Johnson Controls 2014 Annual Report Download - page 67

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a major effect on an entity's operations and financial results, and requires expanded disclosures for discontinued operations. ASU
No. 2014-08 will be effective prospectively for the Company for disposals that occur during or after the quarter ending December
31, 2015, with early adoption permitted in certain instances. The significance of this guidance for the Company is dependent on
any future dispositions or disposals.
In July 2013, the FASB issued ASU No. 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When
a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." ASU No. 2013-11 clarifies that
companies should present an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward,
a similar tax loss or a tax credit carryforward. ASU No. 2013-11 will be effective prospectively for the Company for the quarter
ending December 31, 2014, with early adoption permitted. The Company is currently assessing the impact adoption of this guidance
may have on its consolidated statement of financial position. The adoption of this guidance will have no impact on the Company's
consolidated results of operations.
In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative
Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment
in a Foreign Entity." ASU No. 2013-05 clarifies when companies should release the cumulative translation adjustment (CTA) into
net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial
interest in a subsidiary or group of assets within a foreign entity. Additionally, ASU No. 2013-05 states that CTA should be released
into net income upon an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the
acquisition date (step acquisition). ASU No. 2013-05 was early adopted by the Company in the quarter ended September 30, 2014.
The adoption of this guidance did not have a significant impact on the Company's consolidated financial condition or results of
operations.
In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified
Out of Accumulated Other Comprehensive Income." ASU No. 2013-02 requires companies to provide information about the
amounts reclassified out of accumulated other comprehensive income by component. Additionally, companies are required to
disclose these reclassifications by each respective line item on the statements of income. ASU No. 2013-02 was effective for the
Company for the quarter ended December 31, 2013. The adoption of this guidance had no impact on the Company's consolidated
financial condition or results of operations. Refer to Note 14, "Equity and Noncontrolling Interests," of the notes to consolidated
financial statements for disclosures regarding other comprehensive income.
In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and
Liabilities." ASU No. 2011-11 requires additional quantitative and qualitative disclosures of gross and net information regarding
derivative instruments that are offset or eligible for offset in the consolidated statement of financial position. ASU No. 2011-11
was effective for the Company for the quarter ending December 31, 2013. The adoption of this guidance had no impact on the
Company’s consolidated financial condition or results of operations. Refer to Note 10, "Derivative Instruments and Hedging
Activities," of the notes to consolidated financial statements for disclosure of gross and net information regarding the Company's
derivative instruments.
2. ACQUISITIONS AND DIVESTITURES
On June 16, 2014, the Company completed its purchase of Air Distribution Technologies, Inc. (ADT) for approximately $1.6
billion, net of cash acquired, all of which was paid as of September 30, 2014. ADT is one of the largest independent providers of
air distribution and ventilation products in North America. On June 13, 2014, the Company completed a public offering of $1.7
billion aggregate principal amount of fixed rate senior notes to finance the purchase of ADT. In connection with the ADT acquisition,
the Company recorded goodwill of $837 million in the Building Efficiency Other segment. The Company also recorded
approximately $477 million of intangible assets that are subject to amortization, of which approximately $475 million was assigned
to customer relationships with useful lives between 18 and 20 years. In addition, the Company recorded approximately $230
million of trade names that are not subject to amortization. The purchase price allocations may be subsequently adjusted to reflect
final valuation studies.
Also during fiscal 2014, the Company completed four additional acquisitions for a combined purchase price, net of cash acquired,
of $144 million, all of which was paid as of September 30, 2014. 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 $140 million.
The purchase price allocations may be subsequently adjusted to reflect final valuation studies. Three of the acquisitions increased
the Company's ownership from a noncontrolling to controlling interest. As a result, the Company recorded a combined non-cash
gain of $38 million in equity income to adjust the Company's existing equity investments in the partially-owned affiliates to fair
value. The $38 million gain includes $19 million for the Power Solutions business and $19 million for the Building Efficiency
Asia business.