Johnson Controls 2014 Annual Report Download - page 113

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113
Summarized income statement data for the years ended September 30 is as follows (in millions):
2014 2013 2012
Significant
Affiliate All Other Significant
Affiliate All Other Significant
Affiliate All Other
Net sales $ 2,857 $ 7,963 $ 2,453 $ 7,520 $ 2,000 $ 7,261
Gross profit 396 1,242 353 1,130 301 1,122
Net income attributable to the
entity 294 493 238 401 224 440
21. COMMITMENTS AND CONTINGENCIES
The Company accrues for potential environmental liabilities when it is probable a liability has been incurred and the amount of
the liability is reasonably estimable. Reserves for environmental liabilities totaled $24 million and $25 million at September 30,
2014 and 2013, respectively. 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, 2014 and 2013, the Company recorded conditional asset retirement obligations
of $52 million and $56 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.