Johnson Controls 2014 Annual Report Download - page 52

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Environmental considerations are a part of all significant capital expenditure decisions; however, expenditures in fiscal 2014 related
solely to environmental compliance were not material. Reserves for environmental liabilities totaled $24 million and $25 million
at September 30, 2014 and 2013, respectively. A charge to income is recorded when it is probable that a liability has been incurred
and the amount of the liability is reasonably estimable. The Company’s environmental liabilities do not take into consideration
any possible recoveries of future insurance proceeds. Because of the uncertainties associated with environmental remediation
activities at sites where the Company may be potentially liable, future expenses to remediate identified sites could be considerably
higher than the accrued liability. However, while neither the timing nor the amount of ultimate costs associated with known
environmental remediation matters can be determined at this time, the Company does not expect that these matters will have a
material adverse effect on its financial position, results of operations or cash flows. In addition, the Company has identified asset
retirement obligations for environmental matters that are expected to be addressed at the retirement, disposal, removal or
abandonment of existing owned facilities, primarily in the Power Solutions business. At September 30, 2014 and 2013, the Company
recorded conditional asset retirement obligations of $52 million and $56 million, respectively.
Additionally, the Company is involved in a number of product liability and various other casualty lawsuits incident to the operation
of its businesses. The Company maintains insurance coverages and records estimated costs for claims and suits of this nature. It
is management’s opinion that none of these will have a materially adverse effect on the Company’s financial position, results of
operations or cash flows (see Note 21, "Commitments and Contingencies," of the notes to consolidated financial statements). Costs
related to such matters were not material to the periods presented.
QUARTERLY FINANCIAL DATA
Previously reported quarterly amounts have been revised to reflect the retrospective application of the classification of the
Automotive Experience Electronics segment as a discontinued operation. Refer to Note 3, "Discontinued Operations," of the notes
to consolidated financial statements for additional details.
(in millions, except per share data)
(unaudited) First
Quarter Second Quarter Third Quarter Fourth Quarter Full Year
2014
Net sales $ 10,574 $ 10,463 $ 10,812 $ 10,979 $ 42,828
Gross profit 1,576 1,546 1,663 1,842 6,627
Net income (1) 502 291 196 346 1,335
Net income attributable to Johnson
Controls, Inc. 469 261 176 309 1,215
Earnings per share (3)
Basic 0.70 0.39 0.26 0.46 1.82
Diluted 0.69 0.39 0.26 0.46 1.80
2013
Net sales $ 10,109 $ 10,102 $ 10,499 $ 10,700 $ 41,410
Gross profit 1,436 1,440 1,564 2,025 6,465
Net income (2) 388 193 572 139 1,292
Net income attributable to Johnson
Controls, Inc. 359 164 550 105 1,178
Earnings per share
Basic 0.53 0.24 0.80 0.15 1.72
Diluted 0.52 0.24 0.80 0.15 1.71
(1) The fiscal 2014 third quarter net income includes $162 million of significant restructuring and impairment costs, an $120
million loss on business divestitures, divestiture-related losses of $80 million within discontinued operations and $20
million for transaction/integration costs. The fiscal 2014 fourth quarter net income includes $162 million of significant
restructuring and impairment costs, $274 million of net mark-to-market losses on pension and postretirement plans, a $16
million pension settlement loss and $23 million for transaction/integration costs. The preceding amounts are stated on a
pre-tax basis.