,412)		(3,914)
Restructuring and impairment costs	(121)		(79)		(554)		(175)
Net financing charges	(49)		(56)		(153)		(159)
Equity income	63		74		175		188
Income from continuing operations before income taxes	504		769		1,104		1,808
Income tax provision	61		108		190		378
Income from continuing operations	443		661		914		1,430
Income from discontinued operations, net of tax (Note 4)	—		—		—		124
Net income	443		661		914		1,554
Income from continuing operations attributable to noncontrolling    interests	64		87		143		186
Net income attributable to Johnson Controls	$	379	$	574	$	771	$	1,368
Amounts attributable to Johnson Controls ordinary shareholders:
Income from continuing operations	$	379	$	574	$	771	$	1,244
Income from discontinued operations	—		—		—		124
Net income	$	379	$	574	$	771	$	1,368
Basic earnings per share attributable to Johnson Controls
Continuing operations	$	0.55	$	0.80	$	1.10	$	1.73
Discontinued operations	—		—		—		0.17
Net income	$	0.55	$	0.80	$	1.10	$	1.90
Diluted earnings per share attributable to Johnson Controls
Continuing operations	$	0.55	$	0.80	$	1.10	$	1.72
Discontinued operations	—		—		—		0.17
Net income	$	0.55	$	0.80	$	1.10	$	1.89

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

4

Johnson Controls International plc

Consolidated Statements of Comprehensive Income

(in millions; unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
Net income	$	443	$	661	$	914	$	1,554
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(356)		89		(286)		460
Realized and unrealized losses on derivatives	(22)		(18)		(5)		(9)
Pension and postretirement plans	—		(1)		(2)		(2)
Other comprehensive income (loss)	(378)		70		(293)		449
Total comprehensive income	65		731		621		2,003
Comprehensive income attributable to noncontrolling interests:
Net income	64		87		143		186
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(58)		14		(66)		25
Realized and unrealized gains (losses) on derivatives	(3)		(3)		1		(1)
Other comprehensive income (loss)	(61)		11		(65)		24
Comprehensive income attributable to noncontrolling interests	3		98		78		210
Comprehensive income attributable to Johnson Controls	$	62	$	633	$	543	$	1,793

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

5

Johnson Controls International plc

Consolidated Statements of Cash Flows

(in millions; unaudited)

	Nine Months Ended June 30,
	2022		2021
Operating Activities of Continuing Operations
Net income from continuing operations attributable to Johnson Controls	$	771	$	1,244
Income from continuing operations attributable to noncontrolling interests	143		186
Net income from continuing operations	914		1,430
Adjustments to reconcile net income from continuing operations to cash provided by operating activities:
Depreciation and amortization	633		627
Pension and postretirement benefit expense (income)	8		(393)
Pension and postretirement contributions	(83)		(40)
Equity in earnings of partially-owned affiliates, net of dividends received	(25)		(66)
Deferred income taxes	(241)		6
Noncash restructuring and impairment charges	430		94
Equity-based compensation	79		51
Other - net	(47)		(89)
Changes in assets and liabilities, excluding acquisitions and divestitures:
Accounts receivable	(637)		(157)
Inventories	(761)		(204)
Other assets	(276)		(30)
Restructuring reserves	(2)		(27)
Accounts payable and accrued liabilities	788		854
Accrued income taxes	31		(34)
Cash provided by operating activities from continuing operations	811		2,022
Investing Activities of Continuing Operations
Capital expenditures	(430)		(324)
Sale of property, plant and equipment	38		76
Acquisition of businesses, net of cash acquired	(236)		(707)
Business divestitures, net of cash divested	16		19
Proceeds from equity swap	23		35
Changes in long-term investments	1		14
Other	—		1
Cash used by investing activities from continuing operations	(588)		(886)
Financing Activities of Continuing Operations
Increase in short-term debt - net	2,237		239
Repayment of long-term debt	(3)		(303)
Stock repurchases and retirements	(1,427)		(1,001)
Payment of cash dividends	(674)		(570)
Proceeds from the exercise of stock options	15		160
Employee equity-based compensation withholding taxes	(49)		(30)
Change in noncontrolling interest share	—		(14)
Dividends paid to noncontrolling interests	(121)		(133)
Other - net	51		2
Cash provided (used) by financing activities from continuing operations	29		(1,650)
Discontinued Operations
Cash used by operating activities	(4)		(56)
Cash used by discontinued operations	(4)		(56)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(49)		67
Increase (decrease) in cash, cash equivalents and restricted cash	199		(503)
Cash, cash equivalents and restricted cash at beginning of period	1,342		1,960
Cash, cash equivalents and restricted cash at end of period	1,541		1,457
Less: Restricted cash	35		7
Cash and cash equivalents at end of period	$	1,506	$	1,450

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

6

Johnson Controls International plc

Consolidated Statements of Shareholders' Equity

(in millions, except per share data; unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
Shareholders' Equity Attributable to Johnson Controls
Beginning Balance	$	16,536	$	17,698	$	17,562	$	17,447
Ordinary Shares
Beginning balance	7		7		7		8
Repurchases and retirements of ordinary shares	—		—		—		(1)
Ending balance	7		7		7		7
Ordinary Shares Held in Treasury, at Cost
Beginning balance	(1,200)		(1,148)		(1,152)		(1,119)
Other, including options exercised	(1)		(1)		(49)		(30)
Ending balance	(1,201)		(1,149)		(1,201)		(1,149)
Capital in Excess of Par Value
Beginning balance	17,174		17,034		17,116		16,865
Change in noncontrolling interest share	—		—		—		(8)
Other, including options exercised	25		43		83		220
Ending balance	17,199		17,077		17,199		17,077
Retained Earnings
Beginning balance	900		2,215		2,025		2,469
Net income attributable to Johnson Controls	379		574		771		1,368
Cash dividends declared	(242)		(193)		(724)		(577)
Repurchases and retirements of ordinary shares	(392)		(340)		(1,427)		(1,000)
Adoption of ASU 2016-13	—		—		—		(4)
Ending balance	645		2,256		645		2,256
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(345)		(410)		(434)		(776)
Other comprehensive income	(317)		59		(228)		425
Ending balance	(662)		(351)		(662)		(351)
Ending Balance	15,988		17,840		15,988		17,840
Shareholders' Equity Attributable to Noncontrolling Interests
Beginning Balance	1,152		1,059		1,191		1,086
Comprehensive income attributable to noncontrolling interests	3		98		78		210
Dividends attributable to noncontrolling interests	—		—		(121)		(133)
Change in noncontrolling interest share	—		—		7		(6)
Ending Balance	1,155		1,157		1,155		1,157
Total Shareholders' Equity	$	17,143	$	18,997	$	17,143	$	18,997
Cash Dividends Declared per Ordinary Share	$	0.35	$	0.27	$	1.04	$	0.80

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

7

Johnson Controls International plc

Notes to Consolidated Financial Statements

June 30, 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, 2021 filed with the SEC on November 15, 2021. The results of operations for the three and nine month periods ended June 30, 2022 are not necessarily indicative of results for the Company’s 2022 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.

The Company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including residential and commercial heating, ventilating, air-conditioning ("HVAC") equipment, industrial refrigeration systems, controls, security systems, fire-detection systems and fire-suppression solutions. The Company further serves customers by providing technical services, including maintenance, management and repair of equipment (in the HVAC, industrial refrigeration, security and fire-protection space), energy-management consulting and data-driven “smart building” services and solutions powered by its OpenBlue software platform and capabilities. The Company partners with customers by leveraging its broad product portfolio and digital capabilities powered by OpenBlue, together with its direct channel service and solutions capabilities, to deliver outcome-based solutions across the lifecycle of a building that address customers’ needs to improve energy efficiency and reduce greenhouse gas emissions.

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’s interest exceeds 20% and the Company does not have a controlling interest.

The Company consolidates variable interest entities ("VIE") in which the Company 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 a significant variable interest in any consolidated or nonconsolidated VIEs in its continuing operations for the presented reporting periods.

Restricted Cash

At June 30, 2022 and September 30, 2021, the Company held restricted cash of approximately $35 million and $6 million, respectively, all of which was recorded within other current assets in the consolidated statements of financial position. These amounts were related to cash restricted for payment of asbestos liabilities and certain litigation and environmental matters.

8

Johnson Controls International plc

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Retrospective Changes

Effective October 1, 2021, the Company's marine businesses, which were previously included in the Building Solutions Asia Pacific and Global Products segments, became part of the Building Solutions EMEA/LA segment. Historical information has been re-cast to present the comparative periods on a consistent basis. This change was not material to the segment presentation. Refer to Note 8, "Goodwill and Other Intangible Assets," and Note 20, “Segment Information,” of the notes to the consolidated financial statements for further information.

2.      New Accounting Standards

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities (e.g. deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers.” Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting. The guidance is applied prospectively to acquisitions occurring on or after the effective date. During the quarter ended December 31, 2021, the Company early adopted ASU No. 2021-08. The adoption of the new standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

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 nine months of fiscal 2022, the Company completed certain acquisitions for a combined purchase price, net of cash acquired, of $287 million, of which $236 million was paid as of June 30, 2022. In connection with the acquisitions, the Company recorded goodwill of $45 million within the Building Solutions Asia Pacific segment, $68 million within the Building Solutions EMEA/LA segment, $24 million within the Building Solutions North America segment and $45 million within the Global Products segment.

During the first nine months 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 June 30, 2022. In connection with the divestiture, the Company reduced goodwill by $5 million.

Silent-Aire Acquisition

On May 12, 2021, the Company completed its acquisition of Silent-Aire, a global leader in hyperscale data center cooling and modular critical infrastructure solutions, for approximately $755 million, net of cash acquired, which was comprised of an upfront net cash payment of approximately $661 million, the estimated fair value at the acquisition date of contingent earn-out liabilities of approximately $86 million and a working capital adjustment of $8 million. The contingent earn-out liabilities are based upon the achievement of certain defined operating results in each of the three years following the acquisition and cumulatively over the three-year period, with a maximum payout of approximately $250 million. The fair value of contingent earn-out liabilities is reassessed on a quarterly basis and could differ materially from the initial estimates. Subsequent changes in the estimated fair value of contingent earn-out liabilities are recorded in the consolidated statements of income when incurred. During the nine months ended June 30, 2022, the Company recorded a reduction in the fair value of the contingent earn-out liability of $43 million. No earn-out payments were made for the first twelve-month earn-out period ended May 31, 2022 as the performance measures for the period were not achieved.

9

Johnson Controls International plc

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

In connection with the acquisition, the Company recorded goodwill of $244 million in the Global Products segment. Goodwill is attributable primarily to expected synergies, expanded market opportunities and other benefits that the Company believes will result from combining its operations with the operations of Silent-Aire. The goodwill created in the acquisition is not deductible for tax purposes.

During the first nine months of fiscal 2021, the Company completed certain additional acquisitions for a combined purchase price, net of cash acquired, of $58 million, of which $46 million was paid as of June 30, 2021. In connection with the acquisitions, the Company recorded goodwill of $21 million within the Building Solutions EMEA/LA segment and $17 million within the Building Solutions North America segment.

During the first nine months of fiscal 2021, the Company completed certain divestitures within the Buildings Solutions Asia Pacific segment. The combined selling price was $27 million, of which $19 million was received as of June 30, 2021. In connection with the divestitures, the Company reduced goodwill by $7 million.

Acquisitions and divestitures were not material to the Company's consolidated financial statements in the first nine months of fiscal 2022 or 2021.

4.     Discontinued Operations & Assets and Liabilities Held for Sale

Discontinued Operations

On April 30, 2019, the Company completed the sale of its Power Solutions business. In December 2020, the favorable resolution of certain post-closing working capital and net debt adjustments resulted in income from discontinued operations, net of tax, of $124 million due to a reversal of a reserve established in connection with the sale.

The following table summarizes the results of Power Solutions which are classified as discontinued operations (in millions):

	Nine Months Ended June 30, 2021
Net sales	$	—
Income from discontinued operations before income taxes	150
Provision for income taxes on discontinued operations	(26)
Income from discontinued operations attributable to noncontrolling interests, net of tax	—
Income from discontinued operations	$	124

There is no Power Solutions related activity for the three and nine months ended June 30, 2022 and the three months ended June 30, 2021.

Assets and Liabilities Held for Sale

During the third quarter of fiscal 2022, the Company determined that a business within the Building Solutions Asia Pacific segment met the criteria to be classified as held for sale. The assets and liabilities of this business are presented as held for sale in the consolidated statements of financial position as of June 30, 2022. Assets and liabilities held for sale are required to be 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". Accordingly, the Company has recorded total impairment charges of $60 million within restructuring and impairment costs in the consolidated statements of income to write down the disposal group to its estimated fair value, less costs to sell. The divestiture of the business held for sale could result in a gain or loss on sale to the extent the ultimate selling price differs from the current carrying value of the net assets recorded. The

10

Johnson Controls International plc

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

business did not meet the criteria to be classified as a discontinued operation as the divestiture of the business does not represent a strategic shift that will have a major effect on the Company's operations and financial results.

During the second quarter of 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 met the criteria to be classified as held for sale. The assets and liabilities of this business are presented as held for sale in the consolidated statements of financial position as of June 30, 2022. The carrying amount of any assets, including goodwill, that are part of the disposal group, but not in the scope of ASC 360-10, should be tested for impairment under the relevant guidance prior to measuring the disposal group at fair value, less cost to sell. Accordingly, the Company recorded a non-cash impairment charge of $235 million during the second quarter of fiscal 2022 within restructuring and impairment costs in the consolidated statements of income to write down the goodwill related to its North America Retail reporting unit. Refer to Note 8, "Goodwill and Other Intangible Assets," of the notes to the consolidated financial statements for further information regarding the goodwill impairment charges. Additionally, the Company recorded total impairment charges of $86 million within restructuring and impairment costs in the consolidated statements of income to write down the disposal group to its estimated fair value, less costs to sell. Refer to Note 18, "Impairment of Long-Lived Assets," of the notes to the consolidated financial statements for further information regarding the impairment charges. The divestiture of the business held for sale could result in a gain or loss on sale to the extent the ultimate selling price differs from the current carrying value of the net assets recorded, which could be material. The business did not meet the criteria to be classified as a discontinued operation as the divestiture of the business does not represent a strategic shift that will have a major effect on the Company's operations and financial results.

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

	June 30, 2022
Accounts receivable - net	$	198
Inventories	144
Other current assets	39
Current assets held for sale	$	381
Property, plant and equipment - net	$	88
Goodwill	22
Other intangible assets - net	517
Other noncurrent assets	58
Noncurrent assets held for sale	$	685
Accounts payable	$	138
Accrued compensation and benefits	24
Deferred revenue	43
Other current liabilities	40
Current liabilities held for sale	$	245
Other noncurrent liabilities	$	49
Noncurrent liabilities held for sale	$	49

During the third quarter of fiscal 2020, the Company determined that certain noncurrent assets of the Building Solutions Asia Pacific segment met the criteria to be classified as held for sale. The estimated fair value, less costs to sell, of these assets was $150 million at June 30, 2022 and $156 million at September 30, 2021.

11

Johnson Controls International plc

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

5.     Revenue Recognition

Disaggregated Revenue

The following tables present the Company's revenues disaggregated by segment and by Products & Systems and Services revenue (in millions):

	Three Months Ended June 30,
	2022						2021
	Products & Systems		Services		Total		Products & Systems		Services		Total
Building Solutions North America	$	1,481	$	945	$	2,426	$	1,355	$	857	$	2,212
Building Solutions EMEA/LA	537		415		952		507		494		1,001
Building Solutions Asia Pacific	493		172		665		413		290		703
Global Products	2,571		—		2,571		2,425		—		2,425
Total	$	5,082	$	1,532	$	6,614	$	4,700	$	1,641	$	6,341

	Nine Months Ended June 30,
	2022						2021
	Products & Systems		Services		Total		Products & Systems		Services		Total
Building Solutions North America	$	4,123	$	2,682	$	6,805	$	3,869	$	2,469	$	6,338
Building Solutions EMEA/LA	1,617		1,252		2,869		1,441		1,442		2,883
Building Solutions Asia Pacific	1,442		521		1,963		1,067		834		1,901
Global Products	6,937		—		6,937		6,154		—		6,154
Total	$	14,119	$	4,455	$	18,574	$	12,531	$	4,745	$	17,276

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

	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
HVAC	$	1,889	$	1,781	$	5,030	$	4,373
Fire & Security	610		580		1,732		1,605
Industrial Refrigeration	72		64		175		176
Total	$	2,571	$	2,425	$	6,937	$	6,154

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 relat