Johnson Controls 2015 Annual Report Download - page 30

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30
a favorable impact on SG&A of $189 million. Refer to the segment analysis below within Item 7 for a discussion of segment
income by segment.
Restructuring and Impairment Costs
Year Ended
September 30,
(in millions) 2015 2014 Change
Restructuring and impairment costs $ 397 $ 324 23%
Refer to Note 16, "Significant Restructuring and Impairment Costs," of the notes to consolidated financial statements for further
disclosure related to the Company's restructuring plans.
Net Financing Charges
Year Ended
September 30,
(in millions) 2015 2014 Change
Net financing charges $ 288 $ 244 18%
Net financing charges increased in fiscal 2015 as compared to fiscal 2014 primarily due to higher average borrowing levels related
to the acquisition of ADT and the share repurchase program.
Equity Income
Year Ended
September 30,
(in millions) 2015 2014 Change
Equity income $ 375 $ 395 -5%
The decrease in equity income was primarily due to prior year gains on acquisitions of partially-owned affiliates in the Power
Solutions business ($19 million) and Building Efficiency business ($19 million), partially offset by higher current year income at
certain Automotive Experience partially-owned affiliates. Refer to the segment analysis below within Item 7 for a discussion of
segment income by segment.
Income Tax Provision
Year Ended
September 30,
(in millions) 2015 2014 Change
Income tax provision $ 600 $ 407 47%
The effective rate is below the U.S. statutory rate for fiscal 2015 primarily due to the benefits of continuing global tax planning
initiatives, income in certain non-U.S. jurisdictions with a tax rate lower than the U.S. statutory tax rate and adjustments due to
tax audit resolutions, partially offset by the tax consequences of business divestitures, and significant restructuring and impairment
costs. The effective rate is below the U.S. statutory rate for fiscal 2014 primarily due to the benefits of continuing global tax
planning initiatives and income in certain non-U.S. jurisdictions with a tax rate lower than the U.S. statutory tax rate partially
offset by the tax consequences of business divestitures, significant restructuring and impairment costs, and valuation allowance
adjustments. Refer to Note 18, "Income Taxes," of the notes to consolidated financial statements for further details.
Valuation Allowances
The Company reviews the realizability of its deferred tax asset valuation allowances on a quarterly basis, or whenever events or
changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical
and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along
with any other positive or negative evidence. Since future financial results may differ from previous estimates, periodic adjustments
to the Company’s valuation allowances may be necessary.