Johnson Controls 2012 Annual Report Download - page 68

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68
adjust the Company’s existing equity investment in the partially-owned affiliate to fair value. Goodwill of $100
million was recorded as part of the transaction, of which $6 million was recorded in fiscal 2012.
During the third quarter of fiscal 2011, the Company completed its acquisition of Keiper/Recaro Automotive, a
leader in recliner system technology with engineering and manufacturing expertise in metals and mechanisms for
automobile seats, based in Kaiserslautern, Germany. The total purchase price, net of cash acquired, was
approximately $442 million, of which $450 million was paid as of September 30, 2011 and $8 million was received
in the three months ended December 31, 2011 as a result of a true-up to the purchase price. In connection with the
Keiper/Recaro Automotive acquisition, the Company recorded goodwill of $128 million primarily in the
Automotive Experience Europe segment, of which $2 million was recorded in fiscal 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, was approximately $529 million, all of which
was paid as of September 30, 2011. In connection with the Hammerstein acquisition, the Company recorded
goodwill of $200 million primarily in the Automotive Experience Europe segment, of which $7 million was
recorded in fiscal 2012.
Also during fiscal 2011, the Company completed five additional acquisitions for a combined purchase price, net of
cash acquired, of $115 million, all of which was paid as of September 30, 2011. The acquisitions in the aggregate
were not material to the Company’s consolidated financial statements. As a result of one of these acquisitions, which
increased the Company’s ownership from a noncontrolling to controlling interest, the Company recorded a non-cash
gain of $14 million within Automotive Experience Asia equity income to adjust the Company’s existing equity
investment in the partially-owned affiliate to fair value. In connection with the acquisitions, the Company recorded
goodwill of $119 million, of which $14 million was recorded in fiscal 2012.
During the fourth quarter of fiscal 2010, the Company acquired an additional 40% of a Power Solutions Korean
partially-owned affiliate. The acquisition increased the Company’s ownership percentage to 90%. The remaining
10% was acquired by the local management team. The Company paid approximately $86 million (excluding cash
acquired of $57 million) for the additional ownership percentage and incurred approximately $10 million of
acquisition costs and related purchase accounting adjustments. As a result of the acquisition, the Company recorded
a non-cash gain of $47 million within Power Solutions equity income to adjust the Company’s existing equity
investment in the Korean partially-owned affiliate to fair value. Goodwill of $51 million was recorded as part of the
transaction.
Also during fiscal 2010, the Company completed three acquisitions for a combined purchase price of $35 million, of
which $32 million was paid as of September 30, 2010. The acquisitions in the aggregate were not material to the
Company’s consolidated financial statements. In connection with the acquisitions, the Company recorded goodwill
of $9 million.
There were no business divestitures for the years ended September 30, 2011 and 2010.
3. INVENTORIES
Inventories consisted of the following (in millions):
September 30,
2012
2011
Raw materials and supplies
$
1,118
$
1,136
Work-in-process
417
434
Finished goods
806
867
FIFO inventories
2,341
2,437
LIFO reserve
(114)
(121)
Inventories
$
2,227
$
2,316
Inventories valued using the LIFO method of accounting were approximately 19% and 18% of total inventories at
September 30, 2012 and 2011, respectively.