Segment Information

9 Months Ended

Jun. 30, 2011

17. Segment Information

Effective October 1, 2010, the building efficiency business unit of the Company reorganized its management reporting structure to reflect its current business activities.

Prior to this reorganization, building efficiency was comprised of six reportable segments for financial reporting purposes (North America systems, North America service, North America unitary products, global workplace solutions, Europe and rest of world). As a result of this change, building efficiency is now comprised of five reportable segments for financial reporting purposes (North America systems, North America service, global workplace solutions, Asia and other).

A summary of the significant building efficiency reportable segment changes is as follows:

	•		The systems and services businesses in Asia, previously included in the rest of world segment, are now part of a new reportable segment named “Asia.”

	•		The former Europe segment is now included in the former rest of world segment, which has been renamed “other.”

	•		The former North America unitary products segment is now included in the other segment.

The Company’s financial statements reflect the new building efficiency reportable segment structure and certain building efficiency cost allocation methodology changes. The changes in allocation methodology more specifically allocate engineering and other building efficiency costs to the reportable segments. Prior year building efficiency reportable segment information has been revised to conform to this presentation.

ASC 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, the Company has determined that it has nine reportable segments for financial reporting purposes. Certain segments are aggregated or combined based on materiality within power solutions in accordance with the guidance. The Company’s nine reportable segments are presented in the context of its three primary businesses — building efficiency, automotive experience and power solutions.

Building efficiency

Building efficiency designs, produces, markets and installs heating, ventilating and air conditioning (HVAC) and control systems that monitor, automate and integrate critical building segment equipment and conditions including HVAC, fire-safety and security in commercial buildings and in various industrial applications.

	•		North America systems designs, produces, markets and installs mechanical equipment that provides heating and cooling in North American non-residential buildings and industrial applications as well as control systems that integrate the operation of this equipment with other critical building systems.

	•		North America service provides technical services including inspection, scheduled maintenance, repair and replacement of mechanical and control systems in North America, as well as the retrofit and service components of performance contracts and other solutions.

	•		Global workplace solutions provides on-site staff for complete real estate services, facility operation and management to improve the comfort, productivity, energy efficiency and cost effectiveness of building systems around the globe.

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

•

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

Automotive experience

Automotive experience designs and manufactures interior systems and products for passenger cars and light trucks, including vans, pick-up trucks and sport utility/crossover vehicles in North America, Europe and Asia. Automotive experience systems and products include complete seating systems and components; cockpit systems, including instrument panels and clusters, information displays and body controllers; overhead systems, including headliners and electronic convenience features; floor consoles; and door systems.

Power solutions

Power solutions services both automotive original equipment manufacturers and the battery aftermarket by providing advanced battery technology, coupled with systems engineering, marketing and service expertise.

Management evaluates the performance of the segments based primarily on segment income, which represents income before income taxes and noncontrolling interests excluding net financing charges. 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):


	Net Sales
	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Building efficiency
North America systems	$	633	$	551	$	1,711	$	1,552
North America service		601		531		1,639		1,505
Global workplace solutions		1,046		787		3,053		2,404
Asia		498		349		1,334		988
Other		1,115		999		3,068		2,759

		3,893		3,217		10,805		9,208

Automotive experience
North America		1,772		1,740		5,517		4,981
Europe		2,800		2,033		7,693		6,238
Asia		546		440		1,717		1,263

		5,118		4,213		14,927		12,482

Power solutions		1,353		1,110		4,313		3,575

Total net sales	$	10,364	$	8,540	$	30,045	$	25,265


	Segment Income
	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Building efficiency
North America systems	$	66		$	61		$	169		$	144
North America service		35			25			69			50
Global workplace solutions		7			6			17			18
Asia		69			47			178			119
Other		30			51			45			67

		207			190			478			398

Automotive experience
North America		67			97			328			293
Europe		24			49			40			110
Asia		51			25			162			78

		142			171			530			481

Power solutions		163			135			558			450

Total segment income	$	512		$	496		$	1,566		$	1,329


Net financing charges		(43	)		(39	)		(124	)		(117	)


Income before income taxes	$	469		$	457		$	1,442		$	1,212