JCIJohnson Controls

Please tell us whether you use any metrics to monitor your ability to retain customers, acquire new customers or expand sales to existing customers. For example, we note in your quarterly earnings slides that you highlight sites under long-term service agreements, and order growth for install and service on a consolidated and segmental basis.

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Tell us your consideration of disclosing these or other metrics for each period presented and any related trends that affect your revenues or results of operations. We refer you to Item 303(a) of Regulation S-K and SEC Release No. 33-10751.

The Company acknowledges the Staff’s comment and had revised its filings to remove total segment EBITA from its previously filed Quarterly Reports on Form 10-Q for all quarterly periods during fiscal year 2024 and for the most recent quarter ended December 31, 2024. The revisions were inadvertently omitted from the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The Company will not present the non-GAAP measure total segment EBITA in future periodic filings. Read in the reply ↗

We note that you present total segment EBITA, which is a non-GAAP measure and should be reconciled to the most directly comparable GAAP measure. However, once reconciled it would appear that such measure may include adjustments that are inconsistent with the applicable non-GAAP guidance.

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In this regard, adjusting for “Corporate” expenses" appears to present a non-GAAP measure that excludes normal, recurring, cash operating expenses. Therefore, please revise to remove this measure from your periodic filings, Form 8-K earnings releases, and earnings presentations. Refer to Item 10(e)(1)(i)(B) of Regulation S-K and Questions 100.01 and 104.04 of the non-GAAP C&DIs.

The Company acknowledges the Staff’s comment and had revised its disclosures to only present a calculation of working capital as defined in the FASB Codification Master Glossary in its previously filed Quarterly Reports on Form 10-Q for all quarterly periods during fiscal year 2024 and for the most recent quarter ended December 31, 2024. The revisions were inadvertently omitted from the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

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The Company will only include a calculation of working capital as defined in the FASB Codification Master Glossary in its future periodic filings.

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We note your disclosure of working capital is not consistent with the definition of working capital in the FASB Codification Master Glossary and is therefore a non- GAAP measure. Please tell us how your presentation complies with Item 10(e)(1)(ii)(A) of Regulation S-K which prohibits excluding charges or liabilities that required or will require cash settlement from non-GAAP liquidity measures.

The Company acknowledges the Staff’s comment and will include a presentation of operating cash flow conversion with equal or greater prominence when also presenting free cash flow and adjusted free cash flow conversion in its future earnings releases furnished on Form 8-K. Read in the reply ↗

We note you present the non-GAAP ratio, net debt as a % of total capitalization without presenting the ratio calculated using the most directly comparable GAAP measure(s) with equal or greater prominence. Please revise future filings accordingly. Refer to Question 102.10(a) of the Non-GAAP C&DIs.

The Company acknowledges the Staff’s comment and will not include presentations of combined continuing and discontinued operations results in future filings.

We acknowledge that the Company is responsible for the accuracy of its disclosures, that the Commission is not foreclosed from taking action with respect to its filing and that the Company may not use the staff comments as a defense in any proceeding. Read in the reply ↗

We note that you discuss the percentage changes in non-GAAP EPS, adjusted net income, EBIT and EBIT margin on page 1 without providing a similar discussion of the percentage changes in the most directly comparable GAAP measure. Also, you disclose EBIT and adjusted EBIT margins without disclosing the comparable GAAP margin.

Rest of the question

Please revise to present and discuss the most directly comparable GAAP measure with equal or greater prominence as required by Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the non-GAAP C&DIs.

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Please revise to remove the “GAAP” header in the table on page 2 as total segment EBITA and EBIT are non-GAAP measures.

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Please revise the reconciliations on page 15 to begin with the most directly comparable GAAP measure and reconcile to the non-GAAP. For example, your reconciliation should start with net income and reconcile down to EBIT and Adjusted EBIT. Refer to Question 102.10(b) of the Non-GAAP C&DIs.

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Please revise the title of your free cash flow measure to adjusted free cash flow or a similar description as your calculation differs from the typical calculation of cash flows from operating activities less capital expenditures. Refer to Question 102.07 of the Non- GAAP C&DIs.

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