Segment Information

ASC 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, the Company has determined that it has five reportable segments for financial reporting purposes. The Company’s five reportable segments are presented in the context of its two primary businesses – Building Technologies & Solutions and Power Solutions.

Effective July 1, 2017, the Company reorganized the reportable segments within its Building Technologies & Solutions business to align with its new management reporting structure and business activities. Prior to this reorganization, Building Technologies & Solutions was comprised of five reportable segments for financial reporting purposes: Systems and Service North America, Products North America, Asia, Rest of World and Tyco. As a result of this change, Building Technologies & Solutions is now comprised of four reportable segments for financial reporting purposes: Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific and Global Products. Historical information has been revised to reflect the new Building Technologies & Solutions segments.

A summary of the significant Building Technologies & Solutions reportable segment changes is as follows:


•	The “Systems and Service North America” segment is now part of the new “Building Solutions North America” reportable segment.

•

The North America Unitary Products business, Air Distribution Technologies business and refrigeration systems business, as well as HVAC products installed for Marine customers, previously included in the “Products North America” segment, are now part of the new reportable segment “Global Products.” The systems and products installation business for U.S. Navy customers, previously included in the “Products North America” segment, is now part of the new “Building Solutions North America” reportable segment.


•	The systems and service business within the former “Asia” segment is now part of the new “Building Solutions Asia Pacific” reportable segment. The HVAC products manufacturing business and the Johnson Controls-Hitachi joint venture, previously part of the “Asia” segment, are now part of the new “Global Products” reportable segment.


•	The systems and service businesses in Europe, the Middle East and Latin America within the former “Rest of World” segment are now part of the new “Building Solutions EMEA/LA” reportable segment. The HVAC products manufacturing businesses, previously part of the “Rest of World” segment, are now part of the new “Global Products” reportable segment.


•	As the Company has integrated the legacy Tyco business with its legacy Building Efficiency business for segment reporting purposes, Tyco is no longer a separate reportable segment. The Tyco businesses are now included throughout the new reportable segments.

Building Technologies & Solutions

•

Building Solutions North America designs, sells, installs, and services HVAC and controls systems, integrated electronic security systems (including monitoring), and integrated fire detection and suppression systems for commercial, industrial, retail, small business, institutional and governmental customers in North America. Building Solutions North America also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, to non-residential building and industrial applications in the North American marketplace.


•	Building Solutions EMEA/LA designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to markets in Europe, the Middle East, Africa and Latin America.


•	Building Solutions Asia Pacific designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to the Asia Pacific marketplace.

•

Global Products designs and produces heating and air conditioning for residential and commercial applications, and markets products and refrigeration systems to replacement and new construction market customers globally. The Global Products business also designs, manufactures and sells fire protection and security products, including intrusion security, anti-theft devices, and access control and video management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide. Global Products also includes the Johnson Controls-Hitachi joint venture, which was formed October 1, 2015, and included the Scott Safety business, prior to its sale on October 4, 2017.

Power Solutions

Power Solutions services both automotive original equipment manufacturers and the battery aftermarket by providing advanced battery technology, coupled with systems engineering, marketing and service expertise.

Management evaluates the performance of its business segments primarily on segment earnings before interest, taxes and amortization ("EBITA"), which represents income from continuing operations before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset amortization, net financing charges, significant restructuring and impairment costs, and the net mark-to-market adjustments related to pension and postretirement plans.

Financial information relating to the Company’s reportable segments is as follows (in millions):



	Net Sales
	Three Months Ended March 31,				Six Months Ended March 31,
	2018		2017		2018		2017
Building Technologies & Solutions
Building Solutions North America	$	2,097	$	2,097	$	4,109	$	4,039
Building Solutions EMEA/LA	907		898		1,822		1,773
Building Solutions Asia Pacific	586		562		1,183		1,137
Global Products	2,040		2,014		3,821		3,808
	5,630		5,571		10,935		10,757
Power Solutions	1,845		1,696		3,975		3,596

Total net sales	$	7,475	$	7,267	$	14,910	$	14,353



	Segment EBITA
	Three Months Ended March 31,						Six Months Ended March 31,
	2018			2017			2018			2017
Building Technologies & Solutions
Building Solutions North America	$	239		$	255		$	466		$	451
Building Solutions EMEA/LA	77			89			146			138
Building Solutions Asia Pacific	71			67			145			130
Global Products	228			242			514			369
	615			653			1,271			1,088
Power Solutions	314			303			698			692

Total segment EBITA	$	929		$	956		$	1,969		$	1,780

Corporate expenses	$	(159	)	$	(240	)	$	(293	)	$	(433	)
Amortization of intangible assets	(94		)	(126		)	(188		)	(275		)
Restructuring and impairment costs	—			(99		)	(158		)	(177		)
Net mark-to-market adjustments on pension plans	—			18			—			135
Net financing charges	(115		)	(116		)	(231		)	(252		)
Income from continuing operations before income taxes	$	561		$	393		$	1,099		$	778