Equity and Noncontrolling Interests

9 Months Ended

Jun. 30, 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 June 30, 2019									Three Months Ended June 30, 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, March 31,	$	20,036		$	1,265		$	21,301		$	20,874		$	1,006		$	21,880
Total comprehensive income:
Net income	4,192			84			4,276			723			71			794
Foreign currency translation adjustments	(90		)	(4		)	(94		)	(557		)	(44		)	(601		)
Realized and unrealized gains (losses) on derivatives	(5		)	(4		)	(9		)	3			(1		)	2
Other comprehensive loss	(95		)	(8		)	(103		)	(554		)	(45		)	(599		)
Comprehensive income	4,097			76			4,173			169			26			195

Other changes in equity:
Cash dividends—ordinary shares	(208		)	—			(208		)	(240		)	—			(240		)
Repurchases and retirements of ordinary shares	(4,122		)	—			(4,122		)	(56		)	—			(56		)
Change in noncontrolling interest share	—			—			—			—			4			4
Divestiture of Power Solutions	483			(295		)	188			—			—			—
Other, including options exercised	77			—			77			26			—			26
Ending balance, June 30	$	20,363		$	1,046		$	21,409		$	20,773		$	1,036		$	21,809



	Nine Months Ended June 30, 2019									Nine Months Ended June 30, 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	5,062			171			5,233			1,391			132			1,523
Foreign currency translation adjustments	(103		)	8			(95		)	(331		)	3			(328		)
Realized and unrealized gains (losses) on derivatives	10			—			10			(2		)	1			(1		)
Realized and unrealized losses on marketable securities	—			—			—			(2		)	—			(2		)
Other comprehensive income (loss)	(93		)	8			(85		)	(335		)	4			(331		)
Comprehensive income	4,969			179			5,148			1,056			136			1,192

Other changes in equity:
Cash dividends—ordinary shares	(683		)	—			(683		)	(722		)	—			(722		)
Dividends attributable to noncontrolling interests	—			(132		)	(132		)	—			(43		)	(43		)
Repurchases and retirements of ordinary shares	(5,122		)	—			(5,122		)	(255		)	—			(255		)
Change in noncontrolling interest share	—			—			—			—			23			23
Divestiture of Power Solutions	483			(295		)	188			—			—			—
Adoption of ASC 606	(45		)	—			(45		)	—			—			—
Adoption of ASU 2016-16	(546		)	—			(546		)	—			—			—
Adoption of ASU 2016-09	—			—			—			179			—			179
Other, including options exercised	143			—			143			68			—			68
Ending balance, June 30	$	20,363		$	1,046		$	21,409		$	20,773		$	1,036		$	21,809

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, which closed on April 30, 2019.

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.

On May 1, 2019, the Company announced 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 tender offer expired on May 31, 2019. Through the tender offer, the Company accepted for payment 102 million shares at a purchase price of $39.25 per share, for a total of approximately $4,035 million, including fees and commissions. The shares purchased through the tender offer were immediately retired. Ordinary shares were reduced by the number of shares retired at $0.01 par value per share. The excess purchase price over par value was recorded in retained earnings in the consolidated statements of financial position.

In addition to the equity tender offer described above, the Company repurchased $87 million and $1,087 million of its ordinary shares, respectively, during the three and nine months ended June 30, 2019. For the three and nine months ended June 30, 2018, the Company repurchased $56 million and $255 million of its ordinary shares, respectively. As of June 30, 2019, approximately $5.4 billion remains available under the share repurchase program.

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 nine months ended June 30, 2018 (in millions):



	Three Months Ended June 30, 2018

Beginning balance, March 31, 2018	$	235
Net income	10
Foreign currency translation adjustments	(13		)
Realized and unrealized losses on derivatives	(1		)
Ending balance, June 30, 2018	$	231




	Nine Months Ended June 30, 2018

Beginning balance, September 30, 2017	$	211
Net income	35
Foreign currency translation adjustments	(3		)
Realized and unrealized losses on derivatives	(9		)
Dividends	(3		)
Ending balance, June 30, 2018	$	231

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



	Three Months Ended June 30,
	2019			2018

Foreign currency translation adjustments ("CTA")
Balance at beginning of period	$	(952	)	$	(255	)
Divestiture of Power Solutions	479			—
Aggregate adjustment for the period (net of tax effect of $0)	(90		)	(557		)
Balance at end of period	(563		)	(812		)

Realized and unrealized gains (losses) on derivatives
Balance at beginning of period	2			1
Divestiture of Power Solutions (net of tax effect of $1 and $0)	4			—
Current period changes in fair value (net of tax effect of $(3) and $1)	(4		)	5
Reclassification to income (net of tax effect of $0 and $(2)) **	(1		)	(2		)
Balance at end of period	1			4

Realized and unrealized gains (losses) on marketable securities
Balance at beginning of period	—			2
Current period changes in fair value (net of tax effect of $0)	—			1
Reclassification to income (net of tax effect of $0 and $(1))	—			(1		)
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	$	(564	)	$	(808	)




	Nine Months Ended June 30,
	2019			2018

CTA
Balance at beginning of period	$	(939	)	$	(481	)
Divestiture of Power Solutions	479			—
Aggregate adjustment for the period (net of tax effect of $0 and $1) *	(103		)	(331		)
Balance at end of period	(563		)	(812		)

Realized and unrealized gains (losses) on derivatives
Balance at beginning of period	(13		)	6
Divestiture of Power Solutions (net of tax effect of $1 and $0)	4			—
Current period changes in fair value (net of tax effect of $1 and $2)	4			7
Reclassification to income (net of tax effect of $3 and $(4)) **	6			(9		)
Balance at end of period	1			4

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)	—			(1		)
Reclassification to income (net of tax effect of $(1)) ****	—			(1		)
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	$	(564	)	$	(808	)

* During the nine months ended June 30, 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.

**** During the nine months ended June 30, 2018, the Company sold certain marketable common stock for approximately $3 million. As a result, the Company recorded $2 million of realized gains within selling, general and administrative expenses.