JOHNSON CONTROLS INC | 2013 | FY | 3

SEGMENT INFORMATION

Effective October 1, 2012, the Company reorganized the reportable segments within its Automotive Experience business to align with its new management reporting structure and business activities. Prior to this reorganization, Automotive Experience was comprised of three reportable segments for financial reporting purposes: North America, Europe and Asia. As a result of this change, Automotive Experience is now comprised of three new reportable segments for financial reporting purposes: Seating, Interiors and Electronics. Historical information has been revised to reflect the new Automotive Experience reportable segment structure.

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 nine reportable segments for financial reporting purposes. The Company’s nine 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 heating, ventilating and air conditioning (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.

•
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.

•
Asia provides HVAC and refrigeration systems and technical services to the Asian marketplace.

•
Other provides HVAC and refrigeration systems and technical services to markets in Europe, the Middle East and Latin America. Other also designs and produces heating and air conditioning solutions for residential and light commercial applications, and markets products to the replacement and new construction markets.

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.

•
Seating produces automotive seat metal structures and mechanisms, foam, trim, fabric and complete seat systems.

•
Interiors produces instrument panels, floor consoles, door panels, headliners and overhead systems.

•
Electronics produces information displays and body controllers, including electronic convenience features, and clusters.

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 before income taxes and noncontrolling interests excluding net financing charges, significant restructuring and impairment costs, and net mark-to-market adjustments on pension and postretirement plans. General corporate and other overhead expenses are allocated to business segments in determining segment income. Financial information relating to the Company’s reportable segments is as follows (in millions):
 
Year Ended September 30,
 
2013
 
2012
 
2011
Net Sales
 
 
 
 
 
Building Efficiency
 
 
 
 
 
North America Systems
$
2,362

 
$
2,389

 
$
2,343

North America Service
2,130

 
2,145

 
2,305

Global Workplace Solutions
4,265

 
4,294

 
4,153

Asia
2,022

 
1,987

 
1,840

Other
3,812

 
3,900

 
4,252

 
14,591

 
14,715

 
14,893

Automotive Experience
 
 
 
 
 
Seating
16,285

 
15,854

 
14,656

Interiors
4,176

 
4,129

 
4,119

Electronics
1,320

 
1,351

 
1,290

 
21,781

 
21,334

 
20,065

Power Solutions
6,358

 
5,906

 
5,875

 
 
 
 
 
 
Total net sales
$
42,730

 
$
41,955

 
$
40,833

 
Year Ended September 30,
 
2013
 
2012
 
2011
Segment Income (Loss)
 
 
 
 
 
Building Efficiency
 
 
 
 
 
North America Systems (1)
$
279

 
$
286

 
$
247

North America Service (2)
228

 
164

 
121

Global Workplace Solutions (3)
114

 
52

 
22

Asia (4)
278

 
267

 
251

Other (5)
89

 
141

 
105

 
988

 
910

 
746

Automotive Experience
 
 
 
 
 
Seating (6)
723

 
694

 
641

Interiors (7)
(9
)
 
(20
)
 
(5
)
Electronics (8)
585

 
129

 
144

 
1,299

 
803

 
780

Power Solutions (9)
1,006

 
784

 
822

 
 
 
 
 
 
Total segment income
$
3,293

 
$
2,497

 
$
2,348

 
 
 
 
 
 
Net financing charges
(248
)
 
(233
)
 
(174
)
Restructuring and impairment costs
(985
)
 
(297
)
 
—

Net mark-to-market adjustments on pension and postretirement plans
405

 
(447
)
 
(384
)
 
 
 
 
 
 
Income before income taxes
$
2,465

 
$
1,520

 
$
1,790

 
 
September 30,
 
2013
 
2012
 
2011
Assets
 
 
 
 
 
Building Efficiency
 
 
 
 
 
North America Systems
$
1,222

 
$
1,326

 
$
1,300

North America Service
1,477

 
1,523

 
1,581

Global Workplace Solutions
1,286

 
1,234

 
1,228

Asia
1,352

 
1,316

 
1,247

Other
3,769

 
3,947

 
4,115

 
9,106

 
9,346

 
9,471

Automotive Experience
 
 
 
 
 
Seating
9,763

 
9,334

 
9,319

Interiors (10)
1,872

 
2,577

 
2,590

Electronics (10)
—

 
842

 
889

 
11,635

 
12,753

 
12,798

Power Solutions
7,459

 
7,312

 
6,750

Assets held for sale
804

 
—

 
—

Unallocated
2,514

 
1,543

 
769

 
 
 
 
 
 
Total
$
31,518

 
$
30,954

 
$
29,788

 
Year Ended September 30,
 
2013
 
2012
 
2011
Depreciation/Amortization
 
 
 
 
 
Building Efficiency
 
 
 
 
 
North America Systems
$
11

 
$
12

 
$
10

North America Service
25

 
25

 
25

Global Workplace Solutions
25

 
24

 
18

Asia
19

 
19

 
15

Other
89

 
66

 
69

 
169

 
146

 
137

Automotive Experience
 
 
 
 
 
Seating
354

 
320

 
273

Interiors
116

 
109

 
111

Electronics
41

 
35

 
35

 
511

 
464

 
419

Power Solutions
272

 
214

 
175

 
 
 
 
 
 
Total
$
952

 
$
824

 
$
731

 
 
Year Ended September 30,
 
2013
 
2012
 
2011
Capital Expenditures
 
 
 
 
 
Building Efficiency
 
 
 
 
 
North America Systems
$
4

 
$
6

 
$
6

North America Service
8

 
25

 
17

Global Workplace Solutions
7

 
7

 
32

Asia
73

 
38

 
22

Other
106

 
103

 
91

 
198

 
179

 
168

Automotive Experience
 
 
 
 
 
Seating
467

 
549

 
446

Interiors
235

 
171

 
146

Electronics
52

 
57

 
46

 
754

 
777

 
638

Power Solutions
425

 
875

 
519

 
 
 
 
 
 
Total
$
1,377

 
$
1,831

 
$
1,325

 
(1)
Building Efficiency - North America Systems segment income for the years ended September 30, 2013 and 2012 excludes $20 million and $2 million, respectively, of restructuring and impairment costs.

(2)
Building Efficiency - North America Service segment income for the years ended September 30, 2013 and 2012 excludes $18 million and $6 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2012 and 2011 North America Service segment income includes $1 million and $2 million, respectively, of equity income.

(3)
Building Efficiency - Global Workplace Solutions segment income for the years ended September 30, 2013 and 2012 excludes $54 million and $16 million, respectively, of restructuring and impairment costs.

(4)
Building Efficiency - Asia segment income for the years ended September 30, 2013 and 2012 excludes $5 million and $1 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Asia segment income includes $2 million, $3 million and $3 million, respectively, of equity income.

(5)
Building Efficiency - Other segment income for the years ended September 30, 2013 and 2012 excludes $95 million and $64 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Other segment income includes $26 million, $23 million and $17 million, respectively, of equity income.

(6)
Automotive Experience - Seating segment income for the years ended September 30, 2013 and 2012 excludes $152 million and $101 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Seating segment income includes $287 million, $194 million and $192 million, respectively, of equity income.

(7)
Automotive Experience - Interiors segment income for the years ended September 30, 2013 and 2012 excludes $560 million and $48 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Interiors segment income includes $16 million, $17 million and $9 million, respectively, of equity income.

(8)
Automotive Experience - Electronics segment income for the years ended September 30, 2013 and 2012 excludes $28 million and $12 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Electronics segment income includes $3 million, $2 million and $13 million, respectively, of equity income. The year ended September 30, 2013 includes a $476 million gain on divestiture of the HomeLink® product line net of transaction costs.

(9)
Power Solutions segment income for the years ended September 30, 2013 and 2012 excludes $36 million and $37 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2013, 2012 and 2011, Power Solutions segment income includes $68 million, $100 million and $62 million, respectively, of equity income.

(10)
Current year amounts exclude assets held for sale. Refer to Note 3, "Assets and Liabilities Held for Sale," of the notes to consolidated financial statements for further information regarding the Company's disposal groups classified as held for sale.
 
The Company has significant sales to the automotive industry. In fiscal years 2013, 2012 and 2011, no customer exceeded 10% of consolidated net sales.

Geographic Segments

Financial information relating to the Company’s operations by geographic area is as follows (in millions):
 
Year Ended September 30,
 
2013
 
2012
 
2011
Net Sales
 
 
 
 
 
United States
$
16,681

 
$
15,484

 
$
14,367

Germany
4,730

 
4,790

 
4,590

Mexico
2,330

 
2,189

 
1,869

Other European countries
9,943

 
10,663

 
10,212

Other foreign
9,046

 
8,829

 
9,795

 
 
 
 
 
 
Total
$
42,730

 
$
41,955

 
$
40,833

 
 
 
 
 
 
Long-Lived Assets (Year-end)
 
 
 
 
 
United States
$
2,551

 
$
2,521

 
$
2,116

Germany
1,057

 
879

 
864

Mexico
560

 
588

 
540

Other European countries
1,439

 
1,557

 
1,356

Other foreign
978

 
895

 
740

 
 
 
 
 
 
Total
$
6,585

 
$
6,440

 
$
5,616



Net sales attributed to geographic locations are based on the location of the assets producing the sales. Long-lived assets by geographic location consist of net property, plant and equipment.

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