Johnson Controls 2012 Annual Report Download - page 32

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32
Power Solutions
Year Ended
September 30,
(in millions)
2012
2011
Change
Net sales
$
5,906
$
5,875
1%
Segment income
854
821
4%
Net sales increased primarily due to favorable pricing and product mix ($156 million), higher volumes
including the prior year negative impact of the earthquake in Japan and related events ($144 million), and
incremental sales due to business acquisitions ($38 million), partially offset by the unfavorable impact of
foreign currency translation ($193 million) and impact of pass through pricing ($114 million).
Segment income increased primarily due to favorable pricing and product mix including lead net of higher
costs for battery cores ($117 million); a gain on redemption of a warrant for an existing partially-owned
affiliate ($25 million); higher volumes including the prior year negative impact of the earthquake in Japan
and related events ($24 million); change in asset retirement obligations ($14 million); an insurance
settlement ($12 million); a gain on a current year acquisition of a partially-owned affiliate ($9 million) and
higher equity income ($4 million); 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 affiliate’s restatement of prior period income ($37 million); the
unfavorable impact of foreign currency translation ($21 million); an impairment of an equity investment
($14 million) and the unfavorable impact of business acquisitions ($11 million).
FISCAL YEAR 2011 COMPARED TO FISCAL YEAR 2010
Net Sales
Year Ended
September 30,
(in millions)
2011
2010
Change
Net sales
$
40,833
$
34,305
19%
The increase in consolidated net sales was primarily due to higher sales in the Automotive Experience business
($3.1 billion) as a result of increased industry production levels in all segments and incremental sales due to business
acquisitions; higher sales in the Building Efficiency business ($1.7 billion) as a result of higher sales in all segments;
higher sales in the Power Solutions business ($0.9 billion) reflecting higher sales volumes, the impact of higher lead
costs on pricing and sales associated with a prior year business acquisition; and the favorable impact of foreign
currency translation ($0.8 billion). Excluding the favorable impact of foreign currency translation, consolidated net
sales increased 17% as compared to the prior year. Refer to the segment analysis below within Item 7 for a
discussion of net sales by segment.
Cost of Sales / Gross Profit
Year Ended
September 30,
(in millions)
2011
2010
Change
Cost of sales
$
34,775
$
29,084
20%
Gross profit
6,058
5,221
16%
% of sales
14.8%
15.2%
The increase in total cost of sales year over year corresponds to the sales growth noted above, with gross profit
percentage decreasing slightly. Gross profit in the Automotive Experience business was unfavorably impacted by
the earthquake in Japan and related events, higher operating costs in Europe and unfavorable commercial