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 Johnson
Controls' future financial position, sales, costs, earnings, cash flows, other
measures of results of operations, synergies and integration opportunities,
capital expenditures and debt levels 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.
Johnson Controls cautions that these statements are subject to numerous
important risks, uncertainties, assumptions and other factors, some of which are
beyond Johnson Controls' control, that could cause Johnson Controls'
actual results to differ materially from those expressed or implied by such
forward-looking statements, including, among others, risks related to: Johnson
Controls' ability to manage general economic, business, capital market and
geopolitical conditions, including global price inflation; Johnson Controls'
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 strength of the U.S. or other
economies; changes or uncertainty in laws, regulations, rates, policies or
interpretations that impact Johnson Controls' business operations or tax status;
the ability to develop or acquire new products and technologies that achieve
market acceptance; changes to laws or policies governing foreign trade,
including increased tariffs or trade restrictions; maintaining the capacity,
reliability and security of Johnson Controls' enterprise and product information
technology infrastructure; the risk of infringement or expiration of
intellectual property rights; any delay or inability of Johnson Controls to
realize the expected benefits and synergies of recent portfolio transactions
such as its merger with Tyco and the disposition of the Power Solutions
business; the outcome of litigation and governmental proceedings; the ability to
hire and retain key senior management; the tax treatment of recent portfolio
transactions; significant transaction costs and/or unknown liabilities
associated with such transactions; the availability of raw materials and
component products; fluctuations in currency exchange rates; 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, 2020 filed with the
United States Securities and Exchange Commission ("SEC") on November 16, 2020,
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
diversified technology and multi industrial leader serving a wide range of
customers in more than 150 countries. The Company's products and solutions
enable smart, energy efficient, sustainable buildings that work seamlessly
together to advance the safety, comfort and intelligence of spaces to power its
customers' mission. The Company is committed to helping its customers win and
creating greater value for all of its stakeholders through its strategic focus
on buildings.

Johnson Controls was originally incorporated in the state of Wisconsin in 1885
as Johnson Electric Service Company to manufacture, install and service
automatic temperature regulation systems for buildings. The Company was renamed
to Johnson Controls, Inc. in 1974. In 2005, the Company acquired York
International, a global supplier of heating, ventilating, air-conditioning
("HVAC") and refrigeration equipment and services. In 2014, the Company acquired
Air Distribution Technologies, Inc., one of the largest independent providers of
air distribution and ventilation products in North America. In 2015, the Company
formed a joint venture with Hitachi to expand its building related product
offerings. In 2016, Johnson Controls, Inc. and Tyco completed their combination
(the "Merger"), combining Johnson Controls portfolio of building efficiency
solutions with Tyco's portfolio of fire and security solutions. Following the
Merger, Tyco changed its name to "Johnson Controls International plc."

                                       45
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In 2016, Johnson Controls completed the spin-off of its automotive business into
Adient plc, an independent, publicly traded company. In 2019, the Company sold
its Power Solutions business to BCP Acquisitions LLC, an entity controlled by
investment funds managed by Brookfield Capital Partners LLC, completing the
Company's transformation into a pure-play building technologies and solutions
provider.

The Company is a global leader in engineering, manufacturing and commissioning
building products and systems, including residential and commercial 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, repair,
retrofit and replacement of equipment (in the HVAC, security and fire-protection
space), energy-management consulting and data-driven "smart building" services
and solutions powered by its digital platforms and capabilities.

The Company continues to observe trends demonstrating increased interest and
demand for safe, efficient and sustainable buildings, and seeks to capitalize on
these trends to drive growth by developing and delivering technologies and
solutions to create healthy buildings. In 2020, the Company launched OpenBlue, a
digitally driven suite of connected solutions that delivers impactful
sustainability, new occupant experiences, and respectful safety and security by
combining the Company's building expertise with cutting-edge technology,
including AI-powered service solutions such as remote diagnostics, predictive
maintenance, compliance monitoring and advanced risk assessments. In January
2021, the Company committed to invest 75 percent of its new product research and
development in climate-related innovation to develop sustainable products and
services.

The following information should be read in conjunction with the September 30,
2020 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, 2020 filed with the SEC on November 16, 2020. References in the
following discussion and analysis to "Three Months" (or similar language) refer
to the three months ended June 30, 2021 compared to the three months ended
June 30, 2020, while "Year-to-Date" refers to the nine months ended June 30,
2021 compared to the nine months ended June 30, 2020.

Impact of COVID-19 pandemic



The global outbreak of COVID-19 severely restricted the level of economic
activity around the world and caused a significant contraction in the global
economy. The Company's affiliates, employees, suppliers, customers and others
have been and may continue to be restricted or prevented from conducting normal
business activities, including as a result of shutdowns, travel restrictions and
other actions that may be requested or mandated by governmental authorities.
Although shutdown orders and similar restrictions have been lifted in many
jurisdictions in conjunction with the global distribution of vaccines,
challenges in achieving sufficient vaccination levels and the spread of new
variants of COVID-19 have caused some governments to extend or reinstitute
restrictions in impacted areas. While a substantial portion of the Company's
businesses have been classified as essential businesses in jurisdictions in
which facility closures have been mandated, some of its facilities have at times
nevertheless been ordered to close, and we can give no assurance that there will
not be additional closures in the future or that the Company's businesses will
be classified as essential in each of the jurisdictions in which it operates.

In response to the challenges presented by COVID-19, the Company has focused its
efforts on preserving the health and safety of its employees and customers, as
well as maintaining the continuity of its operations. The Company modified its
business practices in response to the COVID-19 outbreak, including restricting
non-essential employee travel, implementation of remote work protocols, and
limiting physical participation in meetings, events and conferences. The Company
also instituted preventive measures at its facilities, including enhanced health
and safety protocols, temperature screening, requiring face coverings for all
unvaccinated employees and encouraging employees to follow similar protocols
when away from work. The Company has adopted a multifaceted framework to guide
its decision making as it reopens its offices and facilities to employees, and
will continue to monitor and audit its facilities to ensure that they are in
compliance with the Company's COVID-19 safety requirements.

The Company initially experienced a decline in demand and volumes in its global
businesses as a result of the impact of efforts to contain the spread of
COVID-19. Specifically, the Company experienced lower demand due to restricted
access to customer sites to perform service and installation work as well as
reduced discretionary capital spending by the Company's customers. In fiscal
2021, the Company has experienced increases in both demand and volumes as
governments have distributed vaccines and lifted COVID-19-related restrictions,
leading to increases in retrofit activity and, to a lesser extent, commercial
building construction. The global pandemic has also provided the Company with
the opportunity to help its customers prepare to re-open by delivering solutions
and support that enhance the safety and increase the efficiency of their
operations. As a result of the pandemic, the Company has seen an increase in
demand for its products and solutions that promote building health and
                                       46
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optimize customers' infrastructure, including thermal cameras, indoor air quality, location-based services for contact tracing and touchless access control.



However, the Company continues to be influenced by COVID-19 related trends
impacting site access, the labor force and the global supply chain, which have
and may continue to negatively impact the Company's revenues and margins.
Challenges in achieving sufficient vaccination levels to achieve herd immunity
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. In addition, the Company has
experienced, and expects to continue to experience, increased input material
costs and component shortages, as well as disruptions and delays in its supply
chain, as a result of government-mandated actions and increased demand. While
actions taken by the Company to mitigate supply chain issues, including
expanding and redistributing its supplier network, supplier financing, price
increases and productivity improvements, have generally been successful in
mitigating these trends, the Company could experience further disruptions,
shortages and price increases in the future.

In the third and fourth quarter of fiscal 2020, the Company executed temporary
and permanent cost mitigation actions to offset a portion of the impact of
COVID-19 on the demand for its products and services. As a result of these
actions, including the Company's 2020 restructuring plan, the Company
experienced a positive impact on its results of operations in the first half of
fiscal 2021, but the Company has experienced, and expects to experience, a
negative impact on its results of operations in the second half of fiscal 2021
as the temporary cost reduction actions reverse. Although the Company has
largely ceased temporary cost mitigation actions initiated in fiscal 2020, the
necessity of future cost mitigation actions will depend on the continued impact
of COVID-19, which is highly uncertain.

During portions of fiscal 2020, the Company experienced temporary reductions of its manufacturing and operating capacity, particularly in China, India and Mexico. Currently, the Company's facilities have been operating at normal levels.



During fiscal 2020, the Company determined that it had triggering events
requiring assessment of impairment for certain of its indefinite-lived
intangible assets due to declines in revenue directly attributable to the
COVID-19 pandemic and for certain of its indefinite-lived intangible assets,
long-lived assets and goodwill due to declines in revenue and further declines
in forecasted cash flows in its North America Retail reporting unit. As a
result, the Company recorded an impairment charge of $62 million related
primarily to the Company's retail business indefinite-lived intangible assets
and an impairment charge of $424 million related to the Company's North America
Retail reporting unit's goodwill. There were no triggering events requiring that
an impairment assessment be conducted for indefinite-lived intangible assets or
goodwill in the nine months ended June 30, 2021. However, it is possible that
future changes in circumstances, including a more prolonged and/or severe
COVID-19 pandemic, would require the Company to record additional non-cash
impairment charges.

The Company continues to actively monitor its liquidity position and working
capital needs. The Company believes that, following its implementation of
liquidity and cost mitigation actions in fiscal 2020, it remains in a solid
overall capital resources and liquidity position that is adequate to meet its
projected needs.

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, including the resurgence of
COVID-19 and its variants in regions recovering from the impacts of the
pandemic, the effectiveness of COVID-19 vaccines and the speed at which
populations are vaccinated around the globe, the impact of COVID-19 on economic
activity, and regulatory actions taken to contain its impact on public health
and the global economy. See Part I, Item 1A, of the Company's Annual Report on
Form 10-K for the year ended September 30, 2020 for an additional discussion of
risks related to COVID-19.

Restructuring and Cost Optimization Initiatives



To better align its resources with its growth strategies and reduce the cost
structure of its global operations in certain underlying markets, the Company
has committed to various restructuring plans. In fiscal 2021, the Company
announced its plans to optimize its cost structure through broad-based SG&A
actions focused on simplification, standardization and centralization, with the
intent to deliver annualized savings of $300 million by fiscal 2023.
Additionally, the Company announced cost of sales actions to drive $250 million
in annual run rate savings by fiscal 2023. For more information on the Company's
restructuring plans, see "Liquidity and Capital Resources-Restructuring".
                                       47
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Net Sales
                       Three Months Ended                          Nine Months Ended
                            June 30,                                   June 30,
(in millions)           2021            2020        Change        2021           2020        Change

Net sales         $    6,341          $ 5,343         19  %    $  17,276      $ 16,363          6  %



The increase in consolidated net sales for the three months ended June 30, 2021
was due to higher organic sales ($803 million), the favorable impact of foreign
currency translation ($165 million) and incremental sales from acquisitions ($90
million), partially offset by lower sales due to business divestitures ($57
million) and the impact of nonrecurring purchase accounting adjustments ($3
million). Excluding the impact of foreign currency translation, business
acquisitions and divestitures and nonrecurring adjustments, consolidated net
sales increased 15% as compared to the prior year, primarily attributable to the
increased demand generated by the COVID-19 pandemic recovery. Refer to the
"Segment Analysis" below within this Item 2 for a discussion of net sales by
segment.

The increase in consolidated net sales for the nine months ended June 30, 2021
was due to higher organic sales ($617 million), the favorable impact of foreign
currency translation ($390 million) and incremental sales from acquisitions
($103 million), partially offset by lower sales due to business divestitures
($194 million) and the impact of nonrecurring purchase accounting adjustments
($3 million). Excluding the impact of foreign currency translation, business
acquisitions and divestitures and nonrecurring adjustments, consolidated net
sales increased 4% as compared to the prior year, primarily attributable to the
increased demand generated by the COVID-19 pandemic recovery. Refer to the
"Segment Analysis" below within this Item 2 for a discussion of net sales by
segment.

Cost of Sales / Gross Profit


                              Three Months Ended                        Nine Months Ended
                                   June 30,                                  June 30,
        (in millions)         2021           2020        Change        2021

2020 Change



        Cost of sales     $   4,144       $ 3,511          18  %    $ 11,408       $ 10,927           4  %
        Gross profit          2,197         1,832          20  %       5,868          5,436           8  %
        % of sales             34.6  %       34.3  %                    34.0  %        33.2  %



Cost of sales and gross profit increased for the three month period ended
June 30, 2021, and gross profit as a percentage of sales increased by 30 basis
points. Gross profit increased due to organic sales growth, business
acquisitions and favorable year-over-year impact of net pension mark-to-market
adjustments ($34 million), partially offset by business divestitures. Foreign
currency translation had an unfavorable impact on cost of sales of approximately
$111 million. Refer to the "Segment Analysis" below within this Item 2 for a
discussion of segment earnings before interest, taxes and amortization ("EBITA")
by segment.

Cost of sales and gross profit increased for the nine month period ended
June 30, 2021, and gross profit as a percentage of sales increased by 80 basis
points. Gross profit increased due to organic sales growth, favorable
year-over-year impact of net pension mark-to-market adjustments ($83 million)
and business acquisitions, partially offset by business divestitures. Foreign
currency translation had an unfavorable impact on cost of sales of approximately
$269 million. Refer to the "Segment Analysis" below within this Item 2 for a
discussion of segment EBITA by segment.

                                       48
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Selling, General and Administrative Expenses


                                    Three Months Ended                                         Nine Months Ended
                                         June 30,                                                   June 30,
(in millions)                     2021              2020               Change                2021              2020               Change

Selling, general and
administrative
   expenses                   $   1,367          $  1,334                     2  %       $   3,914          $  4,212                    -7  %
% of sales                         21.6  %           25.0  %                                  22.7  %           25.7  %



Selling, general and administrative expenses ("SG&A") for the three month period
ended June 30, 2021 increased $33 million, and SG&A as a percentage of sales
decreased by 340 basis points. The increase in SG&A was primarily due to prior
year temporary cost mitigation actions and the unfavorable impact of foreign
currency translation, partially offset by favorable year-over-year impact of net
mark-to-market adjustments on pension plans ($179 million). Foreign currency
translation had an unfavorable impact on SG&A of $36 million. Refer to the
"Segment Analysis" below within this Item 2 for a discussion of segment EBITA by
segment.

SG&A for the nine month period ended June 30, 2021 decreased $298 million, and
SG&A as a percentage of sales decreased by 300 basis points. The decrease in
SG&A was primarily due to favorable year-over-year impact of net mark-to-market
adjustments on pension plans ($337 million) and favorable impacts of cost
mitigation actions and reductions in discretionary spend in the current year,
partially offset by an unfavorable impact of foreign currency translation.
Foreign currency translation had an unfavorable impact on SG&A of $88 million.
Refer to the "Segment Analysis" below within this Item 2 for a discussion of
segment EBITA by segment.

Restructuring and Impairment Costs


                                  Three Months Ended                                         Nine Months Ended
                                       June 30,                                                   June 30,
(in millions)                   2021              2020               Change                2021              2020               Change

Restructuring and
impairment costs            $      79          $    610                   -87  %       $     175          $    783                   -78  %



Refer to Note 10, "Significant Restructuring and Impairment Costs," of the notes
to consolidated financial statements and "Restructuring" below within this
Item 2 for further disclosure related to the Company's restructuring plans and
impairment costs.

Net Financing Charges
                                Three Months Ended                             Nine Months Ended
                                     June 30,                                      June 30,
 (in millions)                    2021              2020      Change            2021            2020       Change

 Net financing charges   $       56                $ 58         -3  %    $     159             $ 169         -6  %



Refer to Note 13, "Debt and Financing Arrangements," of the notes to consolidated financial statements for further disclosure related to the Company's net financing charges.


                                       49
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Equity Income
                         Three Months Ended                             Nine Months Ended
                              June 30,                                      June 30,
(in millions)              2021              2020      Change            2021            2020       Change

Equity income     $       74                $ 47         57  %    $     188             $ 110         71  %



The increase in equity income for the three months ended June 30, 2021 was
primarily due to higher income at certain partially-owned affiliates of the
Johnson Controls - Hitachi joint venture. Foreign currency translation had a
favorable impact on equity income of $4 million for the three months ended
June 30, 2021. Refer to the "Segment Analysis" below within this Item 2 for a
discussion of segment EBITA by segment.

The increase in equity income for the nine months ended June 30, 2021 was
primarily due to higher income at certain partially-owned affiliates of the
Johnson Controls - Hitachi joint venture. Foreign currency translation had a
favorable impact on equity income of $8 million for the nine months ended
June 30, 2021. Refer to the "Segment Analysis" below within this Item 2 for a
discussion of segment EBITA by segment.

Income Tax Provision


                                Three Months Ended                                           Nine Months Ended
                                     June 30,                                                     June 30,
(in millions)                 2021               2020              Change               2021                    2020              Change

Income tax provision
(benefit)                 $     108           $     (1)                     *       $     378                $     77                      *
Effective tax rate               14   %              1  %                                  21   %                  20  %


* Measure not meaningful

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 June 30, 2021, the
Company's effective tax rate for continuing operations was 14% 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. For the nine months
ended June 30, 2021, the Company's effective tax rate for continuing operations
was 21% and was higher than the statutory tax rate of 12.5% primarily due to
valuation allowance adjustments, the income tax effects of mark-to-market
adjustments and tax rate differentials, partially offset by the benefits of
continuing global tax planning initiatives. For the three months ended June 30,
2020, the Company's effective tax rate for continuing operations was 1% and was
lower than the statutory tax rate of 12.5% primarily due to tax audit reserve
adjustments, the income tax effects of mark-to-market adjustments and the
benefits of continuing global tax planning initiatives, partially offset by the
tax impact of an impairment charge and tax rate differentials. For the nine
months ended June 30, 2020, the Company's effective tax rate for continuing
operations was 20% and was higher than the statutory tax rate of 12.5% primarily
due to a discrete tax charge related to the remeasurement of deferred tax assets
and liabilities as a result of Swiss tax reform, the tax impact of an impairment
charge and tax rate differentials, partially offset by tax audit reserve
adjustments, the income tax effects of mark-to-market adjustments and the
benefits of continuing global tax planning initiatives. The effective tax rate
for the nine months ended June 30, 2021 increased as compared to the nine months
ended June 30, 2020 primarily due to the discrete tax items. Refer to Note 11,
"Income Taxes," of the notes to consolidated financial statements for further
detail.

                                       50
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Income From Discontinued Operations, Net of Tax


                                   Three Months Ended                                          Nine Months Ended
                                        June 30,                                                    June 30,
(in millions)                   2021                2020              Change                2021                 2020              Change


Income from discontinued
operations, net of tax      $        -          $       -                      *       $        124          $       -                      *


* Measure not meaningful

Refer to Note 4, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding the Company's discontinued operations.

Income Attributable to Noncontrolling Interests


                                    Three Months Ended                                          Nine Months Ended
                                         June 30,                                                    June 30,
(in millions)                     2021               2020               Change                2021              2020               Change

Income from continuing
operations attributable to
noncontrolling interests      $       87          $     60                    45  %       $     186          $    115                    62  %


The increase in income from continuing operations attributable to noncontrolling
interests for the three and nine months ended June 30, 2021 was primarily due to
higher net income at certain partially-owned affiliates within the Global
Products segment.

Net Income (Loss) Attributable to Johnson Controls


                                  Three Months Ended                                          Nine Months Ended
                                       June 30,                                                    June 30,
(in millions)                   2021              2020              Change                  2021                 2020              Change

Net income (loss)
attributable to Johnson
Controls                    $     574          $   (182)                     *       $     1,368              $    190                      *


* Measure not meaningful

The increase in net income attributable to Johnson Controls for the three months
ended June 30, 2021 was primarily due to lower restructuring and impairment
costs and higher gross profit, partially offset by higher income tax provision.
The increase in net income attributable to Johnson Controls for the nine months
ended June 30, 2021 was primarily due to lower restructuring and impairment
costs, higher gross profit, lower SG&A and the current year income from
discontinued operations, partially offset by higher income tax provision.

Diluted earnings (loss) per share attributable to Johnson Controls for the three
months ended June 30, 2021 was $0.80 compared to $(0.24) for the three months
ended June 30, 2020. Diluted earnings per share attributable to Johnson Controls
for the nine months ended June 30, 2021 was $1.89 compared to $0.25 for the nine
months ended June 30, 2020.

Comprehensive Income (Loss) Attributable to Johnson Controls


                                     Three Months Ended                                           Nine Months Ended
                                          June 30,                                                     June 30,
(in millions)                      2021              2020              Change                   2021                  2020              Change

Comprehensive income (loss)
attributable to Johnson
Controls                       $     633          $   (104)                     *       $      1,793               $     42                      *


                                       51

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* Measure not meaningful



The increase in comprehensive income attributable to Johnson Controls for the
three months ended June 30, 2021 was due to higher net income attributable to
Johnson Controls ($756 million), partially offset by a decrease in other
comprehensive income attributable to Johnson Controls ($19 million) resulting
primarily from the realized and unrealized losses on derivatives.

The increase in comprehensive income attributable to Johnson Controls for the
nine months ended June 30, 2021 was due to higher net income attributable to
Johnson Controls ($1,178 million) and an increase in other comprehensive income
attributable to Johnson Controls ($573 million) resulting primarily from
favorable currency translation adjustments. The year-over-year favorable foreign
currency translation adjustments were primarily driven by the strengthening of
the British pound, Canadian dollar and Mexican peso against the U.S. dollar in
the current year.

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                                           Nine Months Ended
                                           June 30,                                                     June 30,
(in millions)                       2021                2020               Change                2021              2020               Change

Building Solutions North
America                       $    2,212             $  2,020                    10  %       $   6,338          $  6,362                     -  %
Building Solutions EMEA/LA           962                  756                    27  %           2,765             2,534                     9  %
Building Solutions Asia
Pacific                              712                  588                    21  %           1,930             1,742                    11  %
Global Products                    2,455                1,979                    24  %           6,243             5,725                     9  %
                              $    6,341             $  5,343                    19  %       $  17,276          $ 16,363                     6  %



Three Months:

•The increase in Building Solutions North America was due to higher volumes
($171 million) and the favorable impact of foreign currency translation ($21
million). The increase in volumes was primarily attributable to the increased
demand generated by the COVID-19 pandemic recovery.

•The increase in Building Solutions EMEA/LA was due to higher volumes ($140
million), the favorable impact of foreign currency translation ($56 million) and
incremental sales related to business acquisitions ($10 million). The increase
in volumes was primarily attributable to the increased demand generated by the
COVID-19 pandemic recovery.

•The increase in Building Solutions Asia Pacific was due to favorable volumes
($86 million) and the favorable impact of foreign currency translation ($41
million), partially offset by business divestitures ($3 million). The increase
in volumes was primarily attributable to the increased demand generated by the
COVID-19 pandemic recovery.

•The increase in Global Products was due to favorable volumes ($406 million),
incremental sales related to business acquisitions ($80 million) and the
favorable impact of foreign currency translation ($47 million), partially offset
by business divestitures ($54 million) and the impact of nonrecurring purchase
accounting adjustments ($3 million). The increase in volumes was primarily
attributable to the increased demand generated by the COVID-19 pandemic
recovery.

                                       52
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Year-to-Date:



•The decrease in Building Solutions North America was due to lower volumes ($61
million), partially offset by the favorable impact of foreign currency
translation ($37 million). The decrease in volumes was primarily attributable to
the unfavorable impact of the COVID-19 pandemic in the first half of the year.

•The increase in Building Solutions EMEA/LA was due to the favorable impact of
foreign currency translation ($119 million), higher volumes ($89 million) and
incremental sales related to business acquisitions ($23 million). The increase
in volumes was primarily attributable to the COVID-19 pandemic recovery.

•The increase in Building Solutions Asia Pacific was due to the favorable impact
of foreign currency translation ($99 million) and favorable volumes ($96
million), partially offset by business divestitures ($7 million). The increase
in volumes was primarily attributable to the COVID-19 pandemic recovery.

•The increase in Global Products was due to favorable volumes ($493 million),
the favorable impact of foreign currency translation ($135 million) and
incremental sales related to business acquisitions ($80 million), partially
offset by business divestitures ($187 million) and the impact of nonrecurring
purchase accounting adjustments ($3 million). The increase in volumes was
primarily attributable to the COVID-19 pandemic recovery.

Segment EBITA
                                       Three Months Ended                                              Nine Months Ended
                                            June 30,                                                       June 30,
(in millions)                        2021                  2020               Change                2021               2020               Change

Building Solutions North
America                       $       326               $    307                     6  %       $      847          $    816                     4  %
Building Solutions EMEA/LA            103                     62                    66  %              284               237                    20  %
Building Solutions Asia
Pacific                                84                     92                    -9  %              237               229                     3  %
Global Products                       507                    378                    34  %            1,005               797                    26  %
                              $     1,020               $    839                    22  %       $    2,373          $  2,079                    14  %



Three Months:

•The increase in Building Solutions North America was due to favorable volumes
and productivity savings, net of prior year temporary cost mitigation actions
($13 million), prior year integration costs ($4 million) and the favorable
impact of foreign currency translation ($2 million).

•The increase in Building Solutions EMEA/LA was due to favorable volumes ($34
million), the favorable impact of foreign currency translation ($4 million),
higher equity income ($2 million) and higher income due to business acquisitions
($1 million).

•The decrease in Building Solutions Asia Pacific was due to prior year temporary
cost mitigation actions, net of favorable volumes ($12 million) and lower income
due to business divestitures ($1 million), partially offset by the favorable
impact of foreign currency translation ($5 million).

•The increase in Global Products was due to favorable volumes and productivity
savings, net of prior year temporary cost mitigation actions ($97 million),
higher equity income ($19 million) driven primarily by certain partially-owned
affiliates of the Johnson Controls - Hitachi joint venture, the favorable impact
of foreign currency translation ($11 million), prior year integration costs ($7
million) and incremental income related to business acquisitions ($4 million),
partially offset by Silent-Aire transaction costs and nonrecurring purchase
accounting adjustments ($7 million) and lower income due to business
divestitures ($2 million).

Year-to-Date:

•The increase in Building Solutions North America was due to productivity savings, net of unfavorable volumes ($23 million), prior year integration costs ($5 million) and the favorable impact of foreign currency translation ($3 million).


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•The increase in Building Solutions EMEA/LA was due to productivity savings and favorable volumes ($40 million), the favorable impact of foreign currency translation ($5 million) and higher income due to business acquisitions ($3 million), partially offset by lower equity income ($1 million).



•The increase in Building Solutions Asia Pacific was due to the favorable impact
of foreign currency translation ($11 million), partially offset by lower income
due to business divestitures ($2 million) and prior year temporary cost
mitigation actions, net of productivity savings and favorable volumes ($1
million).

•The increase in Global Products was due to favorable volumes and productivity
savings, net of prior year temporary cost mitigation actions ($131 million),
higher equity income ($64 million) driven primarily by certain partially-owned
affiliates of the Johnson Controls - Hitachi joint venture, the favorable impact
of foreign currency translation ($22 million), prior year integration costs ($8
million) and incremental income related to business acquisitions ($4 million),
partially offset by lower income due to business divestitures ($14 million) and
Silent-Aire transaction costs and nonrecurring purchase accounting adjustments
($7 million).

Backlog

The Company's backlog is applicable to its sales of systems and services. At
June 30, 2021, the backlog was $10.5 billion, of which $10.0 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 June 30, 2021, remaining performance obligations were $15.6 billion, which is
$5.1 billion higher than the Company's backlog of $10.5 billion. Differences
between the Company's remaining performance obligations and backlog are
primarily due to:

•Remaining performance obligations include large, multi-purpose contracts to
construct hospitals, schools and other governmental buildings, which are
services to be performed over the building's lifetime with initial contract
terms of 25 to 35 years for the entire term of the contract versus backlog which
includes only the lifecycle period of these contracts which approximates five
years;
•The Company has elected to exclude from remaining performance obligations
certain contracts with customers with a term of one year or less or contracts
that are cancelable without substantial penalty while these contracts are
included within backlog; and
•Remaining performance obligations include the full remaining term of service
contracts with substantial termination penalties versus backlog which includes
one year for all outstanding service contracts.

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


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Liquidity and Capital Resources



Working Capital
                                            June 30,      September 30,
(in millions)                                 2021             2020           Change

Current assets                             $ 10,310      $       10,053
Current liabilities                          (9,285)             (8,248)
                                              1,025               1,805        -43  %

Less: Cash                                   (1,450)             (1,951)
Add: Short-term debt                            265                  31
Add: Current portion of long-term debt          196                 262

Working capital (as defined)               $     36      $          147        -76  %

Accounts receivable - net                  $  5,668      $        5,294          7  %
Inventories                                   2,064               1,773         16  %
Accounts payable                              3,719               3,120         19  %



•The Company defines working capital as current assets less current liabilities,
excluding cash, short-term debt, the current portion of long-term debt, and the
current portions of 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 decrease in working capital at June 30, 2021 as compared to September 30,
2020, was primarily due to an increase in accounts payable and accrued
compensation and benefits liabilities, partially offset by an increase in
inventory to meet anticipated customer demand, an increase in accounts
receivable, and the favorable resolution of certain post-closing working capital
and net debt adjustments related to the Power Solutions sale.

•The Company's days sales in accounts receivable at June 30, 2021 and
September 30, 2020 were 61 days and 63 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 June 30, 2021 were lower than the comparable period ended September 30, 2020, primarily due to changes in inventory production levels.

•Days in accounts payable at June 30, 2021 were 77 days, higher than 69 days at the comparable period ended September 30, 2020, primarily due to timing.


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