Johnson Controls 2013 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2013 Johnson Controls annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

79
Location of Gain (Loss)
Recognized in Income on Derivative
Amount of Gain (Loss) Recognized in Income on Derivative
Derivatives in ASC 815 Fair Value
Hedging Relationships
Year Ended September 30,
2013 2012
Interest rate swap Net financing charges $ (2) $ (8)
Fixed rate debt swapped to floating Net financing charges 2 9
Total $ — $ 1
Location of Gain (Loss)
Recognized in Income on Derivative
Amount of Gain (Loss) Recognized in Income on Derivative
Derivatives Not Designated as Hedging
Instruments under ASC 815
Year Ended September 30,
2013 2012
Foreign currency exchange derivatives Cost of sales $ (8) $ 23
Foreign currency exchange derivatives Net financing charges 25 (19)
Foreign currency exchange derivatives Provision for income taxes (5) 1
Equity swap Selling, general and administrative 65 6
Total $ 77 $ 11
The amount of gains recognized in cumulative translation adjustment (CTA) within AOCI on the effective portion of outstanding
net investment hedges was $4 million and $1 million at September 30, 2013 and 2012, respectively. For the years ended
September 30, 2013 and 2012, no gains or losses were reclassified from CTA into income for the Company’s outstanding net
investment hedges, and no gains or losses were recognized in income for the ineffective portion of cash flow hedges.
11. FAIR VALUE MEASUREMENTS
ASC 820, “Fair Value Measurement,” defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair
value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own
assumptions.
ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to
measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized
is based on the lowest level input that is significant to the fair value measurement.