Johnson Controls 10-Q 3 Aug 09 2009 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	9 Months Ended Jun. 30, 2009	Mar. 31, 2008
Document and Company Information [Abstract]
Entity Registrant Name	Johnson Controls, Inc.
Entity Central Index Key	0000053669
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		20.1
Entity Common Stock, Shares Outstanding	595,457,368

Condensed Consolidated Statemen

Condensed Consolidated Statements of Financial Position (Unaudited) (USD $)
In Millions	Jun. 30, 2009	Sep. 30, 2008	Jun. 30, 2008
Assets
Cash and cash equivalents	$543	$384	$256
Accounts receivable - net	4,910	6,472	6,647
Inventories	1,561	2,099	2,292
Other current assets	1,725	1,721	1,898
Current assets	8,739	10,676	11,093
Property, plant and equipment - net	3,969	4,389	4,385
Goodwill	6,420	6,513	6,425
Other intangible assets - net	745	769	779
Investments in partially-owned affiliates	713	863	859
Other noncurrent assets	1,880	1,777	1,702
Total assets	22,466	24,987	25,243
Liabilities and Shareholders' Equity
Short-term debt	605	456	641
Current portion of long-term debt	172	287	241
Accounts payable	3,741	5,225	5,179
Accrued compensation and benefits	892	1,024	1,036
Accrued income taxes	0	117	207
Other current liabilities	2,533	2,701	2,432
Current liabilities	7,943	9,810	9,736
Long-term debt	4,001	3,201	3,247
Postretirement health and other benefits	217	236	263
Other noncurrent liabilities	1,876	2,080	1,845
Long-term liabilities	6,094	5,517	5,355
Commitments and contingencies
Minority interests in equity of subsidiaries	202	236	156
Shareholders' equity	8,227	9,424	9,996
Total liabilities and shareholders' equity	$22,466	$24,987	$25,243

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009		3 Months Ended Jun. 30, 2008		9 Months Ended Jun. 30, 2009		9 Months Ended Jun. 30, 2008
Net sales
Products and systems	$5,304	[1]	$7,969	[1]	$15,668	[1]	$23,271	[1]
Services	1,675	[1]	1,896	[1]	4,962	[1]	5,484	[1]
Net sales	6,979		9,865		20,630		28,755
Cost of sales
Products and systems	4,608		6,869		14,243		20,226
Services	1,332		1,511		3,981		4,427
Cost of sales	5,940		8,380		18,224		24,653
Gross profit	1,039		1,485		2,406		4,102
Selling, general and administrative expenses	(787)		(877)		(2,449)		(2,715)
Restructuring costs	0		0		(230)		0
Net financing charges	(65)		(69)		(167)		(204)
Equity income (loss)	30		37		(104)		85
Income (loss) before income taxes and minority interests	217		576		(544)		1,268
Provision for income taxes	50		121		109		266
Minority interests in net earnings (loss) of subsidiaries	4		16		(15)		39
Net income (loss)	$163		$439		($638)		$963
Earnings (loss) per share
Basic	0.27		0.74		-1.07		1.62
Diluted	0.26		0.73		-1.07		1.6
[1]Products and systems consist of automotive experience and power solutions products and systems and building efficiency installed systems. Services are building efficiency technical and global workplace solutions.

1_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	9 Months Ended Jun. 30, 2009	9 Months Ended Jun. 30, 2008
Operating Activities
Net income (loss)	$163	$439	($638)	$963
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	172	187	535	553
Amortization of intangibles	8	9	26	28
Equity in earnings (loss) of partially-owned affiliates, net of dividends received	(4)	10	207	10
Minority interests in net earnings (loss) of subsidiaries	4	16	(15)	39
Deferred income taxes	(20)	(53)	202	(73)
Impairment charges	0	0	156	0
Equity-based compensation	19	10	47	43
Other	28	18	42	37
Changes in working capital, excluding acquisitions and divestitures of businesses:
Accounts receivable	(27)	(169)	1,297	260
Inventories	135	(57)	476	(207)
Other current assets	(6)	(156)	(13)	(117)
Restructuring reserves	(53)	(10)	(22)	(42)
Accounts payable and accrued liabilities	87	209	(1,666)	(551)
Accrued income taxes	(12)	99	(275)	85
Cash provided by operating activities	494	552	359	1,028
Investing Activities
Capital expenditures	(103)	(190)	(529)	(551)
Sale of property, plant and equipment	5	10	8	42
Acquisition of businesses, net of cash acquired	0	(4)	(32)	(73)
Recoverable customer engineering expenditures	(20)	(32)	(68)	(17)
Settlement of cross-currency interest rate swaps	0	(62)	31	(155)
Changes in long-term investments	(21)	(10)	(84)	(22)
Cash used by investing activities	(139)	(288)	(674)	(776)
Financing Activities
Increase (decrease) in short-term debt - net	(23)	66	164	349
Increase in long-term debt - net	2	7	880	240
Repayment of long-term debt	(9)	(215)	(340)	(927)
Payment of cash dividends	(77)	(77)	(231)	(220)
Stock repurchases	0	0	0	(73)
Other	(16)	(22)	1	(39)
Cash provided (used) by financing activities	(123)	(241)	474	(670)
Increase (decrease) in cash and cash equivalents	$232	$23	$159	($418)

Financial Statements

Financial Statements
	9 Months Ended Jun. 30, 2009 USD / shares
Financial Statements [Abstract]
Financial Statements	1. Financial Statements In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Johnson Controls, Inc. (the Company) Annual Report on Form 10-K for the year ended September30, 2008. The results of operations for the three and nine month periods ended June30, 2009 are not necessarily indicative of results for the Companys 2009 fiscal year because of seasonal and other factors. The consolidated financial statements include the accounts of Johnson Controls, Inc. and its domestic and non-U.S subsidiaries that are consolidated in conformity with U.S. GAAP. All significant intercompany transactions have been eliminated. Investments in partially-owned affiliates are accounted for by the equity method when the Companys interest exceeds 20% and the Company does not have a controlling interest. The financial results for the nine month period ended June30, 2009 include an out of period adjustment of $62million made in the first and second quarters of fiscal 2009 to correct an error related to the power solutions segment. The error, which reduces segment income, primarily originated in 2007 and 2008 and resulted in the overstatement of inventory and understatement of cost of sales in prior periods. Under certain criteria as provided for in Financial Accounting Standards Board (FASB) Interpretation No. (FIN)46(R), Consolidation of Variable Interest Entities an Interpretation of ARB No.51, the Company may consolidate a partially-owned affiliate when it has less than a 50% ownership. In order to determine whether to consolidate a partially-owned affiliate when the Company has less than a 50% ownership, we first determine if the entity is a variable interest entity (VIE). An entity is considered to be a VIE if it has one of the following characteristics: 1) the entity is thinly capitalized; 2) residual equity holders do not control the entity; 3) equity holders are shielded from economic losses or do not participate fully in the entitys residual economics; or 4) the entity was established with non-substantive voting. If the entity meets one of these characteristics, we then determine if the Company is the primary beneficiary of the VIE. Under FIN 46(R), the party exposed to the majority of the risks and rewards associated with the VIE is the VIEs primary beneficiary and must consolidate the entity. Based upon the criteria set forth in FIN 46(R), the Company has determined that at June30, 2009 it was the primar

New Accounting Standards

New Accounting Standards
	9 Months Ended Jun. 30, 2009 USD / shares
New Accounting Standards [Abstract]
New Accounting Standards	2. New Accounting Standards In June2009, the Financial Accounting Standards Board (FASB)issued Statement of Financial Accounting Standards (SFAS)No.168 The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162. This statement is effective for the Company in the fourth quarter of fiscal 2009 (September30, 2009). Upon effect, the FASB Accounting Standard Codification will become the source of authoritative U.S. GAAP recognized by the FASB. The adoption of this statement will have no impact on the Companys consolidated financial condition and results of operations. In June2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R). SFAS No.167 changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entitys purpose and design and a companys ability to direct the activities of the entity that most significantly impact the entitys economic performance. This statement is effective for the Company beginning in the first quarter of fiscal 2011 (October1, 2010). The Company is assessing the potential impact that the adoption on SFAS No.167 will have on its consolidated financial condition and results of operations. In May2009, FASB issued SFAS No.165, Subsequent Events. SFAS No.165 is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The standard requires disclosure of the date through which the company has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. This statement is effective for the Company in the third quarter of fiscal 2009 (June30, 2009). Refer to Note 20, Subsequent Events, for disclosure of the Companys subsequent events for the current reporting period. In April2009, the FASB issued Staff Position (FSP)Financial Accounting Standards (FAS)107-1 and Accounting Principles Board (APB)28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP requires disclosure about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This statement was effective for the Company beginning in the third quarter of fiscal 2009 (April1, 2009) with early adoption permitted. The Company adopted this FSP effective January1, 2009 and determined that the impact of adoption was not material to its consolidated financial condition and results of operation. See Note 15, Derivative Instruments and Hedging Activities, and Note 16, Fair Value Measurements, for disclosure of the Companys fair value of financial instruments as of June30, 2009. In March2008, the FASB issued SFAS No.161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.133.

Acquisition of Businesses

Acquisition of Businesses
	9 Months Ended Jun. 30, 2009 USD / shares
Acquisition of Businesses [Abstract]
Acquisition of Businesses	3. Acquisition of Businesses During fiscal 2009 the Company completed two acquisitions for a combined purchase price of $37 million, of which $32 milion was paid in the nine months ended June30, 2009. Neither acquisition was material to the Companys consolidated financial statements. In connection with these acquisitions, the Company recorded goodwill of $24million. The purchase price allocation may be subsequently adjusted to reflect final valuation studies. During the nine months ended June30, 2008, the Company completed four acquisitions for a combined purchase price of $80million, of which $73million was paid in the respective period. None of these acquisitions were material to the Companys consolidated financial statements. In connection with these acquisitions, the Company recorded goodwill of $55 million. In July2008, the Company formed a joint venture to acquire the interior product assets of Plastech Engineered Products, Inc (Plastech). Plastech filed for bankruptcy in February2008. The Company owns 70% of the newly formed entity and certain Plastech term lenders hold the minority position. The Company contributed cash and injection molding plants to the new entity with a fair value of $262million. The lenders contributed their rights to receive Plastechs interiors business obtained in exchange for certain Plastech debt. The combined equity in the new entity was approximately $375million. Goodwill of $199million was recorded as part of the transaction. In the third quarter of fiscal 2009, the Company finalized valuations associated with the acquisition and recorded a $21million increase to goodwill.

Percentage of Completion Contra

Percentage of Completion Contracts
	9 Months Ended Jun. 30, 2009 USD / shares
Percentage-of-Completion Contracts [Abstract]
Percentage-of-Completion Contracts	4. Percentage-of-Completion Contracts The building efficiency business records certain long term contracts under the percentage-of-completion method of accounting. Under this method, sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. The Company records costs and earnings in excess of billings on uncompleted contracts within accounts receivable net and billings in excess of costs and earnings on uncompleted contracts within other current liabilities in the condensed consolidated statements of financial position. Amounts included within accounts receivable net related to these contracts were $522million, $670million and $637million at June30, 2009, September30, 2008, and June30, 2008, respectively. Amounts included within other current liabilities were $610 million, $654million, and $615million at June30, 2009, September30, 2008, and June30, 2008, respectively.

Inventories

Inventories
	9 Months Ended Jun. 30, 2009 USD / shares
Inventories [Abstract]
Inventories	5. Inventories Inventories consisted of the following (in millions): June 30, September 30, June 30, 2009 2008 2008 Raw materials and supplies $ 720 $ 902 $ 929 Work-in-process 225 324 359 Finished goods 728 985 1,066 FIFO inventories 1,673 2,211 2,354 LIFO reserve (112 ) (112 ) (62 ) Inventories $ 1,561 $ 2,099 $ 2,292

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	9 Months Ended Jun. 30, 2009 USD / shares
Goodwill and Other Intangible Assets [Abstract]
Goodwill and Other Intangible Assets	6. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill in each of the Companys reporting segments for the three month period ended September30, 2008 and the nine month period ended June30, 2009 were as follows (in millions): Currency June 30, Business Translation September 30, 2008 Acquisitions and Other 2008 Building efficiency North America systems $ 512 $ 4 $ (1 ) $ 515 North America service 663 (6 ) 657 North America unitary products 481 481 Global workplace solutions 181 6 (9 ) 178 Europe 416 12 428 Rest of world 593 (19 ) 574 Automotive experience North America 1,177 178 1 1,356 Europe 1,275 7 (63 ) 1,219 Asia 205 (5 ) 200 Power solutions 922 (17 ) 905 Total $ 6,425 $ 189 $ (101 ) $ 6,513 Currency September 30, Business Translation June 30, 2008 Acquisitions and Other 2009 Building efficiency North America systems $ 515 $ $ $ 515 North America service 657 1 658 North America unitary products 481 2 483 Global workplace solutions 178 (5 ) 173 Europe 428 (9 ) 419 Rest of world 574 24 (49 ) 549 Automotive experience North America 1,356 21 1 1,378 Europe 1,219 (46 ) 1,173 Asia 200 4 204 Power solutions 905 (37 ) 868 Total $ 6,513 $ 45 $ (138 ) $ 6,420 The Companys other intangible assets, primarily from business acquisitions, are valued based on independent appraisals and consisted of (in millions): June 30, 2009 September 30, 2008 June 30, 2008 Gross Gross Gross Carrying Accumulated Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Amount Amortization Net Amortized intangible assets Patented technology $ 303 $ (181 ) $ 122 $ 302 $ (168 ) $ 134 $ 309 $ (167 ) $ 142 Unpatented technology 23 (12 ) 11 25 (11 ) 14 26 (11 ) 15 Customer relationships 343 (51 ) 292 344 (42 ) 302 342 (39 ) 303 Miscellaneous 36 (13 ) 23 35 (13 ) 22 35 (13 ) 22 Total amortized intangible assets

Product Warranties

Product Warranties
	9 Months Ended Jun. 30, 2009 USD / shares
Product Warranties [Abstract]
Product Warranties	7. Product Warranties The Company offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement. A typical warranty program requires that the Company replace defective products within a specified time period from the date of sale. The Company records an estimate for future warranty-related costs based on actual historical return rates. Based on analysis of return rates and other factors, the adequacy of the Companys warranty provisions are adjusted as necessary. While the Companys warranty costs have historically been within its calculated estimates, it is possible that future warranty costs could exceed those estimates. The Companys product warranty liability is included in other current liabilities in the condensed consolidated statement of financial position. The changes in the carrying amount of the Companys total product warranty liability for the nine months ended June30, 2009 and 2008 were as follows (in millions): 2009 2008 Balance as of September 30 $ 204 $ 186 Accruals for warranties issued during the period 163 121 Accruals from acquisitions Accruals related to pre-existing warranties (including changes in estimates) 4 3 Settlements made (in cash or in kind) during the period (155 ) (108 ) Currency translation (4 ) 6 Balance as of June 30 $ 212 $ 208

Restructuring Costs

Restructuring Costs
	9 Months Ended Jun. 30, 2009 USD / shares
Restructuring Costs Disclosure [Abstract]
Restructuring Costs	8. Restructuring Costs To further align the Companys cost structure with global automotive market conditions, the Company committed to a restructuring plan (2009 Plan) in the second quarter of fiscal 2009 and recorded a $230million restructuring charge. The restructuring charge relates to cost reduction initiatives in the Companys automotive experience, building efficiency and power solutions businesses and includes workforce reductions and plant consolidations. The Company expects to substantially complete the 2009 Plan by the end of 2010. The automotive-related restructuring actions target excess manufacturing capacity resulting from lower industry production in the European, North American and Japanese automotive markets. The restructuring actions in building efficiency are primarily in Europe where the Company is centralizing certain functions and rebalancing its resources to target the geographic markets with the greatest potential growth. Power solutions actions are focused on optimizing its manufacturing capacity as a result of lower overall demand for original equipment batteries resulting from lower vehicle production levels. The 2009 Plan includes workforce reductions of approximately 6,400 employees (2,900 for automotive experience North America, 1,900 for automotive experience Europe, 600 for automotive experience Asia, 200 for building efficiency North America, 400 for building efficiency Europe, 100 for building efficiency rest of world, and 300 for power solutions). Restructuring charges associated with employee severance and termination benefits are paid over the severance period granted to each employee and on a lump sum basis when required in accordance with individual severance agreements. As of June30, 2009, approximately 3,700 employees have been separated from the Company pursuant to the 2009 Plan. In addition, the 2009 Plan includes 9 plant closures (3 for automotive experience North America, 1 for automotive experience Europe, 3 for automotive experience Asia, 1 for building efficiency rest of world, and 1 for power solutions). As of June30, 2009, none of the plants have been closed. The portion of the restructuring charge for the impairment of long-lived assets associated with the plant closures was determined using fair value based on a discounted cash flow analysis. The following table summarizes the changes in the Companys 2009 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions): Employee Severance and Termination Fixed Asset Currency Benefits Impairment Other Translation Total Original Reserve $ 182 $ 46 $ 2 $ $ 230 Utilized Cash (15 ) (15 ) Utilized Noncash (46 ) (46 ) Balance at March31, 2009 $ 167 $ $ 2 $ $ 169 Utilized Cash (8 ) (8 ) Utilized Noncash

Research and Development

Research and Development
	9 Months Ended Jun. 30, 2009 USD / shares
Research and Development [Abstract]
Research and Development	9. Research and Development Expenditures for research activities relating to product development and improvement are charged against income as incurred and included within selling, general and administrative expenses in the consolidated statement of income. A portion of the costs associated with these activities is reimbursed by customers. Such expenditures amounted to $29million and $95 million for the three months ended June30, 2009 and 2008, respectively, and $219million and $322million for the nine months ended June30, 2009 and 2008, respectively. These expenditures are net of customer reimbursements of $146million and $106million for the three months ended June30, 2009 and 2008, respectively, and $312million and $282million for the nine months ended June30, 2009 and 2008, respectively.

Income Taxes

Income Taxes
	9 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	10. Income Taxes The more significant components of the Companys income tax provision from continuing operations are as follows (in millions): Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Federal, state and foreign income tax expense at annual effective rate $ 59 $ 121 $ (147 ) $ 266 Effective tax rate adjustment 11 Valuation allowance adjustment (3 ) 252 Restructuring charges 18 Impairment charges 39 Uncertain tax positions (17 ) (17 ) Change in tax status of foreign subsidiary (30 ) Interest refund (6 ) Provision for income taxes $ 50 $ 121 $ 109 $ 266 Effective Tax Rate In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter. For the three and nine months ended June30, 2009, the Company decreased its estimated annual effective income tax rate from continuing operations from 31% to 27%, primarily due to a geographical shift in income and global tax planning initiatives. Because there is a cumulative year-to-date loss, this created a tax increase of $11million in the current quarter after applying the new effective rate to the provision in the prior two quarters. The effective income tax rate from continuing operations for the three and nine months ended June30, 2008 was 21%. Valuation Allowance The Company reviews its deferred tax asset valuation allowances on a quarterly basis. In determining the potential need 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 Companys valuation allowances may be necessary. In the third quarter of fiscal 2009, the Company performed an analysis of its worldwide deferred tax assets. As a result, and after considering tax planning initiatives and other positive and negative evidence, the Company determined that it was more likely than not that the deferred tax assets within the Brazil power solutions entity would be utilized. Therefore, the Company released $10million of valuation allowances in the three month period ended June 30, 2009. This is comprised of a $3million decrease in income tax expense with the remaining amount impacting the statement of financial position because it related to acquired net operating losses.

Retirement Plans

Retirement Plans
	9 Months Ended Jun. 30, 2009 USD / shares
Retirement Plans [Abstract]
Retirement Plans	11. Retirement Plans The components of the Companys net periodic benefit costs associated with its defined benefit pension plans and other postretirement health and other benefits are shown in the tables below in accordance with SFAS No.132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits an amendment of FASB Statements No.87, 88 and 106 (in millions): U.S. Pension Plans Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Service cost $ 17 $ 20 $ 50 $ 60 Interest cost 40 35 119 105 Expected return on plan assets (45 ) (41 ) (134 ) (124 ) Amortization of net actuarial loss 1 1 3 4 Amortization of prior service cost 1 1 Net periodic benefit cost $ 13 $ 15 $ 39 $ 46 Non-U.S. Pension Plans Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Service cost $ 8 $ 10 $ 23 $ 29 Interest cost 16 20 48 56 Expected return on plan assets (13 ) (17 ) (39 ) (50 ) Amortization of net actuarial loss 1 1 3 5 Amortization of prior service cost 1 1 Net periodic benefit cost $ 13 $ 14 $ 36 $ 40 Postretirement Health and Other Benefits Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Service cost $ 1 $ 2 $ 3 $ 4 Interest cost 5 4 14 13 Amortization of net actuarial gain (1 ) (1 ) (2 ) (2 ) Amortization of prior service credit (2 ) (1 ) (5 ) (5 ) Net periodic benefit cost $ 3 $ 4 $ 10 $ 10

Debt and Financing Arrangements

Debt and Financing Arrangements
	9 Months Ended Jun. 30, 2009 USD / shares
Debt and Financing Arrangements [Abstract]
Debt and Financing Arrangements	12. Debt and Financing Arrangements In May2009, the Company entered into a new one year revolving credit facility in the amount of 50million euro expiring in May2010, which replaced a 100million euro revolving facility expiring May2009. On March16, 2009, the Company issued nine million Equity Units (Units) with an aggregate principal amount of $450million in a public offering. The Company received approximately $436 million in net proceeds from the sale of the Units after underwriting discounts and other expenses. The proceeds were used to repay short-term indebtedness incurred within the second quarter to fund working capital requirements. Each Unit has a stated amount of $50 and consists of (a)a purchase contract which obligates the holder to purchase, and obligates the Company to sell, no later than March31, 2012, a variable number of shares of the Companys common stock for $50 and (b)a one-twentieth, or 5%, undivided beneficial ownership interest in a subordinated note issued by the Company due March31, 2042 with a principal amount of $1,000. The subordinated notes are pledged by the holders to secure their obligations under the purchase contract, and at the time of the offering, the estimated fair value of the purchase contract was zero. The Company will make quarterly interest payments at the annual rate of 11.5% on the subordinated notes, and the first interest payment was made on June30, 2009. Prior to March31, 2012, the Company may defer payment of interest on the subordinated notes for one or more consecutive interest periods provided that each deferred interest payment may only be deferred until the earlier of (a)the third anniversary of the interest payment date on which the interest payment was originally scheduled to be paid or (b)March 31, 2014. The subordinated notes will be remarketed between January1, 2012 and March31, 2012 whereby the interest rate on the notes will be reset and certain other terms of the notes may be modified in order to generate sufficient remarketing proceeds to satisfy the Unit holders obligations under the purchase contract. If the subordinated notes are not successfully remarketed, then a put right of holders of the notes will be automatically exercised unless such holders (a)notify the Company of their intent to settle their obligations under the purchase contracts in cash, and (b)deliver $50 in cash per purchase contract, by the applicable dates specified by the purchase contracts. Following such exercise and settlement, the Unit holders obligations to purchase shares of common stock under the purchase contracts will be satisfied in full, and the Company will deliver the shares of common stock to such holders. In connection with this transaction, approximately $14million of issuance costs were incurred. Of the total issuance costs, approximately $12million was charged to Capital in excess of par value with the remainder deferred and amortized over three years. The number of shares to be issued under the purchase contracts is contingent and is based on, among other things, the share price of the Companys common stock on the stock purchase date and anti-di

Earnings Per Share

Earnings Per Share
	9 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share Disclosure [Abstract]
Earnings Per Share	13. Earnings Per Share The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share (in millions): Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Income Available to Common Shareholders Basic income (loss)available to common shareholders $ 163 $ 439 $ (638 ) $ 963 Financing costs related to the convertible senior notes and Equity Units, net of tax 13 Diluted income (loss)available to common shareholders $ 176 $ 439 $ (638 ) $ 963 Weighted Average Shares Outstanding Basic weighted average shares outstanding 594.7 592.9 593.9 593.0 Effect of dilutive securities: Stock options 1.8 8.0 8.7 Equity units 43.7 Convertible senior notes 36.0 Diluted weighted average shares outstanding 676.2 600.9 593.9 601.7 Antidilutive Securities Options to purchase common shares 6.2 0.9 6.2 0.9 For the nine months ended June30, 2009, the total number of potential dilutive shares due to stock options, Equity Units and convertible senior notes was 87.6million. However, these items were not included in the computation of diluted net loss per common share for the nine months ended June30, 2009, since to do so would decrease the loss per share. During each of the three months ended June30, 2009 and 2008, the Company declared a dividend of $0.13 per common share and during each of the nine months ended June30, 2009 and 2008, the Company declared three quarterly dividends totaling $0.39 per common share. The Company paid all dividends in the month subsequent to the end of each fiscal quarter.

Comprehensive Income

Comprehensive Income
	9 Months Ended Jun. 30, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income	14. Comprehensive Income A summary of comprehensive income is shown below (in millions): Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Net income (loss) $ 163 $ 439 $ (638 ) $ 963 Realized and unrealized gains (losses) on derivatives 28 (49 ) 30 (101 ) Foreign currency translation adjustments 193 70 (383 ) 518 Other comprehensive income (loss) 221 21 (353 ) 417 Comprehensive income (loss) $ 384 $ 460 $ (991 ) $ 1,380 The Company selectively hedges anticipated transactions that are subject to foreign exchange exposure or commodity price exposure, primarily using foreign currency exchange contracts and commodity contracts, respectively. These instruments are designated as cash flow hedges in accordance with SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No.137, No.138 and No.149 and are recorded in the condensed consolidated statement of financial position at fair value. The effective portion of the contracts gains or losses due to changes in fair value are initially recorded as unrealized gains/losses on derivatives, a component of accumulated other comprehensive income, and are subsequently reclassified into earnings when the hedged transactions, typically sales or costs related to sales, occur and affect earnings. The Company has foreign currency-denominated debt obligations which are designated as hedges of net investments in foreign subsidiaries. Gains and losses, net of tax, attributable to these hedges are deferred as cumulative translation adjustments within the accumulated other comprehensive income account until the sale or liquidation of the related foreign subsidiary. Refer to Note 15, Derivative Instruments and Hedging Activities, and Note 16, Fair Value Measurements, for further discussion of the Companys derivative instruments and related hedge items.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	9 Months Ended Jun. 30, 2009 USD / shares
Derivative Instruments and Hedging Activities [Abstract]
Derivative Instruments and Hedging Activities	15. Derivative Instruments and Hedging Activities In March2008, the FASB issued SFAS No.161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.133. SFAS No.161 enhances required disclosures regarding derivatives and hedging activities, including how an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No.133 and how derivative instruments and related hedged items affect an entitys financial position, financial performance and cash flows. SFAS No.161 was effective for the Company beginning in the second quarter of fiscal 2009 and is being applied prospectively. The Company selectively uses derivative instruments to reduce market risk associated with changes in foreign currency, commodities and compensation expense. Under Company policy, the use of derivatives is restricted to those intended for hedging purposes; the use of any derivative instrument for speculative purposes is strictly prohibited. A description of each type of derivative utilized by the Company to manage risk is included in the following paragraphs. In addition, refer to Note 16, Fair Value Measurements, for information related to the fair value measurements and valuation methods utilized by the Company for each derivative type. The Company has global operations and participates in the foreign exchange markets to minimize its risk of loss from fluctuations in foreign currency exchange rates. The Company primarily uses foreign currency exchange contracts to hedge certain of its foreign exchange rate exposures. The Company hedges 70% to 90% of the nominal amount of each of its known foreign exchange transactional exposures. The Company has entered into foreign currency denominated debt obligations to selectively hedge portions of its net investment in Japan. The currency effects of the debt obligations are reflected in the accumulated other comprehensive income (AOCI)account within shareholders equity where they offset gains and losses recorded on the Companys net investment in Japan. As of June30, 2009, the Company had 37billion yen of foreign denominated debt outstanding designated as net investment hedges in the Companys net investment in Japan. The Company uses commodity contracts in the financial derivatives market in cases where commodity price risk cannot be naturally offset or hedged through supply base fixed price contracts. Commodity risks are systematically managed pursuant to policy guidelines. As cash flow hedges, the effective portion of the hedge gains or losses due to changes in fair value are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions, typically sales or costs related to sales, occur and affect earnings. Any ineffective portion of the hedge is reflected in the consolidated statement of income. The maturities of the commodity contracts coincide with the expected purchase of the commodities. As of June30, 2009, the Company had the following outstanding commodity hedge contracts that hedge forecasted purchases:

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Jun. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	16.Fair Value Measurements In September2006, the FASB issued SFAS No.157, Fair Value Measurements. SFAS No.157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. In February2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No.157, which delays the effective date of SFAS No.157 for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis to fiscal years beginning after November15, 2008. The Company has not applied the provisions of SFAS No.157 to its nonfinancial assets and nonfinancial liabilities in accordance with FSP FAS 157-2 as of June30, 2009. SFAS No.157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No.157 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions. SFAS No.157 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Recurring Fair Value Measurements The following table presents the Companys fair value hierarchy for those assets and liabilities measured at fair value on a quarterly basis as of June30, 2009 (in millions): Fair Value Measurements Using: Quoted Prices in Significant Other Significant Total as of Active Markets Observable Inputs Unobservable Inputs June 30, 2009 (Level 1) (Level 2) (Level 3) Assets Cross-currency interest rate swap $ $ $ $ Equity swap 45 45 Foreign currency exchange derivatives 36 36 Commodity derivatives 2 2 Total $ 83 $ 81 $ 2 $ Liabilities Foreign currency exchange derivatives $ 28 $ 28 $ $ Commodity derivatives 11 11 Interest rate swaps and related debt Foreign currency denominated debt 388 388 Total $ 427 $ 416 $ 11 $ Valuation Methods Cross-currency interest rate swap The Company selectively uses cross-currency interest rate swaps

Impairment of Long Lived Assets

Impairment of Long Lived Assets
	9 Months Ended Jun. 30, 2009 USD / shares
Impairment of Long-Lived Assets [Abstract]
Impairment of Long-Lived Assets	17. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the assets carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with SFAS No.144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No.144 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value. In the third quarter of fiscal 2009, the Company concluded it had a triggering event requiring assessment of impairment of its long-lived assets in light of the restructuring plans in North America announced by Chrysler LLC (Chrysler) and General Motors Corporation (GM)during the quarter as part of their bankruptcy reorganization plans. As a result, the Company reviewed its long-lived assets relating to the Chrysler and GM platforms within the North America automotive experience segment and determined no impairment existed. In the second quarter of fiscal 2009, the Company concluded it had a triggering event requiring assessment of impairment of its long-lived assets in conjunction with its restructuring plan announced in March2009. As a result, the Company reviewed its long-lived assets associated with the plant closures for impairment and recorded a $46million impairment charge in the second quarter of fiscal 2009, of which $25million related to the North America automotive experience segment, $16million related to the Asia automotive experience segment and $5 million related to the Europe automotive experience segment. Refer to Note 8, Restructuring Costs, for further information regarding the 2009 restructuring plan. Additionally, at March 31, 2009, in conjunction with the preparation of its financial statements, the Company concluded it had a triggering event requiring assessment of its other long-lived assets within the European automotive experience segment due to significant declines in European automotive sales volume. As a result, the Company reviewed its other long-lived assets within the Europe automotive experience segment for impairment and determined no additional impairment existed. At December31, 2008, in conjunction with the preparation of its financial statements, the Company concluded it had a triggering event requiring assessment of impairment of its long-lived assets due to the significant declines in North American and European automotive sales volumes. As a result, the Company reviewed its long-lived assets for impairment and recorded a $110million impairment charge in the first quarter of fiscal 2009, of which $77million related to the North America automotive experience segment and $33million related to the Europe automotive experienc

Segment Information

Segment Information
	9 Months Ended Jun. 30, 2009 USD / shares
Segment Information [Abstract]
Segment Information	18. Segment Information SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in SFAS No.131, the Company has determined that it has ten reportable segments for financial reporting purposes. Certain segments are aggregated or combined based on materiality within building efficiency rest of world and power solutions in accordance with the standard. The Companys ten reportable segments are presented in the context of its three primary businesses building efficiency, automotive experience and power solutions. Building efficiency Building efficiency designs, produces, markets and installs HVAC and control systems that monitor, automate and integrate critical building segment equipment and conditions including HVAC, fire-safety and security in commercial buildings and in various industrial applications. North America systems designs, produces, markets and installs mechanical equipment that provides heating and cooling in North American non-residential buildings and industrial applications as well as control systems that integrate the operation of this equipment with other critical building systems. North America service provides technical services including inspection, scheduled maintenance, repair and replacement of mechanical and control systems in North America, as well as the retrofit and service components of performance contracts and other solutions. North America unitary products designs and produces heating and air conditioning solutions for residential and light commercial applications and markets products to the replacement and new construction markets. Global workplace solutions provides on-site staff for complete real estate services, facility operation and management to improve the comfort, productivity, energy efficiency and cost effectiveness of building systems around the globe. Europe provides HVAC and refrigeration systems and technical services to the European marketplace. Rest of world provides HVAC and refrigeration systems and technical services to markets in Asia, the Middle East and Latin America. Automotive experience Automotive experience designs and manufactures interior systems and products for passenger cars and light trucks, including vans, pick-up trucks and sport utility/crossover vehicles in North America, Europe and Asia. Automotive experience systems and products include complete seating systems and components; cockpit systems, including instrument panels and clusters, information displays and body controllers; overhead systems, including headliners and electronic convenience features; floor consoles; and door systems. Power solutions Power solutions services both automotive original equipment manufacturers and the battery aftermarket by providing advanced battery technology, coupled with systems engineering, marketing and service expertise. Management evaluates the performance of the segments based primarily on segment income

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Jun. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	19. Commitments and Contingencies The Company accrues for potential environmental losses in a manner consistent with U.S. GAAP; that is, when it is probable a loss has been incurred and the amount of the loss is reasonably estimable. 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 Companys 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 has no reason to believe at the present time that any claims, penalties or costs in connection with known environmental matters will have a material adverse effect on the Companys financial position, results of operations or cash flows. The Company is involved in a number of product liability and various other suits incident to the operation of its businesses. Insurance coverages are maintained and estimated costs are recorded for claims and suits of this nature. It is managements opinion that none of these will have a material adverse effect on the Companys financial position, results of operations or cash flows. Costs related to such matters were not material to the periods presented. A significant portion of the Companys sales are to customers in the automotive industry. Continued adverse developments in the North American or European automotive industries could impact the Companys liquidity position and/or require additional restructuring of the Companys operations or impairment charges. In addition, a prolonged downturn in the automotive market may likely impact certain vendors financial solvency, including the ability to meet restrictive debt covenants, resulting in potential liabilities or additional costs to the Company to ensure uninterrupted supply to its customers.

Subsequent Events

Subsequent Events
	9 Months Ended Jun. 30, 2009 USD / shares
Subsequent Events [Abstract]
Subsequent Events	20.Subsequent Events In May2009, the FASB issued SFAS No.165, Subsequent Events, which requires disclosure of the date through which subsequent events have been evaluated, as well as whether the date is the date the financial statements were issued or the date the financial statements were available to be issued. The Company has evaluated subsequent events through August3, 2009, the date the financial statements were issued. Except as disclosed in Note 16, Fair Value Measurements, the Company noted no other significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures.