Johnson Controls 2010 Annual Report Download - page 93

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93
assets within the Europe automotive experience segment for impairment and determined no additional impairment
existed.
At December 31, 2008, in conjunction with the preparation of its financial statements, the Company concluded it
had a triggering event requiring assessment of impairment of its long-lived assets due to the significant declines in
North American and European automotive sales volumes. As a result, the Company reviewed its long-lived assets
for impairment and recorded a $110 million impairment charge within cost of sales in the first quarter of fiscal 2009,
of which $77 million related to the North America automotive experience segment and $33 million related to the
Europe automotive experience segment.
The Company reviews its equity investments for impairment whenever there is a loss in value of an investment
which is other than a temporary decline. The Company conducts its equity investment impairment analyses in
accordance with ASC 323, ―Investments-Equity Method and Joint Ventures.‖ ASC 323 requires the Company to
record an impairment charge for a decrease in value of an investment when the decline in the investment is
considered to be other than temporary.
At December 31, 2008, in conjunction with the preparation of its financial statements, the Company concluded it
had a triggering event requiring assessment of impairment of its equity investment in a 48%-owned joint venture
with U.S. Airconditioning Distributors, Inc. (U.S. Air) due to the significant decline in North American residential
housing construction starts, which had significantly impacted the financial results of the equity investment. The
Company reviewed its equity investment in U.S. Air for impairment and as a result, recorded a $152 million
impairment charge within equity income (loss) for the building efficiency North America unitary products segment
in the first quarter of fiscal 2009. The U.S. Air investment balance included in the consolidated statement of
financial position at September 30, 2010 was $53 million. The Company does not anticipate future impairment of
this investment as, based on its current forecasts, a further decline in value that is other than temporary is not
considered reasonably likely to occur.
18. INCOME TAXES
The more significant components of the Company’s income tax provision from continuing operations are as follows
(in millions):
Year Ended September 30,
2010
2009
2008
Tax expense (benefit) at federal statutory rate
$
617
$
(111)
$
463
State income taxes, net of federal benefit
28
(15)
27
Foreign income tax expense at different rates and
foreign losses without tax benefits
(330)
(92)
(148)
U.S. tax on foreign income
(3)
81
(19)
Reserve and valuation allowance adjustments
(138)
180
-
Medicare Part D
16
-
-
Credits
(3)
(11)
(16)
Other
10
-
14
Provision for income taxes
$
197
$
32
$
321