Acquisitions and Divestitures

12 Months Ended

Sep. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

ACQUISITIONS AND DIVESTITURES

Fiscal 2025

In July 2024, the Company entered into a definitive agreement to sell its Residential and Light Commercial ("R&LC") HVAC business, which includes the North America Ducted businesses and the global Residential joint venture with Hitachi, of which Johnson Controls owns 60% and Hitachi owns 40%. The Company completed the sale of its R&LC HVAC business on July 31, 2025 for proceeds of $5.6 billion, net of cash disposed, after tax and transaction-related expenses. In connection with the sale, the Company recognized a gain, net of transaction and other costs, of $2.7 billion ($1.5 billion after tax) for the year ended September 30, 2025, subject to final post-closing working capital and net debt adjustments, within income from discontinued operations, net of tax, in the consolidated statements of income.

The Company determined that the R&LC HVAC business, which was previously reported in the Global Products segment prior to the Company's resegmentation, met the criteria to be classified as a discontinued operation as it represented a strategic shift in the Company's operations and resulted in the exit of substantially all of its residential and light commercial HVAC businesses. As a result, the R&LC HVAC business was presented in discontinued operations separate from continuing operations for all periods presented.

The Company determined that the assets and liabilities for the R&LC HVAC business met the held for sale criteria during the fourth quarter of 2024 and ceased recording depreciation and amortization for the held for sale assets upon meeting the held for sale criteria.

The major classes of line items constituting income from discounted operations, net, in millions:


	Year Ended September 30,
	2025		2024		2023
Net sales	$	3,790	$	4,466	$	4,462
Cost of goods sold	2,881		3,300		3,295
Gross profit	909		1,166		1,167
Selling, general and administrative expenses	(2,008)		761		794
Restructuring and impairment costs	30		34		15
Net financing charges	5		17		23
Equity income	240		276		262
Income from discontinued operations before income taxes	3,122		630		597
Provision for income taxes on discontinued operations	1,333		141		145
Income from discontinued operations, net of tax	1,789		489		452
Income from discontinued operations attributable to noncontrolling interest, net of tax	219		191		165
Income from discontinued operations	$	1,570	$	298	$	287

The carrying amounts of major classes of assets and liabilities included as part of the R&LC HVAC business discontinued operations and reported as held for sale, were as follows, in millions:


	September 30, 2024


Cash	$	5
Accounts receivable - net	592
Inventories	876
Other current assets	122
Current assets held for sale	1,595

Property, plant and equipment - net	793
Goodwill	1,182
Other intangible assets - net	96
Investments in partially-owned affiliates	949
Other noncurrent assets	190
Noncurrent assets held for sale	3,210
Total assets classified as held for sale	$	4,805




Accounts payable	$	917
Accrued compensation and benefits	113
Deferred revenue	84
Other current liabilities	317
Current liabilities held for sale	1,431


Pension and postretirement benefit obligations	28
Other noncurrent liabilities	377
Noncurrent liabilities held for sale	405
Total liabilities classified as held for sale	$	1,836

In conjunction with the divestiture, we entered into Transition Services Agreements to provide administrative services to the buyers. The fees for services rendered under each of the Transition Service Agreements were not material to our results of operations.

Fiscal 2024

During fiscal 2024, the Company completed three divestitures, including the divestiture of its Air Distribution Technologies ("ADTi") business which was previously reported in the Global Products segment prior to the Company's resegmentation. The combined selling price, net of cash divested, was $347 million, of which $332 million was received as of September 30, 2024. In connection with the closing of the ADTi transaction, the Company recorded a pre-tax loss of $42 million within selling, general and administrative expenses in the consolidated statements of income. An impairment of $56 million was recorded within restructuring and impairment costs in the consolidated statements of income while the business was classified as held for sale. Net cash proceeds from the divestitures were used for general corporate purposes. The businesses did not meet the criteria to be classified as discontinued operations as the divestitures did not represent a strategic shift that will have a major effect on the Company's operations and financial results.