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2007-10-01 2008-09-30
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2008-09-30 0000053669
2008-06-30 0000053669
2009-04-01 2009-06-30
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2008-04-01 2008-06-30
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2007-10-01 2008-06-30
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2008-03-31 0000053669
2009-06-30 0000053669
2008-10-01 2009-06-30
iso4217:USD xbrli:shares
xbrli:shares
iso4217:USD
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Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <!-- xbrl,ns
--> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b></div>
<div align="left"> </div> <div align="center" style="font-size:
10pt; margin-top: 0pt"><b> </b></div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>1.</b></td> <td width="1%"> </td>
<td><b>Financial Statements</b></td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>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, 2008.
The results of operations for the three and nine month periods ended June 30,
2009 are not necessarily indicative of results for the Company’s
2009 fiscal year because of seasonal and other factors.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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. 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 error, which reduces segment income, primarily
originated in 2007 and 2008 and resulted in the overstatement of inventory
and understatement of cost of sales in prior periods.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Under certain criteria
as provided for in Financial Accounting Standards Board (FASB) Interpretation
No. (FIN) 46(R), “Consolidation of Variable Interest Entities
— an Interpretation of ARB No. 51,” the Company
may consolidate a partially-owned affiliate when it has less than a 50% ownership.
In order to determine whether to consolidate a partially-owned affiliate when
the Company has less than a 50% ownership, we first determine if the entity
is a variable interest entity (VIE). An entity is considered to be a VIE if
it has one of the following characteristics: 1) the entity is thinly capitalized;
2) residual equity holders do not control the entity; 3) equity holders are
shielded from economic losses or do not participate fully in the entity’s
residual economics; or 4) the entity was established with non-substantive
voting. If the entity meets one of these characteristics, we then determine
if the Company is the primary beneficiary of the VIE. Under FIN 46(R), the
party exposed to the majority of the risks and rewards associated with the
VIE is the VIE’s primary beneficiary and must consolidate the entity.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Based upon the criteria
set forth in FIN 46(R), the Company has determined that at 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 as of June 30, 2009. The carrying
amounts and classification of assets and liabilities included in our consolidated
statements of financial position for consolidated VIE’s are as follows
(in millions):</td> </tr> </table> </div> <div
align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="76%"> </td> <td
width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Current assets </div></td>
<td> </td> <td align="left">$</td> <td
align="right">116</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">116</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Noncurrent assets </div></td>
<td> </td> <td> </td> <td align="right">106</td>
<td> </td> <td> </td> <td> </td>
<td align="right">126</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Total assets </div></td>
<td> </td> <td align="left">$</td> <td
align="right">222</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">242</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Current liabilities </div></td> <td> </td>
<td align="left">$</td> <td align="right">76</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">127</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Noncurrent liabilities </div></td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total
liabilities </div></td> <td> </td> <td
align="left">$</td> <td align="right">76</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">127</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
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'Times New Roman',Times,serif"> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> </div>
</body> </html>
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Tagged Note 2 - us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>2.</b></td> <td width="1%"> </td>
<td><b>New Accounting Standards</b></td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In June 2009,
the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 168 “The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles — a replacement of FASB Statement No. 162.”
This statement is effective for the Company in the fourth quarter of fiscal
2009 (September 30, 2009). Upon effect, the FASB Accounting Standard
Codification will become the source of authoritative U.S. GAAP recognized
by the FASB. The adoption of this statement will have no impact on the Company’s
consolidated financial condition and results of operations.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In June 2009,
the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R).” SFAS No. 167 changes how a company
determines when an entity that is insufficiently capitalized or is not controlled
through voting should be consolidated. The determination of whether a company
is required to consolidate an entity is based on, among other things, an 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 on SFAS No. 167 will have
on its consolidated financial condition and results of operations.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In May 2009,
FASB issued SFAS No. 165, “Subsequent Events.”
SFAS No. 165 is intended to establish general standards of accounting
for and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. The standard
requires disclosure of the date through which the company has evaluated subsequent
events and whether that date represents the date the financial statements
were issued or were available to be issued. This statement is effective for
the Company in the third quarter of fiscal 2009 (June 30, 2009).
Refer to Note 20, “Subsequent Events,” for disclosure
of the Company’s subsequent events for the current reporting period.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In April 2009,
the FASB issued Staff Position (FSP) Financial Accounting Standards
(FAS) 107-1 and Accounting Principles Board (APB) 28-1,
“Interim Disclosures about Fair Value of Financial Instruments.”
This FSP requires disclosure about fair value of financial instruments for
interim reporting periods of publicly traded companies as well as in annual
financial statements. This statement was effective for the Company beginning
in the third quarter of fiscal 2009 (April 1, 2009) with early adoption
permitted. The Company adopted this FSP effective January 1, 2009
and determined that the impact of adoption was not material to its consolidated
financial condition and results of operation. See Note 15, “Derivative
Instruments and Hedging Activities,” and Note 16, “Fair
Value Measurements,” for disclosure of the Company’s fair
value of financial instruments as of June 30, 2009.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In March 2008,
the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities — an amendment of FASB Statement
No. 133.” SFAS No. 161 enhances required disclosures
regarding derivatives and hedging activities, including how an entity uses
derivative instruments, how derivative instruments and related hedged items
are accounted for under SFAS No. 133 and how derivative instruments
and related hedged items affect an entity’s financial position,
financial performance and cash flows. SFAS No. 161 was effective
for the Company beginning in the second quarter of fiscal 2009 (January 1,
2009). See Note 15, “Derivative Instruments and Hedging Activities,”
for disclosure of the Company’s derivative instruments and hedging
activities at June 30, 2009.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>In December 2007, the
FASB issued SFAS No. 141 (revised 2007), “Business Combinations.”
SFAS No. 141(R) changes 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 SFAS No. 141(R), changes in an
acquired entity’s deferred tax assets and uncertain tax positions
after the measurement period will impact income tax expense. SFAS No. 141(R)
will be effective for the Company beginning in the first quarter of fiscal
2010 (October 1, 2009). This standard, when adopted, will change
the Company’s accounting treatment for business combinations on
a prospective basis.</td> </tr> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial Statements,
an amendment of ARB No. 51.” SFAS No. 160 changes
the accounting and reporting for minority interests, which will be recharacterized
as noncontrolling interests and classified as a component of equity.</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div align="center" style="font-size: 10pt;
margin-top: 0pt"> <b> </b> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>This new consolidation method changes the accounting for transactions
with minority interest holders. SFAS No. 160 is effective for fiscal
years beginning after December 15, 2008. SFAS No. 160 will
be effective for the Company beginning in the first quarter of fiscal 2010
(October 1, 2009). The Company is assessing the potential impact
that the adoption of SFAS No. 160 will have on its consolidated financial
condition and results of operations.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>In February 2007, the
FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities — including an amendment to FASB
Statement No. 115.” SFAS No. 159 permits entities
to measure certain financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. The objective
is to improve financial reporting by providing entities with the opportunity
to mitigate volatility in reported earnings caused by measuring related assets
and liabilities differently without having to apply complex hedge accounting
provisions. The Company adopted this statement effective October 1,
2008 and has not elected to measure any financial assets and financial liabilities
at fair value which were not previously required to be measured at fair value.
The adoption of this standard has had no impact on the Company’s
consolidated financial condition and results of operations.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In September 2006,
the FASB issued SFAS No. 157, “Fair Value Measurements.”
SFAS No. 157 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. SFAS No. 157
also establishes a fair value hierarchy that prioritizes information used
in developing assumptions when pricing an asset or liability. The Company
adopted this statement effective October 1, 2008. The adoption of
this standard has had no material impact on the Company’s consolidated
financial condition and results of operation. See Note 16, “Fair
Value Measurements,” for more information regarding the impact of
the Company’s adoption of SFAS No. 157. In February 2008,
the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement
No. 157,” which delays the effective date of SFAS No. 157
for nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed in the financial statements on a nonrecurring basis to fiscal years
beginning after November 15, 2008. The Company has not applied the
provisions of SFAS No. 157 to its nonfinancial assets and nonfinancial
liabilities in accordance with FSP FAS 157-2 as of June 30, 2009.
The provisions of SFAS No. 157 for nonfinancial assets and nonfinancial
liabilities will be effective for the Company beginning in the first quarter
of fiscal 2010 (October 1, 2009).</td> </tr> </table>
</div> </div> </body> </html>
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Tagged Note 3 - us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>3.</b></td> <td width="1%"> </td>
<td><b>Acquisition of Businesses</b></td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>During fiscal 2009 the
Company completed two acquisitions for a combined purchase price of $37 million,
of which $32 milion was paid in the nine months ended June 30, 2009.
Neither acquisition was material to the Company’s consolidated financial
statements. In connection with these acquisitions, the Company recorded goodwill
of $24 million. The purchase price allocation may be subsequently
adjusted to reflect final valuation studies.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>During the nine months ended
June 30, 2008, the Company completed four acquisitions for a combined
purchase price of $80 million, of which $73 million was
paid in the respective period. None of these acquisitions were material to
the Company’s consolidated financial statements. In connection with
these acquisitions, the Company recorded goodwill of $55 million.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In July 2008,
the Company formed a joint venture to acquire the interior product assets
of Plastech Engineered Products, Inc (Plastech). Plastech filed for bankruptcy
in February 2008. The Company owns 70% of the newly formed entity
and certain Plastech term lenders hold the minority position. The Company
contributed cash and injection molding plants to the new entity with a fair
value of $262 million. The lenders contributed their rights to receive
Plastech’s interiors business obtained in exchange for certain Plastech
debt. The combined equity in the new entity was approximately $375 million.
Goodwill of $199 million was recorded as part of the transaction.
In the third quarter of fiscal 2009, the Company finalized valuations associated
with the acquisition and recorded a $21 million increase to goodwill.</td>
</tr> </table> </div> </div> </body> </html>
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Tagged Note 4 - us-gaap:LongTermContractsOrProgramsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>4.</b></td> <td width="1%"> </td>
<td><b>Percentage-of-Completion Contracts</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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 $522 million, $670 million
and $637 million at June 30, 2009, September 30,
2008, and June 30, 2008, respectively. Amounts included within other
current liabilities were $610 million, $654 million, and $615 million
at June 30, 2009, September 30, 2008, and June 30,
2008, respectively.</td> </tr> </table> </div> </div>
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Tagged Note 5 - us-gaap:InventoryDisclosureTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>5.</b></td>
<td width="1%"> </td> <td><b>Inventories</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Inventories consisted
of the following (in millions):</td> </tr> </table> </div>
<div align="center"> <table style="font-size: 10pt; text-align: left"
cellspacing="0" border="0" cellpadding="0" width="100%"> <!-- Begin
Table Head --> <tr valign="bottom"> <td width="64%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">June
30,</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Raw materials and supplies
</div></td> <td> </td> <td align="left">$</td>
<td align="right">720</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">902</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">929</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Work-in-process
</div></td> <td> </td> <td> </td>
<td align="right">225</td> <td> </td> <td> </td>
<td> </td> <td align="right">324</td> <td> </td>
<td> </td> <td> </td> <td align="right">359</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Finished
goods </div></td> <td> </td> <td> </td>
<td align="right">728</td> <td> </td> <td> </td>
<td> </td> <td align="right">985</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,066</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">FIFO inventories </div></td>
<td> </td> <td> </td> <td align="right">1,673</td>
<td> </td> <td> </td> <td> </td>
<td align="right">2,211</td> <td> </td> <td> </td>
<td> </td> <td align="right">2,354</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">LIFO reserve </div></td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(112</td> <td nowrap="nowrap">)</td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(112</td> <td nowrap="nowrap">)</td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(62</td> <td nowrap="nowrap">)</td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Inventories
</div></td> <td> </td> <td align="left">$</td>
<td align="right">1,561</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">2,099</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">2,292</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
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Tagged Note 6 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>6.</b></td> <td width="1%"> </td>
<td><b>Goodwill and Other Intangible Assets</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The changes in the carrying
amount of goodwill in each of the Company’s reporting segments for
the three month period ended September 30, 2008 and the nine month
period ended June 30, 2009 were as follows (in millions):</td>
</tr> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">Currency</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Business</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">Translation</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">September
30,</td> <td> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">2008</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Acquisitions</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">and Other</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Building efficiency </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">North America systems
</div></td> <td> </td> <td align="left">$</td>
<td align="right">512</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">4</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(1</td> <td nowrap="nowrap">)</td>
<td> </td> <td align="left">$</td> <td
align="right">515</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">North America service </div></td>
<td> </td> <td> </td> <td align="right">663</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(6</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">657</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">North America unitary
products </div></td> <td> </td> <td> </td>
<td align="right">481</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">481</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Global
workplace solutions </div></td> <td> </td>
<td> </td> <td align="right">181</td> <td> </td>
<td> </td> <td> </td> <td align="right">6</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(9</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">178</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Europe
</div></td> <td> </td> <td> </td>
<td align="right">416</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">12</td> <td> </td> <td> </td>
<td> </td> <td align="right">428</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Rest of world </div></td>
<td> </td> <td> </td> <td align="right">593</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(19</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">574</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Automotive experience
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">North America </div></td>
<td> </td> <td> </td> <td align="right">1,177</td>
<td> </td> <td> </td> <td> </td>
<td align="right">178</td> <td> </td> <td> </td>
<td> </td> <td align="right">1</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,356</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Europe </div></td>
<td> </td> <td> </td> <td align="right">1,275</td>
<td> </td> <td> </td> <td> </td>
<td align="right">7</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(63</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">1,219</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Asia </div></td>
<td> </td> <td> </td> <td align="right">205</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">200</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Power solutions </div></td>
<td> </td> <td> </td> <td align="right">922</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(17</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">905</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total
</div></td> <td> </td> <td align="left">$</td>
<td align="right">6,425</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">189</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(101</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left">$</td>
<td align="right">6,513</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<tr style="font-size: 10pt"> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">Business</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Translation</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">Acquisitions</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">and Other</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Building efficiency </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">North America systems
</div></td> <td> </td> <td align="left">$</td>
<td align="right">515</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">—</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">515</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">North America service </div></td>
<td> </td> <td> </td> <td align="right">657</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">1</td>
<td> </td> <td> </td> <td> </td>
<td align="right">658</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North
America unitary products </div></td> <td> </td>
<td> </td> <td align="right">481</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">2</td> <td> </td> <td> </td>
<td> </td> <td align="right">483</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Global workplace solutions
</div></td> <td> </td> <td> </td>
<td align="right">178</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(5</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">173</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Europe
</div></td> <td> </td> <td> </td>
<td align="right">428</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(9</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">419</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Rest of world </div></td>
<td> </td> <td> </td> <td align="right">574</td>
<td> </td> <td> </td> <td> </td>
<td align="right">24</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(49</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">549</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Automotive
experience </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">North America </div></td>
<td> </td> <td> </td> <td align="right">1,356</td>
<td> </td> <td> </td> <td> </td>
<td align="right">21</td> <td> </td> <td> </td>
<td> </td> <td align="right">1</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,378</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Europe </div></td>
<td> </td> <td> </td> <td align="right">1,219</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">1,173</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Asia
</div></td> <td> </td> <td> </td>
<td align="right">200</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">4</td> <td> </td> <td> </td>
<td> </td> <td align="right">204</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Power solutions </div></td> <td> </td>
<td> </td> <td align="right">905</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(37</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">868</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left">$</td> <td
align="right">6,513</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">45</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(138</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left">$</td>
<td align="right">6,420</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <!-- Folio -->
<!-- /Folio --> </div> <!-- PAGEBREAK --> <div style="font-family:
'Times New Roman',Times,serif"> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>The Company’s other intangible assets, primarily from
business acquisitions, are valued based on independent appraisals and consisted
of (in millions):</td> </tr> </table> </div> <div
align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="19%"> </td> <td
width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
<td width="3%"> </td> <td width="2%"> </td>
<td width="1%"> </td> <td width="3%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="11"
style="border-bottom: 1px solid #000000">June 30, 2009</td> <td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px
solid #000000">September 30, 2008</td> <td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px
solid #000000">June 30, 2008</td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="3">Gross</td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="3">Gross</td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="3">Gross</td> <td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Carrying</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Accumulated</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="3">Carrying</td> <td> </td>
<td nowrap="nowrap" align="center" colspan="3">Accumulated</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="3">Carrying</td> <td> </td>
<td nowrap="nowrap" align="center" colspan="3">Accumulated</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amount</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amortization</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Net</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amount</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amortization</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Net</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amount</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Amortization</td>
<td> </td> <td nowrap="nowrap" align="center" colspan="3">Net</td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr style="font-size: 1px"> <td> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td> <td colspan="11" align="left" style="border-top:
1px solid #000000"> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Amortized intangible
assets </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Patented technology
</div></td> <td> </td> <td align="right">$</td>
<td align="right">303</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(181</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">122</td> <td> </td>
<td> </td> <td align="right">$</td> <td
align="right">302</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(168</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">134</td> <td> </td>
<td> </td> <td align="right">$</td> <td
align="right">309</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(167</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">142</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Unpatented technology
</div></td> <td> </td> <td> </td>
<td align="right">23</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(12</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">11</td> <td> </td> <td> </td>
<td> </td> <td align="right">25</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="right"> </td>
<td align="right">(11</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">14</td>
<td> </td> <td> </td> <td> </td>
<td align="right">26</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(11</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">15</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Customer
relationships </div></td> <td> </td> <td> </td>
<td align="right">343</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(51</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">292</td> <td> </td> <td> </td>
<td> </td> <td align="right">344</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="right"> </td>
<td align="right">(42</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">302</td>
<td> </td> <td> </td> <td> </td>
<td align="right">342</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(39</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">303</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Miscellaneous </div></td>
<td> </td> <td> </td> <td align="right">36</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="right"> </td> <td align="right">(13</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">23</td> <td> </td> <td> </td>
<td> </td> <td align="right">35</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="right"> </td>
<td align="right">(13</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">22</td>
<td> </td> <td> </td> <td> </td>
<td align="right">35</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(13</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">22</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td> <td colspan="11" align="left" style="border-top:
1px solid #000000"> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Total amortized intangible assets </div></td>
<td> </td> <td> </td> <td align="right">705</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="right"> </td> <td align="right">(257</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">448</td> <td> </td> <td> </td>
<td> </td> <td align="right">706</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="right"> </td>
<td align="right">(234</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">472</td>
<td> </td> <td> </td> <td> </td>
<td align="right">712</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right"> </td> <td align="right">(230</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">482</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Unamortized intangible assets
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Trademarks </div></td>
<td> </td> <td> </td> <td align="right">297</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">297</td>
<td> </td> <td> </td> <td> </td>
<td align="right">297</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">297</td> <td> </td> <td> </td>
<td> </td> <td align="right">297</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">297</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td> <td colspan="11" align="left" style="border-top:
1px solid #000000"> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets
</div></td> <td> </td> <td align="right">$</td>
<td align="right">1,002</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(257</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">745</td> <td> </td>
<td> </td> <td align="right">$</td> <td
align="right">1,003</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(234</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">769</td> <td> </td>
<td> </td> <td align="right">$</td> <td
align="right">1,009</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="right">$</td> <td align="right">(230</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="right">$</td> <td align="right">779</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> </td>
<td> </td> <td colspan="11" align="left" style="border-top:
3px double #000000"> </td> <td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </td>
<td> </td> <td colspan="11" align="left" style="border-top:
3px double #000000"> </td> </tr> <!-- End Table
Body --> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Amortization of other
intangible assets for the nine month periods ended June 30, 2009
and 2008 was $26 million and $28 million, respectively.
Excluding the impact of any future acquisitions, the Company anticipates amortization
of other intangible assets will average approximately $33 million
per year over the next five years.</td> </tr> </table> </div>
</div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 7 - us-gaap:ProductWarrantyDisclosureTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>7.</b></td>
<td width="1%"> </td> <td><b>Product Warranties</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The Company offers warranties
to its customers depending upon the specific product and terms of the customer
purchase agreement. A typical warranty program requires that the Company replace
defective products within a specified time period from the date of sale. The
Company records an estimate for future warranty-related costs based on actual
historical return rates. Based on analysis of return rates and other factors,
the adequacy of the Company’s warranty provisions are adjusted as
necessary. While the Company’s warranty costs have historically
been within its calculated estimates, it is possible that future warranty
costs could exceed those estimates. The Company’s product warranty
liability is included in other current liabilities in the condensed consolidated
statement of financial position.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The changes in the carrying amount of the Company’s total
product warranty liability for the nine months ended June 30, 2009
and 2008 were as follows (in millions):</td> </tr> </table>
</div> <div align="center"> <table style="font-size: 10pt;
text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --> <tr valign="bottom"> <td width="76%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Balance as of September 30
</div></td> <td> </td> <td align="left">$</td>
<td align="right">204</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">186</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Accruals for warranties
issued during the period </div></td> <td> </td>
<td> </td> <td align="right">163</td> <td> </td>
<td> </td> <td> </td> <td align="right">121</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Accruals
from acquisitions </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Accruals related to pre-existing warranties (including
changes in estimates) </div></td> <td> </td>
<td> </td> <td align="right">4</td> <td> </td>
<td> </td> <td> </td> <td align="right">3</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Settlements
made (in cash or in kind) during the period </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(155</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(108</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Currency
translation </div></td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(4</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">6</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Balance as of June 30 </div></td>
<td> </td> <td align="left">$</td> <td
align="right">212</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">208</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <!-- End Table Body -->
</table> </div> </div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 8 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>8.</b></td> <td width="1%"> </td>
<td><b>Restructuring Costs</b></td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>To further 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.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>The 2009 Plan includes workforce
reductions of approximately 6,400 employees (2,900 for automotive experience
— North America, 1,900 for automotive experience — Europe,
600 for automotive experience — Asia, 200 for building efficiency
— North America, 400 for building efficiency — Europe,
100 for building efficiency — rest of world, and 300 for power solutions).
Restructuring charges associated with employee severance and termination benefits
are paid over the severance period granted to each employee and on a lump
sum basis when required in accordance with individual severance agreements.
As of June 30, 2009, approximately 3,700 employees have been separated
from the Company pursuant to the 2009 Plan. In addition, the 2009 Plan includes
9 plant closures (3 for automotive experience — North America, 1
for automotive experience — Europe, 3 for automotive experience
— Asia, 1 for building efficiency — rest of world, and
1 for power solutions). As of June 30, 2009, none of the plants have
been closed. The portion of the restructuring charge for the impairment of
long-lived assets associated with the plant closures was determined using
fair value based on a discounted cash flow analysis.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The following table summarizes
the changes in the Company’s 2009 Plan reserve, included within
other current liabilities in the consolidated statements of financial position
(in millions):</td> </tr> </table> </div> <div
align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="40%"> </td> <td
width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Employee</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">Severance and</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">Termination</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">Fixed Asset</td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2">Currency</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Benefits</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Impairment</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Other</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Translation</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Total</td> <td> </td> </tr>
<!-- End Table Head --> <!-- Begin Table Body --> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px">Original Reserve </div></td> <td> </td>
<td align="left">$</td> <td align="right">182</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">46</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">2</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">—</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">230</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Utilized —
Cash </div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(15</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(15</td> <td nowrap="nowrap">)</td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Utilized —
Noncash </div></td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td> <td nowrap="nowrap">)</td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance
at March 31, 2009 </div></td> <td> </td>
<td align="left">$</td> <td align="right">167</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">—</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">2</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">169</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Utilized — Cash </div></td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(8</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(8</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:30px; text-indent:-15px">Utilized
— Noncash </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">6</td> <td> </td> <td> </td>
<td> </td> <td align="right">6</td> <td> </td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Balance at June 30,
2009 </div></td> <td> </td> <td align="left">$</td>
<td align="right">159</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">2</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">6</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">167</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>Included within the “other” category are exit
costs for terminating supply contracts associated with changes in the Company’s
manufacturing footprint and strategies, lease termination costs and other
direct costs.</td> </tr> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>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 early 2010. The automotive-related restructuring
is in response to the changing 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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The 2008 Plan includes workforce reductions of approximately 9,400
employees (3,700 for automotive experience — North America, 3,400
for automotive experience — Europe, 400 for building efficiency
— North America, 1,000 for building efficiency — Europe,
400 for building efficiency — rest of world and 500 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, 2009, approximately 7,200 employees have been separated
from the Company pursuant to the 2008 Plan. In addition, the 2008 Plan includes
21 plant closures (9 for automotive experience — North America,
9 for automotive experience — Europe, 1 for building efficiency
— North America, and 2 for power solutions). As of June 30,
2009, 10 of the 21 plants have been closed. The portion of the restructuring
charge for the impairment of long-lived assets associated with the plant closures
was determined using fair value based on a discounted cash flow analysis.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The following table summarizes
the changes in the Company’s 2008 Plan reserve, included within
other current liabilities in the consolidated statements of financial position
(in millions):</td> </tr> </table> </div> <div
align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="52%"> </td> <td
width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Employee</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Severance
and</td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2">Termination</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Benefits</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Other</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Translation</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000">Total</td> <td> </td> </tr>
<!-- End Table Head --> <!-- Begin Table Body --> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px">Balance at September 30, 2008 </div></td>
<td> </td> <td align="left">$</td> <td
align="right">435</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">9</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">—</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">444</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Utilized —
Cash </div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(47</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(47</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:30px;
text-indent:-15px">Utilized — Noncash </div></td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(17</td> <td nowrap="nowrap">)</td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(17</td> <td nowrap="nowrap">)</td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance
at December 31, 2008 </div></td> <td> </td>
<td align="left">$</td> <td align="right">388</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">9</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(17</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">380</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Utilized —
Cash </div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(86</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(86</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:30px; text-indent:-15px">Utilized
— Noncash </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(22</td> <td nowrap="nowrap">)</td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(22</td> <td nowrap="nowrap">)</td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Balance at March 31,
2009 </div></td> <td> </td> <td align="left">$</td>
<td align="right">302</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">9</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(39</td> <td nowrap="nowrap">)</td>
<td> </td> <td align="left">$</td> <td
align="right">272</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Utilized
— Cash </div></td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(45</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(45</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:30px;
text-indent:-15px">Utilized — Noncash </div></td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(5</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">17</td> <td> </td> <td> </td>
<td> </td> <td align="right">12</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance
at June 30, 2009 </div></td> <td> </td>
<td align="left">$</td> <td align="right">257</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">4</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(22</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">239</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>Included within the “other” category are exit
costs for terminating supply contracts associated with changes in the Company’s
manufacturing footprint and strategies, lease termination costs and other
direct costs.</td> </tr> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>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 the Company’s operations.</td> </tr> </table>
</div> </div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 9 - us-gaap:ResearchDevelopmentAndComputerSoftwareDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>9.</b></td> <td width="1%"> </td>
<td><b>Research and Development</b></td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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 $29 million and $95 million for the three months ended June 30,
2009 and 2008, respectively, and $219 million and $322 million
for the nine months ended June 30, 2009 and 2008, respectively. These
expenditures are net of customer reimbursements of $146 million and
$106 million for the three months ended June 30, 2009 and
2008, respectively, and $312 million and $282 million for
the nine months ended June 30, 2009 and 2008, respectively.</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div align="center" style="font-size: 10pt;
margin-top: 0pt"> <b> </b> </div> </div> </body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 10 - us-gaap:IncomeTaxDisclosureTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>10.</b></td>
<td width="1%"> </td> <td><b>Income Taxes</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The more significant
components of the Company’s income tax provision from continuing
operations are as follows (in millions):</td> </tr> </table>
</div> <div align="center"> <table style="font-size: 10pt;
text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --> <tr valign="bottom"> <td width="52%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6">Three
Months</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Nine Months</td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Federal, state and foreign
income tax expense at annual effective rate </div></td> <td> </td>
<td align="left">$</td> <td align="right">59</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">121</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(147</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">266</td> <td> </td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Effective tax rate
adjustment </div></td> <td> </td> <td> </td>
<td align="right">11</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Valuation
allowance adjustment </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(3</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">252</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Restructuring charges </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">18</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Impairment charges
</div></td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">39</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Uncertain tax positions
</div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(17</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(17</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Change in tax status of foreign
subsidiary </div></td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(30</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Interest refund </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Provision for income taxes
</div></td> <td> </td> <td align="left">$</td>
<td align="right">50</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">121</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">109</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">266</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <!-- End Table Body -->
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td><b><i>Effective
Tax Rate</i></b></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In calculating the provision for income taxes, the Company uses
an estimate of the annual effective tax rate based upon the facts and circumstances
known at each interim period. On a quarterly basis, the annual effective tax
rate is adjusted, as appropriate, based upon changed facts and circumstances,
if any, as compared to those forecasted at the beginning of the fiscal year
and each interim period thereafter. For the three and nine months ended 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 is a cumulative
year-to-date loss, this created a tax increase of $11 million in
the current quarter after applying the new effective rate to the provision
in the prior two quarters. The effective income tax rate from continuing operations
for the three and nine months ended June 30, 2008 was 21%.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td><b><i>Valuation
Allowance</i></b></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The Company reviews its deferred tax asset valuation allowances
on a quarterly basis. In determining the potential need for a valuation allowance,
the historical and projected financial results of the legal entity or consolidated
group recording the net deferred tax asset are considered, along with any
other positive or negative evidence. Since future financial results may differ
from previous estimates, periodic adjustments to the Company’s valuation
allowances may be necessary.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In the third quarter of fiscal 2009, the Company performed an analysis
of its worldwide deferred tax assets. As a result, and after considering tax
planning initiatives and other positive and negative evidence, the Company
determined that it was more likely than not that the deferred tax assets within
the Brazil power solutions entity would be utilized. Therefore, the Company
released $10 million of valuation allowances in the three month period
ended June 30, 2009. This is comprised of a $3 million decrease in
income tax expense with the remaining amount impacting the statement of financial
position because it related to acquired net operating losses.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In the first quarter of fiscal 2009, the Company performed an analysis
of its worldwide deferred tax assets. 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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Restructuring Charge</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In the second quarter
of fiscal 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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Impairment Charges</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In the first quarter
of fiscal 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 effective 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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Uncertain Tax Positions</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In June 2006,
FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes
— an interpretation of FASB Statement No. 109.”
FIN 48 prescribes a comprehensive model for how a company should recognize,
measure, present, and disclose in its financial statements uncertain tax positions
that a company has taken or expects to take on a tax return. The Company adopted
FIN 48 as of October 1, 2007.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>Upon adoption, the Company increased
its existing reserves for uncertain tax positions by $93 million. The increase
was recorded as a cumulative effect adjustment to shareholders’
equity of $68 million and an increase to goodwill of $25 million
related to prior year business combinations. As of the adoption date, the
Company had gross tax affected unrecognized tax benefits of $616 million
of which $475 million, if recognized, would affect the effective
tax rate. Also as of the adoption date, the Company had accrued interest expense
and penalties related to the unrecognized tax benefits of $75 million
(net of tax benefit). The net change in interest and penalties during the
nine months ended June 30, 2009 was $17 million and was
not material for the same period in fiscal 2008. The Company recognizes interest
and penalties related to unrecognized tax benefits as a component of income
tax expense or goodwill, when applicable.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>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 is comprised of a $17 million decrease to tax expense, which
impacts the effective tax rate, and a $16 million decrease to goodwill.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The Company is subject
to income taxes in the United States 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 the major jurisdictions noted below:</td> </tr>
</table> </div> <!-- Folio --> <!-- /Folio --> </div>
<!-- PAGEBREAK --> <div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt"> <b>
</b> </div> <div style="margin-top: 6pt"> <table width="100%"
border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align:
left"> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="88%"> </td> <td width="2%"> </td>
<td width="10%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td nowrap="nowrap" align="left">Tax</td>
<td> </td> <td nowrap="nowrap" align="left">Statute
of</td> </tr> <tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Jurisdiction</td> <td> </td>
<td nowrap="nowrap" align="left">Limitations</td> </tr>
<!-- End Table Head --> <!-- Begin Table Body --> <tr style="font-size:
1px"> <td colspan="3" align="left" style="border-top: 1px solid #000000"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Austria </div></td>
<td> </td> <td align="left" valign="top">5 years</td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Belgium </div></td> <td> </td>
<td align="left" valign="top">3 years</td> </tr> <tr
valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px">Canada </div></td> <td> </td>
<td align="left" valign="top">5 years</td> </tr> <tr
valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">China
</div></td> <td> </td> <td align="left"
valign="top" nowrap="nowrap">3 to 5 years</td> </tr> <tr
valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px">Czech Republic </div></td> <td> </td>
<td align="left" valign="top">3 years</td> </tr> <tr
valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">France
</div></td> <td> </td> <td align="left"
valign="top">3 years</td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Germany
</div></td> <td> </td> <td align="left"
valign="top" nowrap="nowrap">4 to 5 years</td> </tr> <tr
valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Italy
</div></td> <td> </td> <td align="left"
valign="top">4 years</td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Japan
</div></td> <td> </td> <td align="left"
valign="top" nowrap="nowrap">5 to 7 years</td> </tr> <tr
valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Mexico
</div></td> <td> </td> <td align="left"
valign="top">5 years</td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Spain
</div></td> <td> </td> <td align="left"
valign="top">4 years</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">United Kingdom
</div></td> <td> </td> <td align="left"
valign="top">6 years</td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">U.S.
— Federal </div></td> <td> </td>
<td align="left" valign="top">3 years</td> </tr> <tr
valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">U.S.
— State </div></td> <td> </td>
<td align="left" valign="top" nowrap="nowrap">3 to 5 years</td>
</tr> <!-- End Table Body --> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In the United States, the 2004 through 2006 fiscal years are currently
under exam by the Internal Revenue Service (IRS) and the fiscal years
1999 to 2003 are currently under IRS Appeals. Additionally, the Company is
currently under exam in the following major foreign jurisdictions:</td>
</tr> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="80%"> </td> <td width="4%"> </td>
<td width="16%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom:
1px solid #000000">Tax Jurisdiction</td> <td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Tax
Years Covered</td> </tr> <!-- End Table Head --> <!--
Begin Table Body --> <tr valign="bottom" style="background: #cceeff">
<td> <div style="margin-left:15px; text-indent:-15px">Austria
</div></td> <td> </td> <td align="left"
valign="top">2003 — 2005</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Brazil </div></td>
<td> </td> <td align="left" valign="top">2005 —
2008</td> </tr> <tr valign="bottom" style="background: #cceeff">
<td> <div style="margin-left:15px; text-indent:-15px">Canada </div></td>
<td> </td> <td align="left" valign="top">2004 —
2006</td> </tr> <tr valign="bottom"> <td> <div
style="margin-left:15px; text-indent:-15px">France </div></td>
<td> </td> <td align="left" valign="top">2005 —
2008</td> </tr> <tr valign="bottom" style="background: #cceeff">
<td> <div style="margin-left:15px; text-indent:-15px">Germany
</div></td> <td> </td> <td align="left"
valign="top">2001 — 2006</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Italy </div></td>
<td> </td> <td align="left" valign="top">2004 —
2006</td> </tr> <tr valign="bottom" style="background: #cceeff">
<td> <div style="margin-left:15px; text-indent:-15px">Mexico </div></td>
<td> </td> <td align="left" valign="top">2003 —
2004</td> </tr> <tr valign="bottom"> <td> <div
style="margin-left:15px; text-indent:-15px">Spain </div></td>
<td> </td> <td align="left" valign="top">2003 —
2005</td> </tr> <!-- End Table Body --> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>It is reasonably possible that certain tax examinations, appellate
proceedings and/or tax litigation will conclude within the next 12 months,
which may result in favorable tax reserve adjustments in the range of $30 million
to $70 million.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Change in Tax Status of non-U.S. Subsidiary</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In the second quarter
of fiscal 2009, the Company recorded a $30 million discrete period
tax benefit related to a change in tax status of a French subsidiary.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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
provisions of SFAS No. 109.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td><b><i>Interest Refund
Claim</i></b></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In the second quarter of fiscal 2009, the Company filed a claim
for refund with the IRS related to interest computations of prior tax payments
and refunds. The refund claim resulted in a tax provision decrease of $6 million.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td><b><i>Impacts
of Tax Legislation</i></b></td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>In February 2009, Wisconsin
enacted numerous changes to Wisconsin income tax law as part of the Budget
Stimulus and Repair Bill, Wisconsin Act 2. These changes will become effective
in the Company’s tax year ended September 30, 2010. The
major changes included an adoption of corporate unitary combined reporting
and an expansion of the related entity expense add back provisions. These
Wisconsin tax law changes will not have a material impact on the Company’s
consolidated financial condition, results of operations or cash flows.</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div align="center" style="font-size: 10pt;
margin-top: 0pt"> <b> </b> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>Various other tax legislation was adopted in the nine months ended
June 30, 2009. None of these changes will have a material impact
on the Company’s consolidated financial condition, results of operations
or cash flows.</td> </tr> </table> </div> </div>
</body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 11 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>11.</b></td> <td width="1%"> </td>
<td><b>Retirement Plans</b></td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>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 SFAS No. 132 (revised 2003), “Employers’
Disclosures about Pensions and Other Postretirement Benefits — an
amendment of FASB Statements No. 87, 88 and 106” (in millions):</td>
</tr> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px
solid #000000">U.S. Pension Plans</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6">Three
Months</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Nine Months</td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Service cost </div></td>
<td> </td> <td align="left">$</td> <td
align="right">17</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">20</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">50</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">60</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Interest cost </div></td>
<td> </td> <td> </td> <td align="right">40</td>
<td> </td> <td> </td> <td> </td>
<td align="right">35</td> <td> </td> <td> </td>
<td> </td> <td align="right">119</td> <td> </td>
<td> </td> <td> </td> <td align="right">105</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected
return on plan assets </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(45</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(41</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(134</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(124</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Amortization
of net actuarial loss </div></td> <td> </td>
<td> </td> <td align="right">1</td> <td> </td>
<td> </td> <td> </td> <td align="right">1</td>
<td> </td> <td> </td> <td> </td>
<td align="right">3</td> <td> </td> <td> </td>
<td> </td> <td align="right">4</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior
service cost </div></td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">1</td> <td> </td> <td> </td>
<td> </td> <td align="right">1</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net
periodic benefit cost </div></td> <td> </td>
<td align="left">$</td> <td align="right">13</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">15</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">39</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">46</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px
solid #000000">Non-U.S. Pension Plans</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6">Three
Months</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Nine Months</td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Service cost </div></td>
<td> </td> <td align="left">$</td> <td
align="right">8</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">10</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">23</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">29</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Interest cost </div></td>
<td> </td> <td> </td> <td align="right">16</td>
<td> </td> <td> </td> <td> </td>
<td align="right">20</td> <td> </td> <td> </td>
<td> </td> <td align="right">48</td> <td> </td>
<td> </td> <td> </td> <td align="right">56</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected
return on plan assets </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(13</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(17</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(39</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(50</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Amortization
of net actuarial loss </div></td> <td> </td>
<td> </td> <td align="right">1</td> <td> </td>
<td> </td> <td> </td> <td align="right">1</td>
<td> </td> <td> </td> <td> </td>
<td align="right">3</td> <td> </td> <td> </td>
<td> </td> <td align="right">5</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior
service cost </div></td> <td> </td> <td> </td>
<td align="right">1</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">1</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit
cost </div></td> <td> </td> <td align="left">$</td>
<td align="right">13</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">14</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">36</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">40</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <!-- End Table Body -->
</table> </div> <div align="center"> <table style="font-size:
10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --> <tr valign="bottom"> <td width="52%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="14"
style="border-bottom: 1px solid #000000">Postretirement Health and Other
Benefits</td> <td> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="6">Nine Months</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Service cost </div></td>
<td> </td> <td align="left">$</td> <td
align="right">1</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">2</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">3</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">4</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Interest cost </div></td> <td> </td>
<td> </td> <td align="right">5</td> <td> </td>
<td> </td> <td> </td> <td align="right">4</td>
<td> </td> <td> </td> <td> </td>
<td align="right">14</td> <td> </td> <td> </td>
<td> </td> <td align="right">13</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net
actuarial gain </div></td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(1</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(1</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(2</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(2</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Amortization
of prior service credit </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(2</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(1</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(5</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(5</td>
<td nowrap="nowrap">)</td> </tr> <tr style="font-size:
1px"> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left: 15px; text-indent:-15px">Net
periodic benefit cost </div></td> <td> </td>
<td align="left">$</td> <td align="right">3</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">4</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">10</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">10</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> </div> </body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 12 - us-gaap:DebtDisclosureTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>12.</b></td>
<td width="1%"> </td> <td><b>Debt and Financing
Arrangements</b></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>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.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>On March 16,
2009, the Company issued nine million Equity Units (Units) with an aggregate
principal amount of $450 million in a public offering. The Company
received approximately $436 million in net proceeds from the sale of the Units
after underwriting discounts and other expenses. The proceeds were used to
repay short-term indebtedness incurred within the second quarter to fund working
capital requirements. Each Unit has a stated amount of $50 and consists of
(a) a purchase contract which obligates the holder to purchase, and
obligates the Company to sell, no later than March 31, 2012, a variable
number of shares of the Company’s common stock for $50 and (b) a
one-twentieth, or 5%, undivided beneficial ownership interest in a subordinated
note issued by the Company due March 31, 2042 with a principal amount
of $1,000. The subordinated notes are pledged by the holders to secure their
obligations under the purchase contract, and at the time of the offering,
the estimated fair value of the purchase contract was zero. The Company will
make quarterly interest payments at the annual rate of 11.5% on the subordinated
notes, and the first interest payment was made on June 30, 2009.
Prior to March 31, 2012, the Company may defer payment of interest
on the subordinated notes for one or more consecutive interest periods provided
that each deferred interest payment may only be deferred until the earlier
of (a) the third anniversary of the interest payment date on which
the interest payment was originally scheduled to be paid or (b) March
31, 2014. The subordinated notes will be remarketed between January 1,
2012 and March 31, 2012 whereby the interest rate on the notes will
be reset and certain other terms of the notes may be modified in order to
generate sufficient remarketing proceeds to satisfy the Unit holders’
obligations under the purchase contract. If the subordinated notes are not
successfully remarketed, then a put right of holders of the notes will be
automatically exercised unless such holders (a) notify the Company
of their intent to settle their obligations under the purchase contracts in
cash, and (b) deliver $50 in cash per purchase contract, by the applicable
dates specified by the purchase contracts. Following such exercise and settlement,
the Unit holders’ obligations to purchase shares of common stock
under the purchase contracts will be satisfied in full, and the Company will
deliver the shares of common stock to such holders.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In connection with this
transaction, approximately $14 million of issuance costs were incurred.
Of the total issuance costs, approximately $12 million was charged
to “Capital in excess of par value” with the remainder
deferred and amortized over three years.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>The number of shares to be issued
under the purchase contracts is contingent and is based on, among other things,
the share price of the Company’s common stock on the stock purchase
date and anti-dilution adjustments. The minimum and maximum number of shares
to be issued under the purchase contract is approximately 43.7 million
and 50.3 million, respectively, subject to anti-dilution adjustments.
Before the issuance of common stock upon settlement of the purchase contracts,
the purchase contracts will be reflected in diluted earnings per share using
the “if-converted” method. Under this method, if dilutive,
the common stock is assumed issued and included in calculating diluted earnings
per share. The number of shares of common stock used in calculating diluted
earnings per share is based on the nine million Units issued at $50 per Unit
divided by the beginning stock price for the reporting period. In addition,
if dilutive, interest expense and amortization, net of tax, related to the
subordinated notes will be added back to the numerator in calculating diluted
earnings per share. Refer to Note 13, “Earnings Per Share,”
for the calculation of diluted earnings per share.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>On March 16,
2009, the Company closed an offering of $402.5 million aggregate
principal amount of 6.5% convertible senior notes due 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 net proceeds from the
sale of the convertible notes were approximately $392 million after
underwriting discounts and other expenses and were used to repay short-term
indebtedness incurred within the second quarter to fund working capital requirements.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>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.</td> </tr>
</table> </div> </div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 13 - us-gaap:EarningsPerShareTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>13.</b></td>
<td width="1%"> </td> <td><b>Earnings Per
Share</b></td> </tr> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The following table reconciles the numerators and denominators used
to calculate basic and diluted earnings per share (in millions):</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div align="center" style="font-size: 10pt;
margin-top: 0pt"> <b> </b> </div> <div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="6">Nine Months</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Income Available to Common
Shareholders </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"><!-- Blank Space --> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:
15px; text-indent:-15px">Basic income (loss) available to common
shareholders </div></td> <td> </td> <td
align="left">$</td> <td align="right">163</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">439</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(638</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">963</td> <td> </td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left: 15px; text-indent:-15px">Financing
costs related to the convertible senior notes and Equity Units, net of tax
</div></td> <td> </td> <td> </td>
<td align="right">13</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left: 15px; text-indent:-15px">Diluted income (loss) available
to common shareholders </div></td> <td> </td>
<td align="left">$</td> <td align="right">176</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">439</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(638</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">963</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"><!-- Blank Space --> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px"><b>Weighted Average
Shares Outstanding</b> </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:
15px; text-indent:-15px">Basic weighted average shares outstanding </div></td>
<td> </td> <td> </td> <td align="right">594.7</td>
<td> </td> <td> </td> <td> </td>
<td align="right">592.9</td> <td> </td> <td> </td>
<td> </td> <td align="right">593.9</td> <td> </td>
<td> </td> <td> </td> <td align="right">593.0</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left: 15px; text-indent:-15px">Effect
of dilutive securities: </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:
30px; text-indent:-15px">Stock options </div></td> <td> </td>
<td> </td> <td align="right">1.8</td> <td> </td>
<td> </td> <td> </td> <td align="right">8.0</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">8.7</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left: 30px; text-indent:-15px">Equity
units </div></td> <td> </td> <td> </td>
<td align="right">43.7</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left: 30px; text-indent:-15px">Convertible senior
notes </div></td> <td> </td> <td> </td>
<td align="right">36.0</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left: 15px; text-indent:-15px">Diluted
weighted average shares outstanding </div></td> <td> </td>
<td> </td> <td align="right">676.2</td> <td> </td>
<td> </td> <td> </td> <td align="right">600.9</td>
<td> </td> <td> </td> <td> </td>
<td align="right">593.9</td> <td> </td> <td> </td>
<td> </td> <td align="right">601.7</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"><!-- Blank Space --> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px"><b>Antidilutive Securities</b> </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Options
to purchase common shares </div></td> <td> </td>
<td> </td> <td align="right">6.2</td> <td> </td>
<td> </td> <td> </td> <td align="right">0.9</td>
<td> </td> <td> </td> <td> </td>
<td align="right">6.2</td> <td> </td> <td> </td>
<td> </td> <td align="right">0.9</td> <td> </td>
</tr> <!-- End Table Body --> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>For the nine months ended June 30, 2009, the total number
of potential dilutive shares due to stock options, Equity Units and convertible
senior notes was 87.6 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.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>During each of the three
months ended June 30, 2009 and 2008, the Company declared a dividend
of $0.13 per common share and during each of the nine months ended June 30,
2009 and 2008, the Company declared three quarterly dividends totaling $0.39
per common share. The Company paid all dividends in the month subsequent to
the end of each fiscal quarter.</td> </tr> </table> </div>
</div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 14 - us-gaap:ComprehensiveIncomeNoteTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>14.</b></td>
<td width="1%"> </td> <td><b>Comprehensive
Income</b></td> </tr> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>A summary of comprehensive income is shown below (in millions):</td>
</tr> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px
solid #000000">Three Months</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 0px solid #000000">Nine Months</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Net income (loss) </div></td>
<td> </td> <td align="left">$</td> <td
align="right">163</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">439</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(638</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left">$</td>
<td align="right">963</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Realized
and unrealized gains (losses) on derivatives </div></td> <td> </td>
<td> </td> <td align="right">28</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(49</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">30</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(101</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:30px;
text-indent:-15px">Foreign currency translation adjustments </div></td>
<td> </td> <td> </td> <td align="right">193</td>
<td> </td> <td> </td> <td> </td>
<td align="right">70</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(383</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">518</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other
comprehensive income (loss) </div></td> <td> </td>
<td> </td> <td align="right">221</td> <td> </td>
<td> </td> <td> </td> <td align="right">21</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(353</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">417</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Comprehensive income (loss)
</div></td> <td> </td> <td align="left">$</td>
<td align="right">384</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">460</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(991</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left">$</td>
<td align="right">1,380</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap"
align="left"> </td> <td width="3%"> </td>
<td>The Company selectively hedges anticipated transactions that are
subject to foreign exchange exposure or commodity price exposure, primarily
using foreign currency exchange contracts and commodity contracts, respectively.
These instruments are designated as cash flow hedges in accordance with SFAS
No. 133, “Accounting for Derivative Instruments and Hedging
Activities,” as amended by SFAS No. 137, No. 138
and No. 149 and are recorded in the condensed consolidated statement
of financial position at fair value. The effective portion of the contracts’
gains or losses due to changes in fair value are initially recorded as unrealized
gains/losses on derivatives, a component of accumulated other comprehensive
income, and are subsequently reclassified into earnings when the hedged transactions,
typically sales or costs related to sales, occur and affect earnings.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The Company has foreign
currency-denominated debt obligations which are designated as hedges of net
investments in foreign subsidiaries. Gains and losses, net of tax, attributable
to these hedges are deferred as cumulative translation adjustments within
the accumulated other comprehensive income account until the sale or liquidation
of the related foreign subsidiary.</td> </tr> </table> </div>
<!-- Folio --> <!-- /Folio --> </div> <!-- PAGEBREAK
--> <div style="font-family: 'Times New Roman',Times,serif"> <div
style="margin-top: 0pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt"> </table> </div> <div
align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>Refer to Note 15, “Derivative
Instruments and Hedging Activities,” and Note 16, “Fair
Value Measurements,” for further discussion of the Company’s
derivative instruments and related hedge items.</td> </tr> </table>
</div> </div> </body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 15 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>15.</b></td> <td width="1%"> </td>
<td><b>Derivative Instruments and Hedging Activities</b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In March 2008,
the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities — an amendment of FASB Statement
No. 133.” SFAS No. 161 enhances required disclosures
regarding derivatives and hedging activities, including how an entity uses
derivative instruments, how derivative instruments and related hedged items
are accounted for under SFAS No. 133 and how derivative instruments
and related hedged items affect an entity’s financial position,
financial performance and cash flows. SFAS No. 161 was effective
for the Company beginning in the second quarter of fiscal 2009 and is being
applied prospectively.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The Company selectively uses derivative instruments to reduce market
risk associated with changes in foreign currency, commodities and compensation
expense. Under Company policy, the use of derivatives is restricted to those
intended for hedging purposes; the use of any derivative instrument for speculative
purposes is strictly prohibited. A description of each type of derivative
utilized by the Company to manage risk is included in the following paragraphs.
In addition, refer to Note 16, “Fair Value Measurements,”
for information related to the fair value measurements and valuation methods
utilized by the Company for each derivative type.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>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.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The Company has entered
into foreign currency denominated debt obligations to selectively hedge portions
of its net investment in Japan. The currency effects of the debt obligations
are reflected in the accumulated other comprehensive income (AOCI) account
within shareholders’ equity where they offset gains and losses recorded
on the Company’s net investment in Japan. As of June 30,
2009, the Company had 37 billion yen of foreign denominated debt
outstanding designated as net investment hedges in the Company’s
net investment in Japan.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The Company uses commodity contracts in the financial derivatives
market in cases where commodity price risk cannot be naturally offset or hedged
through supply base fixed price contracts. Commodity risks are systematically
managed pursuant to policy guidelines. As cash flow hedges, the effective
portion of the hedge gains or losses due to changes in fair value are initially
recorded as a component of AOCI and are subsequently reclassified into earnings
when the hedged transactions, typically sales or costs related to sales, occur
and affect earnings. Any ineffective portion of the hedge is reflected in
the consolidated statement of income. The maturities of the commodity contracts
coincide with the expected purchase of the commodities. As of June 30,
2009, the Company had the following outstanding commodity hedge contracts
that hedge forecasted purchases:</td> </tr> </table> </div>
<div align="center"> <table style="font-size: 10pt; text-align: left"
cellspacing="0" border="0" cellpadding="0" width="100%"> <!-- Begin
Table Head --> <tr valign="bottom"> <td width="12%"> </td>
<td width="28%"> </td> <td width="12%"> </td>
<td width="28%"> </td> <td width="1%"> </td>
<td width="1%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Volume Outstanding</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom:
1px solid #000000"><b>Commodity</b></td> <td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Units</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>as of June 30, 2009</b></td>
<td> </td> </tr> <!-- End Table Head -->
<!-- Begin Table Body --> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Copper
</div></td> <td> </td> <td align="left"
valign="top">Pounds</td> <td> </td> <td align="left"
valign="top"> </td> <td align="right" valign="top">10,350,000</td>
<td valign="top"> </td> </tr> <tr valign="bottom">
<td> <div style="margin-left:15px; text-indent:-15px">Lead </div></td>
<td> </td> <td align="left" valign="top">Metric
tons</td> <td> </td> <td align="left" valign="top"> </td>
<td align="right" valign="top">2,250</td> <td valign="top"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Polypropylene </div></td>
<td> </td> <td align="left" valign="top">Pounds</td>
<td> </td> <td align="left" valign="top"> </td>
<td align="right" valign="top">4,000,000</td> <td valign="top"> </td>
</tr> <!-- End Table Body --> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In addition, the Company selectively uses equity swaps to reduce
market risk associated with certain of its stock-based compensation plans,
such as its deferred compensation plans. These equity compensation liabilities
increase as the Company’s stock price increases and decrease as
the Company’s stock price decreases. In contrast, the value of the
swap agreement moves in the opposite direction of these liabilities, allowing
the Company to fix a portion of the liabilities at a stated amount. As of
June 30, 2009, the Company had hedged approximately 2.1 million shares
of its common stock.</td> </tr> </table> </div> <!--
Folio --> <!-- /Folio --> </div> <!-- PAGEBREAK --> <div
style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
0pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt"> </table> </div> <div align="center"
style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The following table presents the location and fair values of derivative
instruments and hedging activities included in the Company’s condensed
consolidated statement of financial position at June 30, 2009 (in
millions):</td> </tr> </table> </div> <div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="76%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000"><b>June 30, 2009</b></td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Derivatives
and</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Derivatives
and</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Hedging
Activities</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Hedging Activities
Not</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Designated
as Hedging</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Designated as
Hedging</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Instruments
under</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Instruments
under</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>SFAS
No. 133</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>SFAS No. 133</b></td>
<td> </td> </tr> <!-- End Table Head -->
<!-- Begin Table Body --> <tr style="font-size: 1px"> <td> </td>
<td> </td> <td colspan="7" align="left" style="border-top:
1px solid #000000"> </td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px"><b>Other current assets</b> </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign
currency exchange derivatives </div></td> <td> </td>
<td align="left">$</td> <td align="right">19</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">14</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Commodity derivatives </div></td>
<td> </td> <td> </td> <td align="right">2</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Other
noncurrent assets</b> </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign
currency exchange derivatives </div></td> <td> </td>
<td> </td> <td align="right">2</td> <td> </td>
<td> </td> <td> </td> <td align="right">1</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Equity swap </div></td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">45</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:45px; text-indent:-15px">Total assets </div></td>
<td> </td> <td align="left">$</td> <td
align="right">23</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">60</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px"><b>Current portion of long-term debt</b>
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Net investment hedge
</div></td> <td> </td> <td align="left">$</td>
<td align="right">126</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px"><b>Other current liabilities</b> </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Foreign currency exchange derivatives
</div></td> <td> </td> <td> </td>
<td align="right">24</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Commodity derivatives
</div></td> <td> </td> <td> </td>
<td align="right">11</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px"><b>Long-term
debt</b> </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:30px;
text-indent:-15px">Net investment hedges </div></td> <td> </td>
<td> </td> <td align="right">262</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px"><b>Other noncurrent
liabilities</b> </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency exchange
derivatives </div></td> <td> </td> <td> </td>
<td align="right">2</td> <td> </td> <td> </td>
<td> </td> <td align="right">2</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:45px; text-indent:-15px">Total liabilities </div></td>
<td> </td> <td align="left">$</td> <td
align="right">425</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">2</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>The following tables present the location and amount of gains and
losses on derivative instruments and related hedge items included in the Company’s
consolidated statement of income for the three and six months ended June 30,
2009 and gains and losses initially recognized in other comprehensive income
(OCI) net of tax or cumulative translation adjustment (CTA) net
of tax in the condensed consolidated statement of financial position at June 30,
2009 (in millions):</td> </tr> </table> </div> <div
align="center"> <table style="font-size: 7pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="40%"> </td> <td
width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="7%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 7pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>As of June 30, 2009</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="4" style="border-bottom: 1px solid #000000"><b>For
the three months ended June 30, 2009</b></td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000"><b>For the three months
ended June 30, 2009</b></td> <td> </td> </tr>
<tr style="font-size: 7pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Location of Gain</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"> </td> <td> </td>
</tr> <tr style="font-size: 7pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Amount
of Gain (Loss)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center"><b>Location of Gain (Loss)</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Amount
of Gain (Loss)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Loss) Recognized
in</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount of Gain</b></td>
<td> </td> </tr> <tr style="font-size: 7pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in
OCI on</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center"><b>Reclassified from AOCI</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Reclassified
from</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Income on</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>(Loss) Recognized in</b></td>
<td> </td> </tr> <tr style="font-size: 7pt"
valign="bottom"> <td nowrap="nowrap" align="center"><b>Derivatives
in SFAS No. 133 Cash</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Derivative (Effective</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center"><b>into Income (Effective</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>AOCI into Income</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Derivative</b></td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Income
on Derivative</b></td> <td> </td> </tr>
<tr style="font-size: 7pt" valign="bottom"> <td nowrap="nowrap" align="center"
style="border-bottom: 1px solid #000000"><b>Flow Hedging Relationships</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Ineffective
Portion)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000"><b>(Ineffective Portion)</b></td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Foreign currency exchange derivatives
</div></td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(3</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left"
valign="top">Net sales</td> <td> </td> <td
nowrap="nowrap" align="left">$</td> <td align="right">(6</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">—</td> <td> </td> </tr>
<tr valign="bottom"><!-- Blank Space --> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Commodity derivatives </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(9</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left" valign="top">Cost of sales</td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(24</td>
<td nowrap="nowrap">)</td> <td> </td> <td
colspan="2" nowrap="nowrap" align="right">Cost of sales</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td> <td nowrap="nowrap">)</td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(12</td> <td nowrap="nowrap">)</td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(30</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(1</td> <td
nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div align="center">
<table style="font-size: 7pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="7%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="4" style="border-bottom: 1px
solid #000000"><b>For the six months ended June 30, 2009</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>For
the six months ended June 30, 2009</b></td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Location
of Gain</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center"><b>Location of Gain (Loss)</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Amount
of Gain (Loss)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Loss) Recognized
in</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount of Gain</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center"><b>Reclassified from AOCI</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Reclassified
from</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Income on</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>(Loss) Recognized in</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center"><b>into Income (Effective</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>AOCI
into Income</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Derivative</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Income on Derivative</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Ineffective
Portion)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000"><b>(Ineffective Portion)</b></td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Foreign currency exchange derivatives
</div></td> <td> </td> <td align="left"
valign="top">Net sales</td> <td> </td> <td
nowrap="nowrap" align="left">$</td> <td align="right">(13</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">—</td> <td> </td> </tr>
<tr valign="bottom"><!-- Blank Space --> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td align="left" valign="top"> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Commodity
derivatives </div></td> <td> </td> <td
align="left" valign="top">Cost of sales</td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(70</td>
<td nowrap="nowrap">)</td> <td> </td> <td
colspan="2" nowrap="nowrap" align="right">Cost of sales</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td> <td nowrap="nowrap">)</td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td align="left" valign="top"> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td nowrap="nowrap" colspan="2" align="right"
style="border-top: 1px solid #000000"> </td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(83</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(5</td> <td
nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="88%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>As of June 30,
2009</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Amount
of Gain (Loss)</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Recognized
in CTA on</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Hedging
Activities in SFAS No. 133</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Derivative (Effective</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom:
1px solid #000000"><b>Net Investment Hedging Relationships</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td> </tr> <!-- End Table Head -->
<!-- Begin Table Body --> <tr valign="bottom"> <td> <div
style="margin-left:15px; text-indent:-15px">Net investment hedges </div></td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(13</td> <td nowrap="nowrap">)</td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td nowrap="nowrap" align="left">$</td>
<td align="right">(13</td> <td nowrap="nowrap">)</td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <!-- Folio -->
<!-- /Folio --> </div> <!-- PAGEBREAK --> <div style="font-family:
'Times New Roman',Times,serif"> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>For the three and six months ended June 30, 2009, no gains
or losses were reclassified from AOCI into income for the Company’s
net investment hedges.</td> </tr> </table> </div>
<div align="center"> <table style="font-size: 10pt; text-align: left"
cellspacing="0" border="0" cellpadding="0" width="100%"> <!-- Begin
Table Head --> <tr valign="bottom"> <td width="40%"> </td>
<td width="3%"> </td> <td width="40%"> </td>
<td width="3%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="4"
style="border-bottom: 1px solid #000000"><b>For the three months
ended June 30, 2009</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount of Gain
(Loss)</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Derivatives
Not Designated as Hedging</b></td> <td> </td>
<td nowrap="nowrap" align="center"><b>Location of Gain (Loss)
Recognized in Income</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in
Income on</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"
style="border-bottom: 1px solid #000000"><b>Instruments under SFAS
No. 133</b></td> <td> </td> <td nowrap="nowrap"
align="center" style="border-bottom: 1px solid #000000"><b>on Derivative</b></td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>Derivative</b></td>
<td> </td> </tr> <!-- End Table Head -->
<!-- Begin Table Body --> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign
currency exchange derivatives </div></td> <td> </td>
<td align="left" valign="top">Cost of sales</td> <td> </td>
<td nowrap="nowrap" align="left" valign="top">$</td> <td align="right"
valign="top">(10</td> <td nowrap="nowrap" valign="top">)</td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Foreign currency exchange derivatives </div></td>
<td> </td> <td align="left" valign="top">Net financing
charges</td> <td> </td> <td align="left" valign="top"> </td>
<td align="right" valign="top">23</td> <td valign="top"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Equity swap </div></td>
<td> </td> <td align="left" valign="top">Selling,
general and administrative expenses</td> <td> </td>
<td align="left" valign="top"> </td> <td align="right"
valign="top">16</td> <td valign="top"> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Commodity derivatives </div></td> <td> </td>
<td align="left" valign="top">Cost of sales</td> <td> </td>
<td nowrap="nowrap" align="left" valign="top"> </td>
<td align="right" valign="top">(1</td> <td nowrap="nowrap"
valign="top">)</td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
align="left" valign="top"> </td> <td align="right" valign="top"> </td>
<td valign="top"> </td> </tr> <tr style="font-size:
1px"> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
nowrap="nowrap" colspan="2" align="right" valign="top" style="border-top:
1px solid #000000"> </td> <td valign="top"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td align="left" valign="top">$</td>
<td align="right" valign="top">28</td> <td valign="top"> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td align="left" valign="top"> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" valign="top" style="border-top:
3px double #000000"> </td> <td valign="top"> </td>
</tr> <tr valign="bottom"><!-- Blank Space --> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td align="left" valign="top"> </td>
<td align="right" valign="top"> </td> <td valign="top"> </td>
</tr> <!-- End Table Body --> </table> </div> <div
align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0"
border="0" cellpadding="0" width="100%"> <!-- Begin Table Head -->
<tr valign="bottom"> <td width="40%"> </td> <td
width="3%"> </td> <td width="40%"> </td>
<td width="3%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="4"
style="border-bottom: 1px solid #000000"><b>For the six months ended
June 30, 2009</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amount of Gain
(Loss)</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center"><b>Location
of Gain (Loss) Recognized in Income</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in
Income on</b></td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" style="border-bottom:
1px solid #000000"><b>on Derivative</b></td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000"><b>Derivative</b></td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Foreign currency exchange derivatives
</div></td> <td> </td> <td align="left"
valign="top">Cost of sales</td> <td> </td> <td
nowrap="nowrap" align="left" valign="top">$</td> <td align="right"
valign="top">(86</td> <td nowrap="nowrap" valign="top">)</td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Foreign currency exchange derivatives </div></td>
<td> </td> <td align="left" valign="top">Net financing
charges</td> <td> </td> <td align="left" valign="top"> </td>
<td align="right" valign="top">102</td> <td valign="top"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Equity swap </div></td>
<td> </td> <td align="left" valign="top">Selling,
general and administrative expenses</td> <td> </td>
<td align="left" valign="top"> </td> <td align="right"
valign="top">20</td> <td valign="top"> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:15px;
text-indent:-15px">Commodity derivatives </div></td> <td> </td>
<td align="left" valign="top">Cost of sales</td> <td> </td>
<td nowrap="nowrap" align="left" valign="top"> </td>
<td align="right" valign="top">(4</td> <td nowrap="nowrap"
valign="top">)</td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td align="left"
valign="top"> </td> <td> </td> <td
nowrap="nowrap" colspan="2" align="right" valign="top" style="border-top:
1px solid #000000"> </td> <td valign="top"> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:15px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left" valign="top"> </td>
<td> </td> <td align="left" valign="top">$</td>
<td align="right" valign="top">32</td> <td valign="top"> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px;
text-indent:-15px">  </div></td> <td> </td>
<td align="left" valign="top"> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" valign="top" style="border-top:
3px double #000000"> </td> <td valign="top"> </td>
</tr> <!-- End Table Body --> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>Refer to Note 14, “Comprehensive Income,” for
further discussion of realized and unrealized gains and losses on derivatives
recorded in other comprehensive income. In addition, the Company does not
hold any derivative instruments which contain credit-risk-related contingent
features.</td> </tr> </table> </div> </div>
</body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 16 - us-gaap:FairValueByBalanceSheetGroupingTextBlock--> <div
style="font-family: 'Times New Roman',Times,serif"> <div align="left"
style="font-size: 10pt; margin-top: 12pt"><b>16.    Fair
Value Measurements</b> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In September 2006,
the FASB issued SFAS No. 157, “Fair Value Measurements.”
SFAS No. 157 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. In February 2008,
the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement
No. 157,” which delays the effective date of SFAS No. 157
for nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed in the financial statements on a nonrecurring basis to fiscal years
beginning after November 15, 2008. The Company has not applied the
provisions of SFAS No. 157 to its nonfinancial assets and nonfinancial
liabilities in accordance with FSP FAS 157-2 as of June 30, 2009.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>SFAS No. 157
defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants
at the measurement date. SFAS No. 157 also establishes a three-level
fair value hierarchy that prioritizes information used in developing assumptions
when pricing an asset or liability as follows:</td> </tr> </table>
</div> <div align="left" style="font-size: 10pt; margin-top: 6pt;
margin-left: 4%"><i>Level 1: </i>Observable inputs such as
quoted prices in active markets; </div> <div align="left" style="font-size:
10pt; margin-top: 6pt; margin-left: 4%"><i>Level 2: </i>Inputs,
other than quoted prices in active markets, that are observable either directly
or indirectly; and </div> <div align="left" style="font-size: 10pt;
margin-top: 6pt; margin-left: 4%"><i>Level 3: </i>Unobservable
inputs where there is little or no market data, which requires the reporting
entity to develop its own assumptions. </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="2%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>SFAS No. 157 requires the use of observable market data,
when available, in making fair value measurements. When inputs used to measure
fair value fall within different levels of the hierarchy, the level within
which the fair value measurement is categorized is based on the lowest level
input that is significant to the fair value measurement.</td> </tr>
</table> </div> <!-- Folio --> <!-- /Folio --> </div>
<!-- PAGEBREAK --> <div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 0pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt"> </table> </div> <div
align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td><i>Recurring Fair Value
Measurements</i></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The following table presents the Company’s fair value
hierarchy for those assets and liabilities measured at fair value on a quarterly
basis as of June 30, 2009 (in millions):</td> </tr> </table>
</div> <div align="center"> <table style="font-size: 10pt;
text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --> <tr valign="bottom"> <td width="52%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
<td width="5%"> </td> <td width="1%"> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="14"
style="border-bottom: 1px solid #000000"><b>Fair Value Measurements
Using:</b></td> <td> </td> </tr> <tr
style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Significant Other</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Significant</b></td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Total
as of</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b> Active Markets</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Observable Inputs</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2"><b>Unobservable Inputs</b></td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000"><b>June 30, 2009</b></td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level
2)</b></td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px
solid #000000"><b>(Level 3)</b></td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px"><b>Assets</b> </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Cross-currency interest
rate swap </div></td> <td> </td> <td align="left">$</td>
<td align="right">—</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">—</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Equity swap </div></td>
<td> </td> <td> </td> <td align="right">45</td>
<td> </td> <td> </td> <td> </td>
<td align="right">45</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:30px;
text-indent:-15px">Foreign currency exchange derivatives </div></td>
<td> </td> <td> </td> <td align="right">36</td>
<td> </td> <td> </td> <td> </td>
<td align="right">36</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Commodity derivatives
</div></td> <td> </td> <td> </td>
<td align="right">2</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">2</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:45px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left">$</td> <td
align="right">83</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">81</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">2</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <tr valign="bottom"><!--
Blank Space --> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px"><b>Liabilities</b>
</div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign
currency exchange derivatives </div></td> <td> </td>
<td align="left">$</td> <td align="right">28</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">28</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">—</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Commodity derivatives
</div></td> <td> </td> <td> </td>
<td align="right">11</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">11</td> <td> </td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Interest rate swaps
and related debt </div></td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign
currency denominated debt </div></td> <td> </td>
<td> </td> <td align="right">388</td> <td> </td>
<td> </td> <td> </td> <td align="right">388</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:45px; text-indent:-15px">Total </div></td>
<td> </td> <td align="left">$</td> <td
align="right">427</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">416</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">11</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td> </tr> <!-- End Table Body -->
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td><i>Valuation Methods</i></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Cross-currency interest
rate swap — The Company selectively uses cross-currency interest
rate swaps to hedge the foreign currency rate risk associated with certain
of its foreign currency denominated debt obligations. The cross-currency interest
rate swap is valued using market assumptions. The currency effects of the
swap and related debt obligation are reflected in the consolidated statement
of income and the change in value of the swap and debt obligation offset.
The Company settled its cross-currency interest rate swap in the second quarter
of fiscal 2009.</td> </tr> </table> </div> <div
style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>Equity swap — The Company selectively uses equity swaps
to reduce market risk associated with certain of its stock-based compensation
plans, such as its deferred compensation plans. The equity swaps are valued
under a market approach as the fair value of the swaps is equal to the Company’s
stock price at the reporting period date. Changes in fair value on the equity
swaps are reflected in the consolidated statement of income. The Company settled
the equity swap at the beginning of the second quarter of fiscal 2009. The
Company reinstituted the equity swap at the end of the second quarter of fiscal
2009 with a reduced number of shares and additional shares were purchased
in the third quarter of fiscal 2009.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>Foreign currency exchange derivatives
— The Company selectively hedges anticipated transactions that are
subject to foreign exchange rate risk primarily using foreign currency exchange
hedge contracts. The foreign currency exchange derivatives are valued under
a market approach using publicized spot and forward prices. As cash flow hedges,
the effective portion of the hedge gains or losses due to changes in fair
value are initially recorded as a component of accumulated other comprehensive
income and are subsequently reclassified into earnings when the hedged transactions
occur and affect earnings. Any ineffective portion of the hedge is reflected
in the consolidated statement of income. These contracts are highly effective
in hedging the variability in future cash flows attributable to changes in
currency exchange rates at June 30, 2009.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Commodity derivatives
— The Company selectively hedges anticipated transactions that are
subject to commodity price risk, primarily using commodity hedge contracts,
to minimize overall price risk associated with the Company’s purchases
of lead, copper and polypropylene. The commodity derivatives are valued under
a market approach using publicized prices, where available, or dealer quotes.
As cash flow hedges, the effective portion of the hedge gains or losses due
to changes in fair value are initially recorded as a component of accumulated
other comprehensive income and are subsequently reclassified into earnings
when the hedged transactions, typically sales or cost related to sales, occur
and affect earnings. Any ineffective portion of the hedge is reflected in
the consolidated statement of income. These contracts are highly effective
in hedging the variability in future cash flows attributable to changes in
commodity price changes at June 30, 2009.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Interest rate swaps and
related debt — The Company selectively uses interest rate swaps
to reduce market risk associated with changes in interest rates for its fixed-rate
bonds. As fair value hedges, the interest rate swaps and related debt balances
are valued under a market approach using publicized swap curves. Changes in
the fair value of the swap and hedged portion of the debt are recorded in
the consolidated statement of income. The Company settled interest rate swaps
hedging $450 million of debt in the second quarter of fiscal 2009.
In July 2009, the Company entered into three interest rate swaps totaling
$700 million to hedge a portion of the Company’s 5.25%
note maturing in January 2011 ($746 million).</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>Foreign currency denominated
debt — The Company has entered into certain foreign currency denominated
debt obligations to selectively hedge portions of its net investment in Japan.
As net investment hedges, the currency effects of the debt obligations are
reflected in the foreign currency translation adjustments component of accumulated
other comprehensive income where they offset gains and losses recorded on
the Company’s net investment in Japan. The Company’s foreign
denominated debt obligations are valued under a market approach using publicized
spot prices. On January 15, 2008, the Company had entered into a
18 billion yen, three year, floating rate loan agreement. The Company
did not elect to designate the debt as part of the hedge of the net investment
in Japan and hedged the exposure of the change in value of the yen with a
18 billion yen cross-currency swap. The currency effect of the 18
billion yen loan was reflected in the consolidated statement of income. On
January 17, 2009, the Company retired its 24 billion yen,
three year, floating rate loan agreement that matured, leaving unhedged a
significant portion of the net investment in Japan. On that date, the Company
unwound the cross-currency swap that hedged the 18 billion yen loan
and elected to designate the latter as part of its net investment hedge in
Japan.</td> </tr> </table> </div> </div> </body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 17 - jci:ImpairmentOfLongLivedAssetsTextBlock--> <div style="font-family:
'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"><b>17.</b></td>
<td width="1%"> </td> <td><b>Impairment of
Long-Lived Assets</b></td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The Company reviews long-lived assets for impairment whenever events
or changes in circumstances indicate that the asset’s carrying amount
may not be recoverable. The Company conducts its long-lived asset impairment
analyses in accordance with SFAS No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144
requires the Company to group assets and liabilities at the lowest level for
which identifiable cash flows are largely independent of the cash flows of
other assets and liabilities and evaluate the asset group against the sum
of the undiscounted future cash flows. If the undiscounted cash flows do not
indicate the carrying amount of the asset group is recoverable, an impairment
charge is measured as the amount by which the carrying amount of the asset
group exceeds its fair value.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>In the third quarter of fiscal 2009, the Company concluded it had
a triggering event requiring assessment of impairment of its long-lived assets
in light of the restructuring plans in North America announced by Chrysler
LLC (Chrysler) and General Motors Corporation (GM) during the quarter
as part of their bankruptcy reorganization plans. As a result, the Company
reviewed its long-lived assets relating to the Chrysler and GM platforms within
the North America automotive experience segment and determined no impairment
existed.</td> </tr> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"> </td> <td width="1%"> </td>
<td>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 March 2009.
As a result, the Company reviewed its long-lived assets associated with the
plant closures for impairment and recorded a $46 million impairment
charge in the second quarter of fiscal 2009, of which $25 million
related to the North America automotive experience segment, $16 million
related to the Asia automotive experience segment and $5 million related to
the Europe automotive experience segment. Refer to Note 8, “Restructuring
Costs,” for further information regarding the 2009 restructuring
plan. Additionally, at March 31, 2009, in conjunction with the preparation
of its financial statements, the Company concluded it had a triggering event
requiring assessment of its other long-lived assets within the European automotive
experience segment due to significant declines in European automotive sales
volume. As a result, the Company reviewed its other long-lived assets within
the Europe automotive experience segment for impairment and determined no
additional impairment existed.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>At December 31, 2008, in conjunction with the preparation
of its financial statements, the Company concluded it had a triggering event
requiring assessment of impairment of its long-lived assets due to the significant
declines in North American and European automotive sales volumes. As a result,
the Company reviewed its long-lived assets for impairment and recorded a $110 million
impairment charge in the first quarter of fiscal 2009, of which $77 million
related to the North America automotive experience segment and $33 million
related to the Europe automotive experience segment.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>The Company reviews its
equity investments for impairment whenever there is a loss in value of an
investment which is other than a temporary decline. The Company conducts its
equity investment impairment analyses in accordance with APB Opinion No. 18,
“The Equity Method of Accounting for Investments in Common Stock.”
APB Opinion No. 18 requires the Company to record an impairment charge
for a decrease in value of an investment when the decline in the investment
is considered to be other than temporary.</td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>At December 31, 2008,
in conjunction with the preparation of its financial statements, the Company
concluded it had a triggering event requiring assessment of impairment of
its equity investment in a 48%-owned joint venture with U.S. Airconditioning
Distributors, Inc. (U.S. Air) due to the significant decline in North American
residential housing construction starts, which has significantly impacted
the financial results of the equity investment. The Company reviewed its equity
investment in U.S. Air for impairment and as a result, recorded a $152 million
impairment charge within its North America unitary products segment in the
first quarter of fiscal 2009.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>The Company concluded there were no other impairments as of June 30,
2009. The Company will continue to monitor developments in the automotive
and North American residential heating, ventilating and air conditioning (HVAC) industries
as future adverse developments in these industries could lead to additional
impairment charges.</td> </tr> </table> </div> </div>
</body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 18 - us-gaap:SegmentReportingDisclosureTextBlock--> <div
style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>18.</b></td> <td width="1%"> </td>
<td><b>Segment Information</b></td> </tr> </table>
</div> <div style="margin-top: 6pt"> <table width="100%" border="0"
cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td>SFAS No. 131, “Disclosures
about Segments of an Enterprise and Related Information,” establishes
the standards for reporting information about segments in financial statements.
In applying the criteria set forth in SFAS No. 131, the Company has
determined that it has ten reportable segments for financial reporting purposes.
Certain segments are aggregated or combined based on materiality within building
efficiency — rest of world and power solutions in accordance with
the standard. The Company’s ten reportable segments are presented
in the context of its three primary businesses — building efficiency,
automotive experience and power solutions.</td> </tr> <tr>
<td style="font-size: 6pt"> </td> </tr> <tr
valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td> <td
width="1%"> </td> <td><b><i>Building efficiency</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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.</td> </tr> </table> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="4%" style="background:
transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>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.</td> </tr> <tr>
<td style="font-size: 6pt"> </td> </tr> <tr
valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>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.</td> </tr> <tr> <td style="font-size: 6pt"> </td>
</tr> <tr valign="top" style="font-size: 10pt; color: #000000; background:
transparent"> <td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>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.</td> </tr> <tr> <td style="font-size:
6pt"> </td> </tr> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="4%" style="background:
transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>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.</td> </tr>
<tr> <td style="font-size: 6pt"> </td> </tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="5%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>Europe provides HVAC
and refrigeration systems and technical services to the European marketplace.</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div style="margin-top: 0pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt"> </table> </div> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="5%" style="background:
transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td> <td>Rest of world provides
HVAC and refrigeration systems and technical services to markets in Asia,
the Middle East and Latin America.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Automotive experience</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td><b><i>Power solutions</i></b></td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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.</td> </tr> </table> </div>
<div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0"
cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top"
style="font-size: 10pt; color: #000000; background: transparent"> <td
width="3%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td>
<td>Management evaluates the performance of the segments based primarily
on segment income, which represents income from continuing operations before
income taxes and minority interests excluding net financing charges and restructuring
costs. 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):</td>
</tr> </table> </div> <div align="center"> <table
style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0"
width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px
solid #000000">Net Sales</td> <td> </td> </tr>
<tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6">Three
Months</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Nine Months</td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Building efficiency </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">North America systems
</div></td> <td> </td> <td align="left">$</td>
<td align="right">563</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">605</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">1,671</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">1,680</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">North
America service </div></td> <td> </td> <td> </td>
<td align="right">552</td> <td> </td> <td> </td>
<td> </td> <td align="right">626</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,610</td>
<td> </td> <td> </td> <td> </td>
<td align="right">1,749</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North
America unitary products </div></td> <td> </td>
<td> </td> <td align="right">227</td> <td> </td>
<td> </td> <td> </td> <td align="right">235</td>
<td> </td> <td> </td> <td> </td>
<td align="right">477</td> <td> </td> <td> </td>
<td> </td> <td align="right">550</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Global workplace solutions
</div></td> <td> </td> <td> </td>
<td align="right">708</td> <td> </td> <td> </td>
<td> </td> <td align="right">785</td> <td> </td>
<td> </td> <td> </td> <td align="right">2,095</td>
<td> </td> <td> </td> <td> </td>
<td align="right">2,347</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Europe
</div></td> <td> </td> <td> </td>
<td align="right">517</td> <td> </td> <td> </td>
<td> </td> <td align="right">716</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,587</td>
<td> </td> <td> </td> <td> </td>
<td align="right">1,997</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Rest of world </div></td>
<td> </td> <td> </td> <td align="right">600</td>
<td> </td> <td> </td> <td> </td>
<td align="right">710</td> <td> </td> <td> </td>
<td> </td> <td align="right">1,779</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,897</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td align="right">3,167</td>
<td> </td> <td> </td> <td> </td>
<td align="right">3,677</td> <td> </td> <td> </td>
<td> </td> <td align="right">9,219</td> <td> </td>
<td> </td> <td> </td> <td align="right">10,220</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Automotive
experience </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North
America </div></td> <td> </td> <td> </td>
<td align="right">988</td> <td> </td> <td> </td>
<td> </td> <td align="right">1,681</td> <td> </td>
<td> </td> <td> </td> <td align="right">3,279</td>
<td> </td> <td> </td> <td> </td>
<td align="right">5,199</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Europe </div></td>
<td> </td> <td> </td> <td align="right">1,706</td>
<td> </td> <td> </td> <td> </td>
<td align="right">2,705</td> <td> </td> <td> </td>
<td> </td> <td align="right">4,478</td> <td> </td>
<td> </td> <td> </td> <td align="right">7,657</td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">Asia </div></td>
<td> </td> <td> </td> <td align="right">262</td>
<td> </td> <td> </td> <td> </td>
<td align="right">402</td> <td> </td> <td> </td>
<td> </td> <td align="right">775</td> <td> </td>
<td> </td> <td> </td> <td align="right">1,171</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td> </td>
<td align="right">2,956</td> <td> </td> <td> </td>
<td> </td> <td align="right">4,788</td> <td> </td>
<td> </td> <td> </td> <td align="right">8,532</td>
<td> </td> <td> </td> <td> </td>
<td align="right">14,027</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Power
solutions </div></td> <td> </td> <td> </td>
<td align="right">856</td> <td> </td> <td> </td>
<td> </td> <td align="right">1,400</td> <td> </td>
<td> </td> <td> </td> <td align="right">2,879</td>
<td> </td> <td> </td> <td> </td>
<td align="right">4,508</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Total net sales </div></td>
<td> </td> <td align="left">$</td> <td
align="right">6,979</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">9,865</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">20,630</td> <td> </td>
<td> </td> <td align="left">$</td> <td
align="right">28,755</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> <!-- Folio -->
<!-- /Folio --> </div> <!-- PAGEBREAK --> <div style="font-family:
'Times New Roman',Times,serif"> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> <div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0"
cellpadding="0" width="100%"> <!-- Begin Table Head --> <tr valign="bottom">
<td width="52%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> <td width="5%"> </td>
<td width="1%"> </td> </tr> <tr style="font-size:
8pt" valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px
solid #000000">Segment Income</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6">Three
Months</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6">Nine Months</td>
<td> </td> </tr> <tr style="font-size: 8pt"
valign="bottom"> <td> </td> <td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px
solid #000000">Ended June 30,</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="6"
style="border-bottom: 1px solid #000000">Ended June 30,</td> <td> </td>
</tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2009</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="center" colspan="2"
style="border-bottom: 1px solid #000000">2008</td> <td> </td>
</tr> <!-- End Table Head --> <!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Building efficiency </div></td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:30px; text-indent:-15px">North America systems
</div></td> <td> </td> <td align="left">$</td>
<td align="right">63</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">80</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">173</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">192</td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">North
America service </div></td> <td> </td> <td> </td>
<td align="right">58</td> <td> </td> <td> </td>
<td> </td> <td align="right">76</td> <td> </td>
<td> </td> <td> </td> <td align="right">129</td>
<td> </td> <td> </td> <td> </td>
<td align="right">144</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North
America unitary products </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(2</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">3</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(227</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(20</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:30px;
text-indent:-15px">Global workplace solutions </div></td> <td> </td>
<td> </td> <td align="right">10</td> <td> </td>
<td> </td> <td> </td> <td align="right">16</td>
<td> </td> <td> </td> <td> </td>
<td align="right">24</td> <td> </td> <td> </td>
<td> </td> <td align="right">45</td> <td> </td>
</tr> <tr valign="bottom"> <td> <div style="margin-left:30px;
text-indent:-15px">Europe </div></td> <td> </td>
<td> </td> <td align="right">12</td> <td> </td>
<td> </td> <td> </td> <td align="right">38</td>
<td> </td> <td> </td> <td> </td>
<td align="right">36</td> <td> </td> <td> </td>
<td> </td> <td align="right">78</td> <td> </td>
</tr> <tr valign="bottom" style="background: #cceeff"> <td>
<div style="margin-left:30px; text-indent:-15px">Rest of world </div></td>
<td> </td> <td> </td> <td align="right">49</td>
<td> </td> <td> </td> <td> </td>
<td align="right">88</td> <td> </td> <td> </td>
<td> </td> <td align="right">124</td> <td> </td>
<td> </td> <td> </td> <td align="right">202</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">  </div></td>
<td> </td> <td> </td> <td align="right">190</td>
<td> </td> <td> </td> <td> </td>
<td align="right">301</td> <td> </td> <td> </td>
<td> </td> <td align="right">259</td> <td> </td>
<td> </td> <td> </td> <td align="right">641</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Automotive
experience </div></td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> <td> </td>
<td> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North
America </div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(34</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">47</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(370</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">82</td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:30px; text-indent:-15px">Europe </div></td>
<td> </td> <td> </td> <td align="right">3</td>
<td> </td> <td> </td> <td> </td>
<td align="right">139</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(238</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">334</td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Asia
</div></td> <td> </td> <td> </td>
<td align="right">17</td> <td> </td> <td> </td>
<td> </td> <td align="right">13</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(10</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">16</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom" style="background:
#cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
align="left"> </td> <td align="right">(14</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">199</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(618</td>
<td nowrap="nowrap">)</td> <td> </td> <td> </td>
<td align="right">432</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Power
solutions </div></td> <td> </td> <td> </td>
<td align="right">106</td> <td> </td> <td> </td>
<td> </td> <td align="right">145</td> <td> </td>
<td> </td> <td> </td> <td align="right">212</td>
<td> </td> <td> </td> <td> </td>
<td align="right">399</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid
#000000"> </td> <td> </td> </tr>
<tr valign="bottom" style="background: #cceeff"> <td> <div
style="margin-left:15px; text-indent:-15px">Total segment income (loss)
</div></td> <td> </td> <td align="left">$</td>
<td align="right">282</td> <td> </td> <td> </td>
<td align="left">$</td> <td align="right">645</td>
<td> </td> <td> </td> <td nowrap="nowrap"
align="left">$</td> <td align="right">(147</td> <td
nowrap="nowrap">)</td> <td> </td> <td align="left">$</td>
<td align="right">1,472</td> <td> </td> </tr>
<tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net
financing charges </div></td> <td> </td>
<td nowrap="nowrap" align="left"> </td> <td align="right">(65</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(69</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(167</td>
<td nowrap="nowrap">)</td> <td> </td> <td
nowrap="nowrap" align="left"> </td> <td align="right">(204</td>
<td nowrap="nowrap">)</td> </tr> <tr valign="bottom"
style="background: #cceeff"> <td> <div style="margin-left:15px;
text-indent:-15px">Restructuring costs </div></td> <td> </td>
<td> </td> <td align="right">—</td>
<td> </td> <td> </td> <td> </td>
<td align="right">—</td> <td> </td>
<td> </td> <td nowrap="nowrap" align="left"> </td>
<td align="right">(230</td> <td nowrap="nowrap">)</td>
<td> </td> <td> </td> <td align="right">—</td>
<td> </td> </tr> <tr style="font-size: 1px">
<td> <div style="margin-left:30px; text-indent:-15px"> 
</div></td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> <td> </td> <td nowrap="nowrap"
colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td> </tr> <tr valign="bottom"> <td>
<div style="margin-left:15px; text-indent:-15px">Income (loss) before
income taxes and minority interests </div></td> <td> </td>
<td align="left">$</td> <td align="right">217</td>
<td> </td> <td> </td> <td align="left">$</td>
<td align="right">576</td> <td> </td> <td> </td>
<td nowrap="nowrap" align="left">$</td> <td align="right">(544</td>
<td nowrap="nowrap">)</td> <td> </td> <td
align="left">$</td> <td align="right">1,268</td> <td> </td>
</tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px;
text-indent:-15px">  </div></td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> <td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double
#000000"> </td> <td> </td> </tr>
<!-- End Table Body --> </table> </div> </div> </body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 19 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top:
6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0"
style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size:
10pt; color: #000000; background: transparent"> <td width="3%" nowrap="nowrap"
align="left"><b>19.</b></td> <td width="1%"> </td>
<td><b>Commitments and Contingencies</b></td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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 Company’s 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
Company’s financial position, results of operations or cash flows.</td>
</tr> </table> </div> <div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>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 management’s
opinion that none of these will have a material adverse effect on the Company’s
financial position, results of operations or cash flows. Costs related to
such matters were not material to the periods presented.</td> </tr>
</table> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>A significant portion
of the Company’s sales are to customers in the automotive industry.
Continued adverse developments in the North American or European automotive
industries could impact the Company’s liquidity position and/or
require additional restructuring of the Company’s operations or
impairment charges. In addition, a prolonged downturn in the automotive market
may likely impact certain vendors’ financial solvency, including
the ability to meet restrictive debt covenants, resulting in potential liabilities
or additional costs to the Company to ensure uninterrupted supply to its customers.</td>
</tr> </table> </div> <!-- Folio --> <!-- /Folio
--> </div> <!-- PAGEBREAK --> <div style="font-family: 'Times
New Roman',Times,serif"> <div style="margin-top: 0pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt"> </table> </div> <div align="center" style="font-size:
10pt; margin-top: 0pt"> <b> </b> </div> </div>
</body> </html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD
XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"
--> <html> <head></head> <body> <!-- Begin Block
Tagged Note 20 - us-gaap:ScheduleOfSubsequentEventsTextBlock--> <div
style="font-family: 'Times New Roman',Times,serif"> <div align="left"
style="font-size: 10pt; margin-top: 12pt"><b>20.    Subsequent
Events</b> </div> <div style="margin-top: 6pt"> <table
width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size:
10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color:
#000000; background: transparent"> <td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td> <td>In May 2009,
the FASB issued SFAS No. 165, “Subsequent Events,”
which requires disclosure of the date through which subsequent events have
been evaluated, as well as whether the date is the date the financial statements
were issued or the date the financial statements were available to be issued.
The Company has evaluated subsequent events through August 3, 2009,
the date the financial statements were issued. Except as disclosed in Note
16, “Fair Value Measurements,” the Company noted no other
significant subsequent events have occurred through this date requiring adjustment
to the financial statements or disclosures.</td> </tr> </table>
</div> </div> </body> </html>
false --09-30
2009-06-30
10-Q
0000053669
595457368
Yes
Large Accelerated
Filer 20100000000
Johnson
Controls, Inc. No Yes
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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.