Johnson Controls 2014 Annual Report Download - page 38

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38
the underlying tax basis in the impaired assets, thus causing $229 million and $78 million incremental tax expense in fiscal 2013
and 2012, respectively.
In the third quarter of fiscal 2013, the Company resolved certain Mexican tax issues, which resulted in a $61 million benefit to
income tax expense.
Impacts of Tax Legislation and Change in Statutory Tax Rates
As a result of foreign law changes during the second quarter of fiscal 2013, the Company increased its total reserve for uncertain
tax positions, resulting in income tax expense of $17 million.
The "look-through rule," under subpart F of the U.S. Internal Revenue Code, expired for the Company on September 30, 2012.
The "look-through rule" had provided an exception to the U.S. taxation of certain income generated by foreign subsidiaries. The
rule was extended in January 2013 retroactive to the beginning of the Company's 2013 fiscal year.
During the fiscal year ended September 30, 2012, tax legislation was adopted in Japan which reduced its statutory income tax rate
by 5%. Also, tax legislation was adopted in various jurisdictions to limit the annual utilization of tax losses that are carried forward.
None of these changes had a material impact on the Company’s consolidated financial condition, results of operations or cash
flows.
Income From Discontinued Operations, Net of Tax
Year Ended
September 30,
(in millions) 2013 2012 Change
Income from discontinued operations, net of
tax $ 101 $ 85 19%
The increase in income from discontinued operations, net of tax, was primarily due to a gain, net of tax, of $257 million related
to the fiscal 2013 sale of the Automotive Experience Electronics' HomeLink® product line, partially offset by a fiscal 2013 tax
charge of $210 million related to foreign undistributed earnings of the non-U.S. subsidiaries primarily related to the Electronics
business, and higher selling, general and administrative expenses.
Refer to Note 3, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding
the Company's discontinued operations.
Income from Continuing Operations Attributable to Noncontrolling Interests
Year Ended
September 30,
(in millions) 2013 2012 Change
Income from continuing operations attributable
to noncontrolling interests $ 114 $ 126 -10%
The decrease in income attributable to noncontrolling interests was primarily due to the effects of an increase in the Company's
ownership percentage in an Automotive Experience partially-owned affiliate.
Net Income Attributable to Johnson Controls, Inc.
Year Ended
September 30,
(in millions) 2013 2012 Change
Net income attributable to Johnson Controls, Inc. $ 1,178 $ 1,184 -1%
The decrease in net income attributable to Johnson Controls, Inc. was primarily due to higher restructuring and impairment costs,
higher net financing charges, an increase in the income tax provision and the unfavorable impact of foreign currency translation,
partially offset by higher gross profit, lower selling, general and administrative expenses, incremental gains on business divestitures