Johnson Controls 2015 Annual Report Download - page 21

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smelters and lead recycling sites where the Company returned lead-containing materials for recycling; a few involve the cleanup
of Company manufacturing facilities; and the remaining fall into miscellaneous categories. The Company may face similar claims
of liability at additional sites in the future. Where potential liabilities are alleged, the Company pursues a course of action intended
to mitigate them.
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.
In June 2013, the Company self-reported to the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ)
alleged Foreign Corrupt Practices Act (FCPA) violations related to its Building Efficiency marine business in China dating back
to 2007. These allegations were isolated to the Company’s marine business in China which had annual sales ranging from $20
million to $50 million during this period. The Company, under the oversight of its Audit Committee and Board of Directors,
proactively initiated an investigation into this matter with the assistance of external legal counsel and external forensic accountants.
In connection with this investigation, the Company has made and continues to evaluate certain enhancements to its FCPA compliance
program. The Company continues to fully cooperate with the SEC and the DOJ, including engaging in discussions regarding the
resolution of the matter, which are ongoing. The Company does not anticipate any material adverse effect on its business or financial
condition as a result of this matter.
An investigation by the European Commission (EC) related to European lead recyclers’ procurement practices is currently
underway, with the Company one of several named companies subject to review. On June 24, 2015, the EC initiated proceedings
and adopted a statement of objections alleging infringements of competition rules in Europe against the Company and certain other
companies. We will continue to cooperate with the EC in their proceedings and do not anticipate any material adverse effect on
our business or financial condition. The Company’s policy is to comply with antitrust and competition laws and, if a violation of
any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry. Competition
and antitrust law investigations may continue for several years and can result in substantial fines depending on the gravity and
duration of the violations.
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 by 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.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list of executive officers of the Company as of November 18,
2015 is included as an unnumbered Item in Part I of this report in lieu of being included in the Company’s Proxy Statement relating
to the Annual Meeting of Shareholders to be held on January 27, 2016.
Michael K. Bartschat, 53, was elected a Vice President and named Chief Procurement Officer in July 2014. He previously
served as Group Vice President and General Manager, Metals and Mechanisms, Automotive Seating from 2013 to 2014, as