Johnson Controls 2013 Annual Report Download - page 72

Download and view the complete annual report

Please find page 72 of the 2013 Johnson Controls annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

72
6. GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill in each of the Company’s reporting segments for the fiscal years ended
September 30, 2013 and 2012 were as follows (in millions):
September 30,
2011 Business
Acquisitions Business
Divestitures Impairments
Currency
Translation
and Other September 30,
2012
Building Efficiency
North America Systems $ 519 $ — $ — $ — $ 2 $ 521
North America Service 710 — (2) — — 708
Global Workplace Solutions 184 — — — 3 187
Asia 391 — — — 5 396
Other 1,065 — (32) — (39) 994
Automotive Experience
Seating 2,505 34 — — (55) 2,484
Interiors 387 — — — 15 402
Electronics 251 — — — (1) 250
Power Solutions 1,004 45 — — (9) 1,040
Total $ 7,016 $ 79 $ (34) $ — $ (79) $ 6,982
September 30,
2012 Business
Acquisitions Business
Divestitures Impairments
Currency
Translation
and Other September 30,
2013
Building Efficiency
North America Systems $ 521 $ — $ — $ — $ (1) $ 520
North America Service 708 — — — — 708
Global Workplace Solutions 187 79 — — (9) 257
Asia 396 — — — (8) 388
Other 994 — — — 9 1,003
Automotive Experience
Seating 2,484 187 (15) — 3 2,659
Interiors 402 — — (430) 28 —
Electronics 250 — (251) — 1 —
Power Solutions 1,040 — — — 14 1,054
Total $ 6,982 $ 266 $ (266) $ (430) $ 37 $ 6,589
The fiscal 2013 Automotive Experience Electronics business divestitures amount includes $74 million of goodwill transferred to
assets held for sale on the consolidated statement of financial position. Refer to Note 3, "Assets and Liabilities Held for Sale," of
the notes to consolidated financial statements for further information regarding the Company's disposal groups classified as held
for sale.
Based on a combination of factors, including the recent operating results of the Automotive Experience Interiors business,
restrictions on future capital and restructuring funding, and the Company's announced intention to explore strategic options related
to this business, the Company's forecasted cash flow estimates used in the goodwill assessment were negatively impacted as of
September 30, 2013. As a result, the Company concluded that the carrying value of the Interiors reporting unit exceeded its fair
value as of September 30, 2013. The Company recorded a goodwill impairment charge of $430 million in the fourth quarter of
fiscal 2013, which was determined by comparing the carrying value of the reporting unit's goodwill with the implied fair value of
goodwill for the reporting unit. The assumptions included in the impairment test require judgment, and changes to these inputs
could impact the results of the calculation. Other than management's internal projections of future cash flows, the primary
assumptions used in the impairment test were the weighted-average cost of capital and long-term growth rates. Although the
Company's cash flow forecasts are based on assumptions that are considered reasonable by management and consistent with the