Johnson Controls 2012 Annual Report Download - page 14

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14
Decreased demand from our customers in the automotive industry may adversely affect our results of
operations.
Our financial performance in the Power Solutions business depends, in part, on conditions in the automotive
industry. Sales to OEMs accounted for approximately 23% of the total sales of the Power Solutions business in
fiscal 2012. Declines in the North American and European automotive production levels could reduce our sales and
adversely affect our results of operations. In addition, if any OEMs reach a point where they cannot fund their
operations, we may incur write-offs of accounts receivable, incur impairment charges or require additional
restructuring actions beyond our current restructuring plans.
A variety of other factors could adversely affect the results of operations of our Power Solutions business.
Any of the following could materially and adversely impact the results of operations of our Power Solutions
business: loss of, or changes in, automobile battery supply contracts with our large original equipment and
aftermarket customers; the increasing quality and useful life of batteries or use of alternative battery technologies,
both of which may contribute to a growth slowdown in the lead-acid battery market; delays or cancellations of new
vehicle programs; market and financial consequences of any recalls that may be required on our products; delays or
difficulties in new product development, including lithium-ion technology; impact of potential increases in lithium-
ion battery volumes on established lead-acid battery volumes as lithium-ion battery technology grows and costs
become more competitive; financial instability or market declines of our customers or suppliers; interruption of
supply of certain single-source components; changing nature of our joint ventures and relationships with our
strategic business partners; unseasonable 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
availability of battery cores used in recycling; and the lack of the development of a market for hybrid and electric
vehicles.
ITEM 1B UNRESOLVED STAFF COMMENTS
The Company has no unresolved written comments regarding its periodic or current reports from the staff of the
SEC.