Johnson Controls 10-Q 4 May 10 2010 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	6 Months Ended Mar. 31, 2010	Mar. 31, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	JOHNSON CONTROLS INC
Entity Central Index Key	0000053669
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q2
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		7.1
Entity Common Stock, Shares Outstanding	672,703,016

Condensed Consolidated Statemen

Condensed Consolidated Statements of Financial Position (Unaudited) (USD $)
In Millions	6 Months Ended Mar. 31, 2010	6 Months Ended Mar. 31, 2009	12 Months Ended Sep. 30, 2009
Assets
Cash and cash equivalents	$770	$311	$761
Accounts receivable - net	5,431	4,745	5,528
Inventories	1,579	1,648	1,521
Other current assets	2,124	1,748	2,016
Current assets	9,904	8,452	9,826
Property, plant and equipment - net	3,779	3,949	3,986
Goodwill	6,377	6,320	6,542
Other intangible assets - net	709	749	746
Investments in partially-owned affiliates	770	668	718
Other noncurrent assets	2,270	1,586	2,270
Total assets	23,809	21,724	24,088
Liabilities and Equity
Short-term debt	68	621	658
Current portion of long-term debt	675	176	140
Accounts payable	4,822	3,540	4,434
Accrued compensation and benefits	936	830	872
Other current liabilities	2,314	2,520	2,612
Current liabilities	8,815	7,687	8,716
Long-term debt	2,636	3,994	3,168
Postretirement health and other benefits	208	222	255
Other noncurrent liabilities	2,524	1,722	2,610
Long-term liabilities	5,368	5,938	6,033
Commitments and contingencies (Note 19)
Shareholders' equity attributable to Johnson Controls, Inc.	9,407	7,900	9,138
Noncontrolling interests	219	199	201
Total equity	9,626	8,099	9,339
Total liabilities and equity	$23,809	$21,724	$24,088

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009		6 Months Ended Mar. 31, 2010		6 Months Ended Mar. 31, 2009
Net sales
Products and systems	$6,642	[1]	$4,717	[1]	$13,318	[1]	$10,364	[1]
Services	1,675	[1]	1,598	[1]	3,407	[1]	3,287	[1]
Net sales	8,317		6,315		16,725		13,651
Cost of sales
Products and systems	5,715		4,362		11,471		9,635
Services	1,379		1,271		2,795		2,649
Cost of sales	7,094		5,633		14,266		12,284
Gross profit	1,223		682		2,459		1,367
Selling, general and administrative expenses	(847)		(803)		(1,730)		(1,662)
Restructuring costs			(230)				(230)
Net financing charges	(43)		(46)		(78)		(102)
Equity income (loss)	51		2		104		(134)
Income (loss) before income taxes	384		(395)		755		(761)
Provision (benefit) for income taxes	87		(183)		92		59
Net income (loss)	297		(212)		663		(820)
Income (loss) attributable to noncontrolling interests	23		(19)		39		(19)
Net income (loss) attributable to Johnson Controls, Inc.	$274		($193)		$624		($801)
Earnings (loss) per share
Basic	0.41		-0.33		0.93		-1.35
Diluted	0.4		-0.33		0.92		-1.35
[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 Mar. 31, 2010	3 Months Ended Mar. 31, 2009	6 Months Ended Mar. 31, 2010	6 Months Ended Mar. 31, 2009
Operating Activities
Net income (loss) attributable to Johnson Controls, Inc.	$274	($193)	$624	($801)
Income (loss) attributable to noncontrolling interests	23	(19)	39	(19)
Net income (loss)	297	(212)	663	(820)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation	165	182	334	363
Amortization of intangibles	11	9	22	18
Equity in earnings of partially-owned affiliates, net of dividends received	(32)	27	(44)	211
Deferred income taxes	18	(78)	(44)	222
Impairment charges	19	46	19	156
Equity-based compensation	9	8	29	28
Other	24	(1)	33	14
Changes in working capital, excluding acquisitions:
Accounts receivable	(388)	196	(36)	1,324
Inventories	(41)	263	(97)	341
Other current assets	(24)	(92)	(111)	(7)
Restructuring reserves	(66)	83	(124)	31
Accounts payable and accrued liabilities	233	(97)	376	(1,753)
Accrued income taxes	(12)	(152)	1	(263)
Cash provided (used) by operating activities	213	182	1,021	(135)
Investing Activities
Capital expenditures	(134)	(158)	(311)	(426)
Sale of property, plant and equipment	5		24	3
Acquisition of businesses, net of cash acquired	(15)	(10)	(15)	(32)
Recoverable customer engineering expenditures	(16)	(26)	(38)	(48)
Settlement of cross-currency interest rate swaps		31		31
Changes in long-term investments	(25)	(15)	(30)	(63)
Cash used by investing activities	(185)	(178)	(370)	(535)
Financing Activities
Increase (decrease) in short-term debt - net	(295)	(362)	(579)	187
Increase in long-term debt	513	878	513	878
Repayment of long-term debt	(263)	(322)	(503)	(331)
Payment of cash dividends	(87)	(77)	(164)	(154)
Proceeds from the exercise of stock options	19		32	1
Other	64	(12)	59	16
Cash provided (used) by financing activities	(49)	105	(642)	597
Increase (decrease) in cash and cash equivalents	($21)	$109	$9	($73)

Financial Statements

Financial Statements
	6 Months Ended Mar. 31, 2010
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, 2009. The results of operations for the three and six month periods ended March 31, 2010 are not necessarily indicative of results for the Companys 2010 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 three and six month periods ended March31, 2009 include an out of period adjustment made to correct an error related to the power solutions segment. The correction of the error, which reduced segment income by $29million and $62million in the three and six month periods ended March31, 2009, respectively, primarily originated in fiscal 2007 and 2008 and resulted in the overstatement of inventory and understatement of cost of sales in prior periods. The Company determined that the impact of the error on the originating periods was immaterial, and accordingly a restatement of prior period amounts was not considered necessary. The Company also determined the impact of correcting the error in fiscal 2009 was not material. Under certain criteria as provided for in Financial Accounting Standards Board (FASB)Accounting Standards Codification (ASC)810, Consolidation, 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

New Accounting Standards

New Accounting Standards
	6 Months Ended Mar. 31, 2010
New Accounting Standards [Abstract]
New Accounting Standards	2. New Accounting Standards In December2009, the FASB issued Accounting Standards Update (ASU)No.2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU No.2009-17 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 of ASU No.2009-17 will have on its consolidated financial condition and results of operations. In October2009, the FASB issued ASU No.2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues Task Force. ASU No.2009-13 establishes the accounting and reporting guidance for arrangements under which a vendor will perform multiple revenue-generating activities. Specifically, this ASU addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. This guidance will be effective for the Company beginning in the first quarter of fiscal 2011 (October1, 2010) and, when adopted, will change the Companys accounting treatment for multiple-element revenue arrangements on a prospective basis. In December2008, the FASB issued guidance on an employers disclosures about plan assets of a defined benefit pension plan. The guidance requires enhanced transparency surrounding the types of plan assets and associated risks, as well as disclosure of information about fair value measurements of plan assets. This guidance is included in ASC 715, Compensation Retirement Benefits, and is effective for the Company for the fiscal year ending September30, 2010. The adoption of this guidance will have no impact on the Companys consolidated financial condition and results of operations. In December2007, the FASB issued guidance changing the accounting for business combinations in a number of areas including the treatment of contingent consideration, preacquisition contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under this guidance changes in an acquired entitys deferred tax assets and uncertain tax positions after the measurement period will impact income tax expense. This guidance is included in ASC 805, Business Combinations, and was adopted by the Company in the first quarter of fiscal 2010 (October1, 2009). This guidance changes the Companys accounting treatment for business combinations on a prospective basis. In December2007, the FASB issued guidance changing the accounting and reporting for minority interests, which are recharacterized as noncontrolling interests and classified as a component of equity. This new consolidatio

Acquisition of Businesses

Acquisition of Businesses
	6 Months Ended Mar. 31, 2010
Acquisition of Businesses [Abstract]
Acquisition of Businesses	3. Acquisition of Businesses In the first six months of fiscal 2010, the Company completed one acquisition for a purchase price of $18million, of which $15million was paid as of March31, 2010. The acquisition was not material to the Companys consolidated financial statements. In connection with the acquisition, the Company recorded goodwill of $8million. The purchase price allocation may be subsequently adjusted to reflect final valuation studies. In the first and second quarters of fiscal 2009, the Company completed two acquisitions for a combined purchase price of $37million, of which $32million was paid as of March31, 2009. Neither of the acquisitions was material to the Companys consolidated financial statements. In connection with these acquisitions, the Company recorded goodwill of $24million.

Percentage-of-Completion Contra

Percentage-of-Completion Contracts
	6 Months Ended Mar. 31, 2010
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 $600million, $579million and $512million at March31, 2010, September30, 2009, and March31, 2009, respectively. Amounts included within other current liabilities were $602million, $601million and $609million at March31, 2010, September30, 2009, and March31, 2009, respectively.

Inventories

Inventories
	6 Months Ended Mar. 31, 2010
Inventories [Abstract]
Inventories	5. Inventories Inventories consisted of the following (in millions): March 31, September 30, March 31, 2010 2009 2009 Raw materials and supplies $ 741 $ 712 $ 722 Work-in-process 247 225 215 Finished goods 681 674 795 FIFO inventories 1,669 1,611 1,732 LIFO reserve (90 ) (90 ) (84 ) Inventories $ 1,579 $ 1,521 $ 1,648

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	6 Months Ended Mar. 31, 2010
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 six month period ended September30, 2009 and the six month period ended March31, 2010 were as follows (in millions): Currency March 31, Business Translation and September 30, 2009 Acquisitions Other 2009 Building efficiency North America systems $ 513 $ $ 12 $ 525 North America service 656 12 668 North America unitary products 481 9 490 Global workplace solutions 160 14 174 Europe 408 408 Rest of world 549 38 587 Automotive experience North America 1,354 21 1 1,376 Europe 1,122 2 87 1,211 Asia 195 28 223 Power solutions 882 (2 ) 880 Total $ 6,320 $ 23 $ 199 $ 6,542 Currency September 30, Business Translation and March 31, 2009 Acquisitions Other 2010 Building efficiency North America systems $ 525 $ $ 1 $ 526 North America service 668 8 1 677 North America unitary products 490 490 Global workplace solutions 174 (5 ) 169 Europe 408 (34 ) 374 Rest of world 587 (13 ) 574 Automotive experience North America 1,376 2 1,378 Europe 1,211 (91 ) 1,120 Asia 223 (9 ) 214 Power solutions 880 (25 ) 855 Total $ 6,542 $ 8 $ (173 ) $ 6,377 The Companys other intangible assets, primarily from business acquisitions, are valued based on independent appraisals and consisted of (in millions): March 31, 2010 September 30, 2009 March 31, 2009 Gross Gross Gross Carrying Accumulated Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Amount Amortization Net Amortized intangible assets Patented technology $ 277 $ (182 ) $ 95 $ 308 $ (190 ) $ 118 $ 297 $ (173 ) $ 124 Unpatented technology 23 (12 ) 11 24 (12 ) 12 23 (11 ) 12 Customer relationships 342 (61 ) 281 345 (56 ) 289 341 (48 ) 293 Miscellaneous 43 (16 ) 27 43 (13 ) 30 36 (13 ) 23 Total amortized

Product Warranties

Product Warranties
	6 Months Ended Mar. 31, 2010
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 and other known factors. 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, the Company monitors its warranty activity and adjusts its reserve estimates when it is probable that future warranty costs will be different than those estimates. During the fourth quarter of fiscal 2009, the building efficiency North America unitary products segment increased its warranty reserve by $29million as a result of the Companys periodic warranty review process and analysis of return rates. The Companys product warranty liability is recorded in the consolidated statement of financial position in other current liabilities if the warranty is less than one year and in other noncurrent liabilities if the warranty extends longer than one year. The changes in the carrying amount of the Companys total product warranty liability for the six months ended March31, 2010 and 2009 were as follows (in millions): Six Months Ended March 31, 2010 2009 Balance at beginning of period $ 344 $ 204 Accruals for warranties issued during the period 118 97 Accruals from acquisitions 2 Accruals related to pre-existing warranties (including changes in estimates) (2 ) Settlements made (in cash or in kind) during the period (142 ) (110 ) Currency translation (4 ) (7 ) Balance at end of period $ 316 $ 184

Restructuring Costs

Restructuring Costs
	6 Months Ended Mar. 31, 2010
Restructuring Costs [Abstract]
Restructuring Costs	8. Restructuring Costs To better 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. Since the announcement of the 2009 Plan in March2009, the Company has experienced lower employee severance and termination benefit cash payouts than previously calculated for automotive experience Europe of approximately $43million, all of which was identified prior to the current quarter, due to favorable severance negotiations and the decision to not close previously planned plants in response to increased customer demand. The underspend of the initial 2009 Plan reserves will be utilized for additional costs to be incurred as part of power solutions and automotive experience Europes additional cost reduction initiatives. The planned workforce reductions disclosed for the 2009 Plan have been updated for the Companys revised actions. 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 Currency Benefits Other Translation Total Balance at September30, 2009 $ 140 $ 2 $ 8 $ 150 Utilized cash (22 ) (22 ) Utilized noncash (2 ) (1 ) (3 ) Noncash adjustment underspend (15 ) (15 ) Noncash adjustment revised actions 15 15 Balance at December31, 2009 $ 118 $ $ 7 $ 125 Utilized cash (20 ) (20 ) Utilized noncash (8 ) (8 ) Balance at March31, 2010 $ 98 $ $ (1 ) $ 97 To better align the Companys resources with its growth strategies while reducing the cost structure of its global operations, the Company committed to a restructuring plan (2008 Plan) in the fourth quarter of fiscal 2008 and recorded a $495million restructuring

Research and Development

Research and Development
	6 Months Ended Mar. 31, 2010
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 $88million and $85million for the three months ended March31, 2010 and 2009, respectively, and $175million and $190million for the six months ended March31, 2010 and 2009, respectively. These expenditures are net of customer reimbursements of $81million and $79million for the three months ended March31, 2010 and 2009, respectively, and $167million and $166million for the six months ended March31, 2010 and 2009, respectively.

Income Taxes

Income Taxes
	6 Months Ended Mar. 31, 2010
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 Ended Six Months Ended March 31, March 31, 2010 2009 2010 2009 Federal, state and foreign income tax expense at annual effective rate $ 69 $ (122 ) $ 136 $ (235 ) Effective tax rate adjustment (7 ) Valuation allowance adjustment (45 ) (93 ) 255 Restructuring charges 27 27 Impairment charges 48 Uncertain tax positions 31 Change in tax status of foreign subsidiary (30 ) (30 ) Interest refund (6 ) (6 ) Medicare Part D 18 18 Provision for income taxes $ 87 $ (183 ) $ 92 $ 59 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 actual 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 six months ended March31, 2010, the Companys estimated annual effective income tax rate from continuing operations was 18%. For the three and six months ended March31, 2009, the Company increased its estimated annual effective income tax rate from continuing operations from 24% to 31%, primarily due to a geographical shift in income. This rate change created a tax benefit of $7million in the second quarter of fiscal year 2009. Valuation Allowance The Company reviews 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 Companys valuation allowances may be necessary. In the first quarter of fiscal 2010, the Company determined that it was more likely than not that a portion of the deferred tax assets in Brazil would be utilized. Therefore, the Company released $69 million of valuation allowances. This is comprised of a $93million decrease in income tax expense offset by a $24million reduction in cumulative translation adjustments. In the second 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 a

Retirement Plans

Retirement Plans
	6 Months Ended Mar. 31, 2010
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 ASC 715, Compensation Retirement Benefits (in millions): U.S. Pension Plans Three Months Ended Six Months Ended March 31, March 31, 2010 2009 2010 2009 Service cost $ 17 $ 16 $ 34 $ 33 Interest cost 38 39 76 79 Expected return on plan assets (45 ) (44 ) (90 ) (89 ) Amortization of net actuarial loss 7 1 14 2 Amortization of prior service cost 1 1 1 1 Net periodic benefit cost $ 18 $ 13 $ 35 $ 26 Non-U.S. Pension Plans Three Months Ended Six Months Ended March 31, March 31, 2010 2009 2010 2009 Service cost $ 10 $ 7 $ 19 $ 15 Interest cost 17 16 35 32 Expected return on plan assets (16 ) (13 ) (32 ) (26 ) Amortization of net actuarial loss 2 1 5 2 Settlement loss 1 1 Net periodic benefit cost $ 14 $ 11 $ 28 $ 23 Postretirement Health and Other Benefits Three Months Ended Six Months Ended March 31, March 31, 2010 2009 2010 2009 Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 4 4 7 9 Amortization of net actuarial gain (1 ) Amortization of prior service credit (5 ) (1 ) (9 ) (3 ) Net periodic benefit cost $ $ 4 $ $ 7

Debt and Financing Arrangements

Debt and Financing Arrangements
	6 Months Ended Mar. 31, 2010
Debt and Financing Arrangements [Abstract]
Debt and Financing Arrangements	12. Debt and Financing Arrangements During the quarter ended March31, 2010, the Company issued $500million aggregate principal amount of 5.0% senior unsecured fixed rate notes due in fiscal 2020. Net proceeds from the issue were used for general corporate purposes including the retirement of short-term debt. During the quarter ended March31, 2010, the Company retired approximately $61million in principal amount of its fixed rate bonds scheduled to mature on January15, 2011. The Company used cash to fund the repurchases. During the quarter ended March31, 2010, the Company retired its 18billion yen, three year, floating rate loan agreement scheduled to mature on January18, 2011. The Company used cash to repay the note. During the quarter ended December31, 2009, the Company retired approximately $13million in principal amount of its fixed rate bonds scheduled to mature on January15, 2011. Additionally, the Company repurchased 1,685 bonds ($1,685,000 par value) of its 6.5% convertible senior notes scheduled to mature on September30, 2012. The Company used cash to fund the repurchases. During the quarter ended December31, 2009, the Company retired its 12billion yen, three year, floating rate loan agreement that matured. Additionally, the Company retired its 7billion yen, three year, floating rate loan agreement scheduled to mature on January18, 2011. The Company used cash to repay the notes. In March2009, the Company closed concurrent public offerings. The Company issued $402.5million aggregate amount of 6.5% senior, unsecured, fixed rate convertible notes that mature September30, 2012. The notes are convertible into shares of the Companys common stock at a conversion rate of 89.3855 shares of common stock per $1,000 principal amount of notes, which is equal to a conversion price of approximately $11.19 per share, subject to anti-dilution adjustments. The Company also issued nine million Equity Units (the Equity Units) each of which has a stated amount of $50 in an aggregate principal amount of $450million. The Equity Units consist of (i)a forward purchase contract obligating the holder to purchase from the Company for a price in cash of $50, on the purchase contract settlement date of March31, 2012, subject to early settlement, a certain number of shares of the Companys common stock and (ii)a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of the Companys 11.5% subordinated notes due 2042. In September2009, the Company settled the results of its previously announced offer to exchange any and all of its outstanding 6.5% convertible senior notes due 2012 and up to 8,550,000 of its nine million outstanding Equity Units in the form of Corporate Units. Upon settlement of the convertible senior notes exchange offer, approximately $400 million aggregate principal amount of convertible senior notes were exchanged for approximately 36 million shares of common stock and approximately $61 million in cash ($48 million of debt conversion payments and $13 million of accrued interest on the convertible senior notes). Upon settlement of the Equity Units exchange offer approximately

Earnings Per Share

Earnings Per Share
	6 Months Ended Mar. 31, 2010
Earnings Per Share [Abstract]
Earnings Per Share	13.Earnings Per Share The Company presents both basic and diluted earnings per share (EPS)amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares and common equivalent shares outstanding during the reporting period that are calculated using the treasury stock method for stock options. The treasury stock method assumes that the Company uses the proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall tax benefits that would be credited to additional paid-in capital when the award generates a tax deduction. If there would be a shortfall resulting in a charge to additional paid-in capital, such an amount would be a reduction of the proceeds. The Companys outstanding Equity Units due 2042 and 6.5% convertible senior notes due 2012 are reflected in diluted earnings per share using the if-converted method. Under this method, if dilutive, the common stock is assumed issued as of the beginning of the reporting period and included in calculating diluted earnings per share. In addition, if dilutive, interest expense, net of tax, related to the outstanding equity units and convertible senior notes is added back to the numerator in calculating diluted earnings per share. The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share (in millions): Three Months Ended Six Months Ended March 31, March 31, 2010 2009 2010 2009 Income Available to Common Shareholders Basic income (loss)available to common shareholders $ 274 $ (193 ) $ 624 $ (801 ) Interest expense, net of tax 1 4 Diluted income (loss)available to common shareholders $ 275 $ (193 ) $ 628 $ (801 ) Weighted Average Shares Outstanding Basic weighted average shares outstanding 671.7 593.6 671.1 593.5 Effect of dilutive securities: Stock options 6.3 6.1 Equity units 4.5 4.5 Convertible senior notes 0.1 0.1 Diluted weighted average shares outstanding 682.6 593.6 681.8 593.5 Antidilutive Securities Options to purchase common shares 0.8 0.8 For the three and six months ended March31, 2009, the total weighted average of potential dilutive shares due to stock options, Equity Units and the convertible senior notes was 14.9mill

Equity Attributable to Johnson

Equity Attributable to Johnson Controls, Inc. and Noncontrolling Interests
	6 Months Ended Mar. 31, 2010
Equity Attributable to Johnson Controls, Inc. and Noncontrolling Interests [Abstract]
Equity Attributable to Johnson Controls, Inc. and Noncontrolling Interests	14. Equity Attributable to Johnson Controls, Inc. and Noncontrolling Interests In December2007, the FASB issued guidance changing the accounting and reporting for minority interests, which are recharacterized as noncontrolling interests and classified as a component of equity. In addition, the guidance changes the presentation and accounting for noncontrolling interests, and requires that equity presented in the consolidated financial statements include amounts attributable to Johnson Controls, Inc. shareholders and the noncontrolling interests. This guidance is included in ASC 810, Consolidation, and was effective for the Company October1, 2009. The following schedule presents changes in consolidated equity attributable to Johnson Controls, Inc. and noncontrolling interests (in millions): Three Months Ended March 31, 2010 Three Months Ended March 31, 2009 Equity Equity Equity Equity Attributable to Attributable to Attributable to Attributable to Johnson Noncontrolling Johnson Noncontrolling Controls, Inc. Interests Total Equity Controls, Inc. Interests Total Equity Beginning balance, December 31 $ 9,353 $ 203 $ 9,556 $ 8,313 $ 229 $ 8,542 Total comprehensive income (loss): Net income (loss) 274 23 297 (193 ) (19 ) (212 ) Foreign currency translation adjustments (175 ) (3 ) (178 ) (178 ) (3 ) (181 ) Realized and unrealized gains on derivatives 4 4 40 40 Employee retirement plans 8 8 Other comprehensive loss (163 ) (3 ) (166 ) (138 ) (3 ) (141 ) Comprehensive income (loss) 111 20 131 (331 ) (22 ) (353 ) Other changes in equity: Cash dividends - common stock ($0.13 per share) (87 ) (87 ) (78 ) (78 ) Dividends attributable to noncontrolling interests (4 ) (4 ) (8 ) (8 ) Other, including options exercised 30 30 (4 ) (4 ) Ending balance, March 31 $ 9,407 $ 219 $ 9,626 $ 7,900 $ 199 $ 8,099 Six Months Ended March 31, 2010 Six Months Ended March 31, 2009 Equity Equity Equity Equity Attributable to Attributable to Attributable to Attributable to Johnson Noncontrolling Johnson Noncontrolling Controls, Inc. Interests Total Equity Controls, Inc. Interests Total Equity Beginning balance, October 1 $ 9,138 $ 201 $ 9,339 $ 9,424 $ 236 $ 9,660 Total comprehensive income (loss):

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	6 Months Ended Mar. 31, 2010
Derivative Instruments and Hedging Activities [Abstract]
Derivative Instruments and Hedging Activities	15. Derivative Instruments and Hedging Activities In March2008, the FASB issued guidance enhancing required disclosures regarding derivatives and hedging activities, including how an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and affect an entitys financial position, financial performance and cash flows. This guidance is included in ASC 815, Derivatives and Hedging, and was effective for the Company beginning in the second quarter of fiscal 2009 and is applied prospectively. The Company selectively uses derivative instruments to reduce market risk associated with changes in foreign currency, commodities, stock-based compensation liabilities and interest rates. 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 and cross-currency interest rate swaps to selectively hedge portions of its net investment in Japan. The currency effects of the debt obligations and cross-currency interest rate swaps are reflected in the accumulated other comprehensive income (AOCI)account within shareholders equity attributable to Johnson Controls, Inc. where they offset gains and losses recorded on the Companys net investment in Japan. At March31, 2009 and September30, 2009, the Company had 37billion yen of foreign denominated debt designated as a net investment hedge. During the first quarter of fiscal 2010, the Company retired 19billion yen of foreign denominated debt which had previously been designated as a net investment hedge in the Companys net investment in Japan. During the second quarter of fiscal 2010, the Company retired the remaining 18billion yen of foreign denominated debt which has previously been designated as a net investment hedge in the Companys net investment in Japan. In its place, the Company entered into three cross-currency interest rate swaps totaling 20billion yen. 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 init

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	16. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, 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. ASC 820 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. ASC 820 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 tables present the Companys fair value hierarchy for those assets and liabilities measured at fair value as of March31, 2010, September30, 2009 and March31, 2009 (in millions): Fair Value Measurements Using: Significant Quoted Prices Other Significant in Active Observable Unobservable Total as of Markets Inputs Inputs March 31, 2010 (Level 1) (Level 2) (Level 3) Other current assets Foreign currency exchange derivatives $ 57 $ 57 $ $ Commodity derivatives 9 9 Cross-currency interest rate swaps 4 4 Interest rate swaps 2 2 Other noncurrent assets Interest rate swaps 2 2 Commodity derivatives 2 2 Equity swap 104 104 Total $ 180 $ 161 $ 19 $ Current portion of long-term debt Fixed rate debt swapped to floating $ 598 $ $ 598 $ Other current liabilities Foreign currency exchange derivatives 51 51 Commodity derivatives 2 2 Long-term debt Fixed rate debt swapped to floating 399 399 Other noncurrent liabilities Foreign currency exchange derivatives 1 1 Total $ 1,051 $ 52 $ 999 $ Fair Value Measurements Using: Significant Quoted Prices Other Significant in Active Observable Unobservable Total as of Markets Inputs Inp

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets
	6 Months Ended Mar. 31, 2010
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 ASC 360-10-15, Impairment or Disposal of Long-Lived Assets. ASC 360-10-15 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 based on discounted cash flow analysis or appraisals. In the second quarter of fiscal 2010, the Company concluded it had a triggering event requiring assessment of impairment of its long-lived assets due to planned plant closures for the North America automotive experience segment. These closures are a result of the Companys revised restructuring actions to the 2008 Plan. Refer to Note 8, Restructuring Costs, for further information regarding the 2008 Plan. As a result, the Company reviewed its long-lived assets for impairment and recorded a $19million impairment charge in the second quarter of fiscal 2010 related to the North America automotive experience segment. This impairment charge was offset by a decrease in the Companys restructuring reserve related to the 2008 Plan due to lower employee severance and termination benefit cash payments than previously expected, as discussed further in Note 8. The impairment was measured under an income approach utilizing forecasted discounted cash flows for fiscal 2010 through 2014 to fair value the impaired assets. This method is consistent with the method we have employed in prior periods to value other long-lived assets. The inputs utilized in the discounted cash flow analysis are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, Fair Value Measurements and Disclosures. At March31, 2010, the Company concluded it did not have any other triggering events requiring assessment of impairment of its long-lived assets. 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 $5million related to the Europe automotive experience segment. Refer to Note 8, Restructuring Costs, for further information regarding the 2009 restructuring plan. Additionally, at March31, 2009, in conjunction with the preparation of its financial statements

Segment Information

Segment Information
	6 Months Ended Mar. 31, 2010
Segment Information [Abstract]
Segment Information	18. Segment Information ASC 280, Segment Reporting, establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, 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, which represents income from continuing operations

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Mar. 31, 2010
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.

Subsequent Events

Subsequent Events
	6 Months Ended Mar. 31, 2010
Subsequent Events [Abstract]
Subsequent Events	20. Subsequent Events The Company has evaluated subsequent events and determined that no significant subsequent events have occurred requiring adjustment to the financial statements or disclosures.