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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 2012
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From To
Commission File Number 1-5097
JOHNSON CONTROLS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin
39-0380010
(State of Incorporation)
(I.R.S. Employer Identification No.)
5757 North Green Bay Avenue
Milwaukee, Wisconsin
(Address of principal executive offices)
53209
(Zip Code)
Registrant’s telephone number, including area code:
(414) 524-1200
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Title of Each Class
Name of Each Exchange on Which Registered
Common Stock
Corporate Units
New York Stock Exchange
New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Exchange Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes No 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
the definitions of ―large accelerated filer,‖ ―accelerated filer‖ and ―smaller reporting company‖ in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
As of March 31, 2012, the aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant
was approximately $22.1 billion based on the closing sales price as reported on the New York Stock Exchange. As of October 31,
2012, 683,797,753 shares of the registrant’s Common Stock, par value $0.01 7/18 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to
be held on January 23, 2013 are incorporated by reference into Part III.

Table of contents

  • Page 1
    ...a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  As of March 31, 2012, the aggregate market value of the registrant's Common Stock held by non-affiliates of the registrant was approximately $22.1 billion based on the closing sales price as reported on the New York Stock...

  • Page 2
    ... DATA ...CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ...CONTROLS AND PROCEDURES ...OTHER INFORMATION ...PART III. ITEM 10. ITEM 11. ITEM 12. ITEM 13. ITEM 14. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ...EXECUTIVE COMPENSATION ...107 107 21 24 25...

  • Page 3
    ...management systems, controls, security and mechanical equipment. In addition, the Building Efficiency business provides technical services, energy management consulting and operations of entire real estate portfolios for the non-residential buildings market. The Company also provides residential air...

  • Page 4
    ...2012, Building Efficiency accounted for 35% of the Company's consolidated net sales. The Company's systems include York® chillers, industrial refrigeration products, air handlers and other HVAC mechanical equipment that provide heating and cooling in non-residential buildings. The Metasys® control...

  • Page 5
    ..., quality, reliability of supply and price. Design, engineering and product planning are increasingly important factors. Independent suppliers that represent the principal automotive experience competitors include Lear Corporation, Faurecia SA and Magna International Inc. Power Solutions Power...

  • Page 6
    ... U.S. law and appropriate international treaties. Environmental, Health and Safety Matters Laws addressing the protection of the environment (environmental laws) and workers' safety and health (worker safety laws) govern the Company's ongoing global operations. They generally provide for civil and...

  • Page 7
    ... conditioning equipment generally increases in the summer months. This seasonality is mitigated by the other products and services provided by the Building Efficiency business that have no material seasonal effect. Sales of automotive seating and interior systems and of batteries to automobile OEMs...

  • Page 8
    ...have significant operations in a number of countries outside the U.S., some of which are located in emerging markets. Long-term economic uncertainty in some of the regions of the world in which we operate, such as Asia, South America, the Middle East, Central Europe and other emerging markets, could...

  • Page 9
    ... gas emissions are linked to global climate changes. Climate changes, such as extreme weather conditions, create financial risk to our business. For example, the demand for our products and services, such as residential air conditioning equipment and automotive replacement batteries, may be affected...

  • Page 10
    ... centralizing certain administrative functions, primarily in North America, Europe and Asia, to improve efficiency and reduce costs. To the extent that these central locations are disrupted or disabled, key business processes, such as invoicing, payments and general management operations, could be...

  • Page 11
    ... of new homes and buildings that are built. The strength of the residential and commercial markets depends in part on the availability of consumer and commercial financing for our customers, along with inventory and pricing of existing homes and buildings. If economic and credit market conditions...

  • Page 12
    ...equipment supplier base. Lower production levels for key customers, increases in certain raw material, commodity and energy costs and global credit market conditions could result in financial distress among many companies within the automotive supply base. Financial distress within the supplier base...

  • Page 13
    ... of lead-acid batteries, as well as a large number of smaller, regional competitors. The North American, European and Asian lead-acid battery markets are highly competitive. The manufacturers in these markets compete on price, quality, technical innovation, service and warranty. If we are...

  • Page 14
    ... weather conditions in various parts of the world; increasing global environmental and safety regulations related to the manufacturing and recycling of lead-acid batteries, and transportation of battery materials; our ability to secure sufficient tolling capacity to recycle batteries; price and...

  • Page 15
    ... (2),(3) Delaware Florida Georgia Illinois China Denmark France Kansas Kentucky Maryland Germany Massachusetts Michigan Minnesota Mississippi Missouri New Jersey North Carolina Oregon Oklahoma Pennsylvania Hong Kong India Italy Japan Mexico Netherlands Poland Russia South Africa Spain Turkey...

  • Page 16
    Automotive Experience Alabama Calera (1) Clanton Cottondale Eastaboga McCalla (1) LaGrange (1) ... (2) Pulaski (1) El Paso (1) San Antonio (1) Argentina Buenos Aires (1) Cordoba (1) Rosario Adelaide (1) ... Louisiana Michigan Bulgaria Canada China Czech Republic France Missouri Ohio Tennessee ...

  • Page 17
    Automotive Experience (continued) Germany Boblingen (1) Bochum (2) ...Jimbolia (1) Mioveni (1) Pitesti (1) Ploesti Timisoara (1) St. Petersburg (1) Togliatti (1) Bratislava (1),(4) Kostany nad Turcom... Romania Russia Slovak Republic Italy South Africa Japan Spain Korea Macedonia Malaysia Sweden ...

  • Page 18
    ... manufacturing facilities Administrative facility only In addition to the above listing, which identifies large properties (greater than 25,000 square feet), there are approximately 570 Building Efficiency branch offices and other administrative offices located in major cities throughout the world...

  • Page 19
    ... human resources leadership positions. Mr. Harvey joined the Company in 1991. William C. Jackson, 52, was elected Executive Vice President - Operations and Innovation, in July 2011 and has served as President - Automotive Electronics & Interiors since October 2012. Prior to joining Johnson Controls...

  • Page 20
    ... 2006, Assistant Chief Financial Officer from October 2004 to May 2005 and Corporate Controller from November 2001 to October 2004. Mr. McDonald joined the Company in 2001. Alex A. Molinaroli, 53, was elected a Corporate Vice President in May 2004 and has served as President of the Power Solutions...

  • Page 21
    ... PURCHASES OF EQUITY SECURITIES The shares of the Company's common stock are traded on the New York Stock Exchange under the symbol ―JCI.â€- Title of Class Common Stock, $0.01 7/18 par value Number of Record Holders as of September 30, 2012 40,019 Dividends 2012 0.18 $ 0.18 0.18 0.18 0.72 $ 2011...

  • Page 22
    ... presents information regarding the repurchase of the Company's common stock by the Company as part of the publicly announced program and purchases of the Company's common stock by Citibank in connection with the Equity Swap Agreement during the three months ended September 30, 2012. Approximate...

  • Page 23
    ....* This graph assumes the investment of $100 on September 30, 2007 and the reinvestment of all dividends since that date. The Company's transfer agent's contact information is as follows: Wells Fargo Bank, N.A. Shareowner Services Department P.O. Box 64874 St. Paul, MN 55164-0874 (877) 602-7397 23

  • Page 24
    ... amortization Number of employees FINANCIAL POSITION Working capital (3) Total assets Long-term debt Total debt Shareholders' equity attributable to Johnson Controls, Inc. Total debt to total capitalization (4) Net book value per share (5) COMMON SHARE INFORMATION Dividends per share Market prices...

  • Page 25
    .... Building Efficiency provides facility systems, services and workplace solutions including comfort, energy and security management for the residential and non-residential buildings markets. Automotive Experience designs and manufactures interior systems and products for passenger cars and light...

  • Page 26
    ... YEAR 2011 Net Sales Year Ended September 30, 2012 2011 $ 41,955 $ 40,833 (in millions) Net sales Change 3% The increase in consolidated net sales was due to higher sales in the Automotive Experience business ($2.0 billion), Power Solutions business ($224 million) and Building Efficiency business...

  • Page 27
    ... charge, $52 million in the third quarter and $245 million in the fourth quarter of fiscal 2012. The restructuring charge related to cost reduction initiatives in the Company's Automotive Experience, Building Efficiency and Power Solutions businesses and included workforce reductions and plant...

  • Page 28
    ... audit by the Internal Revenue Service and respective non-U.S. tax authorities. Although the outcome of tax audits is always uncertain, management believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provisions included amounts sufficient to pay...

  • Page 29
    ... Power Solutions and Building Efficiency partially-owned affiliates, partially offset by the effects of an increase in the Company's ownership percentage in an Automotive Experience partially -owned affiliate. Net Income Attributable to Johnson Controls, Inc. Year Ended September 30, 2012 2011...

  • Page 30
    ...for the Year Ended September 30, 2012 2011 $ 286 $ 164 52 267 141 910 $ 247 121 22 251 105 746 (in millions) North America Systems North America Service Global Workplace Solutions Asia Other * Measure not meaningful Change 2% -7% 3% 8% -8% -1% Change 16% 36% * 6% 34% 22% $ $ Net Sales: ï,· The...

  • Page 31
    ...2012 2011 $ 487 $ (52) 368 803 $ 419 116 245 780 (in millions) North America Europe Asia * Measure not meaningful Change 17% -3% 12% 6% Change 16% * 50% 3% $ $ Net Sales: ï,· The increase in North America was primarily due to higher volumes to major OEM customers ($967 million), the prior year...

  • Page 32
    ...partially offset by higher operating and transportation costs ($46 million); higher selling, general and administrative expenses ($43 million); a gain on a prior year acquisition of a partially-owned affiliate net of acquisition costs and related purchase accounting adjustments and a partially-owned...

  • Page 33
    ... and administrative expenses (SG&A) increased year over year, but decreased as a percentage of sales. Automotive Experience business SG&A increased primarily due to costs related to business acquisitions, incremental SG&A of acquired businesses and higher engineering expenses. Building Efficiency...

  • Page 34
    ...continuing global tax planning initiatives and income in certain non-U.S. jurisdictions with a rate of tax lower than the U.S. statutory tax rate. Refer to Note 17, ―Income Taxes,â€- of the notes to consolidated financial statements for further details. Valuation Allowances The Company reviews the...

  • Page 35
    ... were based on a review of tax filing positions taken in jurisdictions with valuation allowances as indicated above. The Company's federal income tax returns and certain non-U.S. income tax returns for various fiscal years remain under various stages of audit by the Internal Revenue Service and...

  • Page 36
    ...679 (in millions) North America Systems North America Service Global Workplace Solutions Asia Other Change 9% 8% 26% 29% 11% 16% Change 20% 3% -45% 39% -23% 10% $ Net Sales: ï,· $ The increase in North America Systems was primarily due to higher volumes of equipment and controls systems in the...

  • Page 37
    ...for the Year Ended September 30, 2011 2010 $ 419 $ 116 245 780 $ 380 108 109 597 (in millions) North America Europe Asia Change 10% 28% 30% 21% Change 10% 7% 125% 31% $ Net Sales: ï,· $ The increase in North America was primarily due to higher volumes to the Company's major OEM customers ($779...

  • Page 38
    ... selling, general and administrative expenses ($33 million), unfavorable pricing ($16 million) and higher engineering expenses ($12 million). Power Solutions Year Ended September 30, 2011 2010 $ 5,875 $ 821 4,893 672 (in millions) Net sales Segment income ï,· Change 20% 22% Net sales increased...

  • Page 39
    ... fourth quarter of fiscal 2012. Of the total impairment charge, $14 million related to the Power Solutions segment, $11 million related to the Automotive Experience Europe segment, $4 million related to the Building Efficiency Other segment and $10 million related to corporate assets. Refer to Note...

  • Page 40
    ... to the planned relocation of its headquarters building in Japan in the Automotive Experience Asia segment. As a result, the Company reviewed its long-lived assets for impairment and recorded an $11 million impairment charge within selling, general and administrative expenses in the third quarter of...

  • Page 41
    ... receivables or changes in revenue recognition methods. The Company's inventory turns during fiscal 2012 were higher compared to the prior year primarily due to increased sales volumes and improvements in inventory management. Days in accounts payable at September 30, 2012 increased to 72 days from...

  • Page 42
    .... At September 30, 2012, there were no draws on the facility. In April 2011, a total of 157,820 equity units, which had a purchase contract settlement date of March 31, 2012, were early exercised. As a result, the Company issued 766,673 shares of Johnson Controls, Inc. common stock and approximately...

  • Page 43
    ...-term debt. CRITICAL ACCOUNTING ESTIMATES AND POLICIES The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). This requires management to make estimates and assumptions that affect reported...

  • Page 44
    ... with certain customers. For these arrangements, revenue is recognized on a straight-line basis over the respective contract term. The Company's Building Efficiency business also sells certain heating, ventilating and air conditioning (HVAC) and refrigeration products and services in bundled...

  • Page 45
    ... in net periodic benefit costs in the fourth quarter of each fiscal year. If the Company's actual returns on plan assets are less than the Company's expectations, additional contributions may be required. In fiscal 2012, total employer and employee contributions to the defined benefit pension plans...

  • Page 46
    ... product and terms of the customer purchase agreement. A typical warranty program requires that the Company replace defective products within a specified time period from the date of sale. The Company records an estimate of future warranty-related costs based on actual historical return rates...

  • Page 47
    ... health of the plans and the nature of the employer commitments to the plans. ASU No. 2011-09 was effective for the Company for the fiscal year ending September 30, 2012. The adoption of this guidance had no impact on the Company's consolidated financial condition and results of operations. Refer...

  • Page 48
    ... instruments not designated as hedging instruments under ASC 815 require no assessment of effectiveness on a quarterly basis. A discussion of the Company's accounting policies for derivative financial instruments is included in Note 1, ―Summary of Significant Accounting Policies,â€- of the...

  • Page 49
    Commodities The Company uses commodity contracts in the financial derivatives market in cases where commodity price risk cannot be naturally offset or hedged through supply base fixed price contracts. Commodity risks are systematically managed pursuant to policy guidelines. As a cash flow hedge, ...

  • Page 50
    ... Experience Europe segment. The fiscal 2011 fourth quarter net income includes $479 million of net mark-to-market charges on pension and postretirement plans; a $37 million gain on acquisition of a Power Solutions partially-owned affiliate net of acquisition costs and related purchase accounting...

  • Page 51
    ...Flows for the years ended September 30, 2012, 2011 and 2010 Consolidated Statements of Shareholders' Equity Attributable to Johnson Controls, Inc. for the years ended September 30, 2012, 2011 and 2010 Notes to Consolidated Financial Statements Schedule II - Valuation and Qualifying Accounts 52 54 55...

  • Page 52
    ...statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to...

  • Page 53
    ... designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies...

  • Page 54
    ... 1.92 * Products and systems consist of Automotive Experience and Power Solutions products and systems and Building Efficiency installed systems. Services are Building Efficiency technical and Global Workplace Solutions. The accompanying notes are an integral part of the financial statements. 54

  • Page 55
    ..., plant and equipment - net Goodwill Other intangible assets - net Investments in partially-owned affiliates Other noncurrent assets Total assets Liabilities and Equity Short-term debt Current portion of long-term debt Accounts payable Accrued compensation and benefits Other current liabilities...

  • Page 56
    ... Accounts payable and accrued liabilities Accrued income taxes Cash provided by operating activities Investing Activities Capital expenditures Sale of property, plant and equipment Acquisition of businesses, net of cash acquired Business divestitures Settlement of cross-currency interest rate...

  • Page 57
    ... reported) Pension and postretirement policy change (Note 1) At September 30, 2009 (revised) Comprehensive income: Net income attributable to Johnson Controls, Inc. Foreign currency translation adjustments Realized and unrealized gains on derivatives Unrealized gains on marketable common stock...

  • Page 58
    ... the VIEs manufacture products in North America for the automotive industry. The Company funds the entities' short-term liquidity needs through revolving credit facilities and has the power to direct the activities that are considered most significant to the entities through its key customer supply...

  • Page 59
    ... During the three month period ended June 30, 2011, the Company acquired a 40% interest in an equity method investee. The investee produces and sells lead-acid batteries of which the Company will both purchase and supply certain batteries to complement each investment partners' portfolio. Commencing...

  • Page 60
    ... goods and work-in-process inventories include material, labor and manufacturing overhead costs. Pre-Production Costs Related to Long-Term Supply Arrangements The Company's policy for engineering, research and development, and other design and development costs related to products that will be sold...

  • Page 61
    ... by the Company during fiscal 2012, 2011 and 2010. Percentage-of-Completion Contracts The Building Efficiency business records certain long-term contracts under the percentage-of-completion method of accounting. Under this method, sales and gross profit are recognized as work is performed based on...

  • Page 62
    ... with certain customers. For these arrangements, revenue is recognized on a straight-line basis over the respective contract term. The Company's Building Efficiency business also sells certain heating, ventilating and air conditioning (HVAC) and refrigeration products and services in bundled...

  • Page 63
    ... have been reported through retrospective application of the new policy to all periods presented. This change resulted in a $14 million increase in net income attributable to Johnson Controls, Inc. ($0.02 per diluted share) in each of the quarters ended December 31, 2011, March 31, 2012 and June...

  • Page 64
    ... data): 2012 As Reported Previous Method Consolidated Statement of Income Cost of sales Products and systems Services Gross profit Selling, general and administrative expenses Income before income taxes Provision for income taxes Net income Net income attributable to Johnson Controls, Inc. Earnings...

  • Page 65
    2011 Previously Reported Consolidated Statement of Income Cost of sales Products and systems Services Gross profit Selling, general and administrative expenses Income before income taxes Provision for income taxes Net income Net income attributable to Johnson Controls, Inc. Earnings per share Basic ...

  • Page 66
    2010 Previously Reported Consolidated Statement of Income Cost of sales Products and systems Services Gross profit Selling, general and administrative expenses Income before income taxes Provision for income taxes Net income Net income attributable to Johnson Controls, Inc. Earnings per share Basic ...

  • Page 67
    ...the Company recorded a gain, net of transaction costs, of $40 million and reduced goodwill by $34 million in the Building Efficiency business. During the fourth quarter of fiscal 2011, the Company acquired an additional 49% of a Power Solutions partiallyowned affiliate. The acquisition increased the...

  • Page 68
    ... 2012. During the second quarter of fiscal 2011, the Company completed its acquisition of the C. Rob. Hammerstein Group (Hammerstein), a leading global supplier of high-quality metal seat structures, components and mechanisms based in Solingen, Germany. The total purchase price, net of cash acquired...

  • Page 69
    ... Company's reporting segments for the fiscal years ended September 30, 2012 and 2011 were as follows (in millions): Currency Translation and Other $ September 30, 2010 Building Efficiency North America Systems North America Service Global Workplace Solutions Asia Other Automotive Experience North...

  • Page 70
    ... product and terms of the customer purchase agreement. A typical warranty program requires that the Company replace defective products within a specified time period from the date of sale. The Company records an estimate for future warranty-related costs based on actual historical return rates...

  • Page 71
    ... the lease term. Leases generally require the Company to pay for insurance, taxes and maintenance of the property. Leased capital assets included in net property, plant and equipment, primarily buildings and improvements, were $96 million and $68 million at September 30, 2012 and 2011, respectively...

  • Page 72
    ... facility scheduled to expire in August 2013. The Company also entered into a new 37 million euro and a new 50 million euro revolving credit facility both scheduled to expire in September 2013. There were no draws on the facilities during fiscal 2012. During the quarter ended September 30, 2012...

  • Page 73
    ... were used for general corporate purposes, including the retirement of short-term debt and contributions to the Company's pension and postretirement plans. During the quarter ended December 31, 2011, the Company entered into two committed, one-year revolving credit facilities totaling $135 million...

  • Page 74
    ... to Johnson Controls, Inc. where they offset gains and losses recorded on the Company's net investment in Japan. At September 30, 2012 and 2011, the Company had three cross-currency interest rate swaps outstanding totaling 20 billion yen. The Company uses commodity contracts in the financial...

  • Page 75
    ... Company's consolidated statements of financial position (in millions): Derivatives and Hedging Activities Designated as Hedging Instruments under ASC 815 September 30, September 30, 2012 2011 Other current assets Foreign currency exchange derivatives Commodity derivatives Interest rate swaps Cross...

  • Page 76
    ...derivatives Equity swap Total Location of Gain (Loss) Recognized in Income on Derivative Cost of sales Net financing charges Provision for income taxes Selling, general and administrative $ Amount of Gain (Loss) Recognized in Income on Derivative Year Ended September 30, 2012 2011 23 $ (19) 1 6 11...

  • Page 77
    ...30, 2012 and 2011 (in millions): Fair Value Measurements Using: Significant Quoted Prices Other in Active Observable Total as of Markets Inputs September 30, 2012 (Level 1) (Level 2) Other current assets Foreign currency exchange derivatives $ Commodity derivatives Interest rate swaps Cross-currency...

  • Page 78
    ... plans. The equity swaps are valued under a market approach as the fair value of the swaps is equal to the Company's stock price at the reporting period date. Changes in fair value on the equity swaps are reflected in the consolidated statement of income within selling, general and administrative...

  • Page 79
    ... fiscal years ended September 30, 2012, 2011 and 2010, respectively. The Company applies a non-substantive vesting period approach whereby expense is accelerated for those employees that receive awards and are eligible to retire prior to the award vesting. Stock Option Plan The Company's 2007 Stock...

  • Page 80
    ... dividend yield on the Company's stock 0.05 - 4.0 0.07% - .47% 40.00% 1.81% A summary of SAR activity at September 30, 2012, and changes for the year then ended, is presented below: Weighted Average Remaining Contractual Life (years) Weighted Average SAR Price Outstanding, September 30, 2011...

  • Page 81
    ... common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall tax benefits that...

  • Page 82
    ... shares outstanding Antidilutive Securities Options to purchase common shares $ $ 2010 1,307 5 1,312 1,226 1 1,227 681.5 5.2 1.9 688.6 677.7 8.1 4.1 689.9 672.0 5.9 4.5 0.1 682.5 2.2 0.4 0.8 During the three months ended September 30, 2012 and 2011, the Company declared a dividend of $0.18...

  • Page 83
    ...Attributable to Johnson Controls, Noncontrolling Inc. Interests At September 30, 2009 Total comprehensive income: Net income Foreign currency translation adjustments Realized and unrealized gains on derivatives Unrealized gains on marketable common stock Employee retirement plans Other comprehensive...

  • Page 84
    ... the change in accounting policy and the impact of the Company's consolidated financial statements. Pension Benefits The Company has non-contributory defined benefit pension plans covering certain U.S. and non-U.S. employees. The benefits provided are primarily based on years of service and average...

  • Page 85
    ... year 2013. Projected benefit payments from the plans as of September 30, 2012 are estimated as follows (in millions): 2013 2014 2015 2016 2017 2018-2022 $ 281 287 283 288 292 1,555 Postretirement Benefits The Company provides certain health care and life insurance benefits for eligible retirees...

  • Page 86
    ... fiscal years ended 2012, 2011 and 2010, respectively. Multiemployer Benefit Plans The Company contributes to multiemployer benefit plans based on obligations arising from collective bargaining agreements related to certain of its hourly employees in the U.S. These plans provide retirement benefits...

  • Page 87
    The expected return on plan assets is based on the Company's expectation of the long-term average rate of return of the capital markets in which the plans invest. The average market returns are adjusted, where appropriate, for active asset management returns. The expected return reflects the ...

  • Page 88
    ... Prices Other in Active Observable Total as of Markets Inputs September 30, 2012 (Level 1) (Level 2) Asset Category U.S. Pension Cash Equity Securities Large-Cap Small-Cap International - Developed Fixed Income Securities Government Corporate/Other Hedge Funds Real Estate Total Non-U.S. Pension...

  • Page 89
    ... Securities Large-Cap Small-Cap International - Developed International - Emerging Fixed Income Securities Government Corporate/Other Commodities Real Estate Total $ $ $ $ $ $ Total as of September 30, 2011 Fair Value Measurements Using: Significant Quoted Prices Other in Active Observable Markets...

  • Page 90
    ... accounts is not published, but the investment managers report daily the underlying holdings. The underlying holdings are direct quoted market prices on regulated financial exchanges. Fixed Income Securities: The fair value of fixed income securities is determined by direct or indirect quoted market...

  • Page 91
    ... gain Asset value as of September 30, 2011 Additions net of redemptions Unrealized gain Asset value as of September 30, 2012 Non-U.S. Pension Asset value as of September 30, 2010 Unrealized gain Asset value as of September 30, 2011 Additions net of redemptions Unrealized gain Asset value as of...

  • Page 92
    ... of financial position consist of: Prepaid benefit cost Accrued benefit liability Net amount recognized Weighted Average Assumptions (1) Discount rate (2) Rate of compensation increase $ $ U.S. Plans 2012 2011 3,586 $ 2,850 $ Non-U.S. Plans 2012 2011 1,904 $ 1,774 $ Postretirement Benefits 2012 2011...

  • Page 93
    ... obligations are determined based on a September 30 measurement date at September 30, 2012 and 2011. The Company considers the expected benefit payments on a plan-by-plan basis when setting assumed discount rates. As a result, the Company uses different discount rates for each plan depending on the...

  • Page 94
    ..., approximately 800 of the employees have been separated from the Company pursuant to the 2012 Plan. In addition, the 2012 Plan included nine plant closures (six for Automotive Experience, two for Power Solutions and one for Building Efficiency). As of September 30, 2012, two of the nine plants have...

  • Page 95
    ... efficiencies and locate facilities in low cost countries in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering and purchasing operations, as well as the overall global footprint for all its businesses. Because of the importance of new vehicle...

  • Page 96
    ... in the second quarter of fiscal 2010 related to the Automotive Experience North America segment. This impairment charge was offset by a decrease in the Company's restructuring reserve related to the 2008 restructuring plan due to lower employee severance and termination benefit cash payments than...

  • Page 97
    ... $1,274 million, if recognized, would impact the effective tax rate. Total net accrued interest at September 30, 2012 was approximately $72 million (net of tax benefit). At September 30, 2011, the Company had gross tax effected unrecognized tax benefits of $1,357 million of which $1,164 million, if...

  • Page 98
    ... the fiscal years 2007 through 2009 are currently under exam by the Internal Revenue Service (IRS) and 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 Brazil Canada Czech...

  • Page 99
    ... in shareholders' equity attributable to Johnson Controls, Inc. Such earnings could become taxable upon the sale or liquidation of these foreign 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...

  • Page 100
    ..., scheduled maintenance, repair and replacement of mechanical and control systems in North America, as well as the retrofit and service components of performance contracts and other solutions. Global Workplace Solutions provides on-site staff for complete real estate services, facility operation and...

  • Page 101
    ... to the Company's reportable segments is as follows (in millions): Year Ended September 30, 2011 2010 2012 Net Sales Building Efficiency North America Systems North America Service Global Workplace Solutions Asia Other Automotive Experience North America Europe Asia Power Solutions Total net sales...

  • Page 102
    2012 Segment Income (Loss) Building Efficiency North America Systems (1) North America Service (2) Global Workplace Solutions (3) Asia (4) Other (5) Automotive Experience North America (6) Europe (7) Asia (8) Power Solutions (9) Total segment income Net financing charges Restructuring costs Net mark...

  • Page 103
    ...138 147 213 31 391 162 691 $ $ $ 2012 Capital Expenditures Building Efficiency North America Systems North America Service Global Workplace Solutions Asia Other Automotive Experience North America Europe Asia Power Solutions Total Year Ended September 30, 2011 2010 $ 6 25 7 38 103 179 232 463...

  • Page 104
    ... locations are based on the location of the assets producing the sales. Long-lived assets by geographic location consist of net property, plant and equipment. Effective October 1, 2013, the Company reorganized its Automotive Experience reportable segments to align with its new management reporting...

  • Page 105
    ... abandonment of existing owned facilities, primarily in the Power Solutions business. At September 30, 2012 and 2011, the Company recorded conditional asset retirement obligations of $76 million and $91 million, respectively. The Company is involved in a number of product liability and various other...

  • Page 106
    ... information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting The Company...

  • Page 107
    ... Corporate Governance materials for Johnson Controls?,â€- ―Proposal One: Election of Directors,â€- ―Board Information,â€- ―Audit Committee Reportâ€- and ―Section 16(a) Beneficial Ownership Reporting Complianceâ€- of the fiscal 2012 Proxy Statement. Required information on executive officers...

  • Page 108
    ... Attributable to Johnson Controls, Inc. for the years ended September 30, 2012, 2011 and 2010 Notes to Consolidated Financial Statements (2) Financial Statement Schedule For the years ended September 30, 2012, 2011 and 2010: Schedule II - Valuation and Qualifying Accounts (3) Exhibits Reference is...

  • Page 109
    ..., the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JOHNSON CONTROLS, INC. By /s/ R. Bruce McDonald R. Bruce McDonald Executive Vice President and Chief Financial Officer Date: November 19, 2012 Pursuant to the requirements of the...

  • Page 110
    ... as Trustee of the Johnson Controls, Inc. Employee Stock Ownership Plan Trust with Fidelity Management Trust Company as Successor Trustee, effective January 1, 1991 (incorporated by reference to Exhibit 4.F to Johnson Controls, Inc. 's Annual Report on Form 10-K for the year ended September 30, 1991...

  • Page 111
    ... filed February 7, 2011). Johnson Controls, Inc. Common Stock Purchase Plan for Executives as amended November 17, 2004 and effective December 1, 2004 (incorporated by reference to Exhibit 10.B to Johnson Controls, Inc.'s Annual Report on Form 10-K for the year ended September 30, 2004) (Commission...

  • Page 112
    ... 10.P to Johnson Controls, Inc. 's Annual Report on Form 10-K for the year ended September 30, 2009) (Commission File No. 1-5097).** Johnson Controls, Inc. Compensation Summary for Non-Employee Directors as amended and restated effective January 1, 2012, filed herewith.** Form of stock option award...

  • Page 113
    ... of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. The following materials from Johnson Controls, Inc.'s Annual Report on Form 10-K for the year ended September 30, 2012, formatted in...

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