Johnson Controls 2015 Annual Report Download - page 112

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112
Summarized income statement data for the years ended September 30 is as follows (in millions):
2015 2014 2013
Net sales $ 12,922 $ 10,820 $ 9,973
Gross profit 1,911 1,638 1,483
Net income 890 790 644
Income attributable to noncontrolling interests 10 3 5
Net income attributable to the entity 880 787 639
21. COMMITMENTS AND CONTINGENCIES
The Company accrues for potential environmental liabilities when it is probable a liability has been incurred and the amount of
the liability is reasonably estimable. Reserves for environmental liabilities totaled $23 million and $24 million at September 30,
2015 and 2014, respectively. The Company reviews the status of its environmental sites on a quarterly basis and adjusts its reserves
accordingly. Such potential liabilities accrued by the Company do not take into consideration possible recoveries of future insurance
proceeds. They do, however, take into account the likely share other parties will bear at remediation sites. It is difficult to estimate
the Company’s ultimate level of liability at many remediation sites due to the large number of other parties that may be involved,
the complexity of determining the relative liability among those parties, the uncertainty as to the nature and scope of the
investigations and remediation to be conducted, the uncertainty in the application of law and risk assessment, the various choices
and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods
over which eventual remediation may occur. Nevertheless, the Company does not currently believe that any claims, penalties or
costs in connection with known environmental matters will have a material adverse effect on the Company’s 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, 2015 and 2014, the Company recorded conditional asset retirement obligations
of $59 million and $52 million, respectively.
The Company is involved in various lawsuits, claims and proceedings incident to the operation of its businesses, including those
pertaining to product liability, environmental, safety and health, intellectual property, employment, commercial and contractual
matters, and various other casualty matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits,
claims or proceedings may be disposed of unfavorably to us, it is management’s opinion that none of these will have a material
adverse effect on the Company’s financial position, results of operations or cash flows. Costs related to such matters were not
material to the periods presented.