Equity and Noncontrolling Interests

6 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Other comprehensive income includes activity relating to discontinued operations. The following schedules present changes in consolidated equity attributable to Johnson Controls and noncontrolling interests (in millions, net of tax):



	Three Months Ended March 31, 2019									Three Months Ended March 31, 2018
	Equity Attributable to Johnson Controls International plc			Equity Attributable to Noncontrolling Interests			Total Equity			Equity Attributable to Johnson Controls International plc			Equity Attributable to Noncontrolling Interests			Total Equity

Beginning balance, December 31,	$	20,102		$	1,305		$	21,407		$	20,535		$	965		$	21,500
Total comprehensive income:
Net income	515			43			558			438			33			471
Foreign currency translation adjustments	114			3			117			168			31			199
Realized and unrealized gains (losses) on derivatives	14			3			17			(6		)	1			(5		)
Realized and unrealized losses on marketable securities	—			—			—			(2		)	—			(2		)
Other comprehensive income	128			6			134			160			32			192
Comprehensive income	643			49			692			598			65			663

Other changes in equity:
Cash dividends—ordinary shares	(235		)	—			(235		)	(240		)	—			(240		)
Dividends attributable to noncontrolling interests	—			(89		)	(89		)	—			(43		)	(43		)
Repurchases of ordinary shares	(533		)	—			(533		)	(49		)	—			(49		)
Change in noncontrolling interest share	—			—			—			—			19			19
Other, including options exercised	59			—			59			30			—			30
Ending balance, March 31	$	20,036		$	1,265		$	21,301		$	20,874		$	1,006		$	21,880



	Six Months Ended March 31, 2019									Six Months Ended March 31, 2018
	Equity Attributable to Johnson Controls International plc			Equity Attributable to Noncontrolling Interests			Total Equity			Equity Attributable to Johnson Controls International plc			Equity Attributable to Noncontrolling Interests			Total Equity

Beginning balance, September 30,	$	21,164		$	1,294		$	22,458		$	20,447		$	920		$	21,367
Total comprehensive income:
Net income	870			87			957			668			61			729
Foreign currency translation adjustments	(13		)	12			(1		)	226			47			273
Realized and unrealized gains (losses) on derivatives	15			4			19			(5		)	2			(3		)
Realized and unrealized losses on marketable securities	—			—			—			(2		)	—			(2		)
Other comprehensive income	2			16			18			219			49			268
Comprehensive income	872			103			975			887			110			997

Other changes in equity:
Cash dividends—ordinary shares	(475		)	—			(475		)	(482		)	—			(482		)
Dividends attributable to noncontrolling interests	—			(132		)	(132		)	—			(43		)	(43		)
Repurchases of ordinary shares	(1,000		)	—			(1,000		)	(199		)	—			(199		)
Change in noncontrolling interest share	—			—			—			—			19			19
Adoption of ASC 606	(45		)	—			(45		)	—			—			—
Adoption of ASU 2016-16	(546		)	—			(546		)	—			—			—
Adoption of ASU 2016-09	—			—			—			179			—			179
Other, including options exercised	66			—			66			42			—			42
Ending balance, March 31	$	20,036		$	1,265		$	21,301		$	20,874		$	1,006		$	21,880

As previously disclosed, during the quarter ended December 31, 2018, the Company adopted ASC 606, "Revenue from Contracts with Customers." As a result, the Company recorded $45 million to beginning retained earnings, which relates primarily to deferred revenue recorded for the Power Solutions business for certain battery core returns that represent a material right provided to customers.

As previously disclosed, during the quarter ended December 31, 2018, the Company adopted ASU 2016-16, "Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other Than Inventory." As a result, the Company recognized deferred taxes of $546 million related to the tax effects of all intra-entity sales of assets other than inventory on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of October 1, 2018.

As previously disclosed, during the quarter ended December 31, 2017, the Company adopted ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting." As a result, the Company recognized deferred tax assets of $179 million related to certain operating loss carryforwards resulting from the exercise of employee stock options and restricted stock vestings on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of October 1, 2017.

Following the Tyco Merger, the Company adopted, subject to the ongoing existence of sufficient distributable reserves, the existing Tyco International plc $1 billion share repurchase program in September 2016. In December 2017, the Company's Board of Directors approved a $1 billion increase to its share repurchase authorization. In November 2018, the Company's Board of Directors approved an additional $1 billion increase to its share repurchase authorization. In March 2019, the Company's Board of Directors approved an additional $8.5 billion increase to its share repurchase authorization, subject to the completion of the previously announced sale of the Company's Power Solutions business. The share repurchase program does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice. During the three and six months ended March 31, 2019, the Company repurchased $533 million and $1 billion of its ordinary

shares, respectively. For the three and six months ended March 31, 2018, the Company repurchased $49 million and $199 million of its ordinary shares, respectively. As of March 31, 2019, approximately $1.0 billion remains available under the share repurchase program, with an additional $8.5 billion available upon completion of the previously announced sale of the Company's Power Solutions business.

On May 1, 2019, the Company announced that it plans to launch a "modified Dutch auction" tender offer for up to $4.0 billion of its ordinary shares with a price range between $36.00 and $40.00 per share.

The Company consolidates certain subsidiaries in which the noncontrolling interest party has within its control the right to require the Company to redeem all or a portion of its interest in the subsidiary. The redeemable noncontrolling interests are reported at their estimated redemption value. Any adjustment to the redemption value impacts retained earnings but does not impact net income. Redeemable noncontrolling interests which are redeemable only upon future events, the occurrence of which is not currently probable, are recorded at carrying value. Beginning in the fourth quarter of fiscal 2018, the Company does not have any subsidiaries for which the noncontrolling interest party has within their control the right to require the Company to redeem any portion of its interests.

The following schedule present changes in the redeemable noncontrolling interests for the three and six months ended March 31, 2018 (in millions):



	Three Months Ended March 31, 2018

Beginning balance, December 31, 2017	$	226
Net income	12
Foreign currency translation adjustments	5
Realized and unrealized losses on derivatives	(5		)
Dividends	(3		)
Ending balance, March 31, 2018	$	235




	Six Months Ended March 31, 2018

Beginning balance, September 30, 2017	$	211
Net income	25
Foreign currency translation adjustments	10
Realized and unrealized losses on derivatives	(8		)
Dividends	(3		)
Ending balance, March 31, 2018	$	235

The following schedules present changes in accumulated other comprehensive income ("AOCI") attributable to Johnson Controls (in millions, net of tax):



	Three Months Ended March 31,
	2019			2018

Foreign currency translation adjustments ("CTA")
Balance at beginning of period	$	(1,066	)	$	(423	)
Aggregate adjustment for the period (net of tax effect of $0)	114			168
Balance at end of period	(952		)	(255		)

Realized and unrealized gains (losses) on derivatives
Balance at beginning of period	(12		)	7
Current period changes in fair value (net of tax effect of $6 and $(2))	12			(4		)
Reclassification to income (net of tax effect of $2 and $0) **	2			(2		)
Balance at end of period	2			1

Realized and unrealized gains (losses) on marketable securities
Balance at beginning of period	—			4
Current period changes in fair value (net of tax effect of $0)	—			(2		)
Balance at end of period	—			2

Pension and postretirement plans
Balance at beginning of period	(2		)	(2		)
Other changes	—			—
Balance at end of period	(2		)	(2		)

Accumulated other comprehensive loss, end of period	$	(952	)	$	(254	)




	Six Months Ended March 31,
	2019			2018

CTA
Balance at beginning of period	$	(939	)	$	(481	)
Aggregate adjustment for the period (net of tax effect of $0 and $1) *	(13		)	226
Balance at end of period	(952		)	(255		)

Realized and unrealized gains (losses) on derivatives
Balance at beginning of period	(13		)	6
Current period changes in fair value (net of tax effect of $4 and $1)	8			2
Reclassification to income (net of tax effect of $3 and $(2)) **	7			(7		)
Balance at end of period	2			1

Realized and unrealized gains (losses) on marketable securities
Balance at beginning of period	8			4
Adoption of ASU 2016-01 ***	(8		)	—
Current period changes in fair value (net of tax effect of $0)	—			(2		)
Balance at end of period	—			2

Pension and postretirement plans
Balance at beginning of period	(2		)	(2		)
Other changes	—			—
Balance at end of period	(2		)	(2		)

Accumulated other comprehensive loss, end of period	$	(952	)	$	(254	)

* During the six months ended March 31, 2018, $12 million of cumulative CTA was recognized as part of the divestiture-related gain recognized as part of the divestiture of Scott Safety.

** Refer to Note 15, "Derivative Instruments and Hedging Activities," of the notes to consolidated financial statements for disclosure of the line items in the consolidated statements of income affected by reclassifications from AOCI into income related to derivatives.

*** As previously disclosed, during the quarter ended December 31, 2018, the Company adopted ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." As a result the Company reclassified $8 million of unrealized gains on marketable securities to retained earnings as of October 1, 2018.