Johnson Controls 2013 Annual Report Download - page 108

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20. NONCONSOLIDATED PARTIALLY-OWNED AFFILIATES
Investments in the net assets of nonconsolidated partially-owned affiliates are stated in the “Investments in partially-owned
affiliates” line in the consolidated statements of financial position as of September 30, 2013 and 2012. Equity in the net income
of nonconsolidated partially-owned affiliates is stated in the “Equity income” line in the consolidated statements of income for
the years ended September 30, 2013, 2012 and 2011.
The following table presents summarized financial data for the Company’s nonconsolidated partially-owned affiliates. The amounts
included in the table below represent 100% of the results of operations of such nonconsolidated partially-owned affiliates accounted
for under the equity method.
Summarized balance sheet data as of September 30 is as follows (in millions):
2013 2012
Current assets $ 3,987 $ 3,339
Noncurrent assets 1,775 1,648
Total assets 5,762 4,987
Current liabilities $ 3,046 $ 2,501
Noncurrent liabilities 613 553
Shareholders’ equity 2,103 1,933
Total liabilities and shareholders’ equity 5,762 4,987
Summarized income statement data for the years ended September 30 is as follows (in millions):
2013 2012 2011
Net sales $ 9,973 $ 9,261 $ 8,468
Gross profit 1,483 1,423 1,154
Net income attributable to the entity 639 664 526
21. COMMITMENTS AND CONTINGENCIES
The Company accrues for potential environmental liabilities in a manner consistent with U.S. GAAP; that is, when it is probable
a liability has been incurred and the amount of the liability is reasonably estimable. Reserves for environmental liabilities totaled
$25 million at September 30, 2013 and 2012. The Company reviews the status of its environmental sites on a quarterly basis and
adjusts its reserves accordingly. Such potential liabilities accrued by the Company do not take into consideration possible recoveries
of future insurance proceeds. They do, however, take into account the likely share other parties will bear at remediation sites. It
is difficult to estimate the Company’s ultimate level of liability at many remediation sites due to the large number of other parties
that may be involved, the complexity of determining the relative liability among those parties, the uncertainty as to the nature and
scope of the investigations and remediation to be conducted, the uncertainty in the application of law and risk assessment, the
various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often
quite lengthy periods over which eventual remediation may occur. Nevertheless, the Company does not currently believe that any
claims, penalties or costs in connection with known environmental matters will have a material adverse effect on the Company’s
financial position, results of operations or cash flows. In addition, the Company has identified asset retirement obligations for
environmental matters that are expected to be addressed at the retirement, disposal, removal or abandonment of existing owned
facilities, primarily in the Power Solutions business. At September 30, 2013 and 2012, the Company recorded conditional asset
retirement obligations of $56 million and $76 million, respectively.
The Company is involved in a number of product liability and various other casualty lawsuits incident to the operation of its
businesses. The Company maintains insurance coverages and records estimated costs for claims and suits of this nature. It is
management’s opinion that none of these will have a material adverse effect on the Company’s financial position, results of
operations or cash flows. Costs related to such matters were not material to the periods presented.