UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-5097

JOHNSON CONTROLS, INC.

Wisconsin		39-0380010
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)
5757 North Green Bay Avenue
Milwaukee, Wisconsin		53209
(Address of principal executive offices)		(Zip Code)

(414) 524-1200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ    No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Shares Outstanding at June 30, 2010
Common Stock: $0.01 7/18 par value per share		673,311,804

 

 

JOHNSON CONTROLS, INC

FORM 10-Q

Report Index

		Page
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Financial Position at June 30, 2010, September 30, 2009 and June 30, 2009			3
Consolidated Statements of Income for the Three and Nine Month Periods Ended June 30, 2010 and 2009			4
Condensed Consolidated Statements of Cash Flows for the Three and Nine Month Periods Ended June 30, 2010 and 2009			5
Notes to Condensed Consolidated Financial Statements			6
Report of Independent Registered Public Accounting Firm			38
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			39
Item 3. Quantitative and Qualitative Disclosures About Market Risk			57
Item 4. Controls and Procedures			57
Part II. Other Information
Item 1. Legal Proceedings			58
Item 1A. Risk Factors			58
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			58
Item 6. Exhibits			59
Signatures			60
EX-10.Y
EX-15
EX-31.1
EX-31.2
EX-32

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Johnson Controls, Inc.

Condensed Consolidated Statements of Financial Position
(in millions; unaudited)

		June 30,				September 30,				June 30,
		2010				2009				2009
Assets
Cash and cash equivalents		$	908			$	761			$	543
Accounts receivable — net			5,452				5,528				4,910
Inventories			1,644				1,521				1,561
Other current assets			2,114				2,016				1,725
Current assets			10,118				9,826				8,739
Property, plant and equipment — net			3,706				3,986				3,969
Goodwill			6,217				6,542				6,420
Other intangible assets — net			695				746				745
Investments in partially-owned affiliates			766				718				713
Other noncurrent assets			2,584				2,270				1,880
Total assets		$	24,086			$	24,088			$	22,466
Liabilities and Equity
Short-term debt		$	73			$	658			$	605
Current portion of long-term debt			654				140				172
Accounts payable			4,874				4,434				3,741
Accrued compensation and benefits			1,054				872				892
Other current liabilities			2,377				2,612				2,533
Current liabilities			9,032				8,716				7,943
Long-term debt			2,638				3,168				4,001
Postretirement health and other benefits			206				255				217
Other noncurrent liabilities			2,565				2,610				1,876
Long-term liabilities			5,409				6,033				6,094
Commitments and contingencies (Note 19)
Redeemable noncontrolling interests			163				155				168
Shareholders’ equity attributable to Johnson Controls, Inc.			9,395				9,100				8,178
Noncontrolling interests			87				84				83
Total equity			9,482				9,184				8,261
Total liabilities and equity		$	24,086			$	24,088			$	22,466

The accompanying notes are an integral part of the financial statements.

Johnson Controls, Inc.

Consolidated Statements of Income
(in millions, except per share data; unaudited)

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Net sales
Products and systems*		$	6,798			$	5,304			$	20,116			$	15,668
Services*			1,742				1,675				5,149				4,962
			8,540				6,979				25,265				20,630
Cost of sales
Products and systems			5,783				4,608				17,254				14,243
Services			1,418				1,332				4,213				3,981
			7,201				5,940				21,467				18,224
Gross profit			1,339				1,039				3,798				2,406
Selling, general and administrative expenses			(895	)			(787	)			(2,625	)			(2,449	)
Restructuring costs			—				—				—				(230	)
Net financing charges			(39	)			(65	)			(117	)			(167	)
Equity income (loss)			52				30				156				(104	)
Income (loss) before income taxes			457				217				1,212				(544	)
Provision for income taxes			31				50				123				109
Net income (loss)			426				167				1,089				(653	)
Income (loss) attributable to noncontrolling interests			8				4				47				(15	)
Net income (loss) attributable to Johnson Controls, Inc.		$	418			$	163			$	1,042			$	(638	)
Earnings (loss) per share
Basic		$	0.62			$	0.27			$	1.55			$	(1.07	)
Diluted		$	0.61			$	0.26			$	1.53			$	(1.07	)

The accompanying notes are an integral part of the financial statements.

Johnson Controls, Inc.

Condensed Consolidated Statements of Cash Flows
(in millions; unaudited)

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Operating Activities
Net income (loss) attributable to Johnson Controls, Inc.		$	418			$	163			$	1,042			$	(638	)
Income (loss) attributable to noncontrolling interests			8				4				47				(15	)
Net income (loss)			426				167				1,089				(653	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation			158				172				492				535
Amortization of intangibles			10				8				32				26
Equity in earnings of partially-owned affiliates, net of dividends received			6				(4	)			(38	)			207
Deferred income taxes			(51	)			(20	)			(95	)			202
Impairment charges			11				—				30				156
Equity-based compensation			8				19				37				47
Other			9				28				42				42
Changes in working capital, excluding acquisitions:
Accounts receivable			(182	)			(27	)			(218	)			1,297
Inventories			(111	)			135				(208	)			476
Other current assets			(58	)			(6	)			(169	)			(13	)
Restructuring reserves			(32	)			(53	)			(156	)			(22	)
Accounts payable and accrued liabilities			219				87				595				(1,666	)
Accrued income taxes			14				(12	)			15				(275	)
Cash provided by operating activities			427				494				1,448				359
Investing Activities
Capital expenditures			(215	)			(103	)			(526	)			(529	)
Sale of property, plant and equipment			10				5				34				8
Acquisition of businesses, net of cash acquired			(17	)			—				(32	)			(32	)
Recoverable customer engineering expenditures			(18	)			(20	)			(56	)			(68	)
Settlement of cross-currency interest rate swaps			—				—				—				31
Changes in long-term investments			(45	)			(21	)			(75	)			(84	)
Cash used by investing activities			(285	)			(139	)			(655	)			(674	)
Financing Activities
Increase (decrease) in short-term debt — net			10				(23	)			(569	)			164
Increase in long-term debt			6				2				519				880
Repayment of long-term debt			(21	)			(9	)			(524	)			(340	)
Payment of cash dividends			(87	)			(77	)			(251	)			(231	)
Proceeds from the exercise of stock options			12				2				44				3
Other			76				(18	)			135				(2	)
Cash provided (used) by financing activities			(4	)			(123	)			(646	)			474
Increase in cash and cash equivalents		$	138			$	232			$	147			$	159

The accompanying notes are an integral part of the financial statements.

Johnson Controls, Inc.

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 September 30, 2009. The results of operations for the three and nine month periods ended June 30, 2010 are not necessarily indicative of results for the Company’s 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 Company’s interest exceeds 20% and the Company does not have a controlling interest.
		Certain prior year amounts have been revised to conform to the current year’s presentation. Redeemable noncontrolling interests are classified as mezzanine equity (temporary equity) in the condensed consolidated statements of financial position. Refer to Note 14, “Equity and Noncontrolling Interests,” to the financial statements for further information.
		The financial results for the nine month period ended June 30, 2009 include an out of period adjustment of $62 million made in the first and second quarters of fiscal 2009 to correct an error related to the power solutions segment. The correction of the error, which reduces segment income, 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, the Company first determines 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 entity’s residual economics; or 4) the entity was established with non-substantive voting. If the entity meets one of these characteristics, the Company then determines if it is the primary beneficiary of the VIE. The party exposed to the majority of the risks and rewards associated with the VIE is the VIE’s primary beneficiary and must consolidate the entity.

Based upon the criteria set forth in ASC 810, the Company has determined that for the reporting periods ended June 30, 2010, September 30, 2009 and June 30, 2009 it was the primary beneficiary in two VIE’s in which it holds less than 50% ownership as the Company funds the entities’ short-term liquidity needs. Both entities are consolidated within the automotive experience North America segment. The Company did not have a significant variable interest in any unconsolidated VIE’s for the presented reporting periods. The carrying amounts and classification of assets and liabilities included in the Company’s consolidated statements of financial position for consolidated VIE’s are as follows (in millions):

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		June 30,				September 30,				June 30,
		2010				2009				2009
Current assets		$	187			$	146			$	116
Noncurrent assets			72				101				106
Total assets		$	259			$	247			$	222
Current liabilities		$	165			$	103			$	76
Noncurrent liabilities			—				—				—
Total liabilities		$	165			$	103			$	76

2.

New Accounting Standards

		In December 2009, 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 entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. This statement is effective for the Company beginning in the first quarter of fiscal 2011 (October 1, 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 October 2009, 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 (October 1, 2010) and, when adopted, will change the Company’s accounting treatment for multiple-element revenue arrangements on a prospective basis. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial condition and results of operations.
		In December 2008, the FASB issued guidance on an employer’s 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 September 30, 2010. The adoption of this guidance will have no impact on the Company’s consolidated financial condition and results of operations.
		In December 2007, 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 entity’s 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 (October 1, 2009). This guidance changes the Company’s accounting treatment for business combinations on a prospective basis.
		In December 2007, 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 consolidation method changes the accounting for transactions with minority interest holders. This guidance is included in ASC 810, “Consolidation,” and was adopted by the Company in the first quarter of fiscal 2010 (October 1, 2009). The adoption of this guidance did not have a material impact on the Company’s consolidated financial condition and

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		results of operations. Refer to Note 14, “Equity and Noncontrolling Interests,” to the financial statements for further discussion.
		In September 2006, the FASB issued guidance that defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This guidance also establishes a fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability. This guidance is included in ASC 820, “Fair Value Measurements and Disclosures.” The Company adopted this guidance effective October 1, 2008. In February 2008, the FASB delayed the effective date of this guidance for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis to fiscal years beginning after November 15, 2008. The provisions of this guidance for nonfinancial assets and nonfinancial liabilities were effective for the Company in the first quarter of fiscal 2010 (October 1, 2009) and will be applied prospectively to fair value assessments such as the Company’s long-lived asset impairment analyses. Refer to Note 17, “Impairment of Long-Lived Assets,” to the financial statements for further discussion.

3.

Acquisition of Businesses

		In the first nine months of fiscal 2010, the Company completed three acquisitions for a combined purchase price of $35 million, of which $32 million was paid as of June 30, 2010. The acquisitions in the aggregate were not material to the Company’s consolidated financial statements. In connection with the acquisitions, the Company recorded goodwill of $5 million. The purchase price allocation may be subsequently adjusted to reflect final valuation studies.
		In the first nine months of fiscal 2009, the Company completed two acquisitions for a combined purchase price of $37 million, of which $32 million was paid as of June 30, 2009. Neither of the acquisitions was material to the Company’s consolidated financial statements. In connection with these acquisitions, the Company recorded goodwill of $24 million.

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 $614 million, $579 million and $522 million at June 30, 2010, September 30, 2009, and June 30, 2009, respectively. Amounts included within other current liabilities were $610 million, $601 million and $610 million at June 30, 2010, September 30, 2009, and June 30, 2009, respectively.

5.

Inventories

Inventories consisted of the following (in millions):

		June 30,				September 30,				June 30,
		2010				2009				2009
Raw materials and supplies		$	787			$	712			$	711
Work-in-process			254				225				213
Finished goods			693				674				721
FIFO inventories			1,734				1,611				1,645
LIFO reserve			(90	)			(90	)			(84	)
Inventories		$	1,644			$	1,521			$	1,561

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

6.

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill in each of the Company’s reporting segments for the three month period ended September 30, 2009 and the nine month period ended June 30, 2010 were as follows (in millions):

										Currency
		June 30,				Business				Translation and				September 30,
		2009				Acquisitions				Other				2009
Building efficiency
North America systems		$	515			$	—			$	10			$	525
North America service			658				—				10				668
North America unitary products			483				—				7				490
Global workplace solutions			173				—				1				174
Europe			419				—				(11	)			408
Rest of world			549				—				38				587
Automotive experience
North America			1,378				—				(2	)			1,376
Europe			1,173				2				36				1,211
Asia			204				—				19				223
Power solutions			868				—				12				880
Total		$	6,420			$	2			$	120			$	6,542

										Currency
		September 30,				Business				Translation and				June 30,
		2009				Acquisitions				Other				2010
Building efficiency
North America systems		$	525			$	—			$	1			$	526
North America service			668				4				—				672
North America unitary products			490				—				—				490
Global workplace solutions			174				—				(5	)			169
Europe			408				—				(69	)			339
Rest of world			587				—				(13	)			574
Automotive experience
North America			1,376				—				1				1,377
Europe			1,211				1				(190	)			1,022
Asia			223				—				(5	)			218
Power solutions			880				—				(50	)			830
Total		$	6,542			$	5			$	(330	)		$	6,217

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		The Company’s other intangible assets, primarily from business acquisitions, are valued based on independent appraisals and consisted of (in millions):

		June 30, 2010												September 30, 2009												June 30, 2009
		Gross												Gross												Gross
		Carrying				Accumulated								Carrying				Accumulated								Carrying				Accumulated
		Amount				Amortization				Net				Amount				Amortization				Net				Amount				Amortization				Net
Amortized intangible assets
Patented technology		$	266			$	(180	)		$	86			$	308			$	(190	)		$	118			$	303			$	(181	)		$	122
Customer relationships			344				(64	)			280				345				(56	)			289				343				(51	)			292
Miscellaneous			63				(28	)			35				67				(25	)			42				59				(25	)			34
Total amortized intangible assets			673				(272	)			401				720				(271	)			449				705				(257	)			448
Unamortized intangible assets
Trademarks			294				—				294				297				—				297				297				—				297
Total intangible assets		$	967			$	(272	)		$	695			$	1,017			$	(271	)		$	746			$	1,002			$	(257	)		$	745

Amortization of other intangible assets for the three month periods ended June 30, 2010 and 2009 was $10 million and $8 million, respectively. Amortization of other intangible assets for the nine month periods ended June 30, 2010 and 2009 was $32 million and $26 million, respectively. Excluding the impact of any future acquisitions, the Company anticipates amortization for fiscal 2011, 2012, 2013, 2014 and 2015 will be approximately $39 million, $32 million, $27 million, $25 million and $23 million, respectively.

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 Company’s warranty provisions are adjusted as necessary. While the Company’s 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 $29 million as a result of the Company’s periodic warranty review process and analysis of return rates.
		The Company’s product warranty liability is recorded in the condensed 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.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

The changes in the carrying amount of the Company’s total product warranty liability for the nine months ended June 30, 2010 and 2009 were as follows (in millions):

		Nine Months Ended
		June 30,
		2010				2009
Balance at beginning of period		$	344			$	204
Accruals for warranties issued during the period			169				163
Accruals from acquisitions			2				—
Accruals related to pre-existing warranties (including changes in estimates)			(1	)			4
Settlements made (in cash or in kind) during the period			(184	)			(155	)
Currency translation			(9	)			(4	)
Balance at end of period		$	321			$	212

8.

Restructuring Costs

		To better align the Company’s 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 $230 million restructuring charge. The restructuring charge relates to cost reduction initiatives in the Company’s 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 March 2009, the Company has experienced lower employee severance and termination benefit cash payouts than previously calculated for automotive experience – Europe of approximately $65 million, 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, automotive experience — Europe and automotive experience — North America’s additional cost reduction initiatives. The planned workforce reductions disclosed for the 2009 Plan have been updated for the Company’s revised actions.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

The following table summarizes the changes in the Company’s 2009 Plan reserve, included within other current liabilities in the condensed consolidated statements of financial position (in millions):

		Employee
		Severance and
		Termination								Currency
		Benefits				Other				Translation				Total
Balance at September 30, 2009		$	140			$	2			$	8			$	150
Noncash adjustment — underspend			(15	)			—				—				(15	)
Noncash adjustment — revised actions			15				—				—				15
Utilized — cash			(22	)			—				—				(22	)
Utilized — noncash			—				(2	)			(1	)			(3	)
Balance at December 31, 2009		$	118			$	—			$	7			$	125
Noncash adjustment — underspend			(22	)			—				—				(22	)
Utilized — cash			(20	)			—				—				(20	)
Utilized — noncash			—				—				(8	)			(8	)
Balance at March 31, 2010		$	76			$	—			$	(1	)		$	75
Utilized — cash			(12	)			—				—				(12	)
Utilized — noncash			—				—				(4	)			(4	)
Balance at June 30, 2010		$	64			$	—			$	(5	)		$	59

		To better align the Company’s 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 $495 million restructuring charge. The restructuring charge relates to cost reduction initiatives in its automotive experience, building efficiency and power solutions businesses and includes workforce reductions and plant consolidations. The Company expects to substantially complete the 2008 Plan by the end of 2011. The automotive-related restructuring is in response to the fundamentals of the European and North American automotive markets. The actions target reductions in the Company’s cost base by decreasing excess manufacturing capacity due to lower industry production and the continued movement of vehicle production to low-cost countries, especially in Europe. 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 regional manufacturing capacity.
		Since the announcement of the 2008 Plan in September 2008, the Company has experienced lower employee severance and termination benefit cash payouts than previously calculated for building efficiency – Europe and automotive experience – Europe of approximately $95 million, all of which was identified prior to the current quarter, due to favorable severance negotiations, individuals transferred to open positions within the Company and changes in cost reduction actions from plant consolidation to downsizing of operations. The underspend of the initial 2008 Plan will be utilized for similar additional restructuring actions committed to be performed during fiscal 2010 and 2011. The underspend experienced by building efficiency – Europe will be utilized for workforce reductions and plant consolidations in building efficiency – Europe. The underspend experienced by automotive experience – Europe will be utilized for additional plant consolidations for automotive experience – North America and workforce reductions in building efficiency – Europe. The planned workforce reductions disclosed for the 2008 Plan have been updated for the Company’s revised actions.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

The following table summarizes the changes in the Company’s 2008 Plan reserve, included within other current liabilities in the condensed consolidated statements of financial position (in millions):

		Employee
		Severance and
		Termination				Fixed Asset				Currency
		Benefits				Impairment				Translation				Total
Balance at September 30, 2009		$	215			$	—			$	(18	)		$	197
Utilized — cash			(36	)			—				—				(36	)
Utilized — noncash			—				—				(1	)			(1	)
Balance at December 31, 2009		$	179			$	—			$	(19	)		$	160
Noncash adjustment — underspend			(32	)			—				—				(32	)
Noncash adjustment — revised actions			35				19				—				54
Utilized — cash			(27	)			—				—				(27	)
Utilized — noncash			—				(19	)			(8	)			(27	)
Balance at March 31, 2010		$	155			$	—			$	(27	)		$	128
Utilized — cash			(20	)			—				—				(20	)
Utilized — noncash			—				—				(5	)			(5	)
Balance at June 30, 2010		$	135			$	—			$	(32	)		$	103

		The 2008 and 2009 Plans include workforce reductions of approximately 20,700 employees (9,300 for automotive experience – North America, 5,700 for automotive experience – Europe, 1,100 for automotive experience – Asia, 400 for building efficiency – North America, 2,700 for building efficiency – Europe, 700 for building efficiency – rest of world, and 800 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 June 30, 2010, approximately 16,200 of the employees have been separated from the Company pursuant to the 2008 and 2009 Plans. In addition, the 2008 and 2009 Plans include 33 plant closures (14 for automotive experience – North America, 11 for automotive experience – Europe, 3 for automotive experience – Asia, 1 for building efficiency – North America, 1 for building efficiency – rest of world, and 3 for power solutions). As of June 30, 2010, 22 of the 33 plants have been closed. 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.
		Company management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in low cost countries in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering and purchasing operations, as well as the overall global footprint for all its businesses. Because of the importance of new vehicle sales by major automotive manufacturers to operations, the Company is affected by the general business conditions in this industry. Future adverse developments in the automotive industry could impact the Company’s liquidity position, lead to impairment charges and/or require additional restructuring of its operations.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

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 $88 million and $29 million for the three months ended June 30, 2010 and 2009, respectively, and $262 million and $219 million for the nine months ended June 30, 2010 and 2009, respectively. These expenditures are net of customer reimbursements of $72 million and $146 million for the three months ended June 30, 2010 and 2009, respectively, and $239 million and $312 million for the nine months ended June 30, 2010 and 2009, respectively.

10.

Income Taxes

The more significant components of the Company’s income tax provision from continuing operations are as follows (in millions):

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Federal, state and foreign income tax expense at annual effective rate		$	82			$	59			$	218			$	(147	)
Effective tax rate adjustment			—				11				—				—
Valuation allowance adjustment			(13	)			(3	)			(106	)			252
Restructuring charges			—				—				—				18
Impairment charges			—				—				—				39
Uncertain tax positions			(38	)			(17	)			(7	)			(17	)
Change in tax status of foreign subsidiary			—				—				—				(30	)
Interest refund			—				—				—				(6	)
Medicare Part D			—				—				18				—
Provision for income taxes		$	31			$	50			$	123			$	109

		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 nine months ended June 30, 2010, the Company’s estimated annual effective income tax rate from continuing operations was 18%. For the three and nine months ended June 30, 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 was a cumulative year-to-date loss, this created a tax increase of $11 million in the quarter ended June 30, 2009 after applying the new effective rate to the provision in the prior two quarters.
		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 Company’s valuation allowances may be necessary.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		In the third quarter of fiscal 2010, 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 a Slovakia automotive entity would be utilized. Therefore, the Company released $13 million of valuation allowances in the three month period ended June 30, 2010.
		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 within the Brazil automotive entity would be utilized. Therefore, the Company released $69 million of valuation allowances. This was comprised of a $93 million decrease in income tax expense offset by a $24 million reduction in cumulative translation adjustments.
		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 a portion of the deferred tax assets within the Brazil power solutions entity would be utilized. Therefore, the Company released $10 million of valuation allowances in the three month period ended June 30, 2009. This was comprised of a $3 million decrease in income tax expense with the remaining amount impacting the condensed consolidated statement of financial position because it related to acquired net operating losses.
		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 asset associated with a capital loss would be utilized. Therefore, the Company released $45 million of valuation allowances against the income tax provision in the three month period ended March 31, 2009.
		In the first quarter of fiscal 2009, as a result of the rapid deterioration in the economic environment, several jurisdictions incurred unexpected losses in the first quarter that resulted in cumulative losses over the prior three years. 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 would not be utilized in several jurisdictions including France, Mexico, Spain and the United Kingdom. Therefore, the Company recorded $300 million of valuation allowances as income tax expense. To the extent the Company improves its underlying operating results in these jurisdictions, these valuation allowances, or a portion thereof, could be reversed in future periods.
		It is reasonably possible that over the next 12 months, valuation allowances against deferred tax assets in certain jurisdictions of up to $100 million may be released.
		Restructuring Charge
		In the second quarter of fiscal year 2009, the Company recorded a $27 million discrete period tax adjustment related to the second quarter 2009 restructuring costs using a blended statutory tax rate of 19.2%. Due to the tax rate change in the third quarter of fiscal 2009, the discrete period tax adjustment decreased by $9 million for a total tax adjustment for the nine months ended June 30, 2009 of $18 million.
		Impairment Charges
		In the first quarter of fiscal year 2009, the Company recorded a $30 million discrete period tax adjustment related to first quarter 2009 impairment costs using a blended statutory tax rate of 12.6%. Due to the effective tax rate change in the second quarter of fiscal 2009, the discrete period tax adjustment increased by $18 million for a total tax adjustment for the six months ended March 31, 2009 of $48 million. Due to the tax rate change in the third quarter of fiscal 2009, the discrete period tax adjustment decreased by $9 million for a total tax adjustment for the nine months ended June 30, 2009 of $39 million.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		Uncertain Tax Positions
		At September 30, 2009, the Company had gross tax effected unrecognized tax benefits of $1,049 million of which $874 million, if recognized, would impact the effective tax rate. Total net accrued interest at September 30, 2009 was approximately $68 million (net of tax benefit). The net change in interest and penalties during the nine months ended June 30, 2010 was $52 million, including $26 million of quarterly interest expense on existing uncertain tax positions and $26 million related to the events described below, and was $17 million for the same period in fiscal 2009. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense or goodwill, when applicable.
		Based on recently published case law in a non-U.S. jurisdiction and the settlement of a tax audit during the third quarter of fiscal 2010, the Company released net $38 million of reserves for uncertain tax positions, including interest and penalties.
		As a result of certain recent events related to prior year tax planning initiatives, during the first quarter of fiscal 2010, the Company increased the reserve for uncertain tax positions by $31 million, including $26 million of interest and penalties, which impacts the effective tax rate.
		As a result of various entities exiting business in certain jurisdictions and certain recent events related to prior tax planning initiatives, during the third quarter of fiscal 2009, the Company reduced the reserve for uncertain tax positions by $33 million. This was comprised of a $17 million decrease to tax expense, which impacts the effective tax rate, and a $16 million decrease to goodwill.

The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities, including major jurisdictions noted below:

Tax		Statute of
Jurisdiction		Limitations
Austria		5 years
Belgium		3 years
Brazil		5 years
Canada		5 years
China		3 to 5 years
Czech Republic		3 years
France		3 years
Germany		4 to 5 years
Italy		4 years
Japan		5 to 7 years
Mexico		5 years
Spain		4 years
United Kingdom		6 years
United States — Federal		3 years
United States – State		3 to 5 years

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

In the U.S., the fiscal years 1999 through 2001 and 2004 through 2006 are currently under IRS Appeals. Additionally, the Company is currently under exam in the following major foreign jurisdictions:

Tax Jurisdiction		Tax Years Covered
Austria		2003 – 2005
Belgium		2005 – 2008
Brazil		2005 – 2008
Canada		2004 – 2006
France		2002 – 2009
Germany		2001 – 2007
Italy		2005 – 2007
Mexico		2003 – 2004

		It is reasonably possible that certain tax examinations, appellate proceedings and/or tax litigation will conclude within the next 12 months, the impact of which should not be material to the financial statements.
		Change in Tax Status of non-U.S. Subsidiary
		For the nine months ended June 30, 2009, the tax provision decreased as a result of a $30 million tax benefit realized by a change in tax status of a French subsidiary.
		The change in tax status resulted from a voluntary tax election that produced a deemed liquidation for U.S. federal income tax purposes. The Company received a tax benefit in the U.S. for the loss from the decrease in value from the original tax basis of its investment. This election changed the tax status from a controlled foreign corporation (i.e., taxable entity) to a branch (i.e., flow through entity similar to a partnership) for U.S. federal income tax purposes and is thereby reported as a discrete period tax benefit in accordance with the provision of ASC 740.
		Interest Refund
		The Company filed a claim for refund in the nine month period ended June 30, 2009, with the Internal Revenue Service related to interest computations of prior tax payments and refunds. The refund claim resulted in a tax provision decrease of $6 million.
		Impacts of Tax Legislation
		On March 23, 2010, the U.S. President signed into law comprehensive health care reform legislation under the Patient Protection and Affordable Care Act (HR3590). Included among the major provisions of the law is a change in the tax treatment of a portion of Medicare Part D medical payments. The Company recorded a noncash tax charge of approximately $18 million in the second quarter of fiscal year 2010 to reflect the impact of this change.
		During the nine month period ending June 30, 2010, tax legislation was adopted in various jurisdictions. Other than the item listed above, none of these changes are expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

11.

Retirement Plans

The components of the Company’s 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								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Service cost		$	16			$	17			$	50			$	50
Interest cost			38				40				114				119
Expected return on plan assets			(44	)			(45	)			(134	)			(134	)
Amortization of net actuarial loss			8				1				22				3
Amortization of prior service cost			—				—				1				1
Net periodic benefit cost		$	18			$	13			$	53			$	39

		Non-U.S. Pension Plans
		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Service cost		$	9			$	8			$	28			$	23
Interest cost			16				16				51				48
Expected return on plan assets			(15	)			(13	)			(47	)			(39	)
Amortization of net actuarial loss			3				1				8				3
Amortization of prior service cost			—				1				—				1
Settlement loss			—				—				1				—
Net periodic benefit cost		$	13			$	13			$	41			$	36

		Postretirement Health and Other Benefits
		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Service cost		$	1			$	1			$	3			$	3
Interest cost			4				5				11				14
Amortization of net actuarial gain			—				(1	)			—				(2	)
Amortization of prior service credit			(4	)			(2	)			(13	)			(5	)
Net periodic benefit cost		$	1			$	3			$	1			$	10

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

12.

Debt and Financing Arrangements

		During the quarter ended June 30, 2010, the Company retired approximately $18 million in principal amount of its fixed rate bonds scheduled to mature on January 15, 2011. The Company used cash to fund the repurchases.
		During the quarter ended June 30, 2010, a total of 200 bonds ($200,000 par value) of the Company’s 6.5% convertible senior notes scheduled to mature on September 30, 2012, were redeemed for Johnson Controls, Inc. common stock.
		During the quarter ended June 30, 2010, a 50 million euro revolving credit facility expired and the Company entered into a new one year committed, revolving credit facility in the amount of 50 million euro expiring in May 2011. At June 30, 2010, there were no draws on the revolving credit facility.
		During the quarter ended March 31, 2010, the Company issued $500 million 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 March 31, 2010, the Company retired approximately $61 million in principal amount of its fixed rate bonds scheduled to mature on January 15, 2011. The Company used cash to fund the repurchases.
		During the quarter ended March 31, 2010, the Company retired its 18 billion yen, three year, floating rate loan agreement scheduled to mature on January 18, 2011. The Company used cash to repay the note.
		During the quarter ended December 31, 2009, the Company retired approximately $13 million in principal amount of its fixed rate bonds scheduled to mature on January 15, 2011. Additionally, the Company repurchased 1,685 bonds ($1,685,000 par value) of its 6.5% convertible senior notes scheduled to mature on September 30, 2012. The Company used cash to fund the repurchases.
		During the quarter ended December 31, 2009, the Company retired its 12 billion yen, three year, floating rate loan agreement that matured. Additionally, the Company retired its 7 billion yen, three year, floating rate loan agreement scheduled to mature on January 18, 2011. The Company used cash to repay the notes.
		In May 2009, the Company entered into a new one year revolving credit facility in the amount of 50 million euro expiring in May 2010, which replaced a 100 million euro revolving facility expiring May 2009.
		In March 2009, the Company closed concurrent public offerings. The Company issued $402.5 million aggregate amount of 6.5% senior, unsecured, fixed rate convertible notes that mature September 30, 2012. The notes are convertible into shares of the Company’s 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 $450 million. 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 March 31, 2012, subject to early settlement, a certain number of shares of the Company’s common stock and (ii) a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of the Company’s 11.5% subordinated notes due 2042.
		In September 2009, 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 8,082,085 Corporate Units (consisting of $404 million aggregate principal amount of outstanding

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

		11.50% subordinated notes due 2042) were exchanged for approximately 39 million shares of common stock and approximately $65 million in cash ($52 million of debt conversion payments and $13 million of accrued interest payments on the subordinated notes).
		In February 2009, the Company entered into a $50 million, three year, floating rate bilateral loan agreement. The Company drew the entire amount under the loan agreement during the course of the second quarter of fiscal 2009. Also during the second quarter of fiscal 2009, the Company retired approximately $54 million in principal amount of its $800 million fixed rate bonds that mature in January 2011. The Company used proceeds from the $50 million floating rate loan agreement to retire the bonds.
		On January 17, 2009, the Company retired its 24 billion yen, three year, floating rate loan agreement that matured. The Company used proceeds from commercial paper issuances to repay amounts due under the loan agreement.

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 Company’s 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.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share (in millions):

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Income Available to Common Shareholders
Basic income (loss) available to common shareholders		$	418			$	163			$	1,042			$	(638	)
Interest expense, net of tax			1				13				4				—
Diluted income (loss) available to common shareholders		$	419			$	176			$	1,046			$	(638	)
Weighted Average Shares Outstanding
Basic weighted average shares outstanding			672.7				594.7				671.6				593.9
Effect of dilutive securities:
Stock options			6.2				1.8				6.1				—
Equity units			4.5				43.7				4.5				—
Convertible senior notes			0.1				36.0				0.1				—
Diluted weighted average shares outstanding			683.5				676.2				682.3				593.9
Antidilutive Securities
Options to purchase common shares			0.5				6.2				0.5				6.2

		For the nine months ended June 30, 2009, the total weighted average of potential dilutive shares due to stock options, Equity Units and the convertible senior notes was 34.8 million. However, these items were not included in the computation of diluted net loss per common share for the nine months ended June 30, 2009, since to do so would decrease the loss per share.
		During each of the three months ended June 30, 2010 and 2009, the Company declared a dividend of $0.13 per common share and during each of the nine months ended June 30, 2010 and 2009, 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.

Johnson Controls, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2010
(unaudited)

14.

Equity and Noncontrolling Interests

In December 2007, 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 or as redeemable noncontrolling interests and classified as mezzanine equity (temporary 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 October 1, 2009.

The following schedules present changes in consolidated equity attributable to Johnson Controls, Inc. and noncontrolling interests (in millions):

		Three Months Ended June 30, 2010												Three Months Ended June 30, 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, March 31		$	9,378			$	96			$	9,474			$	7,855			$	76			$	7,931
Total comprehensive income (loss):
Net income (loss)			418				(5	)			413				163				10				173
Foreign currency translation adjustments			(322	)			(2	)			(324	)			194				2				196
Realized and unrealized gains (losses) on derivatives			(14	)			—				(14	)			28				—				28
Unrealized losses on marketable common stock			(2	)			—				(2	)			—				—				—
Employee retirement plans			5				—				5				—				—				—
Other comprehensive income (loss)			(333	)			(2	)			(335	)			222				2				224
Comprehensive income (loss)			85				(7	)			78				385				12				397
Other changes in equity:
Cash dividends - common stock ($0.13 per share)			(88	)			—				(88	)			(77	)			—				(77	)
Dividends attributable to noncontrolling interests			—				(3	)			(3	)			—				(6	)			(6	)
Redemption value adjustment attributable to redeemable noncontrolling interests			—				—				—				(5	)			—				(5	)
Other, including options exercised			20				1				21				20				1				21
Ending balance, June 30		$	9,395			$	87			$	9,482			$	8,178			$	83			$	8,261