During the third quarter of fiscal 2026, the Company closed the acquisitions of Alloy Enterprises and Nantum AI. The total aggregate consideration for the acquisitions, net of cash acquired, was approximately $291 million, of which a meaningful component related to Alloy Enterprises. Alloy Enterprises is a thermal, mechanical and materials sciences technology company that designs and manufactures advanced direct liquid cooling components. Nantum AI expands capabilities within the Johnson Controls OpenBlue digital ecosystem. These businesses will be reported within the Americas segment. In connection with the acquisitions, the Company recorded goodwill of $193 million, primarily related to the expected synergies from combining the operations into our business, and $127 million of definite-lived intangible assets related to developed technology being amortized on a straight-line basis over 15 years.

During the third quarter of fiscal 2026, the Company signed a definitive agreement to sell its ADT United Kingdom Residential Security business and determined that it met the criteria to be classified as held for sale. The transaction is expected to close in fiscal 2027. The business did not meet the criteria to be classified as a discontinued operation as the divestiture does not represent a strategic shift that will have a major effect on the Company's operations and financial results. As of June 30, 2026, $229 million of assets and $39 million of liabilities associated with the business were separately presented as held for sale in the consolidated statements of financial position.

Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of June 30, 2026, the estimated fair value less costs to sell of the held for sale business exceeded its carrying value, and therefore, no adjustment was necessary.

On April 1, 2026, the Company completed the sale of its ADT Spain Security business for net proceeds of $98 million, with no gain or loss recorded on the transaction. As the estimated fair value less costs to sell was below its carrying value, the Company recorded non-cash impairment charges in the first quarter of fiscal 2026 of $50 million within restructuring and impairment costs in the consolidated statements of income.

On October 31, 2025, the Company completed the sale of its ADT Mexico Security business for net proceeds of $207 million. In connection with the sale, the Company recognized a pre-tax gain of $70 million within selling, general and administrative expenses in the consolidated statements of income for the nine months ended June 30, 2026.

The held for sale assets and liabilities in the consolidated balance sheet at September 30, 2025 included $154 million of assets and $21 million of liabilities associated with the ADT Mexico Security business, as the Company determined that the held for sale criteria was met in the third quarter of 2025.

In 2024, the Company determined that the R&LC HVAC business, which was previously reported in the Global Products segment, met the criteria to be classified as discontinued operations 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. In July 2025, the Company completed the sale of its R&LC HVAC business.

The results of the R&LC HVAC business recorded in income from discontinued operations, net of tax, was a loss of $27 million for the nine months ended June 30, 2026, reflecting the impacts of post-closing working capital, net debt and other discontinued operations adjustments.


	Three Months Ended June 30, 2025		Nine Months Ended June 30, 2025

Net sales	$	1,369	$	3,404
Cost of goods sold	1,007		2,579
Gross profit	362		825
Selling, general and administrative expenses	212		584
Restructuring and impairment costs	12		21
Net financing charges	5		6
Equity income	77		211
Income from discontinued operations before income taxes	210		425
Provision for income taxes on discontinued operations	50		124
Income from discontinued operations, net of tax	160		301
Income from discontinued operations attributable to noncontrolling interest, net of tax	77		157
Income from discontinued operations	$	83	$	144

In the three months ended June 30, 2026, the Company paid approximately $155 million related to final purchase price adjustments associated with the sale of the R&LC HVAC business to the Bosch Group.