Johnson Controls International plcJCI
Johnson Controls International plc Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The fair value of public debt was determined primarily using market quotes which are classified as Level 1 inputs within the ASC 820 fair value hierarchy. The fair value of other long-term debt was determined using quoted market prices for similar instruments and are classified as Level 2 inputs within the ASC 820 fair value hierarchy.
The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value (in millions):
| Fair Value Measurements Using: | |||||||||||||||||||||||
| Total as of September 30, 2025 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Other current assets | |||||||||||||||||||||||
| Foreign currency exchange derivatives | $ | 14 | $ | — | $ | 14 | $ | — | |||||||||||||||
| Commodity derivatives | 1 | — | 1 | — | |||||||||||||||||||
| Other noncurrent assets | |||||||||||||||||||||||
| Deferred compensation plan assets | 63 | 63 | — | — | |||||||||||||||||||
Exchange traded funds (fixed income)(1) | 73 | 73 | — | — | |||||||||||||||||||
Exchange traded funds (equity)(1) | 217 | 217 | — | — | |||||||||||||||||||
| Total assets | $ | 368 | $ | 353 | $ | 15 | $ | — | |||||||||||||||
| Other current liabilities | |||||||||||||||||||||||
| Foreign currency exchange derivatives | $ | 23 | $ | — | $ | 23 | $ | — | |||||||||||||||
| Commodity derivatives | 1 | — | 1 | — | |||||||||||||||||||
| Contingent earn-out liabilities | 19 | — | — | 19 | |||||||||||||||||||
| Total liabilities | $ | 43 | $ | — | $ | 24 | $ | 19 | |||||||||||||||
(1) Classified as restricted investments for payment of asbestos liabilities. Refer to Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further details.
| Fair Value Measurements Using: | |||||||||||||||||||||||
| Total as of September 30, 2024 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Other current assets | |||||||||||||||||||||||
| Foreign currency exchange derivatives | $ | 20 | $ | — | $ | 20 | $ | — | |||||||||||||||
Commodity derivatives | 2 | — | 2 | — | |||||||||||||||||||
| Other noncurrent assets | |||||||||||||||||||||||
| Deferred compensation plan assets | 56 | 56 | — | — | |||||||||||||||||||
Exchange traded funds (fixed income)(1) | 81 | 81 | — | — | |||||||||||||||||||
Exchange traded funds (equity)(1) | 200 | 200 | — | — | |||||||||||||||||||
| Total assets | $ | 359 | $ | 337 | $ | 22 | $ | — | |||||||||||||||
| Other current liabilities | |||||||||||||||||||||||
| Foreign currency exchange derivatives | $ | 25 | $ | — | $ | 25 | $ | — | |||||||||||||||
| Commodity derivatives | 1 | — | 1 | — | |||||||||||||||||||
| Contingent earn-out liabilities | 14 | — | — | 14 | |||||||||||||||||||
| Other noncurrent liabilities | |||||||||||||||||||||||
| Contingent earn-out liabilities | 14 | — | — | 14 | |||||||||||||||||||
| Total liabilities | $ | 54 | $ | — | $ | 26 | $ | 28 | |||||||||||||||
(1) Classified as restricted investments for payment of asbestos liabilities. Refer to Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further details.
Valuation Methods
Commodity derivatives: The commodity derivatives are valued under a market approach using publicized prices, where available, or dealer quotes.
Contingent earn-out liabilities: The contingent earn-out liabilities are generally established using a Monte Carlo simulation based on the forecasted operating results and the earn-out formulas specified in the purchase agreements.
Deferred compensation plan assets: Assets held in the deferred compensation plans will be used to pay benefits under certain of the Company's non-qualified deferred compensation plans. The investments primarily consist of mutual funds which are publicly traded on stock exchanges and are valued using a market approach based on the quoted market prices. Unrealized gains (losses) on the deferred compensation plan assets are recognized in the consolidated statements of income where they offset unrealized gains and losses on the related deferred compensation plan liability.
Exchange traded funds: Investments in exchange traded funds are valued using a market approach based on quoted market prices, where available, or broker/dealer quotes of identical or comparable instruments. Refer to Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further information.
Foreign currency exchange derivatives: The foreign currency exchange derivatives are valued under a market approach using publicized spot and forward prices.
The following table presents the portion of unrealized gains recognized in the consolidated statements of income that relate to equity securities still held at September 30, 2025 and 2024 (in millions):
| Year Ended September 30, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Deferred compensation plan assets | $ | 5 | $ | 10 | |||||||||||||
| Investments in exchange traded funds | 29 | 58 | |||||||||||||||
The fair values of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values.
The fair value of long-term debt at September 30, 2025 and 2024 was as follows (in billions):
| September 30, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Public debt | $ | 8.4 | $ | 8.1 | |||||||||||||
| Other long-term debt | 0.5 | 0.2 | |||||||||||||||
| Total fair value of long-term debt | $ | 8.9 | $ | 8.3 | |||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 14, 2025 | Showing above |
| 2024 | Nov 19, 2024 | |
| 2023 | Dec 14, 2023 | |
| 2022 | Nov 15, 2022 | |
| 2021 | Nov 15, 2021 | |
| 2020 | Nov 16, 2020 | |
| 2019 | Nov 21, 2019 | |
| 2018 | Nov 20, 2018 | |
| 2017 | Nov 21, 2017 | |
| 2016 | Nov 23, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.