Johnson Controls 2015 Annual Report Download - page 70

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70
administrative expenses on the consolidated statements of income and reduced goodwill by $15 million in the Automotive
Experience Seating segment, and recorded a loss, net of transaction costs, of $22 million within selling, general and administrative
expenses on the consolidated statements of income in the Building Efficiency Other segment.
3. DISCONTINUED OPERATIONS
In the second quarter of fiscal 2015, the Company completed the sale of its interests in two GWS joint ventures to Brookfield
Asset Management, Inc. On March 31, 2015, the Company announced that it had reached a definitive agreement to sell the remainder
of the GWS business to CBRE Group Inc., subject to regulatory and other approvals. The sale closed on September 1, 2015. The
agreement includes a 10-year strategic relationship between the Company and CBRE. The Company will be the preferred provider
of HVAC equipment, building automation systems and related services to the portfolio of real estate and corporate facilities managed
globally by CBRE and GWS. The Company also engages GWS for facility management services. The annual cash flows resulting
from these activities with the legacy GWS business are not expected to be significant.
At March 31, 2015, the Company determined that its GWS segment met the criteria to be classified as a discontinued operation,
which required retrospective application to financial information for all periods presented. The Company did not allocate any
general corporate overhead to discontinued operations. The assets and liabilities of the GWS segment were reflected as held for
sale in the consolidated statements of financial position at September 30, 2014.
The following table summarizes the results of GWS, reclassified as discontinued operations for the fiscal years ended September
30, 2015, 2014 and 2013 (in millions):
Year Ended September 30,
2015 2014 2013
Net sales $ 3,025 $ 4,079 $ 4,265
Income from discontinued operations before income taxes 1,203 119 119
Provision for income taxes on discontinued operations 1,075 75 22
Income from discontinued operations attributable to
noncontrolling interests, net of tax 4 15 12
Income from discontinued operations, net of tax $ 124 $ 29 $ 85
For the fiscal year ended September 30, 2015, the income from discontinued operations before income taxes included a $940
million gain on divestiture for the remainder of the GWS business, a $200 million gain on divestiture of the Company's interest
in two GWS joint ventures and current year transaction costs of $87 million. For the fiscal year ended September 30, 2014, the
income from discontinued operations before income taxes included a $25 million charge related to the indemnification of certain
costs associated with a divested GWS business in 2004.
The effective tax rate is different than the U.S. statutory rate for fiscal 2015 primarily due to $680 million tax expense for repatriation
of cash and other tax reserves, and the tax consequences of the sale of the GWS joint ventures ($73 million) and the remaining
business ($297 million).
The effective tax rate is different than the U.S. statutory rate for fiscal 2014 primarily due to a tax charge of $35 million related
to the change in the Company's assertion over reinvestment of foreign undistributed earnings as well as a non-benefited loss related
to the indemnification of certain costs associated with a divested business in 2004, partially offset by foreign tax rate differentials.
The effective rate is different than the U.S. statutory rate for fiscal 2013 primarily due foreign tax rate differentials.
In the fourth quarter of fiscal 2013, the Company completed the sale of its Automotive Experience Electronics' HomeLink® product
line to Gentex Corporation. In the second quarter of fiscal 2014, the Company announced that it had reached a definitive agreement
to sell the remainder of the Automotive Experience Electronics business to Visteon Corporation, subject to regulatory and other
approvals. The sale closed on July 1, 2014. At March 31, 2014, the Company determined that the Automotive Experience Electronics
segment met the criteria to be classified as a discontinued operation, which required retrospective application to financial
information for all periods presented. The Company did not allocate any general corporate overhead to discontinued operations.