Income Tax Provision

Year Ended
September 30,

(in millions) 2016 2015 Change
Income tax provision $ 2,238
$ 600
*
Effective tax rate 141 % 28 %

* Measure not meaningful



	Year Ended September 30,
(in millions)	2018			2017			Change
Income tax provision	$	518		$	705		-27	%
Effective tax rate	18		%	28		%

The ~~U.S. federal~~ statutory tax rate in Ireland is being used as a comparison since the Company ~~was a U.S.~~is domiciled ~~company~~ in ~~fiscal 2015 and for11 months of 2016.~~Ireland. The effective rate is above the ~~U.S.~~ statutory rate of 12.5% for fiscal ~~2016~~2018 primarily due to the discrete net impacts of U.S. Tax Reform, final income tax ~~consequences surrounding the planned spin-off~~effects of the ~~Automotive Experience business and related expenses, the jurisdictional mix of restructuring and impairment costs, and the tax impacts~~completed divestiture of the ~~merger~~Scott Safety business, legal entity restructuring associated with the Power Solutions business, valuation allowance adjustments and ~~integration related costs,~~tax rate differentials, partially offset by the benefits of continuing global tax planning initiatives, tax audit closures and ~~foreign~~ tax ~~rate differentials.~~benefits due to changes in entity tax status. The effective rate is ~~below~~above the ~~U.S.~~ statutory rate of 12.5% for fiscal ~~2015~~2017 primarily due to the establishment of a deferred tax liability on the outside basis difference of the Company's investment in certain subsidiaries related to the divestiture of the Scott Safety business, the income tax effects of pension mark-to-market gains and tax rate differentials, partially offset by the jurisdictional mix of significant restructuring and impairment costs, Tyco Merger transaction and integration costs, purchase accounting adjustments, tax audit closures, a tax benefit due to changes in entity tax status and the benefits of continuing global tax planning initiatives, income in certain non-U.S. jurisdictions with a tax rate lower than the U.S. statutory tax rate and adjustments due to tax audit resolutions, partially offset by the tax consequences of business divestitures, and significant restructuring and impairment costs.initiatives. The fiscal ~~2016~~2018 effective tax rate ~~increased~~decreased as compared to the fiscal ~~2015~~2017 effective tax rate primarily due to ~~the~~discrete tax ~~effects of transactions predominantly due to the planned spin-off ($1,795 million),~~items and ~~the tax effects of restructuring and impairment costs ($74 million), partially offset by~~ tax planning ~~initiatives ($151 million).~~initiatives. The fiscal year ~~2016~~2018 and ~~2015~~2017 global tax planning initiatives related primarily to foreign tax credit planning, changes in entity tax status, global financing structures and alignment of ~~our~~the Company's global business functions in a tax efficient manner. Refer to Note 18, "Income Taxes," of the notes to consolidated financial statements for further details.

Valuation Allowances

In the fourth quarter of fiscal ~~2016,~~2018, the Company performed an analysis related to the realizability of its worldwide deferred tax assets. As a result, and after considering feasible tax planning initiatives and other positive and negative evidence, the Company determined that ~~no other material changes were needed to its~~it was more likely than not that certain deferred tax assets primarily within Germany would not be realized. Therefore, the Company recorded $56 million of valuation ~~allowances. Therefore, there was no impact to~~allowances as income tax expense ~~due to valuation allowance changes~~ in the three month period ~~or year~~ ended September 30, ~~2016.~~2018.

In the fourth quarter of fiscal ~~2015,~~2017, the Company performed an analysis related to the realizability of its worldwide deferred tax assets. As a result, and after considering tax planning initiatives and other positive and negative evidence, the Company determined that it was more likely than not that certain deferred tax assets primarily ~~within Spain, Germany,~~in Canada, China and ~~the United Kingdom~~Mexico would not be able to be realized, and it was more likely than not that certain deferred tax assets ~~of Poland and~~in Germany would be realized. ~~The impact~~Therefore, the Company recorded $27 million of ~~the~~ net valuation ~~allowance provision offset the benefit of valuation allowance releases and,~~allowances as ~~such, there was no net impact to~~ income tax expense in the three month period ~~or year~~ ended September 30, ~~2015.~~2017.

Uncertain Tax Positions

The Company is subject to income taxes in the U.S. and numerous ~~foreign~~non-U.S. jurisdictions. Judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities.

During fiscal ~~2015,~~2018, the Company settled tax examinations impacting fiscal years 2010 to fiscal 2012 which resulted in a $25 million net benefit to income tax expense.

During fiscal 2017, the Company settled a significant number of tax examinations ~~in Germany, Mexico and the U.S.,~~ impacting fiscal years ~~1998~~2006 to fiscal 2012. The settlement of unrecognized tax benefits included cash payments for approximately $440 million and the loss of various tax attributes. The reduction for tax positions of prior years is substantially related to foreign exchange rates.2014. In the fourth quarter of fiscal ~~2015,~~2017, income tax audit resolutions resulted in a net ~~$99~~$191 million benefit to income tax expense.

The Company’s federal income tax returns and certain non-U.S. income tax returns for various fiscal years remain under various stages of audit by the ~~Internal Revenue Service ("IRS")~~IRS and respective non-U.S. tax authorities. Although the outcome of tax audits is always uncertain,

management believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provisions included amounts sufficient to pay assessments, if any, which may be proposed by the taxing authorities. At September 30, ~~2016,~~2018, the Company had recorded a liability for its best estimate of the probable loss on certain of its tax positions, the majority of which is included in other noncurrent liabilities in the consolidated statements of financial position. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.

Other Tax Matters

In the fourth quarter of fiscal 2018, the Company recorded a tax benefit of $139 million due to changes in entity tax status.

In the fourth quarter of fiscal 2018, the Company recorded a tax charge of $129 million due to legal entity restructuring associated with the Power Solutions business.

In the first quarter of fiscal 2018, the Company completed the sale of its Scott Safety business to 3M Company. In connection with the sale, the Company recorded a pre-tax gain of $114 million and income tax expense of $30 million. In addition, during fiscal 2017, the Company recorded a discrete non-cash tax charge of $490 million related to establishment of a deferred tax liability on the outside basis difference of the Company's investment in certain subsidiaries of the Scott Safety business. Refer to Note 3, "Acquisitions and Divestitures," and Note 4, "Discontinued Operations," of the notes to consolidated financial statements for additional information.

During fiscal ~~2016~~2018 and ~~2015,~~2017, the Company recorded transaction and integration costs of $234 million and $428 million, respectively. These costs generated tax benefits of $27 million and $69 million, respectively, which reflects the Company’s current tax position in these jurisdictions.

During fiscal 2018 and 2017, the Company incurred significant charges for restructuring and impairment ~~costs.~~costs of $263 million and $367 million, respectively. Refer to Note 16, "Significant Restructuring and Impairment Costs," of the notes to consolidated financial statements for additional information. ~~A substantial portion~~These costs generated tax benefits of ~~these charges cannot be benefited for tax purposes due to~~$38 million and $63 million, respectively, which reflects the ~~Company's~~Company’s current tax position in these ~~jurisdictions and the underlying tax basis in the impaired assets, resulting in $126 million and $52 million incremental tax expense in fiscal 2016 and 2015, respectively.~~jurisdictions.

During fiscal 2018 and 2017, the Company recorded pension mark-to-market gains of $10 million and $420 million, respectively. These gains generated tax expense (benefit) of $(3) million and $126 million, respectively, which reflects the Company’s current tax position in these jurisdictions.

In the fourth quarter of fiscal ~~2016,~~2017, the Company ~~completed its merger with Tyco. As~~recorded a ~~result~~tax charge of ~~that transaction,~~$53 million due to a change in the ~~Company incurred incremental~~deferred tax ~~expense~~liability related to the outside basis of ~~$137 million.~~ certain nonconsolidated subsidiaries.

In ~~preparation for the spin-off of the Automotive Experience business in~~ the first quarter of fiscal 2017, the Company ~~incurred incremental~~recorded a discrete tax ~~expense~~benefit of ~~$121~~$101 million in fiscal 2016. The Company also completed substantial business reorganizations which resulted in total tax charges of $1,891 million in fiscal 2016. Included in this amount is the tax charge provided for in the third quarter of fiscal 2016 of $85 million fordue to changes in entity tax ~~status and the charge provided for in the second quarter of fiscal 2016 of $780 million for income tax expense on foreign undistributed earnings of certain non-U.S. subsidiaries.~~

In the fourth quarter of fiscal 2015, the Company completed its global automotive interiors joint venture with Yanfeng Automotive Trim Systems. Refer to Note 3, "Acquisitions and Divestitures," of the notes to consolidated financial statements for additional information. In connection with the divestiture of the Interiors business, the Company recorded a pre-tax gain on divestiture of $145 million, $38 million net of tax. The tax impact of the gain is due to the jurisdictional mix of gains and losses on the divestiture, which resulted in non-benefited expenses in certain countries and taxable gains in other countries. In addition, in the third and fourth quarters of fiscal 2015, the Company provided income tax expense for repatriation of cash and other tax reserves associated with the Automotive Experience Interiors joint venture transaction, which resulted in a tax charge of $75 million and $223 million, respectively.status.

Impacts of Tax Legislation and Change in Statutory Tax Rates

~~After~~On December 22, 2017, the ~~fourth quarter~~“Tax Cuts and Jobs Act” (H.R. 1) was enacted and significantly revises U.S. corporate income tax by, among other things, lowering corporate income tax rates, imposing a one-time transition tax on deemed repatriated earnings of ~~fiscal 2016, on October 13, 2016, the U.S. Treasury~~non-U.S. subsidiaries, and ~~the IRS released final~~implementing a territorial tax system and temporary Section 385 regulations. These regulations address whether certain instruments between related parties are treated as debt or equity. The Company does not expect that the regulations will have a material impact on its consolidated financial statements.various base erosion minimum tax provisions.

~~The "look-through rule," under subpart F~~In connection with the Company’s analysis of the impact of the U.S. ~~Internal Revenue Code, expired for the Company on September 30, 2015. The "look-through rule" had provided an exception~~tax law changes, which is provisional and subject to the U.S. taxation of certain income generated by foreign subsidiaries. The rule was extended in December 2015 retroactive to the beginning of the Company’s 2016 fiscal year. The retroactive extension was signed into legislation and was made permanent through the Company's 2020 fiscal year.

~~In the second quarter of fiscal 2015, tax legislation was adopted in Japan which reduced its statutory income tax rate. As a result of the law~~ change, the Company recorded ~~income~~a net tax ~~expense~~charge of ~~$17~~$108 million during fiscal 2018. This provisional net tax charge arises from a benefit of $108 million due to the remeasurement of U.S. deferred tax assets and liabilities, offset by the Company’s tax charge relating to the one-time transition tax on deemed repatriated earnings, inclusive of all relevant taxes, of $216 million. The Company’s estimated benefit of the remeasurement of U.S. deferred tax assets and liabilities increased from $101 million as of December 31, 2017 to $108 million as of September 30, 2018 due to calculation refinement of the Company’s estimated impact. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the ~~second quarter~~future. The Company’s tax charge for transition tax decreased from $305 million as of ~~fiscal 2015.~~December 31, 2017 to $216 million as of September 30, 2018 due to further analysis of the Company’s post-1986 non-U.S. earnings and profits (“E&P”) previously deferred from U.S. federal taxation and refinement of the estimated impact of tax law changes.

Based on the effective dates of certain aspects of the U.S. tax law changes, various applicable impacts of the enacted legislation could not be finalized as of September 30, 2018. While the Company made reasonable estimates of the impact of the transition tax, the final impact of the U.S. tax law changes may differ from these estimated impacts, due to, future treasury regulations, tax

law technical corrections, notices, rulings, refined computations, and other items. The Company will finalize such provisional amounts within the time period prescribed by Staff Accounting Bulletin 118.

During the fiscal years ended ~~2016~~2018 and ~~2015,~~2017, other tax legislation was adopted in various jurisdictions. These law changes did not have a material impact on the Company's consolidated financial statements.

~~Income~~Loss From Discontinued Operations, Net of Tax


	Year Ended September 30,					Year Ended September 30,
(in millions)	2016		2015		Change	2018		2017			Change
Income from discontinued operations, net of tax	$	—	$	128	*
Loss from discontinued operations, net of tax						$	—	$	(34	)	*

Net Income ~~(Loss)~~ Attributable to Johnson Controls

Year Ended
September 30,

(in millions) 2016 2015 Change
Net income (loss) attributable to Johnson Controls $ (868 ) $ 1,563
*

* Measure not meaningful



	Year Ended September 30,
(in millions)	2018		2017		Change
Net income attributable to Johnson Controls	$	2,162	$	1,611	34	%

The ~~decrease~~increase in net income ~~(loss)~~ attributable to Johnson Controls was primarily due to ~~an increase in the~~lower income tax provision ~~higher SG&A primarily~~ due to higher ~~separation and transaction costs~~discrete period net tax charges in the ~~current~~prior year, ~~and current year~~lower SG&A, lower restructuring and impairment costs, ~~partially offset by~~lower net financing charges and higher gross profit. Fiscal ~~2016~~2018 diluted earnings ~~(loss)~~ per share attributable to Johnson Controls was ~~($1.30)~~$2.32 compared to ~~$2.36~~$1.71 in fiscal ~~2015.~~2017.

Comprehensive Income ~~(Loss)~~ Attributable to Johnson Controls

Year Ended
September 30,

(in millions) 2016 2015 Change
Comprehensive income (loss) attributable to
Johnson Controls
$ (964 ) $ 743
*

* Measure not meaningful



	Year Ended September 30,
(in millions)	2018		2017		Change
Comprehensive income attributable to Johnson Controls	$	1,689	$	1,710	-1	%

The decrease in comprehensive income ~~(loss)~~ attributable to Johnson Controls was due to ~~lower net~~a decrease in other comprehensive income ~~(loss)~~ attributable to Johnson Controls ($~~2,431~~572 million), resulting primarily from unfavorable foreign currency translation adjustments, partially offset by ~~a decrease in other comprehensive loss~~higher net income attributable to Johnson Controls ($~~724~~551 million) ~~primarily related to favorable foreign currency translation adjustments.~~. These year-over-year ~~favorable~~unfavorable foreign currency translation adjustments were primarily driven by the weakening of the ~~Brazilian real, Canadian dollar, Colombian peso,~~British pound and euro ~~and Japanese~~ currencies against the U.S. ~~dollar in the prior year.~~dollar.

~~SEGMENT ANALYSIS~~

Management evaluates the performance of its business units based primarily on segment EBIT, which is defined as income from continuing operations before income taxes and noncontrolling interests excluding net financing charges, significant restructuring and impairment costs, and net mark-to-market adjustments on pension and postretirement plans.

~~Buildings~~Net Income Attributable to Johnson Controls

Net Sales
for the Year Ended
September 30,

Segment EBIT
for the Year Ended
September 30,

(in millions) 2016 2015 Change 2016 2015 Change
Building Efficiency
     Systems and Service North America $ 4,292
$ 4,184
3 % $ 412
$ 375
10 %
     Products North America 2,488
2,450
2 % 173
306
-43 %
     Asia 4,830
1,985
*
431
191
*
     Rest of World 1,766
1,891
-7 % 20
51
-61 %
13,376
10,510
27 % 1,036
923
12 %
Tyco 808
—
*
(17 ) —
*
$ 14,184
$ 10,510
35 % $ 1,019
$ 923
10 %

* Measure not meaningful

~~Net Sales:~~



	Year Ended September 30,
(in millions)	2018		2017		Change
Net income attributable to Johnson Controls	$	2,162	$	1,611	34	%

The increase in ~~Systems and Service North America~~net income attributable to Johnson Controls was primarily due to lower income tax provision due to higher ~~volumes of controls systems~~discrete period net tax charges in the prior year, lower SG&A, lower restructuring and ~~service ($183 million), partially offset by~~impairment costs, lower ~~volumes related to business divestitures ($52 million)~~net financing charges and ~~the unfavorable impact of foreign currency translation ($23 million). The increase in volumes was primarily~~higher gross profit. Fiscal 2018 diluted earnings per share attributable to ~~market share gains.~~Johnson Controls was $2.32 compared to $1.71 in fiscal 2017.

~~The increase in Products North America was due~~Comprehensive Income Attributable to ~~higher volumes ($49 million), partially offset by the unfavorable impact of foreign currency translation ($11 million). The increase in volumes was primarily driven by new product offerings.~~Johnson Controls

The increase in Asia was due to incremental sales related to the JCH joint venture ($2,808 million), higher service volumes ($56 million), and higher volumes of equipment and control systems ($30 million), partially offset by the unfavorable impact of foreign currency translation ($49 million). The increase in volume was driven by favorable local economic conditions.



	Year Ended September 30,
(in millions)	2018		2017		Change
Comprehensive income attributable to Johnson Controls	$	1,689	$	1,710	-1	%

The decrease in ~~Rest of World~~comprehensive income attributable to Johnson Controls was due to ~~the~~a decrease in other comprehensive income attributable to Johnson Controls ($572 million) resulting primarily from unfavorable ~~impact of~~ foreign currency translation ($80 million) and lower volumes in Latin America ($22 million), Europe ($16 million) and the Middle East ($14 million), partially offset by incremental sales related to a business acquisition ($7 million). The net decrease in volumes was primarily attributable to unfavorable local market conditions and the discontinuance of certain products.

~~The increase in Tyco was due to incremental sales related to the Tyco Merger ($808 million).~~

~~Segment EBIT:~~

The increase in Systems and Service North America was due to lower selling, general and administrative expenses ($63 million) as a result of restructuring actions and other cost reduction initiatives and a current year gain on business divestiture net of a prior year gain on business divestitures, higher volumes ($42 million), and prior year transaction and integration costs ($4 million), partially offset by current year transaction costs ($53 million), unfavorable margin rates ($8 million), lower income due to a prior year business divestiture ($5 million), the unfavorable impact of foreign currency translation ($4 million) and a pension settlement loss ($2 million).

The decrease in Products North America was due to higher selling, general and administrative expenses ($118 million)due to global product and related sales force investments and a prior year gain on business divestitures, current year transaction costs ($30 million), unfavorable margin rates ($6 million), a pension settlement loss ($3 million) and the unfavorable impact of foreign currency translation ($1 million),adjustments, partially offset by higher ~~volumes~~net income attributable to Johnson Controls ($16551 million)~~, prior year transaction and integration costs ($8 million), and higher equity income ($1 million)~~.

The increase in Asia was due primarily to incremental operating income related to the JCH joint venture exclusive of global investments in related products and technologies ($293 million), higher volumes ($29 million), prior year transaction and integration costs ($24 million), and lower selling, general and administrative expenses ($2 million), partially offset by current year transaction and integration costs ($87 million), These year-over-year unfavorable ~~margin rates ($12 million) and the unfavorable impact of~~ foreign currency translation ~~($9 million).~~

The decrease in Rest of World was due to current year transaction costs ($21 million), lower volumes ($13 million), higher selling, general and administrative expenses ($5 million), unfavorable margin rates ($3 million), lower equity income ($3 million) andadjustments were primarily driven by the unfavorable impact of foreign currency translation ($3 million), partially offset by a gain on business divestiture ($12 million), a gain on acquisition of a partially-owned affiliate ($4 million) and prior year transaction costs ($1 million).

The Tyco loss was due to the impact of nonrecurring purchasing accounting adjustments ($74 million) and current year transaction costs ($29 million), partially offset by incremental operating income for the period subsequent to the Merger ($86 million).

~~Automotive Experience~~

Net Sales
for the Year Ended
September 30,

Segment EBIT
for the Year Ended
September 30,

(in millions) 2016 2015 Change 2016 2015 Change
Seating $ 16,355
$ 16,539
-1 % $ 676
$ 928
-27 %
Interiors 482
3,540
-86 % 75
254
-70 %
$ 16,837
$ 20,079
-16 % $ 751
$ 1,182
-36 %

~~Net Sales:~~

The decrease in Seating was due to the unfavorable impact of foreign currency translation ($402 million), and net unfavorable pricing and commercial settlements ($142 million), partially offset by higher volumes ($341 million) and incremental sales related to a prior year business acquisition ($19 million). The higher volumes were attributable to growth in Asia and Europe, partially offset by softness in the Americas due to changes in automotive production levels and expiring programs in North America.

~~The decrease in Interiors was due to the deconsolidation~~weakening of the ~~majority of~~British pound and euro currencies against the Interiors business in the prior year ($2,954 million), lower volumes primarily due to plant wind downs ($87 million), the unfavorable impact of foreign currency translation ($9 million), and net unfavorable pricing and commercial settlements ($8 million).

~~Segment EBIT:~~

The decrease in Seating was due to current year separation costs related to the Automotive Experience spin-off ($458 million), net unfavorable pricing and commercial settlements ($33 million), unfavorable mix due to lower volumes at higher margin platforms ($26 million), the unfavorable impact of foreign currency translation ($16 million), a prior year gain on a business divestiture ($10 million) and a pension settlement loss ($5 million), partially offset by lower operating costs as a result of restructuring actions and operational efficiencies ($74 million), lower selling, general and administrative expenses as a result of a favorable legal settlement and cost reduction initiatives ($54 million), lower purchasing costs resulting from supplier price concessions ($46 million), higher equity income ($37 million), higher volumes ($35 million), lower engineering expenses ($32 million), prior year separation costs ($16 million) and incremental operating income related to a business acquisition ($2 million).

The decrease in Interiors was due to a prior year net gain on a business divestiture ($145 million), the impact of the July 2, 2015 joint venture transaction and related prior year held for sale depreciation impact ($109 million), lower volumes ($12 million), net unfavorable pricing and commercial settlements ($7 million), current year integration costs ($1 million) and the unfavorable impact of foreign currency translation ($1 million), partially offset by prior year transaction and integration costs ($38 million), favorable settlements related to prior year business divestitures ($22 million), lower selling, general and administrative expenses as a result of cost reduction initiatives ($21 million), lower operating costs ($10 million) and higher equity income ($5 million).U.S. dollar.

~~Power Solutions~~

Year Ended
September 30,

(in millions) 2016 2015 Change
Net sales $ 6,653
$ 6,590
1 %
Segment EBIT 1,253
1,153
9 %

Net sales increased due to higher sales volumes ($246 million), and favorable pricing and product mix ($105 million), partially offset by the unfavorable impact of foreign currency translation ($180 million) and the impact of lower lead costs on pricing ($108 million). The increase in volumes was primarily driven by start-stop battery volumes and growth in China. Additionally, higher start-stop volumes contributed to favorable product mix.

Segment EBIT increased due to higher volumes ($77 million), favorable pricing and product mix ($55 million), and lower selling, general and administrative expenses due to lower employee related expenses and cost reduction initiatives ($55 million), partially offset by higher operating costs primarily driven by efforts to increase supply to satisfy growing customer

demand and launch new capacity in China ($48 million), the unfavorable impact of foreign currency translation ($29 million), restructuring and impairment costs included in equity income ($7 million), a pension settlement loss ($1 million), transaction costs ($1 million) and lower equity income ($1 million).

~~FISCAL YEAR 2015 COMPARED TO FISCAL YEAR 2014~~

~~Net Sales~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Net sales $ 37,179
$ 38,749
-4 %

The decrease in consolidated net sales was due to the unfavorable impact of foreign currency translation ($2.5 billion) and lower sales in the Automotive Experience business ($344 million), partially offset by higher sales in the Building Efficiency business ($839 million) and Power Solutions business ($408 million). Excluding the unfavorable impact of foreign currency translation, consolidated net sales increased 2% as compared to the prior year. The favorable impacts of higher Automotive Experience volumes globally, incremental sales related to the prior year acquisition of ADTi in the Building Efficiency business, higher Building Efficiency volumes in North America and the Middle East markets, and higher global battery shipments and favorable product mix in the Power Solutions business, were partially offset by the deconsolidation of the majority of the Automotive Experience Interiors business on July 2, 2015. The incremental sales related to business acquisitions were $751 million across the Building Efficiency and Automotive Experience segments. Refer to the segment analysis below within Item 7 for a discussion of net sales by segment.

~~Cost of Sales / Gross Profit~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Cost of sales $ 30,732
$ 32,444
-5 %
Gross profit 6,447
6,305
2 %
% of sales 17.3 % 16.3 %

The decrease in cost of sales year over year corresponds to the sales decrease described above. Foreign currency translation had a favorable impact on cost of sales of approximately $2.2 billion. Gross profit in the Building Efficiency business was favorably impacted by incremental gross profit related to the ADTi acquisition, favorable margin rates, prior year contract related charges in the Middle East and higher market demand in North America. Gross profit in the Power Solutions business was favorably impacted by higher volumes and lower operating costs. Gross profit in the Automotive Experience business was favorably impacted by higher volumes globally, lower purchasing costs and favorable commercial settlements, partially offset by higher operating costs and unfavorable mix. Net mark-to-market adjustments on pension and postretirement plans had a net unfavorable year over year impact on cost of sales of $113 million ($156 million charge in fiscal 2015 compared to a $43 million charge in fiscal 2014) primarily due to unfavorable U.S. investment returns versus expectations and the adoption of new mortality rate changes in the U.S. in the current year. Refer to the segment analysis below within Item 7 for a discussion of segment EBIT by segment.

~~Selling, General and Administrative Expenses~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Selling, general and administrative expenses $ 3,986
$ 4,216
-5 %
% of sales 10.7 % 10.9 %

Selling, general and administrative expenses (SG&A) decreased by $230 million year over year, and SG&A as a percentage of sales decreased 20 basis points. Net mark-to-market adjustments on pension and postretirement plans had a net unfavorable year over year impact on SG&A of $72 million ($266 million charge in fiscal 2015 compared to a $194 million charge in fiscal 2014) primarily due to unfavorable U.S. investment returns versus expectations and the adoption of new mortality rate changes in the U.S. in the current year. The Automotive Experience business SG&A decreased primarily due to gains on business divestitures, a prior year net loss on business divestitures, lower engineering expenses and lower employee related costs, partially offset by

transaction, integration and separation costs. The Building Efficiency business SG&A increased primarily due to incremental SG&A related to the prior year acquisition of ADTi, current year transaction and integration costs, and higher investments. The Power Solutions business SG&A increased primarily due to higher employee related expenses. Foreign currency translation had a favorable impact on SG&A of $189 million. Refer to the segment analysis below within Item 7 for a discussion of segment EBIT by segment.

~~Restructuring and Impairment Costs~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Restructuring and impairment costs $ 397
$ 324
23 %

~~Refer to Note 16, "Significant Restructuring and Impairment Costs," of the notes to consolidated financial statements for further disclosure related to the Company's restructuring plans.~~

~~Net Financing Charges~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Net financing charges $ 288
$ 244
18 %

~~Net financing charges increased in fiscal 2015 as compared to fiscal 2014 primarily due to higher average borrowing levels related to the acquisition of ADTi and the share repurchase program.~~

~~Equity Income~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Equity income $ 375
$ 395
-5 %

The decrease in equity income was primarily due to prior year gains on acquisitions of partially-owned affiliates in the Power Solutions business ($19 million) and Building Efficiency business ($19 million), partially offset by higher current year income at certain Automotive Experience partially-owned affiliates. Refer to the segment analysis below within Item 7 for a discussion of segment EBIT by segment.

~~Income Tax Provision~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Income tax provision $ 600
$ 407
47 %
Effective tax rate 28 % 21 %

The effective rate is below the U.S. statutory rate for fiscal 2015 primarily due to the benefits of continuing global tax planning initiatives, income in certain non-U.S. jurisdictions with a tax rate lower than the U.S. statutory tax rate and adjustments due to tax audit resolutions, partially offset by the tax consequences of business divestitures, and significant restructuring and impairment costs. The effective rate is below the U.S. statutory rate for fiscal 2014 primarily due to the benefits of continuing global tax planning initiatives and income in certain non-U.S. jurisdictions with a tax rate lower than the U.S. statutory tax rate partially offset by the tax consequences of business divestitures, significant restructuring and impairment costs, and valuation allowance adjustments. The fiscal 2015 effective tax rate increased as compared to the fiscal 2014 effective tax rate primarily due to the tax effects of business divestitures ($283 million), partially offset by reserve and valuation allowance adjustments ($133 million). The fiscal year 2015 and 2014 global tax planning initiatives related primarily to foreign tax credit planning, global financing structures and alignment of our global business functions in a tax efficient manner. Refer to Note 18, "Income Taxes," of the notes to consolidated financial statements for further details.

~~Valuation Allowances~~

In the fourth quarter of fiscal 2015, the Company performed an analysis related to the realizability of its worldwide deferred tax assets. As a result, and after considering tax planning initiatives and other positive and negative evidence, the Company determined that it was more likely than not that certain deferred tax assets primarily within Spain, Germany and the United Kingdom would not be realized and it is more likely than not that certain deferred tax assets of Poland and Germany will be realized. The impact of the net valuation allowance provision offset the benefit of valuation allowance releases and, as such, there was no net impact to income tax expense in the three month period ended September 30, 2015.

In the fourth quarter of fiscal 2014, the Company performed an analysis related to the realizability of its worldwide deferred tax assets. As a result, and after considering tax planning initiatives and other positive and negative evidence, the Company determined that it was more likely than not that deferred tax assets within Italy would not be realized. Therefore, the Company recorded $34 million of net valuation allowances as income tax expense in the three month period ended September 30, 2014.

In the first quarter of fiscal 2014, the Company determined that it was more likely than not that the deferred tax asset associated with a capital loss in Mexico would not be utilized. Therefore, the Company recorded a $21 million valuation allowance as income tax expense.

~~Uncertain Tax Positions~~

The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities.

During fiscal 2015, the Company settled a significant number of tax examinations in Germany, Mexico and the U.S., impacting fiscal years 1998 to fiscal 2012. The settlement of unrecognized tax benefits included cash payments for approximately $440 million and the loss of various tax attributes. The reduction for tax positions of prior years is substantially related to foreign exchange rates. In the fourth quarter of fiscal 2015, income tax audit resolutions resulted in a net $99 million benefit to income tax expense.

The Company’s federal income tax returns and certain non-U.S. income tax returns for various fiscal years remain under various stages of audit by the IRS and respective non-U.S. tax authorities. Although the outcome of tax audits is always uncertain, management believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provisions included amounts sufficient to pay assessments, if any, which may be proposed by the taxing authorities. At September 30, 2015, the Company had recorded a liability for its best estimate of the probable loss on certain of its tax positions, the majority of which is included in other noncurrent liabilities in the consolidated statements of financial position. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.

~~Other Tax Matters~~

During fiscal 2015 and 2014, the Company incurred significant charges for restructuring and impairment costs. Refer to Note 16, "Significant Restructuring and Impairment Costs," of the notes to consolidated financial statements for additional information. A substantial portion of these charges cannot be benefited for tax purposes due to our current tax position in these jurisdictions and the underlying tax basis in the impaired assets, resulting in $52 million and $75 million incremental tax expense in fiscal 2015 and 2014, respectively.

fourth quarters of fiscal 2015, the Company provided income tax expense for repatriation of foreign cash and other tax reserves associated with the Automotive Experience Interiors joint venture transaction, which resulted in a tax charge of $75 million and $223 million, respectively.

~~During the fourth quarter of fiscal 2014, the Company recorded a discrete tax benefit of $51 million due to change in entity status.~~

In the third quarter of fiscal 2014, the Company disposed of its Automotive Experience Interiors headliner and sun visor product lines. Refer to Note 3, "Acquisitions and Divestitures," of the notes to consolidated financial statements for additional information. As a result, the Company recorded a pre-tax loss on divestiture of $95 million and income tax expense of $38 million. The income tax expense is due to the jurisdictional mix of gains and losses on the sale, which resulted in non-benefited losses in certain countries and taxable gains in other countries.

~~Impacts of Tax Legislation and Change in Statutory Tax Rates~~

The "look-through rule," under subpart F of the U.S. Internal Revenue Code, expired for the Company on September 30, 2015. The "look-through rule" had provided an exception to the U.S. taxation of certain income generated by foreign subsidiaries. The “look-through rule” previously expired for the Company on September 30, 2014 but was extended retroactively to the beginning of the Company’s 2015 fiscal year.

In the second quarter of fiscal 2015, tax legislation was adopted in Japan which reduced its statutory income tax rate. As a result of the law change, the Company recorded income tax expense of $17 million in the second quarter of fiscal 2015. Tax legislation was also adopted in various other jurisdictions during the fiscal year ended September 30, 2015. These law changes did not have a material impact on the Company's consolidated financial statements.

As a result of changes to Mexican tax law in the first quarter of fiscal 2014, the Company recorded a benefit to income tax expense of $25 million. Tax legislation was also adopted in various other jurisdictions during the fiscal year ended September 30, 2014. These law changes did not have a material impact on the Company's consolidated financial statements.

~~Income (Loss) From Discontinued Operations, Net of Tax~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Income (loss) from discontinued operations,
net of tax
$ 128
$ (166 ) *

* Measure not meaningful

~~Refer to Note 4, "Discontinued Operations," of the notes to consolidated financial statements for further information.~~

~~Income Attributable to Noncontrolling Interests~~

Year Ended
September 30,

(in millions) 2015 2014 Change
Income from continuing operations attributable
to noncontrolling interests
$ 112
$ 105
7 %
Income from discontinued operations
attributable to noncontrolling interests
4
23
-83 %

~~The increase in income from continuing operations attributable to noncontrolling interests for fiscal 2015 was primarily due to higher income at a Power Solutions partially-owned affiliate.~~

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

Net Income Attributable to Johnson Controls


	Year Ended September 30,						Year Ended September 30,
(in millions)	2015		2014		Change		2018		2017		Change
Net income attributable to Johnson Controls	$	1,563	$	1,215	29	%	$	2,162	$	1,611	34	%

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ~~(U.S. GAAP)~~("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 following policies are considered by management to be the most critical in understanding the judgments that are involved in the preparation of the Company’s consolidated financial statements and the uncertainties that could impact the Company’s results of operations, financial position and cash flows.

Revenue Recognition

The ~~Buildings~~Building Technologies & Solutions business recognizes revenue from certain long-term contracts over the contractual period under the ~~POC~~percentage-of-completion ("POC") method of accounting. This method of accounting recognizes sales and gross profit as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Recognized revenues that will not be billed under the terms of the contract until a later date are recorded primarily in accounts receivable. Likewise, contracts where billings to date have exceeded recognized revenues are recorded primarily in ~~other current liabilities.~~deferred revenue. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed monthly. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and contract values. Estimated losses are recorded when identified. Claims against customers are recognized as revenue upon settlement. The use of the POC method of accounting involves considerable use of estimates in determining revenues, costs and profits and in assigning the amounts to accounting periods. The periodic reviews have not resulted in adjustments that were significant to the Company’s results of operations. The Company continually evaluates all of the assumptions, risks and uncertainties inherent with the application of the POC method of accounting.

The ~~Buildings~~Building Technologies & Solutions business enters into extended warranties and long-term service and maintenance agreements with certain customers. For these arrangements, revenue is recognized on a straight-line basis over the respective contract term.

The ~~Buildings~~Building Technologies & Solutions business also sells certain heating, ventilating and air conditioning ~~(HVAC)~~("HVAC") and refrigeration products and services in bundled arrangements, where multiple products and/or services are involved. Significant deliverables within these arrangements include equipment, commissioning, service labor and extended warranties. Approximately four to twelve months separate the timing of the first deliverable until the last piece of equipment is delivered, and there may be extended warranty arrangements with duration of one to five years commencing upon the end of the standard warranty period. In addition, the Buildings business sells security monitoring systems that may have multiple elements, including equipment, installation, monitoring services and maintenance agreements. Revenues associated with sale of equipment and related installations are recognized once delivery, installation and customer acceptance is completed, while the revenue for monitoring and maintenance services are recognized as services are rendered. In accordance with ASU No. 2009-13, "Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements - A Consensus of the FASB Emerging Issues Task Force," the Company divides bundled arrangements into separate deliverables and revenue is allocated to each deliverable based on the relative selling price method. In order to estimate relative selling price, market data and transfer price studies are utilized. Revenue recognized for security monitoring equipment and installation is limited to the lesser of their allocated amounts under the estimated selling price hierarchy or the non-contingent up-front consideration received at the time of installation, since collection of future amounts under the arrangement with the customer is contingent upon the delivery of monitoring and maintenance services. For transactions in which the Company retains ownership of the subscriber system asset, fees for monitoring and maintenance services are recognized on a straight-line basis over the contract term. Non-refundable fees received in connection with the initiation of a monitoring contract, along with associated direct and incremental selling costs, are deferred and amortized over the estimated life of the customer relationship.

In all other cases, the Company recognizes revenue at the time title passes to the customer or as services are performed.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable net assets acquired. The Company reviews goodwill for impairment during the fourth fiscal quarter or more frequently if events or changes in circumstances indicate the asset might be impaired. The Company performs impairment reviews for its reporting units, which have been determined to be the Company’s reportable segments or one level below the reportable segments in certain instances, using a fair value method based on management’s judgments and assumptions or third party valuations. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. In estimating the fair value, the Company uses multiples of earnings based on the average of ~~historical,~~ published multiples of earnings of comparable entities with similar operations and economic ~~characteristics.~~characteristics and applies to the Company's average of historical and future financial results. In certain instances, the Company uses discounted cash flow analyses or estimated sales price to further support the fair value estimates. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. The Company is subject to financial statement risk to the extent that the carrying amount exceeds the estimated fair value. During the fourth quarter of fiscal 2018, the Company changed the date of its annual goodwill impairment test from September 30 to July 31. The change was made to more closely align the impairment testing date with the Company’s long-term planning and forecasting process. The change in the annual impairment testing date did not delay, accelerate or avoid an impairment charge. The Company has determined this change in accounting principle is preferable and does not result in adjustments to the Company’s financial statements when applied retrospectively. Refer to Note 7, "Goodwill and Other Intangible Assets," of the notes to consolidated financial statements for information regarding the goodwill impairment testing performed in the fourth quarters of fiscal years ~~2016, 2015~~2018, 2017 and ~~2014.~~2016.

Indefinite-lived intangible assets are also subject to at least annual impairment testing. Indefinite-lived intangible assets consist of trademarks and tradenames and are tested for impairment using a relief-from-royalty method. A considerable amount of management judgment and assumptions are required in performing the impairment tests.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including tangible assets and other intangible assets with ~~definite~~definitive lives, for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived ~~Assets.~~Assets," ASC 350-30, "General Intangibles Other than Goodwill" and ASC 985-20, "Costs of software to be sold, leased, or marketed." ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. ASC 350-30 requires intangible assets acquired in a business combination that are used in research and development activities be considered indefinite lived until the completion or abandonment of the associated research and development efforts. During the period that those assets are considered indefinite lived, they shall not be amortized but shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If the carrying amount of an intangible asset exceeds its fair value, an entity shall recognize an impairment loss in an amount equal to that excess. ASC 985-20 requires the unamortized capitalized costs of a computer software product be compared to the net realizable value of that product. The amount by which the unamortized capitalized costs of a computer software product exceed the net realizable value of that asset shall be written off. Refer to Note 17, "Impairment of Long-Lived Assets," of the notes to consolidated financial statements for information regarding the impairment testing performed in fiscal years ~~2016, 2015~~2018, 2017 and ~~2014.~~2016.

Employee Benefit Plans

The Company provides a range of benefits to its employees and retired employees, including pensions and postretirement benefits. Plan assets and obligations are measured annually, or more frequently if there is a significant remeasurement event, based on the Company’s measurement date utilizing various actuarial assumptions such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates as of that date. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when appropriate.

The Company utilizes a mark-to-market approach for recognizing pension and postretirement benefit expenses, including measuring the market related value of plan assets at fair value and recognizing actuarial gains and losses in the fourth quarter of each fiscal year or at the date of a remeasurement event. Refer to Note 15, "Retirement Plans," of the notes to consolidated financial statements for disclosure of the Company's pension and postretirement benefit plans.

U.S. GAAP requires that companies recognize in the statement of financial position a liability for defined benefit pension and postretirement plans that are underfunded or unfunded, or an asset for defined benefit pension and postretirement plans that are overfunded. U.S. GAAP also requires that companies measure the benefit obligations and fair value of plan assets that determine a benefit plan’s funded status as of the date of the employer’s fiscal year end.

The Company considers the expected benefit payments on a plan-by-plan basis when setting assumed discount rates. As a result, the Company uses different discount rates for each plan depending on the plan jurisdiction, the demographics of participants and the expected timing of benefit payments. For the U.S. pension and postretirement plans, the Company uses a discount rate provided by an independent third party calculated based on an appropriate mix of high quality bonds. For the non-U.S. pension and postretirement plans, the Company consistently uses the relevant country specific benchmark indices for determining the various discount rates. The Company’s weighted average discount rate on U.S. pension plans was ~~3.70%~~4.10% and ~~4.40%~~3.80% at September 30, ~~2016~~2018 and ~~2015,~~2017, respectively. The Company’s weighted average discount rate on postretirement plans was ~~3.30%~~3.80% and ~~3.75%~~3.70% at September 30, ~~2016~~2018 and ~~2015,~~2017, respectively. The Company’s weighted average discount rate on non-U.S. pension plans was ~~1.90%~~2.45% and ~~3.15%~~2.40% at September 30, ~~2016~~2018 and ~~2015~~2017, respectively.

At September 30, 2015, the Company changed the method used to estimate the service and interest components of net periodic benefit cost for pension and other postretirement benefits for plans that utilize a yield curve approach. This change compared to the previous method will result in different service and interest components of net periodic benefit cost (credit) in future periods. Historically, the Company estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. The Company elected to utilize a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of the total benefit obligations or annual net periodic benefit cost (credit) as the change in the service and interest costs is completely offset in the net actuarial (gain) loss reported. The change in the service and interest costs was not significant. The Company has accounted for this change as a change in accounting estimate.

In estimating the expected return on plan assets, the Company considers the historical returns on plan assets, adjusted for forward-looking considerations, inflation assumptions and the impact of the active management of the plans’ invested assets. Reflecting the relatively long-term nature of the plans’ obligations, approximately ~~47%~~35% of the plans’ assets are invested in ~~fixed income~~equity securities and ~~41%~~56% in ~~equity~~fixed income securities, with the remainder primarily invested in alternative investments. For the years ending September 30, ~~2016~~2018 and ~~2015~~2017, the Company’s expected long-term return on U.S. pension plan assets used to determine net periodic benefit cost was 7.50%. The actual rate of return on U.S. pension plans was below 7.50% in fiscal year 2018 and above 7.50% in fiscal ~~2016 and was below 7.50% in~~

~~fiscal 2015.~~year 2017. For the years ending September 30, ~~2016~~2018 and ~~2015,~~2017, the Company’s weighted average expected long-term return on non-U.S. pension plan assets was ~~4.50%.~~5.35% and 4.60%, respectively. The actual rate of return on non-U.S. pension plans was ~~above 4.50%~~below 5.35% in fiscal ~~2016~~year 2018 and ~~approximated 4.50%~~above 4.60% in ~~2015.~~fiscal year 2017. For the years ending September 30, ~~2016~~2018 and ~~2015,~~2017, the Company’s weighted average expected long-term return on postretirement plan assets was ~~5.45%~~5.65% and ~~5.75%~~5.60%, respectively. The actual rate of return on postretirement plan assets was ~~above 5.45%~~below 5.65% in fiscal ~~2016~~year 2018 and ~~was below 5.75%~~above 5.60% in fiscal ~~2015.~~year 2017.

Beginning in fiscal ~~2017~~2019, the Company believes the long-term rate of return will approximate ~~7.50%~~7.10%, ~~3.40%~~5.20% and ~~5.60%~~5.65% for U.S. pension, non-U.S. pension and postretirement plans, respectively. Any differences between actual investment results and the expected long-term asset returns will be reflected in net periodic benefit costs in the fourth quarter of each fiscal ~~year.~~year or at the date of a significant remeasurement event. If the Company’s actual returns on plan assets are less than the Company’s expectations, additional contributions may be required.

In fiscal ~~2016,~~2018, total employer contributions to the defined benefit pension plans were ~~$136~~$53 million, of which ~~$34~~$18 million were voluntary contributions made by the Company. The Company expects to contribute approximately ~~$326~~$85 million in cash to its defined benefit pension plans in fiscal ~~2017including $247 million due to change-in-control provisions triggered by the Tyco merger.~~2019. In fiscal ~~2016,~~2018, total employer ~~and employee~~ contributions to the postretirement plans were $7$4 million. The Company expects to contribute approximately $4$15 million in cash to its postretirement plans in fiscal ~~2017.~~2019.

Based on information provided by its independent actuaries and other relevant sources, the Company believes that the assumptions used are reasonable; however, changes in these assumptions could impact the Company’s financial position, results of operations or cash flows.

Loss Contingencies

Accruals are recorded for various contingencies including legal proceedings, environmental matters, self-insurance and other claims that arise in the normal course of business. The accruals are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarially determined estimates. Additionally, the Company records receivables from third party insurers when recovery has been determined to be probable.

The Company is subject to laws and regulations relating to protecting the environment. The Company provides for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Refer to Note ~~23,~~22, "Commitments and Contingencies," of the notes to consolidated financial statements.

Asbestos-Related Contingencies and Insurance Receivables

The Company and certain of its subsidiaries along with numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. 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 ~~2069~~2068 (which is the Company's reasonable best estimate of the actuarially determined time period through which asbestos-related claims will be filed against Company affiliates). 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 made through ~~2069.~~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.

In connection with the recognition of liabilities for asbestos-related matters, the Company records asbestos-related insurance recoveries that are probable. The Company's estimate of asbestos-related insurance recoveries represents estimated amounts due to the Company for previously paid and settled claims and the probable reimbursements relating to its estimated liability for pending and future claims discounted to present value. In determining the amount of insurance recoverable, the Company considers available

insurance, allocation methodologies, solvency and creditworthiness of the insurers. Refer to Note ~~23,~~22, "Commitments and Contingencies," of the notes to consolidated financial statements for a discussion on management's judgments applied in the recognition and measurement of asbestos-related assets and liabilities.

Product Warranties

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 of 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. At September 30, ~~2016~~2018, the Company had recorded ~~$396~~$392 million of warranty reserves for continuing operations, including extended warranties for which deferred revenue is recorded. 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. Refer to Note 21, "Guarantees," of the notes to consolidated financial statements for disclosure of the Company's product warranty liabilities.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes." Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and other loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance that primarily represents non-U.S. operating and other loss carryforwards for which realization is uncertain. Management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against the Company’s net deferred tax assets. In calculating the provision for income taxes on an interim basis, 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 the actual results as compared to those forecasted at the beginning of the fiscal year.

The Company reviews the realizability of its deferred tax asset valuation allowances 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. At September 30, ~~2016,~~2018, the Company had a valuation allowance of ~~$3,564 million,~~$5.2 billion for continuing operations, of which ~~$3,067 million~~$4.5 billion relates to net operating loss carryforwards primarily in Australia, Belgium, Brazil, China, France, Luxembourg, Spain, Switzerland ~~Luxembourg~~ and the United Kingdom for which sustainable taxable income has not been demonstrated; and ~~$497~~$700 million for other deferred tax assets.

The Company is subject to income taxes in the U.S. and numerous non-U.S. jurisdictions. Judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities. At September 30, ~~2016,~~2018, the Company had unrecognized tax benefits of ~~$1,836 million.~~$2.4 billion.

The Company does not generally provide additional U.S. or non-U.S. income taxes on outside basis differences of consolidated subsidiaries included in shareholders’ equity attributable to Johnson ~~Controls.~~Controls International plc, except in limited circumstances including anticipated taxation on planned divestitures. The reduction of the outside basis differences via the sale or liquidation of these subsidiaries and/or distributions could create taxable income. The Company’s intent is to reduce the outside basis differences only when it would be tax efficient. Refer to "Capitalization" within the "Liquidity and Capital Resources" section for discussion of U.S. and non-U.S. cash projections.

Refer to Note 18, "Income Taxes," of the notes to consolidated financial statements for the Company's income tax disclosures.

NEW ACCOUNTING PRONOUNCEMENTS

~~Recently Adopted~~Refer to the "New Accounting ~~Pronouncements~~

~~In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification~~Pronouncements" section within Note 1, "Summary of Deferred Taxes." ASU No. 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in the consolidated statements of financial position. During the quarter ended December 31, 2015, the Company early adopted ASU No. 2015-17 and applied the change retrospectively to all periods presented.

In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU No. 2014-08 limits discontinued operations reporting to situations where the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and requires expanded disclosures for discontinued operations. ASU No. 2014-08 was effective for the Company for the quarter ended December 31, 2015. The adoption of this guidance did not have any impact on the Company's consolidated financial statements as there were no dispositions or disposals during the quarter ended December 31, 2015.

~~Recently Issued~~Significant Accounting ~~Pronouncements~~

~~In October 2016, the FASB issued ASU No. 2016-17, "Consolidations (Topic 810): Interests Held through Related Parties that are under Common Control.~~Policies," The ASU changes how a single decision maker of a variable interest entity (VIE) that holds indirect interest in the entity through related parties that are under common control determines whether it is the primary beneficiary of the ~~VIE. The new guidance amends ASU 2015-02, "Consolidation (Topic 810): Amendments~~notes to the Consolidation Analysis" issued in February 2015. The guidance should be applied coincidentally with the adoption of ASU 2015-02, which is effective for the Company for the quarter ending December 31, 2016. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, "Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory". The ASU requires the tax effects of all intra-entity sales of assets other than inventory to be recognized in the period in which the transaction occurs. The guidance will be effective for the Company for the quarter ending December 31, 2018 with early adoption permitted but only in the first interim period of a fiscal year. The changes are required to be applied by means of a cumulative-effect adjustment recorded in retained earnings as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." ASU No. 2016-15 provides clarification guidance on eight specific cash flow presentation issues in order to reduce the diversity in practice. ASU No. 2016-15 will be effective for the Company for the quarter ending December 31, 2018, with early adoption permitted. The guidance should be applied retrospectively to all periods presented, unless deem impracticable, in which case prospective application is permitted. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU No. 2016-13 changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts. Available-for-sale debt securities with unrealized losses will now be recorded through an allowance for credit losses. ASU No. 2016-13 will be effective for the Company for the quarter ended December 31, 2020, with early adoption permitted for the quarter ended December 31, 2019. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU No. 2016-09 impacts certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statements of cash flows. ASU No. 2016-09 will be effective for the Company for the quarter ending December 31, 2017, with early adoption permitted. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, "Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting." ASU No. 2016-07 eliminates the requirement for an investment that qualifies for the use of the equity method of accounting as a result of an increase in the level of ownership or degree of influence to adjust the investment, results of operations and retained earnings retrospectively. ASU No. 2016-07 will be effective prospectively for the Company for increases in the level of ownership interest or degree of influence that result in the adoption of the equity method that occur during or after the quarter ending December 31, 2017, with early adoption permitted. The impact of this guidance for the Company is dependent on any future increases in the level of ownership interest or degree of influence that result in the adoption of the equity method.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU No. 2016-02 requires recognition of operating leases as lease assets and liabilities on the balance sheet, and disclosure of key information about leasing arrangements. ASU No.

2016-02 will be effective retrospectively for the Company for the quarter ending December 31, 2019, with early adoption permitted. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU No. 2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 will be effective for the Company for the quarter ending December 31, 2018, and early adoption is not permitted, with certain exceptions. The changes are required to be applied by means of a cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory." ASU No. 2015-11 requires inventory that is recorded using the first-in, first-out method to be measured at the lower of cost or net realizable value. ASU No. 2015-11 will be effective prospectively for the Company for the quarter ending December 31, 2017, with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In May 2015, the FASB issued ASU No. 2015-07, "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." ASU No. 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Such investments should be disclosed separate from the fair value hierarchy. ASU No. 2015-07 will be effective retrospectively for the Company for the quarter ending December 31, 2016, with early adoption permitted. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements but will impact pension asset disclosures.

In April 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. ASU No. 2015-03 will be effective retrospectively for the Company for the quarter ending December 31, 2016, with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU No. 2015-02 amends the analysis performed to determine whether a reporting entity should consolidate certain types of legal entities. The ASU No. 2015-02 was amended by ASU No. 2016-17, "Consolidations (Topic 810): Interests Held through Related Parties that are under Common Control," issued in October 2016. ASU No. 2015-02 will be effective retrospectively for the Company for the quarter ending December 31, 2016, with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2014-09 clarifies the principles for recognizing revenue when an entity either enters into a contract with customers to transfer goods or services or enters into a contract for the transfer of non-financial assets. The original standard was effective retrospectively for the Company for the quarter ending December 31, 2017; however in August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date of ASU No. 2014-09 by one-year for all entities. The new standard will become effective retrospectively for the Company for the quarter ending December 31, 2018, with early adoption permitted, but not before the original effective date. Additionally, in March 2016, the FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016, the FASB issued ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," and in May 2016, the FASB issued ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," all of which provide additional clarification on certain topics addressed in ASU No. 2014-09. ASU No. 2016-08, ASU No. 2016-10 and ASU No. 2016-12 follow the same implementation guidelines as ASU No. 2014-09 and ASU No. 2015-14. The Company is currently assessing the impact adoption of this guidance will have on its consolidated financial statements.

RISK MANAGEMENT

The Company selectively uses derivative instruments to reduce market risk associated with changes in foreign currency, commodities, interest rates and stock-based compensation. All hedging transactions are authorized and executed pursuant to clearly defined policies and procedures, which strictly prohibit the use of financial instruments for speculative purposes. At the inception of the hedge, the Company assesses the effectiveness of the hedge instrument and designates the hedge instrument as either (1) a hedge of a recognized asset or liability or of a recognized firm commitment (a fair value hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to an unrecognized asset or liability (a cash flow hedge) or (3) a hedge of a net investment in a non-U.S. operation (a net investment hedge). The Company performs hedge effectiveness

testing on an ongoing basis depending on the type of hedging instrument used. All other derivatives not designated as hedging instruments under ASC 815, "Derivatives and Hedging," are revalued in the consolidated statements of income.

For all foreign currency derivative instruments designated as cash flow hedges, retrospective effectiveness is tested on a monthly basis using a cumulative dollar offset test. The fair value of the hedged exposures and the fair value of the hedge instruments are revalued, and the ratio of the cumulative sum of the periodic changes in the value of the hedge instruments to the cumulative sum of the periodic changes in the value of the hedge is calculated. The hedge is deemed as highly effective if the ratio is between 80% and 125%. For commodity derivative contracts designated as cash flow hedges, effectiveness is tested using a regression calculation. Ineffectiveness is minimal as the Company aligns most of the critical terms of its derivatives with the supply contracts.

For net investment hedges, the Company assesses its net investment positions in the non-U.S. operations and compares it with the outstanding net investment hedges on a quarterly basis. The hedge is deemed effective if the aggregate outstanding principal of the hedge instruments designated as the net investment hedge in a non-U.S. operation does not exceed the Company’s net investment positions in the respective non-U.S. operation.

The Company selectively uses interest rate swaps to reduce market risk associated with changes in interest rates for its fixed-rate bonds. At September 30, ~~2016, all~~2018, the Company did not have any outstanding interest rate ~~swaps qualify for the long-haul method.~~swaps. The Company assesses retrospective and prospective effectiveness and records any measured ineffectiveness in the consolidated statements of income on a monthly basis.

Equity swaps and any other derivative instruments not designated as hedging instruments under ASC 815 require no assessment of effectiveness.

A discussion of the Company’s accounting policies for derivative financial instruments is included in Note 1, "Summary of Significant Accounting Policies," of the notes to consolidated financial statements, and further disclosure relating to derivatives and hedging activities is included in Note 10, "Derivative Instruments and Hedging Activities," and Note 11, "Fair Value Measurements," of the notes to consolidated financial statements.

Foreign Exchange

The Company has manufacturing, sales and distribution facilities around the world and thus makes investments and enters into transactions denominated in various foreign currencies. In order to maintain strict control and achieve the benefits of the Company’s global diversification, foreign exchange exposures for each currency are netted internally so that only its net foreign exchange exposures are, as appropriate, hedged with financial instruments.

The Company hedges 70% to 90% of the nominal amount of each of its known foreign exchange transactional exposures. The Company primarily enters into foreign currency exchange contracts to reduce the earnings and cash flow impact of the variation of non-functional currency denominated receivables and payables. Gains and losses resulting from hedging instruments offset the foreign exchange gains or losses on the underlying assets and liabilities being hedged. The maturities of the forward exchange contracts generally coincide with the settlement dates of the related transactions. Realized and unrealized gains and losses on these contracts are recognized in the same period as gains and losses on the hedged items. The Company also selectively hedges anticipated transactions that are subject to foreign exchange exposure, primarily with foreign currency exchange contracts, which are designated as cash flow hedges in accordance with ASC 815.

The Company ~~had~~has entered into ~~cross-currency interest rate swaps and~~ foreign currency denominated debt obligations to selectively hedge portions of its net investment in non-U.S. subsidiaries. The currency effects of ~~the cross-currency interest rate swaps and~~ debt obligations are reflected in the ~~AOCI~~accumulated other comprehensive income ("AOCI") account within shareholders’ equity attributable to Johnson Controls ordinary shareholders where they offset gains and losses recorded on the Company’s net investments globally.

At September 30, ~~2016~~2018 and ~~2015,~~2017, the Company estimates that an unfavorable 10% change in the exchange rates would have decreased net unrealized gains by approximately ~~$297~~$212 million and ~~$234~~$330 million, respectively.

Interest Rates

~~The~~From time to time, the Company ~~uses~~may use interest rate swaps to offset its exposure to interest rate movements. In accordance with ASC 815, these outstanding swaps qualify and are designated as fair value hedges. The Company had ~~eight~~no outstanding interest rate swaps ~~totaling $850 million outstanding~~ at September 30, ~~2016~~2018 and ~~twelve interest rates swaps totaling $1.7 billion outstanding at September 30, 2015.~~2017, respectively. A 10% increase in the average cost of the Company’s variable rate debt would have resulted in an unfavorable change in pre-tax interest expense of approximately ~~$11~~$5 million and $6$13 million for the year ended September 30, ~~2016~~2018 and ~~2015,~~2017, respectively.

Commodities

The Company uses commodity hedge contracts in the financial derivatives market 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. As a cash flow hedge, gains and losses resulting from the hedging instruments offset the gains or losses on purchases of the underlying commodities that will be used in the business. The maturities of the commodity hedge contracts coincide with the expected purchase of the commodities.

ENVIRONMENTAL, HEALTH AND SAFETY AND OTHER MATTERS

The Company’s global operations are governed by environmental laws and worker safety laws. Under various circumstances, these laws impose civil and criminal penalties and fines, as well as injunctive and remedial relief, for noncompliance and require remediation at sites where Company-related substances have been released into the environment.

The Company has expended substantial resources globally, both financial and managerial, to comply with applicable environmental laws and worker safety laws and to protect the environment and workers. The Company believes it is in substantial compliance with such laws and maintains procedures designed to foster and ensure compliance. However, the Company has been, and in the future may become, the subject of formal or informal enforcement actions or proceedings regarding noncompliance with such laws or the remediation of Company-related substances released into the environment. Such matters typically are resolved with regulatory authorities through commitments to compliance, abatement or remediation programs and in some cases payment of penalties. Historically, neither such commitments nor penalties imposed on the Company have been material.

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. As of September 30, 2016, reserves for environmental liabilities totaled $55 million, of which $15 million was recorded within other current liabilities and $40 million was recorded within other noncurrent liabilities in the consolidated statements of financial position. The Company’s environmental liabilities do not take into consideration any possible recoveries of future insurance proceeds. Because of the uncertainties associated with environmental remediation activities at sites where the Company may be potentially liable, future expenses to remediate identified sites could be considerably higher than the accrued liability. However, while neither the timing nor the amount of ultimate costs associated with known environmental remediation matters can be determined at this time, the Company does not expect that these matters will have a material adverse effect on its 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, primarily in the Power Solutions and Buildings businesses. At September 30, 2016, the Company recorded conditional asset retirement obligations of $74 million.

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. As of September 30, 2016, the Company's estimated asbestos related net liability recorded on a discounted basis within the Company's consolidated statements of financial position is $148 million. The net liability within the consolidated statements of financial position is comprised of a liability for pending and future claims and related defense costs of $548 million, of which $35 million is recorded in other current liabilities and $513 million is recorded in other noncurrent liabilities. The Company also maintains separate cash, investments and receivables related to insurance recoveries within the consolidated statements of financial position of $400 million, of which $41 million is recorded in other current assets, and $359 million is recorded in other noncurrent assets. Assets include $16 million of cash and $264 million of investments, which have all been designated as restricted. In connection with the recognition of liabilities for asbestos-related matters, the Company records asbestos-related insurance recoveries that are probable, the amount of such recoveries recorded at September 30, 2016 is $120 million. The Company believes that the asbestos related liabilities and insurance related receivables recorded as of September 30, 2016 are appropriate. The assets recorded in fiscal 2016 were as a result of assets acquired as part of the Tyco merger.

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. At September 30, 2016, the insurable liabilities totaled $473 million, of which $70 million was recorded within other current liabilities, $36 million was recorded within accrued compensation and benefits, and $367 million was recorded within other noncurrent liabilities in the consolidated statements of financial position. The Company records receivables from third party insurers when recovery has been determined to be probable. The Company maintains captive insurance companies to manage certain of its insurable liabilities.

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. Refer to Note ~~23,~~22, "Commitments and Contingencies," of the notes to consolidated financial statements for additional information.

QUARTERLY FINANCIAL DATA


(in millions, except per share data) (quarterly amounts unaudited)	First Quarter		Second Quarter			Third Quarter		Fourth Quarter			Full Year			First Quarter		Second Quarter			Third Quarter		Fourth Quarter		Full Year

2016
2018
Net sales	$	8,929	$	9,031		$	9,516	$	10,198		$	37,674		$	7,435	$	7,475		$	8,120	$	8,370	$	31,400
Gross profit	1,633		1,729			1,887		2,065			7,314			2,169		2,220			2,472		2,519		9,380
Net income (loss) (1)	490		(469		)	459		(1,132		)	(652		)
Net income (1)														271		483			804		825		2,383
Net income attributable to Johnson Controls														230		438			723		771		2,162
Earnings per share (2)
Basic														0.25		0.47			0.78		0.83		2.34
Diluted														0.25		0.47			0.78		0.83		2.32

2017
Net sales														$	7,086	$	7,267		$	7,683	$	8,136	$	30,172
Gross profit														2,114		2,281			2,431		2,513		9,339
Net income (loss) (3)														378		(115		)	629		927		1,819
Net income (loss) attributable to Johnson Controls	450		(530		)	383		(1,171		)	(868		)	329		(148		)	555		875		1,611
Earnings (loss) per share (2)
Basic	0.69		(0.82		)	0.59		(1.61		)	(1.30		)	0.35		(0.16		)	0.59		0.94		1.72
Diluted	0.69		(0.82		)	0.59		(1.61		)	(1.30		)	0.35		(0.16		)	0.59		0.93		1.71

2015
Net sales	$	9,624	$	9,198		$	9,608	$	8,749		$	37,179
Gross profit	1,609		1,573			1,706		1,559			6,447
Net income (3)	546		557			207		369			1,679
Net income attributable to Johnson Controls	507		529			178		349			1,563
Earnings per share (4)
Basic	0.77		0.81			0.27		0.54			2.39
Diluted	0.76		0.80			0.27		0.53			2.36

(1)

The fiscal ~~2016~~2018 first quarter net income includes ~~$101~~a $114 million ~~for transaction, integration and separation costs. The fiscal 2016 second quarter net loss includes $229~~gain on sale of Scott Safety, $158 million of significant restructuring and impairment costs, and ~~$131~~$50 million ~~for~~of transaction ~~integration~~ and ~~separation~~integration costs. The fiscal ~~2016~~2018 second quarter net income includes $64 million of transaction and integration costs. The fiscal 2018 third quarter net income includes ~~$167 million for transaction, integration, and separation costs, and $102~~$51 million of ~~significant restructuring~~transaction and ~~impairment~~integration costs. The fiscal ~~2016~~2018 fourth quarter net ~~loss~~income includes ~~$514~~$10 million of net mark-to-market ~~and settlement losses~~gains on pension and postretirement plans, ~~$296~~$105 million of significant restructuring and impairment costs, and ~~$293~~$69 million ~~for~~of transaction ~~integration~~ and ~~separation~~integration costs. The preceding amounts are stated on a pre-tax and pre-noncontrolling interest impact basis.


(2)	~~Basic and diluted earnings (loss) per share will not cross-foot due to the impact of the Tyco merger on the weighted-average shares included within the earnings per share calculation.~~

~~(3)~~

The fiscal 2015 first quarter net income includes $20 million for transaction and integration costs. The fiscal 2015 second quarter net income includes $28 million for transaction and integration costs, and a $200 million gain on divestiture of two GWS joint ventures within discontinued operations. The fiscal 2015 third quarter net income includes $48 million for transaction, integration, and separation costs. The fiscal 2015 fourth quarter net income includes $422 million of net mark-to-market losses on pension and postretirement plans, $397 million of significant restructuring and impairment costs, a $145 million gain on divestiture of the Interiors business, $82 million for transaction, integration and separation costs, and a $940 million gain on the divestiture of GWS within discontinued operations. The preceding amounts are stated on a pre-tax basis.


~~(4)~~	Due to the use of the weighted-average shares outstanding for each quarter for computing earnings per share, the sum of the quarterly per share amounts may not equal the per share amount for the year.

(3)

The fiscal 2017 first quarter net income includes $117 million of mark-to-market gains on pension plans, $78 million of significant restructuring and impairment costs, and $213 million of transaction, integration and separation costs. The fiscal 2017 second quarter net loss includes $18 million of mark-to-market gains on pension plans, $99 million of significant restructuring and impairment costs, and $138 million of transaction and integration costs. The fiscal 2017 third quarter net income includes $45 million of mark-to-market losses on pension plans, $49 million of significant restructuring and impairment costs, and $70 million of transaction and integration costs The fiscal 2017 fourth quarter net income includes $330 million of net mark-to-market gains on pension and postretirement plans, $141 million of significant restructuring and impairment costs, $90 million of integration costs and $50 million for an unfavorable arbitration award. The preceding amounts are stated on a pre-tax and pre-noncontrolling interest impact basis and include both continuing and discontinued operations activity.


ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Risk Management" included in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.


ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements



	Page

Report of Independent Registered Public Accounting Firm	6655

Consolidated Statements of Income for the years ended September 30, 201~~6, 2015~~8, 2017 and ~~2014~~2016	6857

Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, ~~2016, 2015~~2018, 2017 and ~~2014~~2016	6958

Consolidated Statements of Financial Position as of September 30, 20168 and ~~2015~~2017	7059

Consolidated Statements of Cash Flows for the years ended September 30, 201~~6, 2015~~8, 2017 and ~~2014~~2016	7160

Consolidated Statements of Shareholders' Equity Attributable to Johnson Controls Ordinary Shareholders for the years ended September 30, ~~2016, 2015~~2018, 2017 and ~~2014~~2016	7261

Notes to Consolidated Financial Statements	7362

Schedule II - Valuation and Qualifying Accounts for the years ended September 30, 2018, 2017 and 2016	~~142~~125

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Johnson Controls International plc

~~In our opinion,~~Opinions on the ~~consolidated financial statements listed in~~Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying ~~index present fairly, in all material respects, the~~consolidated statements of financial position of Johnson Controls International plc and its subsidiaries at(the “Company”)as of September 30, ~~2016~~ 2018and ~~2015,~~ 2017,and the ~~results~~related consolidated statements of ~~theiroperations~~income, comprehensive income (loss), shareholders’ equity attributable to Johnson Controls ordinary shareholders, and ~~their~~ cash flows for each of the three years in the period ended September 30, ~~2016~~2018, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of September 30, 2018, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidatedfinancial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2018and 2017, and the results of theiroperations and theircash flows for each of the three years in the period ended September 30, 2018 in conformity with accounting principles generally accepted in the United States of America. ~~In addition, in our opinion, the financial statement schedule listed in the accompanying indexpresents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidatedfinancial statements.~~ Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, ~~2016,~~2018, based on criteria established in Internal Control - Integrated Framework(2013) issued by the ~~Committee of Sponsoring Organizations of the Treadway Commission (COSO).~~ COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, ~~and financial statement schedule,~~ for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in ~~Management's~~Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on ~~these~~ the Company’s consolidatedfinancial statements ~~on the financial statement schedule,~~ and on the Company's internal control over financial reporting based on our ~~integrated~~ audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidatedfinancial statements included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidatedfinancial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, ~~and~~as well as evaluating the overall presentation of the consolidatedfinancial ~~statement presentation.~~statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

~~As discussed in Note 1 to the accompanying consolidated financial statements, the Company changed the manner in which it classifies deferred taxes in fiscal 2016.~~Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management's Report on Internal Control Over Financial Reporting, management has excluded the operations of the Tyco business from its assessment of internal control over financial reporting as of September 30, 2016 given that the acquisition date of Tyco was September 2, 2016. We have also excluded the Tyco business from our audit of internal control over financial reporting. The Tyco business is a wholly-owned subsidiary whose total assets and total revenues represent approximately 44 percent and less than 2 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2016.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Milwaukee, Wisconsin

November ~~23, 2016~~20, 2018

We have served as the Company’s auditor since 1957.

Johnson Controls International plc

Consolidated Statements of Income


	Year Ended September 30,									Year Ended September 30,
(in millions, except per share data)	2016			2015			2014			2018			2017			2016
Net sales
Products and systems*	$	33,635		$	33,513		$	34,978		$	25,332		$	24,099		$	18,084
Services*	4,039			3,666			3,771			6,068			6,073			2,753
	37,674			37,179			38,749			31,400			30,172			20,837
Cost of sales
Products and systems*	27,625			28,214			29,910			18,602			17,220			13,323
Services*	2,735			2,518			2,534			3,418			3,613			1,860
	30,360			30,732			32,444			22,020			20,833			15,183

Gross profit	7,314			6,447			6,305			9,380			9,339			5,654

Selling, general and administrative expenses	(5,325		)	(3,986		)	(4,216		)	(6,010		)	(6,158		)	(4,190		)
Restructuring and impairment costs	(620		)	(397		)	(324		)	(263		)	(367		)	(288		)
Net financing charges	(314		)	(288		)	(244		)	(441		)	(496		)	(289		)
Equity income	531			375			395			235			240			174

Income from continuing operations before income taxes	1,586			2,151			1,916			2,901			2,558			1,061

Income tax provision	2,238			600			407			518			705			197

Income (loss) from continuing operations	(652		)	1,551			1,509
Income from continuing operations										2,383			1,853			864

Income (loss) from discontinued operations, net of tax (Note 4)	—			128			(166		)
Loss from discontinued operations, net of tax (Note 4)										—			(34		)	(1,516		)

Net income (loss)	(652		)	1,679			1,343			2,383			1,819			(652		)

Income from continuing operations attributable to noncontrolling interests	216			112			105			221			199			132
Income from discontinued operations attributable to noncontrolling interests	—			4			23			—			9			84

Net income (loss) attributable to Johnson Controls	$	(868	)	$	1,563		$	1,215		$	2,162		$	1,611		$	(868	)

Amounts attributable to Johnson Controls ordinary shareholders:
Income (loss) from continuing operations	$	(868	)	$	1,439		$	1,404
Income (loss) from discontinued operations	—			124			(189		)
Income from continuing operations										$	2,162		$	1,654		$	732
Loss from discontinued operations										—			(43		)	(1,600		)
Net income (loss)	$	(868	)	$	1,563		$	1,215		$	2,162		$	1,611		$	(868	)

Basic earnings (loss) per share attributable to Johnson Controls
Continuing operations	$	(1.30	)	$	2.20		$	2.11		$	2.34		$	1.77		$	1.10
Discontinued operations	—			0.19			(0.28		)	—			(0.05		)	(2.40		)
Net income (loss) **	$	(1.30	)	$	2.39		$	1.82
Net income (loss)										$	2.34		$	1.72		$	(1.30	)

Diluted earnings (loss) per share attributable to Johnson Controls
Continuing operations	$	(1.30	)	$	2.18		$	2.08		$	2.32		$	1.75		$	1.09
Discontinued operations	—			0.19			(0.28		)	—			(0.05		)	(2.38		)
Net income (loss)**	$	(1.30	)	$	2.36		$	1.80
Net income (loss) **										$	2.32		$	1.71		$	(1.29	)



*	Products and systems consist of ~~Automotive Experience, Buildings~~Building Technologies & Solutions and Power Solutions products and systems. Services are ~~Buildings~~Building Technologies & Solutions technical services.



**	Certain items do not sum due to rounding.

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

Johnson Controls International plc

Consolidated Statements of Comprehensive Income (Loss)


	Year Ended September 30,									Year Ended September 30,
(in millions)	2016			2015			2014			2018			2017			2016

Net income (loss)	$	(652	)	$	1,679		$	1,343		$	2,383		$	1,819		$	(652	)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(94		)	(825		)	(642		)	(483		)	103			(94		)
Realized and unrealized gains (losses) on derivatives	9			(10		)	(3		)	(29		)	(14		)	9
Realized and unrealized losses on marketable common stock	(1		)	—			(7		)
Realized and unrealized gains (losses) on marketable securities										4			5			(1		)
Pension and postretirement plans	(1		)	(10		)	(5		)	—			—			(1		)

Other comprehensive loss	(87		)	(845		)	(657		)
Other comprehensive income (loss)										(508		)	94			(87		)

Total comprehensive income (loss)	(739		)	834			686			1,875			1,913			(739		)

Comprehensive income attributable to noncontrolling interests	225			91			126			186			203			225

Comprehensive income (loss) attributable to Johnson Controls	$	(964	)	$	743		$	560		$	1,689		$	1,710		$	(964	)

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

Johnson Controls International plc

Consolidated Statements of Financial Position


	September 30,						September 30,
(in millions, except par value and share data)	2016			2015			2018			2017

Assets

Cash and cash equivalents	$	684		$	597		$	200		$	321
Cash in escrow related to Adient debt	2,034			—
Accounts receivable, less allowance for doubtful accounts of $194 and $82, respectively	8,018			5,751
Accounts receivable, less allowance for doubtful accounts of $177 and $182, respectively							7,065			6,666
Inventories	3,560			2,377			3,224			3,209
Assets held for sale	174			55			—			189
Other current assets	2,639			1,689			1,334			1,907
Current assets	17,109			10,469			11,823			12,292

Property, plant and equipment - net	7,872			5,870			6,171			6,121
Goodwill	23,409			6,824			19,473			19,688
Other intangible assets - net	7,653			1,516			6,348			6,741
Investments in partially-owned affiliates	2,735			2,143			1,301			1,191
Noncurrent assets held for sale							—			1,920
Other noncurrent assets	4,475			2,800			3,681			3,931
Total assets	$	63,253		$	29,622		$	48,797		$	51,884

Liabilities and Equity

Short-term debt	$	1,119		$	52		$	1,315		$	1,214
Current portion of long-term debt	628			813			26			394
Accounts payable	6,764			5,174			4,644			4,271
Accrued compensation and benefits	1,763			1,090			1,146			1,071
Deferred revenue							1,326			1,279
Liabilities held for sale	28			42			—			72
Other current liabilities	5,991			3,275			2,793			3,553
Current liabilities	16,293			10,446			11,250			11,854

Long-term debt	14,606			5,745			9,654			11,964
Pension and postretirement benefits	1,738			767			717			947
Noncurrent liabilities held for sale							—			173
Other noncurrent liabilities	5,292			1,954			4,718			5,368
Long-term liabilities	21,636			8,466			15,089			18,452

Commitments and contingencies (Note 23)
Commitments and contingencies (Note 22)

Redeemable noncontrolling interests	234			212			—			211

Ordinary shares - par value $0.01, $0.01; 2.0 billion, 1.8 billion shares authorized; 936,247,911, 717,039,108 shares issued, respectively	9			7
Ordinary A shares - par value €1.00; 40,000 shares authorized, none outstanding as of September 30, 2016 and 2015	—			—
Preferred shares - par value $0.01; 200,000,000 shares authorized, none outstanding as of September 30, 2016 and 2015	—			—
Ordinary shares held in treasury, at cost (2016 - 452,083; 2015 - 69,671,840 shares)	(20		)	(3,152		)
Ordinary shares - par value $0.01, $0.01; 2.0 billion, 2.0 billion shares authorized; 950,969,965, 945,055,276 shares issued, respectively							10			9
Ordinary A shares - par value €1.00; 40,000 shares authorized, none outstanding as of September 30, 2018 and 2017							—			—
Preferred shares - par value $0.01; 200,000,000 shares authorized, none outstanding as of September 30, 2018 and 2017							—			—
Ordinary shares held in treasury, at cost (2018 - 25,963,004; 2017 - 17,080,302 shares)							(1,053		)	(710		)
Capital in excess of par value	16,105			3,740			16,549			16,390
Retained earnings	9,177			10,797			6,604			5,231
Accumulated other comprehensive loss	(1,153		)	(1,057		)	(946		)	(473		)
Shareholders’ equity attributable to Johnson Controls	24,118			10,335			21,164			20,447
Noncontrolling interests	972			163			1,294			920
Total equity	25,090			10,498			22,458			21,367
Total liabilities and equity	$	63,253		$	29,622		$	48,797		$	51,884

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

Johnson Controls International plc

Consolidated Statements of Cash Flows


	Year Ended September 30,									Year Ended September 30,
(in millions)	2016			2015			2014			2018			2017			2016
Operating Activities
Net income (loss) attributable to Johnson Controls	$	(868	)	$	1,563		$	1,215		$	2,162		$	1,611		$	(868	)
Income from continuing operations attributable to noncontrolling interests	216			112			105			221			199			132
Income from discontinued operations attributable to noncontrolling interests	—			4			23			—			9			84
Net income (loss)	(652		)	1,679			1,343			2,383			1,819			(652		)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization	953			860			955			1,085			1,188			953
Pension and postretirement benefit expense	460			396			321
Pension and postretirement benefit expense (income)										(156		)	(568		)	460
Pension and postretirement contributions	(137		)	(409		)	(161		)	(57		)	(347		)	(137		)
Equity in earnings of partially-owned affiliates, net of dividends received	(250		)	(144		)	(153		)	(166		)	(181		)	(250		)
Deferred income taxes	(1,241		)	327			(329		)	(636		)	1,125			(1,241		)
Non-cash restructuring and impairment charges	221			183			181			42			78			221
Loss (gain) on divestitures - net	(26		)	(1,340		)	111
Fair value adjustment of equity investment	(4		)	—			(38		)
Gain on Scott Safety business divestiture										(114		)	—			—
Equity-based compensation	142			90			82			115			147			142
Other	5			(1		)	(2		)
Other - net										(48		)	(12		)	(25		)
Changes in assets and liabilities, excluding acquisitions and divestitures:
Accounts receivable	(344		)	(297		)	(18		)	(513		)	(520		)	(344		)
Inventories	1			(99		)	(311		)	(92		)	(398		)	1
Other assets	148			(113		)	(192		)	26			(480		)	148
Restructuring reserves	141			(6		)	(31		)	(8		)	89			141
Accounts payable and accrued liabilities	398			348			440			15			236			411
Accrued income taxes	2,080			126			197			637			(2,145		)	2,080
Cash provided by operating activities	1,895			1,600			2,395			2,513			31			1,908

Investing Activities
Capital expenditures	(1,249		)	(1,135		)	(1,199		)	(1,030		)	(1,343		)	(1,249		)
Sale of property, plant and equipment	32			37			79			48			33			32
Acquisition of businesses, net of cash acquired	353			(22		)	(1,733		)	(21		)	(6		)	353
Business divestitures	32			1,646			225
Business divestitures, net of cash divested										2,202			220			32
Changes in long-term investments	(48		)	(44		)	19			11			(41		)	(48		)
Other	(7		)	(12		)	16
Other - net										5			—			(7		)
Cash provided (used) by investing activities	(887		)	470			(2,593		)	1,215			(1,137		)	(887		)

Financing Activities
Increase (decrease) in short-term debt - net	556			(68		)	73
Increase in short-term debt - net										107			145			556
Increase in long-term debt	1,501			299			2,001			1,136			1,865			1,501
Repayment of long-term debt	(1,299		)	(191		)	(833		)	(3,729		)	(1,297		)	(1,299		)
Debt financing costs	(45		)	—			—			(4		)	(18		)	(45		)
Stock repurchases	(501		)	(1,362		)	(1,249		)	(300		)	(651		)	(501		)
Payment of cash dividends	(915		)	(657		)	(568		)	(954		)	(702		)	(915		)
Proceeds from the exercise of stock options	70			275			186			66			157			70
Cash paid to acquire a noncontrolling interest	(2		)	(38		)	(5		)
Dividends paid to noncontrolling interests	(306		)	(68		)	(55		)	(46		)	(88		)	(306		)
Other	8			(11		)	38
Cash used by financing activities	(933		)	(1,821		)	(412		)
Dividend from Adient spin-off										—			2,050			—
Cash transferred to Adient related to spin-off										—			(665		)	—
Cash paid to prior acquisitions										—			(75		)	—
Employee equity-based compensation withholding										(43		)	(37		)	(5		)
Other - net										15			14			(2		)
Cash provided (used) by financing activities										(3,752		)	698			(946		)
Effect of exchange rate changes on cash and cash equivalents	12			(81		)	(20		)	(106		)	54			12
Change in cash held for sale	—			20			(16		)	9			96			(61		)
Increase (decrease) in cash and cash equivalents	87			188			(646		)	(121		)	(258		)	26
Cash and cash equivalents at beginning of period	597			409			1,055			321			579			553
Cash and cash equivalents at end of period	$	684		$	597		$	409		$	200		$	321		$	579

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

Johnson Controls International plc

Consolidated Statements of Shareholders’ Equity Attributable to Johnson Controls Ordinary Shareholders


(in millions, except per share data)	Total			Ordinary Shares		Capital in Excess of Par Value		Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Total			Ordinary Shares		Capital in Excess of Par Value		Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)
At September 30, 2013	$	12,273		$	7	$	3,092	$	9,287		$	(531	)	$	418
Comprehensive income (loss)	560			—		—		1,215			—			(655		)
Cash dividends Common ($0.88 per share)	(586		)	—		—		(586		)	—			—
Repurchases of common stock	(1,249		)	—		—		—			(1,249		)	—
Other, including options exercised	272			—		277		(1		)	(4		)	—
At September 30, 2014	11,270			7		3,369		9,915			(1,784		)	(237		)
Comprehensive income (loss)	743			—		—		1,563			—			(820		)
Cash dividends Common ($1.04 per share)	(681		)	—		—		(681		)	—			—
Repurchases of common stock	(1,362		)	—		—		—			(1,362		)	—
Other, including options exercised	365			—		371		—			(6		)	—
At September 30, 2015	10,335			7		3,740		10,797			(3,152		)	(1,057		)	$	10,335		$	7	$	3,740	$	10,797		$	(3,152	)	$	(1,057	)
Comprehensive loss	(964		)	—		—		(868		)	—			(96		)	(964		)	—		—		(868		)	—			(96		)
Result of contribution of Johnson Controls, Inc. to Johnson Controls International plc	15,808			2		12,157		—			3,649			—			15,808			2		12,157		—			3,649			—
Cash dividends Common ($1.16 per share)	(752		)	—		—		(752		)	—			—			(752		)	—		—		(752		)	—			—
Repurchases of common stock	(501		)	—		—		—			(501		)	—			(501		)	—		—		—			(501		)	—
Other, including options exercised	192			—		208		—			(16		)	—			192			—		208		—			(16		)	—
At September 30, 2016	$	24,118		$	9	$	16,105	$	9,177		$	(20	)	$	(1,153	)	24,118			9		16,105		9,177			(20		)	(1,153		)
Comprehensive income																	1,710			—		—		1,611			—			99
Cash dividends Ordinary ($1.00 per share)																	(938		)	—		—		(938		)	—			—
Repurchases of ordinary shares																	(651		)	—		—		—			(651		)	—
Spin-off of Adient																	(4,038		)	—		—		(4,619		)	—			581
Other, including options exercised																	246			—		285		—			(39		)	—
At September 30, 2017																	20,447			9		16,390		5,231			(710		)	(473		)
Comprehensive income (loss)																	1,689			—		—		2,162			—			(473		)
Cash dividends Ordinary ($1.04 per share)																	(968		)	—		—		(968		)	—			—
Repurchases of ordinary shares																	(300		)	—		—		—			(300		)	—
Adoption of ASU 2016-09																	179			—		—		179			—			—
Other, including options exercised																	117			1		159		—			(43		)	—
At September 30, 2018																	$	21,164		$	10	$	16,549	$	6,604		$	(1,053	)	$	(946	)

~~25.~~24. SUBSEQUENT EVENT

On ~~October 31, 2016,~~November 13, 2018, the Company ~~completed~~entered into a Stock and Asset Purchase Agreement (“Purchase Agreement”) with BCP Acquisitions LLC (“Purchaser”). The Purchaser is a newly-formed entity controlled by investment funds managed by Brookfield Capital Partners LLC. Pursuant to the ~~spin-off~~Purchase Agreement, on the terms and subject to the conditions therein, the Company has agreed to sell, and Purchaser has agreed to acquire, the Company’s Power Solutions business for a purchase price of ~~its Automotive Experience business~~$13.2 billion. Net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. The transaction is expected to close by ~~way~~June 30, 2019, subject to customary closing conditions and required regulatory approvals. The operating results of the ~~transfer of the Automotive Experience Business from Johnson Controls to Adient plc and the issuance of ordinary shares of Adient directly to holders of Johnson Controls ordinary shares on~~Power Solutions business will be reported as a pro rata basis. Prior to the open of business on October 31, 2016, each of the Company's shareholders received one ordinary share of Adient plc for every 10 ordinary shares of Johnson Controls held as of the close of business on October 19, 2016, the record date for the distribution. Company shareholders received cash in lieu of fractional shares of Adient, if any. Following the separation and distribution, Adient plc is now an independent public company trading on the New York Stock Exchange (NYSE) under the symbol "ADNT." The Company did not retain any equity interest in Adient plc.

~~Beginning~~discontinued operation beginning in the first quarter of fiscal ~~2017, Adient’s historical financial results will be reflected in the Company’s consolidated financial statements as a discontinued operation.~~2019.

JOHNSON CONTROLS ~~INC.~~INTERNATIONAL PLC AND SUBSIDIARIES

~~SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS~~

~~(In millions)~~

Year Ended September 30, 2016 2015 2014

Accounts Receivable - Allowance for Doubtful Accounts
Balance at beginning of period $ 82
$ 72
$ 68
Provision charged to costs and expenses 62
41
50
Reserve adjustments (16 ) (15 ) (22 )
Accounts charged off (26 ) (16 ) (19 )
Acquisition of businesses 92
1
1
Currency translation —
(1 ) (1 )
Transfers to held for sale —
—
(5 )
Balance at end of period $ 194
$ 82
$ 72

Deferred Tax Assets - Valuation Allowance
Balance at beginning of period $ 1,256
$ 1,285
$ 1,172
Allowance provision for new operating and other loss carryforwards 121
23
121
Allowance provision benefits (272 ) (52 ) (8 )
Acquisition of businesses 2,459
—
—
Balance at end of period $ 3,564
$ 1,256
$ 1,285


~~ITEM 9~~	~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~

~~None.~~


~~ITEM 9A~~	~~CONTROLS AND PROCEDURES~~

~~Disclosure Controls and Procedures~~

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluations, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Management’s Report on Internal Control Over Financial Reporting~~Other Matters

The ~~Company’s management~~Company is ~~responsible for establishing~~involved in various lawsuits, claims and ~~maintaining adequate internal control over financial reporting, as such term~~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 ~~defined in Exchange Act Rule 13a-15(f). The Company’s management, with the participation~~management’s opinion that none of these will have a material adverse effect on the Company’s ~~Chief Executive Officer and Chief Financial Officer, has evaluated~~financial position, results of operations or cash flows. Costs related to such matters were not material to the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management has concluded that, as of ~~September 30, 2016, the Company’s internal control over financial reporting was effective.~~

~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future~~ periods ~~are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.~~

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the Company’s consolidated financial statements and the effectiveness of internal control over financial reporting as of ~~September 30, 2016~~ ~~as stated in its report which is included in Item 8 of this Form 10-K and is incorporated by reference herein.~~

Management has excluded the operations of the Tyco business from its assessment of internal control over financial reporting as of September 30, 2016 given that the acquisition date of Tyco was September 2, 2016. Tyco's combined total assets and total revenues excluded from our assessment represent approximately 44% and less than 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2016.

~~Changes in Internal Control Over Financial Reporting~~

~~There have been no changes in the Company’s internal control over financial reporting during the quarter ended~~ ~~September 30, 2016, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.~~presented.


~~ITEM 9B~~	~~OTHER INFORMATION~~

~~None.~~23. RELATED PARTY TRANSACTIONS

~~PART III~~In the ordinary course of business, the Company enters into transactions with related parties, such as equity affiliates. Such transactions consist of facility management services, the sale or purchase of goods and other arrangements.

The ~~information required by Part III, Items 10, 11, 13~~net sales to and ~~14,~~purchases from related parties included in the consolidated statements of income were $958 million and ~~certain of the information required by Item 12, is incorporated herein by reference to the Company’s Proxy Statement~~$203 million, respectively, for ~~its 2017 Annual Meeting of Shareholders (which we refer to as the~~ fiscal ~~2016 Proxy Statement), dated~~2018; $1,004 million and ~~to be filed with the SEC on or about January 20, 2017, as follows:~~$195 million, respectively, for fiscal 2017; and $928 million and $184 million, respectively, for fiscal 2016.


~~ITEM 10~~	~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~

Incorporated by reference to the sections entitled "Q: Where can I find Corporate Governance materials for Johnson Controls?," "Proposal One: Election of Directors," "Corporate Governance," "Board and Committee Membership," "Audit Committee Report" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the fiscal ~~2016~~ ~~Proxy Statement. Required information on executive officers of the Company appears at Part I, Item 4 of this report.~~


~~ITEM 11~~	~~EXECUTIVE COMPENSATION~~

Incorporated by reference to the sections entitled "Corporate Governance," "Board and Committee Membership," "Compensation Committee Report," "Compensation Discussion and Analysis," "Director Compensation during Fiscal Year ~~2016," "Potential Payments and Benefits Upon Termination or Change of Control," and "Johnson Controls Share Ownership" of the fiscal~~ ~~2016~~ ~~Proxy Statement.~~


~~ITEM 12~~	~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~

~~Incorporated by reference to the section entitled "Johnson Controls Share Ownership" of the fiscal~~ ~~2016~~ ~~Proxy Statement.~~

The following table ~~provides information about~~sets forth the ~~Company's equity compensation plans as~~amount of ~~September 30, 2016~~accounts receivable due from and payable to related parties in the consolidated statements of financial position (in millions):

(a) (b) (c)
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category
Equity compensation plans approved by shareholders 22,332,233
$ 32.07
46,471,348
Equity compensation plans not approved by shareholders —
—
—
Total 22,332,233
$ 32.07
46,471,348



	September 30,
	2018		2017

Receivable from related parties	$	103	$	131
Payable to related parties	75		50


~~ITEM 13~~	~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~

~~Incorporated by reference~~The Company has also provided financial support to ~~the section entitled "Corporate Governance"~~certain of ~~the fiscal~~ ~~2016~~ ~~Proxy Statement.~~


~~ITEM 14~~	~~PRINCIPAL ACCOUNTING FEES AND SERVICES~~

~~Incorporated by reference to the section entitled "Audit Committee Report"~~its VIE's, see Note 1, "Summary of ~~the fiscal 2016 Proxy Statement.~~

~~PART IV~~


~~ITEM 15~~	~~EXHIBITS, FINANCIAL STATEMENT SCHEDULES~~



		~~Page in~~ ~~Form 10-K~~
~~(a) The following documents are filed as part of this Form 10-K:~~

~~(1) Financial Statements~~

~~Report of Independent Registered Public Accounting Firm~~		66

~~Consolidated Statements of Income for the years ended September 30, 2016, 2015 and 2014~~		68

~~Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2016, 2015 and 2014~~		69

~~Consolidated Statements of Financial Position at September 30, 2016 and 2015~~		70

~~Consolidated Statements of Cash Flows for the years ended September 30, 2016, 2015 and 2014~~		71

~~Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2016, 2015 and 2014~~		72

~~Notes to Consolidated Financial Statements~~		73

~~(2) Financial Statement Schedule~~

~~For the years ended September 30, 2016, 2015 and 2014:~~

~~Schedule II - Valuation and Qualifying Accounts~~		~~142~~

~~(3) Exhibits~~

~~Reference is made to the separate exhibit index contained on pages 147 through 152 filed herewith.~~

~~All other schedules are omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.~~

Financial statements of 50% or less-owned companies have been omitted because the proportionate share of their profit before income taxes and total assets are individually less than 20% of the respective cons~~olidated amounts, and investments in such companies are less than 20% of consolidated total assets. Refer to Note 20, "Non-Consolidated Partially-Owned Affiliates"~~Significant Accounting Policies," of the notes to consolidated financial statements for additional information.

24. SUBSEQUENT EVENT

On November 13, 2018, the ~~summarized financial data for~~Company entered into a Stock and Asset Purchase Agreement (“Purchase Agreement”) with BCP Acquisitions LLC (“Purchaser”). The Purchaser is a newly-formed entity controlled by investment funds managed by Brookfield Capital Partners LLC. Pursuant to the Purchase Agreement, on the terms and subject to the conditions therein, the Company has agreed to sell, and Purchaser has agreed to acquire, the Company’s ~~nonconsolidated partially-owned affiliates.~~Power Solutions business for a purchase price of $13.2 billion. Net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. The transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals. The operating results of the Power Solutions business will be reported as a discontinued operation beginning in the first quarter of fiscal 2019.

JOHNSON CONTROLS INTERNATIONAL PLC AND SUBSIDIARIES

Other Matters

~~For~~The Company is involved in various lawsuits, claims and proceedings incident to the ~~purposes~~operation of ~~complying~~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.

23. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company enters into transactions with related parties, such as equity affiliates. Such transactions consist of facility management services, the sale or purchase of goods and other arrangements.

The net sales to and purchases from related parties included in the consolidated statements of income were $958 million and $203 million, respectively, for fiscal 2018; $1,004 million and $195 million, respectively, for fiscal 2017; and $928 million and $184 million, respectively, for fiscal 2016.

The following table sets forth the amount of accounts receivable due from and payable to related parties in the consolidated statements of financial position (in millions):



	September 30,
	2018		2017

Receivable from related parties	$	103	$	131
Payable to related parties	75		50

The Company has also provided financial support to certain of its VIE's, see Note 1, "Summary of Significant Accounting Policies," of the notes to consolidated financial statements for additional information.

24. SUBSEQUENT EVENT

On November 13, 2018, the Company entered into a Stock and Asset Purchase Agreement (“Purchase Agreement”) with BCP Acquisitions LLC (“Purchaser”). The Purchaser is a newly-formed entity controlled by investment funds managed by Brookfield Capital Partners LLC. Pursuant to the Purchase Agreement, on the terms and subject to the conditions therein, the Company has agreed to sell, and Purchaser has agreed to acquire, the Company’s Power Solutions business for a purchase price of $13.2 billion. Net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. The transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals. The operating results of the Power Solutions business will be reported as a discontinued operation beginning in the first quarter of fiscal 2019.

JOHNSON CONTROLS INTERNATIONAL PLC AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(In millions)



Year Ended September 30,	2018			2017			2016

Accounts Receivable - Allowance for Doubtful Accounts
Balance at beginning of period	$	182		$	173		$	70
Provision charged to costs and expenses	40			39			45
Reserve adjustments	(24		)	(9		)	(8		)
Accounts charged off	(21		)	(41		)	(25		)
Acquisition of businesses	—			18			91
Currency translation	—			2			—
Balance at end of period	$	177		$	182		$	173

Deferred Tax Assets - Valuation Allowance
Balance at beginning of period	$	3,838		$	3,400		$	1,151
Allowance provision for new operating and other loss carryforwards	1,665			542			121
Allowance provision benefits	(308		)	(157		)	(331		)
Acquisition of businesses	—			53			2,459
Balance at end of period	$	5,195		$	3,838		$	3,400


ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.


ITEM 9A	CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s management, with the ~~amendments to~~participation of the ~~rules governing Form S-8~~Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of ~~1933,~~1934, as amended (the "Exchange Act")) as of the ~~undersigned registrant hereby undertakes~~end of the period covered by this report. Based on such evaluations, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as ~~follows,~~of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management has concluded that, as of September 30, 2018, the Company’s internal control over financial reporting was effective.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the Company’s consolidated financial statements and the effectiveness of internal control over financial reporting as of September 30, 2018 as stated in its report which ~~undertaking shall be~~is included in Item 8 of this Form 10-K and is incorporated by reference ~~into registrant’s Registration Statement~~herein.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2018, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


ITEM 9B	OTHER INFORMATION

None.

PART III

In response to Part III, Items 10, 11, 12, 13 and 14, parts of the Company’s definitive proxy statement (to be filed pursuant to Regulation 14A within 120 days after Registrant’s fiscal year-end of September 30, 2018) for its annual meeting to be held on ~~Post-Effective Amendment~~March 6, 2019, are incorporated by reference in this Form ~~S-8~~10-K.


ITEM 10	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information relating to ~~Form S-4 No. 333-210588~~directors and ~~Registration Statements~~nominees of Johnson Controls is set forth under the caption “Proposal Number One” in Johnson Controls’ proxy statement for its annual meeting of stockholders to be held on March 6, 2019 (the “Johnson Controls Proxy Statement”) and is incorporated by reference herein. Information about executive officers is included in Part I, Item 4 of this Annual Report on Form ~~S-8 Nos. 333-213508, 333-200320, 333-185004, 333-107489, 333-113943~~10-K. The information required by Items 405, 407(c)(3), (d)(4) and ~~333-200314-02.~~(d)(5) of Regulation S-K is contained under the captions “Section 16(a) Beneficial Ownership Reporting Compliance,” “Governance of the Company - Nomination of Directors and Board Diversity,” “Governance of the Company - Board Committees”, and “Committees of the Board - Audit Committee” of the Johnson Controls Proxy Statement and such information is incorporated by reference herein.

~~Insofar~~Code of Ethics

Johnson Controls has adopted a code of ethics for directors, officers (including the Company’s principal executive officer, principal financial officer and principal accounting officer) and employees, known as ~~indemnification for liabilities arising~~the Code of Ethics. The Code of Ethics is available in the “Investors - Corporate Governance” section of its website at www.johnsoncontrols.com. The Company posts any amendments to or waivers of its Code of Ethics (to the extent applicable to the Company’s directors or executive officers) at the same location on the Company’s website. In addition, copies of the Code of Ethics may be obtained in print without charge upon written request by any stockholder to the office of the Company at One Albert Quay, Cork, Ireland.


ITEM 11	EXECUTIVE COMPENSATION

The information required by Item 402 of Regulation S-K is contained under the ~~Securities Act~~captions “Compensation Discussion & Analysis” (excluding the information under the caption “Compensation Committee Report on Executive Compensation”), “Executive Compensation Tables” and “Compensation of ~~1933 may be permitted to directors, officers and controlling persons~~Non-Employee Directors” of the ~~registrant pursuant to~~Johnson Controls Proxy Statement. Such information is incorporated by reference.

The information required by Items 407(e)(4) and (e)(5) of Regulation S-K is contained under the ~~foregoing provisions, or otherwise, the registrant has been advised that in the opinion~~captions “Committees of the ~~SEC such indemnification is against public policy as expressed in~~Board - Compensation Committee Interlocks and Insider Participation” and “Compensation Discussion & Analysis - Compensation Committee Report on Executive Compensation” of the ~~Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities~~Johnson Controls Proxy Statement. Such information (other than the ~~payment~~Compensation Committee Report on Executive Compensation, which shall not be deemed to be “filed”) is incorporated by reference.


ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information in the ~~registrant~~Johnson Controls Proxy Statement set forth under the caption "Security Ownership of ~~expenses incurred or paid~~Certain Beneficial Owners and Management" is incorporated herein by ~~a director, officer or controlling person~~reference.

The following table provides information about the Company's equity compensation plans as of September 30, 2018:



	(a)	(b)		(c)
	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category
Equity compensation plans approved by shareholders	17,836,062	$	34.24	45,026,606
Equity compensation plans not approved by shareholders	—	—		—
Total	17,836,062	$	34.24	45,026,606


ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information in the Johnson Controls Proxy Statement set forth under the captions “Committees of the ~~registrant~~Board,” “Governance of the Company - Director Independence,” and “Governance of the Company - Other Directorships, Conflicts and Related Party Transactions,” is incorporated herein by reference.


ITEM 14	PRINCIPAL ACCOUNTING FEES AND SERVICES

The information in the ~~successful defense~~Johnson Controls Proxy Statement set forth under “Proposal Number Two” related to the appointment of ~~any action, suit~~auditors is incorporated herein by reference.

PART IV


ITEM 15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES



		Page in Form 10-K
(a) The following documents are filed as part of this Form 10-K:

(1) Financial Statements

Report of Independent Registered Public Accounting Firm		55

Consolidated Statements of Income for the years ended September 30, 2018, 2017 and 2016		57

Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2018, 2017 and 2016		58

Consolidated Statements of Financial Position at September 30, 2018 and 2017		59

Consolidated Statements of Cash Flows for the years ended September 30, 2018, 2017 and 2016		60

Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2018, 2017 and 2016		61

Notes to Consolidated Financial Statements		62

(2) Financial Statement Schedule

For the years ended September 30, 2018, 2017 and 2016:

Schedule II - Valuation and Qualifying Accounts		125

(3) Exhibits

Reference is made to the separate exhibit index contained on pages 130 through 135 filed herewith.

All other schedules are omitted because they are not applicable, or ~~proceeding)~~the required information is ~~asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless~~shown in the ~~opinion~~financial statements or notes thereto.

Financial statements of ~~its counsel~~50% or less-owned companies have been omitted because the ~~matter has been settled by controlling precedent, submit~~proportionate share of their profit before income taxes and total assets are individually less than 20% of the respective consolidated amounts, and investments in such companies are less than 20% of consolidated total assets. Refer to ~~a court~~Note 20, "Non-Consolidated Partially-Owned Affiliates" of ~~appropriate jurisdiction~~ the ~~question whether such indemnification by it is against public policy as expressed in~~notes to consolidated financial statements for the ~~Act and will be governed by~~summarized financial data for the ~~final adjudication of such issue.~~Company’s nonconsolidated partially-owned affiliates.


ITEM 16	FORM 10-K SUMMARY

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.



JOHNSON CONTROLS INTERNATIONAL PLC

By	/s/ Brian J. Stief
	Brian J. Stief
	Executive Vice President and Chief Financial Officer

Date:	November ~~23, 2016~~20, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below as of November ~~23, 2016,~~20, 2018, by the following persons on behalf of the registrant and in the capacities indicated:



/s/ ~~Alex A. Molinaroli~~George R. Oliver ~~Alex A. Molinaroli~~George R. Oliver Chairman and Chief Executive Officer (Principal Executive Officer)		/s/ Brian J. Stief Brian J. Stief Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ ~~Suzanne~~Robert M. ~~Vincent~~VanHimbergen ~~Suzanne~~Robert M. ~~Vincent~~VanHimbergen Vice President and Corporate Controller (Principal Accounting Officer)		/s/ ~~David P. Abney~~Jean Blackwell ~~David P. Abney~~Jean Blackwell Director

/s/ Mike Daniels Mike Daniels Director		/s/ Roy Dunbar Roy Dunbar Director

/s/ Brian Duperreault Brian Duperreault Director		/s/ Gretchen R. Haggerty Gretchen R. Haggerty Director

/s/ ~~Natalie A. Black~~Simone Menne ~~Natalie A. Black~~Simone Menne Director		/s/ ~~Mike Daniels~~ ~~Mike Daniels~~ Juan Pablo del Valle Perochena Juan Pablo del Valle Perochena Director

/s/ ~~Brian Duppereault~~ ~~Brian Duppereault~~ Jürgen Tinggren Jürgen Tinggren Director		/s/ ~~Jeffrey A. Joerres~~ ~~Jeffrey A. Joerres~~ Mark P. Vergnano Mark P. Vergnano Director

/s/ ~~Alex A. Molinaroli~~ ~~Alex A. Molinaroli~~ David Yost David Yost Director		/s/ ~~George R. Oliver~~John D. Young ~~George R. Oliver~~John D. Young Director

~~/s/ Jürgen Tinggren~~ ~~Jürgen Tinggren~~ ~~Director~~		~~/s/ Juan Pablo del Valle Perochena~~ ~~Juan Pablo del Valle Perochena~~ ~~Director~~

~~/s/ Mark P. Vergnano~~ ~~Mark P. Vergnano~~ ~~Director~~		~~/s/ David Yost~~ ~~David Yost~~ ~~Director~~

Johnson Controls International plc

Index to Exhibits

(a) (1) and (2) Financial Statements and Supplementary Data - See Item 8

(b) Exhibit Index:



Exhibit		Title

2.1		Separation and Distribution Agreement, dated as of September 8, 2016, by and between Johnson Controls International plc and Adient Limited (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed September 9, 2016)

2.2		Agreement and Plan of Merger by and among Johnson Controls, Inc., Johnson Controls International plc (formerly Tyco International plc) and Jagara Merger Sub LLC, dated as of January 24, 2016 (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed January 27, 2016)

2.3		Merger Agreement, dated as of ~~March~~May 30, 2014, between Tyco International Ltd., and Johnson Controls International plc (formerly Tyco International plc) ~~(Incorporated~~(incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on June 4, 2014)

3.1		Memorandum and Articles of Association of Johnson Controls International plc, as amended by special ~~resolution~~resolutions dated September 8, 2014, ~~and as amended by special resolution dated~~ August 17, 2016 and March 7, 2018 (incorporated by reference to Exhibit 3.1 to the registrant’s ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed on ~~September 6, 2016)~~May 3, 2018)

4.1		Assumption and Accession Agreement, dated as of November 17, 2014, by Johnson Controls International plc (formerly Tyco International plc) (incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on November 17, 2014)

4.2		Indenture, dated ~~as of January 9, 2009, by and among Tyco International Finance S.A., as issuer,~~December 28, 2016, between Johnson Controls International plc ~~(formerly Tyco International Ltd.), as guarantor,~~ and ~~Deutsche~~U.S. Bank ~~Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed on January 9, 2009)~~

~~4.3~~		Fourth Supplemental Indenture, dated as of January 12, 2011, by and among Tyco International Finance S.A., as issuer, Johnson Controls International plc (formerly Tyco International Ltd.), as guarantor, and Deutsche Bank Trust Company Americas, as trustee relating to the issuer's 3.75% notes due 2018 (Incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed on January 12, 2011)

~~4.4~~		Fifth Supplemental Indenture, dated as of January 12, 2011, by and among Tyco International Finance S.A., as issuer, Johnson Controls International plc (formerly Tyco International Ltd.), as guarantor, and Deutsche Bank Trust Company Americas, as trustee relating to the issuer's 4.625% notes due 2023 (Incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on January 12, 2011)

~~4.5~~		Supplemental Indenture 2014-1 to the 2009 Indenture, dated as of November 17, 2014, among Johnson Controls International plc (formerly Tyco International Ltd.), Tyco International Finance S.A., Tyco Fire & Security Finance S.C.A. and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on November 17, 2014)

~~4.6~~		Indenture, dated as of February 25, 2015 (the "2015 Indenture"), among Tyco International Finance S.A., Johnson Controls International plc (formerly Tyco International plc), Tyco Fire & Security Finance S.C.A., and Deutsche Bank Trust Company Americas,National Association, as trustee (incorporated by reference to Exhibit 4.1 to the registrant’s ~~Current Report~~current report on Form 8-K filed on ~~February 25, 2015)~~December 28, 2016)

~~4.7~~4.3		First Supplemental Indenture, ~~to the 2015 Indenture,~~ dated ~~as of February 25, 2015, among Tyco International Finance S.A.,~~December 28, 2016, between Johnson Controls International plc, ~~(formerly Tyco International plc), Tyco Fire & Security Finance S.C.A., Deutsche~~and U.S. Bank ~~Trust Company Americas~~National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent ~~and Deutsche Bank Luxembourg S.A.~~for the New Euro Notes attaching forms of 2.355% Senior Notes due 2017 (retired; no longer outstanding), 7.125% Senior Notes due 2017 (retired; no longer outstanding), 1.400% Senior Notes due 2017 (retired, no longer outstanding as ~~security registrar, transfer agent and authenticating agent relating to the issuer’s~~of November 2, 2017), 3.750% Notes due 2018 (retired; no longer outstanding), 5.000% Senior Notes due 2020, 4.25% Senior Notes due 2021, 3.750% Senior Notes due 2021, 3.625% Senior Notes due 2024, 6.000% Notes due 2036, 5.70% Senior Notes due 2041, 5.250% Senior Notes due 2041, 4.625% Senior Notes due 2044, 6.950% Debentures due December 1, 2045, 4.950% Senior Notes due 2064, 4.625% Notes due 2023, 1.375% ~~Euro notes~~Notes due 2025, ~~(incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on February 25, 2015)~~

~~4.8~~		Second Supplemental Indenture to the 2015 Indenture, dated as of September 14, 2015, among Tyco International Finance S.A., Johnson Controls International plc (formerly Tyco International plc), Tyco Fire & Security Finance S.C.A., Deutsche Bank Trust Company Americas, as trustee related to the issuer’s 3.9% notes3.900% Notes due 2026, ~~(incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed on September 14, 2015)~~

~~Johnson Controls International plc~~

~~Index to Exhibits~~



~~Exhibit~~		~~Title~~

~~4.9~~		Third Supplemental Indenture, dated as of September 14, 2015, among Tyco International Finance S.A., Johnson Controls International plc (formerly Tyco International plc), Tyco Fire & Security Finance S.C.A., Deutsche Bank Trust Company Americas, as trustee relating to the issuer’sand 5.125% ~~notes~~Notes due 2045 (incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on ~~September 14, 2015)~~December 28, 2016)

~~4.10~~4.4		Second Supplemental Indenture, dated February 7, 2017, between Johnson Controls International plc and U.S. Bank National Association, as trustee, attaching form of 4.500% Senior Notes due 2047 (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on February 7, 2017)

4.5		Third Supplemental Indenture, dated March 15, 2017, among Johnson Controls International plc, U.S. Bank National Association, as trustee and Elavon Financial Services DAC, UK Branch, as paying agent, attaching form of 1.000% Senior Notes due 2023 (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on March 15, 2017)

4.6		Fourth Supplemental Indenture, dated December 4, 2017, among Johnson Controls International plc, U.S. Bank National Association, as trustee and Elavon Financial Services DAC, UK Branch, as paying agent (attaching form of 0.000% Senior Notes due 2020) (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on December 4, 2017).

4.7		Miscellaneous long-term debt agreements and financing leases with banks and other creditors and debenture indentures.*

Johnson Controls International plc

Index to Exhibits

~~4.11~~

Exhibit		Title

4.8		Miscellaneous industrial development bond long-term debt issues and related loan agreements and leases.*

~~4.12~~		Senior indenture, dated January 17, 2006, between Johnson Controls, Inc. and U.S. Bank National Association, as successor trustee to JP Morgan Chase Bank, National Association (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc. Registration Statement on Form S-3 filed on February 24, 2009) (Commission File No. 1-5097)

~~4.13~~		Supplemental Indenture No. 2, dated March 1, 2012, between Johnson Controls, Inc. and U.S. Bank National Association, as Trustee, relating to Johnson Controls, Inc.’s 2.355% Senior Notes due 2017 (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed March 1, 2012) (Commission File No. 1-5097)

~~4.14~~		Officer's Certificate, dated January 17, 2006, creating the 5.250% Fixed Rate Notes due 2011 (retired; no longer outstanding), the 5.500% Fixed Rate Notes due 2016 (retired; no longer outstanding ), and the 6.000% Fixed Rate Notes due 2036 (incorporated by reference to Exhibit 4.2 to Johnson Controls, Inc. Form 8-K dated January 9, 2006) (Commission File No. 1-5097)

~~4.15~~		Officers’ Certificate, dated December 2, 2011, establishing Johnson Controls, Inc.’s 2.600% Senior Notes due 2016, 3.750% Senior Notes due 2021 and 5.250% Senior Notes due 2041 (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed December 2, 2011) (Commission File No. 1-5097)

~~4.16~~		Officers’ Certificate, dated March 9, 2010 creating Johnson Controls, Inc.’s 5.000% Senior Notes due 2020 (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed March 10, 2010) (Commission File No. 1-5097)

~~4.17~~		Officers’ Certificate, dated June 13, 2014, establishing Johnson Controls, Inc.’s 1.400% Senior Notes due 2017, 3.625% Senior Notes due 2024, 4.625% Senior Notes due 2044 and 4.950% Senior Notes due 2064 (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed June 13, 2014) (Commission File No. 1-5097)

~~4.18~~		Officers’ Certificate, dated February 4, 2011, establishing Johnson Controls, Inc.’s Floating Rate Notes due 2014 (retired; no longer outstanding), 1.75% Senior Notes due 2014 (retired; no longer outstanding), 4.25% Senior Notes due 2021 and 5.70% Senior Notes due 2041 (incorporated by reference to Exhibit 4.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed February 7, 2011) (Commission File No. 1-5097)

10.1		Term Loan Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citigroup Global Markets Inc., Merrill, Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and JPMorgan Chase Bank N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed March 6,16, 2016)

10.2		Letter Amendment No. 1 dated as of September 1, 2016 to the Term Loan Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citigroup Global Markets Inc., Merrill, Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and JPMorgan Chase Bank N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.2 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed on November 21, 2017)

10.3		Letter Amendment No. 2 dated as of August 10, 2017 to the Term Loan Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citigroup Global Markets Inc., Merrill, Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and JPMorgan Chase Bank N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.3 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed on November 21, 2017)

10.4		Multi-Year Senior Unsecured Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, and Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank plc, Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed March 6,16, 2016)

~~Johnson Controls International plc~~

~~Index to Exhibits~~



~~Exhibit~~		~~Title~~

~~10.3~~10.5		Letter Amendment No. 1 dated as of September 1, 2016 to the Multi-Year Senior Unsecured Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, and Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank plc, Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.5 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed on November 21, 2017)

10.6		Letter Amendment No. 2 dated as of August 10, 2017 to the Multi-Year Senior Unsecured Credit Agreement, dated as of March 10, 2016, among Tyco International Holding S.à r.l., each of the initial lenders named therein, Citibank, N.A., as administrative agent, and Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank plc, Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed on November 21, 2017)

10.7		Consent to Commitment Increase dated March 23, 2018, with respect to the Multi-Year Senior Unsecured Credit Agreement dated as of March 10, 2016 (as amended or modified from time to time) among Tyco International Holding S.à r.l., the lenders party thereto and Citibank, N.A., as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on May 3, 2018)

10.8		Credit Agreement, dated as of March 10, 2016, among Johnson Controls, Inc., the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 4.2 to Johnson Controls, Inc.’s Current Report on Form 8-K filed March 6,16, 2016) (Commission File No. 1-5097)

10.9		Amendment No. 1 dated as of November 1, 2016 to the Credit Agreement, dated as of March 10, 2016, among Johnson Controls, Inc., Johnson Controls International plc, Tyco Fire & Security Finance S.C.A. and Tyco International Finance S.A., the financial parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.8 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed on November 21, 2017)

Johnson Controls International plc

Index to Exhibits



Exhibit		Title

~~10.4~~10.10		Transition Services Agreement, dated as of September 8, 2016, by and between Johnson Controls International plc and Adient Limited (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on September 9, 2016)

~~10.5~~10.11		Tax Matters Agreement, dated as of September 8, 2016, by and between Johnson Controls International plc and Adient Limited (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on September 9, 2016)

~~10.6~~10.12		Employee Matters Agreement, dated as of September 8, 2016, by and between Johnson Controls International plc and Adient Limited (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on September 9, 2016)

~~10.7~~10.13		Transitional Trademark License Agreement, dated as of September 8, 2016, by and between Johnson Controls International plc and Adient Limited (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed on September 9, 2016)

~~10.8~~10.14		Tax Sharing Agreement, dated September 28, 2012 by and among Pentair Ltd., Johnson Controls International plc (formerly Tyco International Ltd.), Tyco International Finance S.A. and The ADT Corporation ~~(Incorporated~~(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on October 1, 2012). (Commission File No. 1-13836)

~~10.9~~10.15		Non-Income Tax Sharing Agreement dated September 28, 2012 by and among Johnson Controls International plc (formerly Tyco International Ltd.), Tyco International Finance S.A. and The ADT Corporation ~~(Incorporated~~(incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on October 1, 2012). (Commission File No. 1-13836)

~~10.10~~10.16		Trademark Agreement, dated as of September 25, 2012, by and among ADT Services GmbH, ADT US Holdings, Inc., Johnson Controls International plc (formerly Tyco International Ltd.) and The ADT Corporation ~~(Incorporated~~(incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on October 1, 2012) (Commission File No. 1-13836)

~~10.11~~10.17		Form of Deed of Indemnification between Johnson Controls International plc (formerly Tyco International plc) and certain of its directors and officers (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)

~~10.12~~10.18		Form of Indemnification Agreement between Tyco Fire & Security (US) Management, Inc. and certain directors and officers of Johnson Controls International plc (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)

~~10.13~~10.19		Tyco International plc 2004 Share and Incentive Plan (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on November 17, 2014) (Commission File No. 1-13836)

~~10.14~~10.20		Johnson Controls International plc 2012 Share and Incentive Plan, amended and restated as of ~~September 2, 2016~~March 8, 2017 (incorporated by reference to Exhibit ~~10.5~~10.2 to the registrant’s ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed on ~~September 9, 2016)~~May 4, 2017)**

~~10.15~~10.21		~~Johnson Controls International plc 2000 Stock Option Plan (incorporated by reference to Exhibit 10.8 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)~~**

~~10.16~~		Johnson Controls International plc 2007 Stock Option Plan (incorporated by reference to Exhibit 10.7 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)**

~~Johnson Controls International plc~~

~~Index to Exhibits~~



~~Exhibit~~		~~Title~~

~~10.17~~10.22		Johnson Controls International plc 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.6 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)

~~10.18~~		Tyco International Change in Control Severance Plan for Certain U.S. Officers and Executives (incorporated by reference to Exhibit 10.6 to the registrant’s Current Report on Form 8-K filed on November 17, 2014) **

~~10.19~~10.23		Johnson Controls International plc Severance and Change in Control Policy for Officers, ~~effective as of September 2, 2016 (filed herewith)~~Amended and Restated December 7, 2017 (Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on December 11, 2017)

Johnson Controls International plc

Index to Exhibits

~~10.20~~

Exhibit		Title

10.24		Johnson Controls International plc Executive Deferred Compensation Plan, as amended and restated effective January 1, 2018 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on May 3, 2018) **

10.25		Johnson Controls International plc Senior Executive Deferred Compensation Plan effective as of January 1, 2018 (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed on September ~~2, 2016 (filed herewith)~~19, 2017) **

~~10.21~~10.26		Johnson Controls, Inc. Deferred Compensation Plan for Certain Directors, as amended and restated effective January 5, 2016 (incorporated by reference to Exhibit 10.3 to Johnson Controls, Inc.’s Quarterly Report on Form 10-Q filed on February 2, 2016) (Commission File No. 1-5097)**

~~10.22~~		Johnson Controls International plc Retirement Restoration Plan, as amended and restated effective ~~September 2, 2016 (filed herewith)~~January 1, 2018 (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed on May 3, 2018)

~~10.23~~10.27		Tyco Supplemental Savings and Retirement Plan as amended and restated effective January 1, 2018 (incorporated by reference to Exhibit ~~10.5~~10.4 to the registrant’s Current Report on Form 8-K filed on ~~November 17, 2014)~~September 19, 2017) **

~~10.24~~10.28		Johnson Controls International plc Executive Compensation Incentive Recoupment Policy effective September 2, 2016 ~~(filed herewith)~~(incorporated by reference to Exhibit 10.24 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed on November 23, 2016)**

~~10.25~~10.29		Amended and Restated Executive Employment Agreement, dated as of January 24, 2016, by and between Johnson Controls, Inc. and Alex A. Molinaroli (incorporated by reference to Exhibit 10.1 to Johnson Controls, Inc.’s Current Report on Form 8-K filed on January 27, 2016) (Commission File No. 1-5097)

~~10.26~~10.30		Amended and Restated Change of Control Executive Employment Agreement, dated as of January 24, 2016, by and between Johnson Controls, Inc. and Alex A. Molinaroli (incorporated by reference to Exhibit 10.2 to Johnson Controls, Inc.’s Current Report on Form 8-K filed on January 27, 2016) (Commission File No. 1-5097)

~~10.27~~10.31		Amendment to the Amended and Restated Change of Control Executive Employment Agreement, dated as of April 1, 2016, by and between Johnson Controls, Inc. and Alex Molinaroli (incorporated by reference to Exhibit ~~10.4~~10.3 to Johnson Controls, Inc.’s ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed on April 29, 2016) (Commission File No. 1-5097)

~~10.28~~10.32		Amended and Restated Executive Employment Agreement, dated as of January 24, 2016, by and between Johnson Controls International plc (formerly Tyco International plc) and George Oliver (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on January 27, 2016)**

~~10.29~~		Employment Offer Letter, dated as of September 1, 2016, between Johnson Controls International plc (formerly Tyco International plc) and Judith Reinsdorf (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on September 6, 2016)**

~~10.30~~		Global Assignment Letter between Johnson Controls, Inc. and Trent Nevill dated as of April 1, 2016 (incorporated by reference to Exhibit 10.4 to Johnson Controls, Inc.’s Current Report on Form 8-K filed on April 29, 2016) (Commission File No. 1-5097)**

~~10.31~~		Form of employment agreement, including form of change in control agreement, between Johnson Controls, Inc. and Messrs. ~~Stief,~~ Jackson, Walicki ~~Nevill~~ and ~~Davis,~~Williams, as amended and restated July 28, 2010 (incorporated by reference to Exhibit 10.Y to Johnson Controls, Inc.’s Quarterly Report on Form 10-Q filed on August 3, 2010)~~(Commission~~ (Commission File No. 1-5097) **

10.33		Form of letter agreement amending certain provisions of the employment agreement between Johnson Controls, Inc. and Messrs. Jackson, Walicki and Williams (incorporated by reference to Exhibit 10.32 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed on November 23, 2016)**

10.34		Letter Agreement between Johnson Controls International plc and George R. Oliver dated December 8, 2017 (Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on December 11, 2017).**

10.35		Form of terms and conditions for Option / SAR Awards, Restricted Stock / Unit Awards, Performance Share Awards under the Johnson Controls International plc 2012 Share and Incentive Plan for fiscal 2018 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on February 2, 2018)**

10.36		Form of terms and conditions for Option / SAR Awards, and Restricted Stock / Unit Awards, under the Johnson Controls International plc 2012 Share and Incentive Plan for fiscal 2018 applicable to Messrs. Oliver and Stief (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed on February 2, 2018)**

Johnson Controls International plc

Index to Exhibits



Exhibit		Title

~~10.32~~10.37		~~Form of letter agreement amending certain provisions of the employment agreement between Johnson Controls, Inc. and Messrs. Stief, Jackson, Walicki, Nevill and Davis (filed herewith)~~**

~~10.33~~		Form of terms and conditions for Option / SAR Awards, Restricted Stock / Unit Awards, Performance Share Awards under the Johnson Controls International plc 2012 Share and Incentive Plan for periods commencing on September 2, 2016 ~~(filed herewith)~~(incorporated by reference to Exhibit 10.33 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed on November 23, 2016)**

~~10.34~~10.38		Form of terms and conditions for Option / SAR Awards, and Restricted Stock / Unit Awards, under the Johnson Controls International plc 2012 Share and Incentive Plan for periods commencing on September 2, 2016 applicable to Messrs. Molinaroli, Oliver and Stief (incorporated by reference to Exhibit 10.1 to registrant’s Quarterly Report on Form 10-Q filed on February 8, 2017)**

10.39		Terms of Unit Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief dated September 14, 2017 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on September 15, 2017)**

10.40		Terms of PSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief dated September 14, 2017 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on September 15, 2017)**

10.41		Terms of RSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief dated September 14, 2017 (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on September 15, 2017)**

10.42		Letter Agreement dated as of September 14, 2017 between Johnson Controls International plc and Brian J. Stief (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed on September 15, 2017)**

10.43		Form of terms and conditions for Option Awards, Restricted Unit Awards, Performance Share Awards under the 2012 Share and Incentive Plan for fiscal 2016 ~~(Incorporated~~(incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on October 13, 2015) **

~~10.35~~10.44		Form of terms and conditions for Option Awards, Restricted Unit Awards, Performance Share Awards under the 2012 Stock and Incentive Plan for fiscal 2015 ~~(Incorporated~~(incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 26, 2014 filed on November 14, 2014) (Commission File No. 1-13836)**

~~10.36~~10.45		Form of terms and conditions for Option Awards, Restricted Unit Awards, Performance Share Awards under the 2012 Stock and Incentive Plan for fiscal 2014 ~~(Incorporated~~(incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K filed on for the year ended September 27, 2013 filed on November 14, 2013) (Commission File No. 1-13836)

~~10.37~~10.46		Form of terms and conditions for Restricted Stock Unit Awards for Directors under the 2012 Stock and Incentive Plan ~~(Incorporated~~(incorporated by reference to Exhibit 10.13 to the registrant’s Annual Report on Form 10-K for the year ended September 28, 2012 filed on November 16, 2012) (Commission File No. 1-13836)**

~~10.38~~10.47		Form of ~~restricted stock award agreement~~terms and conditions for Restricted Stock Units for Directors under the Johnson Controls ~~Inc. 2001 Restricted Stock~~International plc 2012 Share and Incentive Plan ~~as amended effective September 20, 2011~~for use beginning in 2018 (incorporated by reference to Exhibit ~~10.L~~10.2 to ~~Johnson Controls, Inc.’s Annual~~the registrant’s Quarterly Report on Form ~~10-K for the year ended September 30, 2011~~10-Q filed on ~~November 22, 2011) (Commission File No. 1-5097)~~May 3, 2018)**

~~10.39~~10.48		Form of stock option award agreement for Johnson Controls, Inc. 2000 Stock Option Plan, as amended September 16, 2006, as in effect commencing October 2, 2006 (incorporated by reference to Exhibit 10.CC to Johnson Controls, Inc.’s Annual Report on Form 10-K for the year ended September 30, 2006 filed on December 5, 2006) (Commission File No. 1-5097)**

~~10.40~~		Form of stock option or stock appreciation right award agreement for Johnson Controls, Inc. 2007 Stock Option Plan effective September 20, 2011 (incorporated by reference to Exhibit 10.V to Johnson Controls, Inc.’s Annual Report on Form 10-K for the year ended September 30, 2011 filed on November 22, 2011) (Commission File No. 1-5097)**

~~10.41~~10.49		Johnson Controls, Inc. 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1(a) to Johnson Controls, Inc.'s Current Report on Form 8-K filed January 28, 2013) (Commission File No. 1-5097) **

Johnson Controls International plc

Index to Exhibits



Exhibit		Title

10.53		Form of performance share unit agreement for Johnson Controls, Inc. 2012 Omnibus Incentive Plan for recipients who have not announced an intention to retire (incorporated by reference to Exhibit 10.1(a) to Johnson Controls, Inc.'s Current Report on Form 8-K filed November 21, 2013) (Commission File No. 1-5097)**

~~10.42~~10.54		Form of performance share unit agreement for Johnson Controls, Inc. 2012 Omnibus Incentive Plan for recipients who have announced an intention to retire (incorporated by reference to Exhibit 10.1(d) to Johnson Controls, Inc.'s Current Report on Form 8-K filed November 21, 2013) (Commission File No. 1-5097)

~~10.43~~10.55		Form of restricted stock/restricted stock unit agreement for Johnson Controls, Inc. 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1(b) to Johnson Controls, Inc.'s Current Report on Form 8-K filed November 21, 2013) (Commission File No. 1-5097)**

~~10.44~~10.56		Form of restricted stock/restricted stock unit agreement for Johnson Controls, Inc. 2012 Omnibus Incentive Plan reflecting pro rata vesting on retirement, filed herewith (incorporated by reference to Exhibit ~~10.CC~~10.BB to Johnson Controls, Inc.’s Annual Report on Form 10-K for the year ended September 30, ~~2014~~2015 filed on November 18, 2015) (Commission File No. 1-5097)

~~Johnson Controls International plc~~

~~Index to Exhibits~~



~~10.45~~10.57		Form of option/stock appreciation right agreement for Johnson Controls, Inc. 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1(c) to Johnson Controls, Inc.'s Current Report on Form 8-K filed November 21, 2013) (Commission File No. 1-5097)

~~12.1~~10.58		~~Computation of ratio of earnings to fixed charges for~~ Global Assignment Letter between the ~~years ended September~~Company and Jeff M. Williams dated January 30, ~~2016, 2015, 2014, 2013 and 2012, filed herewith.~~2017 (filed herewith) **

~~18.1~~18		Preferability Letter on Change in Accounting Principle (filed herewith)

21.1		Subsidiaries of Johnson Controls International plc (filed herewith)

23.1		Consent of Independent Public Accounting Firm (filed herewith)

31.1		Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2		Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1		Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

101		Financial statements from the Annual Report on Form 10-K of Johnson Controls International plc for the fiscal year ended September 30, ~~2016~~2018 formatted in XBRL: (i) the Consolidated Statements of Financial Position, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flow, (v) the Consolidated Statements of Shareholders’ Equity Attributable to Johnson Controls ~~Inc.~~Ordinary Shareholders and (vi) Notes to Consolidated Financial Statements (filed herewith)



*	These instruments are not being filed as exhibits herewith because none of the long-term debt instruments authorizes the issuance of debt in excess of 10% of the total assets of Johnson Controls ~~Inc.~~International plc and its subsidiaries on a consolidated basis. Johnson Controls ~~Inc.~~International plc agrees to furnish a copy of each agreement to the Securities and Exchange Commission upon request.



**	Management contract or compensatory plan.

~~152~~135



Ireland		98-0390500
(Jurisdiction of Incorporation)		(I.R.S. Employer Identification No.)

One Albert Quay Cork, Ireland
(Address of principal executive offices)
353-21-423-5000
(Registrant's telephone number)



Title of Each Class		Name of Each Exchange on Which Registered
Ordinary Shares, Par Value $0.01		New York Stock Exchange



Large accelerated filer	Rþ	Accelerated filer	¨

Non-accelerated filer	¨

Emerging growth company	¨	Smaller reporting company	¨
~~(Do not check if a smaller reporting company)~~



		Page
CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION		3

PART I.

ITEM 1.	BUSINESS	3

ITEM 1A.	RISK FACTORS	97

ITEM 1B.	UNRESOLVED STAFF COMMENTS	2322

ITEM 2.	PROPERTIES	2322

ITEM 3.	LEGAL PROCEEDINGS	2423

ITEM 4.	MINE SAFETY DISCLOSURES	2723

	EXECUTIVE OFFICERS OF THE REGISTRANT	2723

PART II.

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	2925

ITEM 6.	SELECTED FINANCIAL DATA	3228

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3329

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	6453

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	6554

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~142~~125

ITEM 9A.	CONTROLS AND PROCEDURES	~~142~~126

ITEM 9B.	OTHER INFORMATION	~~143~~126

PART III.

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~143~~126

ITEM 11.	EXECUTIVE COMPENSATION	~~143~~127

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~143~~127

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~144~~127

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	~~144~~127

PART IV.

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	~~145~~128

ITEM 16.	FORM 10-K SUMMARY	129

	SIGNATURES	~~146~~129

	INDEX TO EXHIBITS	~~147~~130



Title of Class	Number of Record Holders as of September 30, ~~2016~~2018
Ordinary Shares, $0.01 par value	~~41,299~~37,836



Rþ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



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


ITEM 5	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



	Ordinary Shares Price Range		Dividends
	2016	2015	2016		2015
First Quarter	$ 32.29 - 39.38	$ 39.95 - 46.95	$	0.205	$	0.18
Second Quarter	30.30 - 38.67	41.77 - 46.31	0.205		0.18
Third Quarter	36.29 - 46.05	40.03 - 45.75	0.205		0.205
Fourth Quarter	42.22 - 48.97	34.62 - 40.84	0.435		0.205
Year	$ 30.30 - 48.97	$ 34.62 - 46.95	$	1.05	$	0.77



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
7/1/16 - 7/31/16
Purchases by Company	613,796	$42.02	613,796	$538,072,815
8/1/16 - 8/31/16
Purchases by Company	—	—	—	NA
9/1/16 - 9/30/16
Purchases by Company	—	—	—	NA
7/1/16 - 7/31/16
Purchases by Citibank	—	—	—	NA
8/1/16 - 8/31/16
Purchases by Citibank (1)	—	—	—	NA
9/1/16 - 9/30/16
Purchases by Citibank	—	—	—	NA


(2)	Return on average shareholders’ equity attributable to Johnson Controls ~~(ROE)~~ represents income from continuing operations attributable to Johnson Controls divided by average shareholders’ equity attributable to Johnson Controls.


(3)	Working capital is defined as current assets less current liabilities, excluding cash, ~~cash in escrow related to Adient debt,~~ short-term debt, the current portion of long-term debt, and the current ~~portion~~portions of assets and liabilities held for sale.


(4)	Total debt to total capitalization represents total debt divided by the sum of total debt and shareholders’ equity attributable to Johnson Controls.


(5)	Net book value per share represents shareholders’ equity attributable to Johnson Controls divided by the number of ~~common~~ shares outstanding at the end of the period.


ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



	Net Sales for the Year Ended September 30,						Segment EBIT for the Year Ended September 30,
(in millions)	2016		2015		Change		2016			2015		Change
Building Efficiency
Systems and Service North America	$	4,292	$	4,184	3	%	$	412		$	375	10	%
Products North America	2,488		2,450		2	%	173			306		-43	%
Asia	4,830		1,985		*		431			191		*
Rest of World	1,766		1,891		-7	%	20			51		-61	%
	13,376		10,510		27	%	1,036			923		12	%
Tyco	808		—		*		(17		)	—		*
	$	14,184	$	10,510	35	%	$	1,019		$	923	10	%



	Net Sales for the Year Ended September 30,						Segment EBITA for the Year Ended September 30,
(in millions)	2018		2017		Change		2018		2017		Change
Building Solutions North America	$	8,679	$	8,341	4	%	$	1,109	$	1,039	7	%
Building Solutions EMEA/LA	3,696		3,595		3	%	344		290		19	%
Building Solutions Asia Pacific	2,553		2,444		4	%	347		323		7	%
Global Products	8,472		8,455		—	%	1,338		1,179		13	%
	$	23,400	$	22,835	2	%	$	3,138	$	2,831	11	%



	September 30, 2016			September 30, 2015
(in millions)	September 30, 2016			September 30, 2015			Change
Current assets	$	17,109		$	10,469
Current liabilities	(16,293		)	(10,446		)
	816			23			*

Less: Cash	(684		)	(597		)
Less: Cash in escrow related to Adient debt	(2,034		)	—
Add: Short-term debt	1,119			52
Add: Current portion of long-term debt	628			813
Less: Assets held for sale	(174		)	(55		)
Add: Liabilities held for sale	28			42
Working capital (as defined)	$	(301	)	$	278		*

Accounts receivable	$	8,018		$	5,751		39	%
Inventories	3,560			2,377			50	%
Accounts payable	6,764			5,174			31	%



	September 30, 2018			September 30, 2017
(in millions)	September 30, 2018			September 30, 2017			Change
Current assets	$	11,823		$	12,292
Current liabilities	(11,250		)	(11,854		)
	573			438			31	%

Less: Cash	(200		)	(321		)
Add: Short-term debt	1,315			1,214
Add: Current portion of long-term debt	26			394
Less: Assets held for sale	—			(189		)
Add: Liabilities held for sale	—			72
Working capital (as defined)	$	1,714		$	1,608		7	%

Accounts receivable	$	7,065		$	6,666		6	%
Inventories	3,224			3,209			—	%
Accounts payable	4,644			4,271			9	%


	Total		2017		2018-2019		2020-2021		2022 and Beyond		Total		2019		2020-2021		2022-2023		2024 and Beyond
Contractual Obligations
Long-term debt (including capital lease obligations)*	$	15,234	$	628	$	379	$	6,905	$	7,322	$	9,724	$	26	$	2,489	$	1,973	$	5,236
Interest on long-term debt (including capital lease obligations)*	6,447		414		795		723		4,515		5,399		317		560		476		4,046
Operating leases	1,352		406		537		254		155		1,200		348		492		263		97
Purchase obligations	2,624		2,218		308		92		6		2,506		1,490		731		262		23
Pension and postretirement contributions	745		330		78		84		253		476		100		75		76		225
Tax indemnification liabilities**	290		—		—		—		—		255		—		—		—		—
Total contractual cash obligations	$	26,692	$	3,996	$	2,097	$	8,058	$	12,251	$	19,560	$	2,281	$	4,347	$	3,050	$	9,627



*	Products and systems consist of Building Technologies & Solutions and Power Solutions products and systems. Services are Building Technologies & Solutions technical services.



(in millions, except for share consolidation ratio and share data)

Number of Tyco shares outstanding at September 2, 2016	427,181,743
Tyco share consolidation ratio	0.955
Tyco ordinary shares outstanding following the share consolidation and immediately prior to the merger	407,958,565
JCI Inc. converted share price (1)	$	47.67
Fair value of equity portion of the merger consideration	$	19,447
Fair value of Tyco equity awards	224
Total fair value of consideration transferred	$	19,671


~~(1)~~	Amount equals JCI Inc. closing share price and market capitalization at September 2, 2016 ($45.45 and $29,012 million, respectively) adjusted for the Tyco $3,864 million cash contribution used to purchase 110.8 million shares of JCI Inc. common stock for $34.88 per share.



Cash and cash equivalents	$	489
Accounts receivable	1,648
Inventories	829
Other current assets	1,062
Property, plant, and equipment - net	1,224
Goodwill	16,363
Intangible assets - net	6,203
Other noncurrent assets	560
Total assets acquired	$	28,378

Short-term debt	$	462
Accounts payable	711
Accrued compensation and benefits	305
Other current liabilities	1,608
Long-term debt	6,416
Long-term deferred tax liabilities	1,173
Long-term pension and postretirement benefits	774
Other noncurrent liabilities	1,088
Total liabilities acquired	$	12,537
Noncontrolling interests	34
Net assets acquired	$	15,807
Cash consideration paid to JCI Inc. shareholders	3,864
Total fair value of consideration transferred	$	19,671



	Preliminary Fair Value (in millions)		Weighted Average Life (in years)
Customer relationships	$	2,280	11
Completed technology	1,530		10
Other definite-lived intangibles	223		8
Indefinite-lived trademarks	2,020
Other indefinite-lived intangibles	90
In-process research and development	60
Total identifiable intangible assets	$	6,203



	Fair Value (in millions)		Weighted Average Life (in years)
Customer relationships	$	2,280	12
Completed technology	1,650		11
Other definite-lived intangibles	214		7
Indefinite-lived trademarks	2,080
Other indefinite-lived intangibles	90
In-process research and development	70
Total identifiable intangible assets	$	6,384


			September 30, 2017

Cash			$	9
Accounts receivable - net	$	9	100
Inventories	7		75
Other current assets	3		5
Assets held for sale			$	189

Property, plant and equipment - net	15		$	79
Goodwill	89		1,248
Other intangible assets - net	30		592
Other noncurrent assets	4		1
Assets held for sale	$	157
Noncurrent assets held for sale			$	1,920

Accounts payable	$	9	$	37
Accrued compensation and benefits			10
Other current liabilities	19		25
Liabilities held for sale	$	28	$	72

Other noncurrent liabilities			$	173
Noncurrent liabilities held for sale			$	173



	September 30, 2014		Business Acquisitions		Business Divestitures			Currency Translation and Other			September 30, 2015
Building Efficiency
Systems and Service North America	$	982	$	—	$	(2	)	$	(2	)	$	978
Products North America	1,688		34		(14		)	(7		)	1,701
Asia	414		—		—			(25		)	389
Rest of World	345		—		—			(35		)	310
Automotive Experience
Seating	2,556		—		(4		)	(188		)	2,364
Interiors	—		9		(9		)	—			—
Power Solutions	1,142		—		—			(60		)	1,082
Total	$	7,127	$	43	$	(29	)	$	(317	)	$	6,824

	September 30, 2015		Business Acquisitions		Business Divestitures			Currency Translation and Other			September 30, 2016
Buildings
Building Efficiency
Systems and Service North America	$	978	$	—	$	(3	)	$	—		$	975
Products North America	1,701		—		(3		)	(1		)	1,697
Asia	389		253		—			15			657
Rest of World	310		5		(13		)	(1		)	301
Tyco	—		16,364		—			(56		)	16,308
Automotive Experience
Seating	2,364		—		—			21			2,385
Power Solutions	1,082		—		—			4			1,086
Total	$	6,824	$	16,622	$	(19	)	$	(18	)	$	23,409


	September 30, 2016							September 30, 2015							September 30, 2018							September 30, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets
Technology	$	1,556	$	(37	)	$	1,519	$	80	$	(59	)	$	21	$	1,334	$	(266	)	$	1,068	$	1,328	$	(137	)	$	1,191
Customer relationships	3,268		(274		)	2,994		975		(206		)	769		3,078		(664		)	2,414		3,168		(486		)	2,682
Miscellaneous	590		(155		)	435		307		(123		)	184		496		(200		)	296		389		(147		)	242
Total amortized intangible assets	5,414		(466		)	4,948		1,362		(388		)	974		4,908		(1,130		)	3,778		4,885		(770		)	4,115
Unamortized intangible assets
Trademarks/trade names	2,555		—			2,555		542		—			542
Trademarks/tradenames															2,448		—			2,448		2,483		—			2,483
Miscellaneous	150		—			150		—		—			—		122		—			122		143		—			143
	2,705		—			2,705		542		—			542		2,570		—			2,570		2,626		—			2,626
Total intangible assets	$	8,119	$	(466	)	$	7,653	$	1,904	$	(388	)	$	1,516	$	7,478	$	(1,130	)	$	6,348	$	7,511	$	(770	)	$	6,741


	Capital Leases			Operating Leases		Capital Leases			Operating Leases
2017	$	5		$	406
2018	4			310
2019	3			227		$	5		$	348
2020	3			156		6			284
2021	3			98		6			208
After 2021	12			155
2022						15			152
2023						2			111
After 2023						9			97
Total minimum lease payments	30			$	1,352	43			$	1,200
Interest	(6		)			(7		)
Present value of net minimum lease payments	$	24				$	36


		Volume Outstanding as of		Volume Outstanding as of
Commodity	Units	September 30, 2016	September 30, 2015	September 30, 2018	September 30, 2017
Copper	Pounds	5,849,000	14,648,000	3,175	1,962
Polypropylene				15,868	19,563
Lead	Metric Tons	5,185	6,785	49,066	24,705
Aluminum	Metric Tons	2,620	5,700	3,381	2,169
Tin	Metric Tons	185	2,080	3,076	1,715


	Derivatives and Hedging Activities Designated as Hedging Instruments under ASC 815				Derivatives and Hedging Activities Not Designated as Hedging Instruments under ASC 815				Derivatives and Hedging Activities Designated as Hedging Instruments under ASC 815				Derivatives and Hedging Activities Not Designated as Hedging Instruments under ASC 815
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015		September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Other current assets
Foreign currency exchange derivatives	$	41	$	31	$	49	$	27	$	6	$	27	$	10	$	—
Commodity derivatives	4		—		—		—		1		9		—		—
Interest rate swaps	—		1		—		—
Cross-currency interest rate swaps	—		5		—		—
Other noncurrent assets
Interest rate swaps	1		5		—		—
Equity swap	—		—		—		164		—		—		63		55
Total assets	$	46	$	42	$	49	$	191	$	7	$	36	$	73	$	55

Other current liabilities
Foreign currency exchange derivatives	$	48	$	37	$	23	$	26	$	10	$	21	$	2	$	25
Commodity derivatives	—		7		—		—		14		1		—		—
Cross-currency interest rate swaps	—		1		—		—
Current portion of long-term debt
Fixed rate debt swapped to floating	551		801		—		—
Long-term debt
Foreign currency denominated debt	2,057		—		—		—		3,149		2,058		—		—
Fixed rate debt swapped to floating	301		855		—		—
Total liabilities	$	2,957	$	1,701	$	23	$	26	$	3,173	$	2,080	$	2	$	25


	Fair Value of Assets						Fair Value of Liabilities						Fair Value of Assets						Fair Value of Liabilities
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015			September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
Gross amount recognized	$	95		$	233		$	2,980		$	1,727		$	80		$	91		$	3,175		$	2,105
Gross amount eligible for offsetting	(21		)	(8		)	(21		)	(8		)	(12		)	(16		)	(12		)	(16		)
Net amount	$	74		$	225		$	2,959		$	1,719		$	68		$	75		$	3,163		$	2,089


Derivatives in ASC 815 Cash Flow Hedging Relationships	Year Ended September 30,									Year Ended September 30,
Derivatives in ASC 815 Cash Flow Hedging Relationships	2016			2015			2014			2018			2017			2016
Foreign currency exchange derivatives	$	(18	)	$	(5	)	$	1		$	2		$	(1	)	$	(18	)
Commodity derivatives	3			(19		)	(7		)	(14		)	14			3
Total	$	(15	)	$	(24	)	$	(6	)	$	(12	)	$	13		$	(15	)


Derivatives in ASC 815 Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative	Year Ended September 30,									Location of Gain (Loss) Recognized in Income on Derivative	Year Ended September 30,
Derivatives in ASC 815 Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative	2016			2015			2014			Location of Gain (Loss) Recognized in Income on Derivative	2018		2017		2016
Foreign currency exchange derivatives	Cost of sales	$	(21	)	$	1		$	(2	)	Cost of sales	$	4	$	25	$	9
Foreign currency exchange derivatives											Loss from discontinued operations	—		—		(30		)
Commodity derivatives	Cost of sales	(12		)	(11		)	1			Cost of sales	12		8		(12		)
Forward treasury locks	Net financing charges	1			1			1			Net financing charges	—		—		1
Total		$	(32	)	$	(9	)	$	—			$	16	$	33	$	(32	)