Johnson Controls 2010 Annual Report Download - page 96

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96
unrecognized tax benefits of $75 million (net of tax benefit). The Company recognizes interest and penalties related
to unrecognized tax benefits as a component of income tax expense or goodwill, when applicable.
At September 30, 2010, the Company had gross tax effected unrecognized tax benefits of $1,262 million of which
$1,063 million, if recognized, would impact the effective tax rate. Total net accrued interest at September 30, 2010
was approximately $68 million (net of tax benefit).
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Year Ended
Year Ended
Year Ended
September 30, 2010
September 30, 2009
September 30, 2008
(in millions of dollars)
Beginning balance, September 30
$
1,049
$
814
$
616
Additions for tax positions related to the current year
253
236
186
Additions for tax positions of prior years
257
65
21
Reductions for tax positions of prior years
(158)
(29)
(9)
Settlements
(109)
(37)
-
Statute closings
(30)
-
-
Ending balance, September 30
$
1,262
$
1,049
$
814
The Company is regularly under audit by tax authorities, including major jurisdictions noted below:
Tax
Statute of
Jurisdiction
Limitations
Austria
5 years
Belgium
3 years
Brazil
5 years
Canada
5 years
China
3 to 5 years
Czech Republic
3 years
France
3 years
Germany
4 to 5 years
Italy
4 years
Japan
5 to 7 years
Mexico
5 years
Spain
4 years
United Kingdom
6 years
United States - Federal
3 years
United States – State
3 to 5 years
In the U.S., the fiscal years 2004 through 2006 are currently under IRS Appeals. Additionally, the Company is
currently under exam in the following major foreign jurisdictions:
Tax Jurisdiction
Tax Years Covered
Austria
2003 – 2005
Brazil
2005 – 2008
France
2002 – 2009
Germany
2001 – 2007
Italy
2005 – 2007
Mexico
2003 – 2004
Spain
2006 – 2008
It is reasonably possible that certain tax examinations, appellate proceedings and/or tax litigation will conclude
within the next 12 months, the impact of which should not be material to the financial statements.