Johnson Controls 2010 Annual Report Download - page 98

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98
related entity expense add back provisions. These Wisconsin tax law changes did not have a material impact on the
Company’s consolidated financial condition, results of operations or cash flows.
In December 2007, Canada enacted a new tax law which effectively reduced the income tax rates from 35% to 32%.
A Business Flat Tax (IETU) was enacted on October 1, 2007 in Mexico that provides for a tax rate of 17% on a
modified tax base with a credit for corporate income tax paid. On December 28, 2007, Italy enacted reductions in
regional taxes from 4.25% to 3.9% effective January 1, 2008. These tax law changes did not have a material impact
on the Company’s consolidated financial condition, results of operations or cash flows.
Continuing Operations
Components of the provision for income taxes on continuing operations were as follows (in millions):
Year Ended September 30,
2010
2009
2008
Current
Federal
$
112
$
53
$
136
State
29
6
26
Foreign
141
(33)
199
282
26
361
Deferred
Federal
145
(276)
13
State
2
(11)
9
Foreign
(232)
293
(62)
(85)
6
(40)
Provision for income taxes
$
197
$
32
$
321
Consolidated domestic income from continuing operations before income taxes and noncontrolling interests for the
fiscal years ended September 30, 2010, 2009 and 2008 was income of $666 million, loss of $263 million and
income of $897 million, respectively. Consolidated non-U.S. income from continuing operations before income
taxes and noncontrolling interests for the fiscal years ended September 30, 2010, 2009 and 2008 was income of
$1,097 million, loss of $55 million and income of $426 million, respectively.
Income taxes paid for the fiscal years ended September 30, 2010, 2009 and 2008 were $535 million, $326 million
and $317 million, respectively.
The Company has not provided additional U.S. income taxes on approximately $4.5 billion of undistributed
earnings of consolidated non-U.S. subsidiaries included in shareholders’ equity attributable to Johnson Controls,
Inc. Such earnings could become taxable upon the sale or liquidation of these non-U.S. subsidiaries or upon
dividend repatriation. The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be
repatriated only when it would be tax effective through the utilization of foreign tax credits. It is not practicable to
estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings.
Deferred taxes were classified in the consolidated statements of financial position as follows (in millions):
September 30,
2010
2009
Other current assets
$
533
$
469
Other noncurrent assets
1,436
1,252
Other current liabilities
(1)
(1)
Other noncurrent liabilities
(112)
(66)
Net deferred tax asset
$
1,856
$
1,654