Johnson Controls 2013 Annual Report Download - page 25

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25
(3) Working capital is defined as current assets less current liabilities, excluding cash, short-term debt, the current portion of
long-term debt, and assets and liabilities held for sale.
(4) Total debt to total capitalization represents total debt divided by the sum of total debt and shareholders’ equity attributable
to Johnson Controls, Inc.
(5) Net book value per share represents shareholders’ equity attributable to Johnson Controls, Inc. divided by the number of
common shares outstanding at the end of the period.
(6) Net income attributable to Johnson Controls, Inc. includes $985 million, $297 million and $230 million of significant
restructuring and impairment costs in fiscal year 2013, 2012, and 2009, respectively. It also includes $(405) million, $447
million, $384 million, $269 million and $532 million of net mark-to-market charges (gains) on pension and postretirement
plans in fiscal year 2013, 2012, 2011, 2010 and 2009, respectively. The preceding amounts are stated on a pre-tax basis.
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The Company operates in three primary businesses: Building Efficiency, Automotive Experience and Power Solutions. 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 trucks, including vans, pick-up trucks and sport/crossover utility vehicles. Power Solutions designs
and manufactures automotive batteries for the replacement and original equipment markets.
This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity
of the Company for the three-year period ended September 30, 2013. This discussion should be read in conjunction with Item 8,
the consolidated financial statements and the notes to consolidated financial statements.
Certain amounts have been revised to reflect the retrospective application of the Company’s change in inventory costing method
for certain inventory in its Power Solutions business to the first-in first-out (FIFO) method from the last-in first-out (LIFO). Refer
to Note 1, “Summary of Significant Accounting Policies,” of the notes to consolidated financial statements for further details
surrounding this accounting policy change.
Effective October 1, 2012, the Company reorganized the reportable segments within its Automotive Experience business to align
with its new management reporting structure and business activities. Prior to this reorganization, Automotive Experience was
comprised of three reportable segments for financial reporting purposes: North America, Europe and Asia. As a result of this
change, Automotive Experience is now comprised of three new reportable segments for financial reporting purposes: Seating,
Interiors and Electronics. Historical information has been revised to reflect the new Automotive Experience reportable segment
structure.
Outlook
On October 29, 2013, the Company gave a preliminary outlook of its market and financial expectations for fiscal 2014, saying it
believes improving end markets will enable the Company to modestly grow revenues in the upcoming year. Additionally, the
Company said it expects first quarter fiscal 2014 earnings per diluted share to increase by approximately 30% (35% adjusting for
the impact of the HomeLink® product line divestiture). The Company will provide further detailed guidance at an analyst meeting
on December 18, 2013, which will be accessible to the public in a manner that the Company will disclose in advance.
An announcement regarding the potential sale of the remaining Automotive Experience Electronics business is expected to be
made by the end of the calendar year. Additionally, on October 29, 2013, the Company announced its intention to explore strategic
options to enhance the position and financial capacity of its Automotive Experience Interiors business as a part of the Company's
previously stated intention to build its multi-industry business portfolio.