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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-5097
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JOHNSON CONTROLS, INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0380010
(State of Incorporation) (I.R.S. Employer Identification No.)
5757 NORTH GREEN BAY AVENUE, P.O. BOX 591, MILWAUKEE, WI 53201
(Address of principal executive office)
Registrant's telephone number, including area code: (414) 524-1200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ____
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT DECEMBER 31, 2000
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Common Stock $.16 2/3 Par Value............................. 86,088,850
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JOHNSON CONTROLS, INC.
FORM 10-Q
DECEMBER 31, 2000
REPORT INDEX
Page No.
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PART I - FINANCIAL INFORMATION:
Consolidated Statement of Financial Position at December 31, 2000,
September 30, 2000 and December 31, 1999 ........................................ 3
Consolidated Statement of Income for the Three-Month
Periods Ended December 31, 2000 and 1999 ....................................... 4
Consolidated Statement of Cash Flows for the Three-Month
Periods Ended December 31, 2000 and 1999 ....................................... 5
Notes to Consolidated Financial Statements ....................................... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................................ 10
Quantitative and Qualitative Disclosures About Market Risk ........................ 14
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings ......................................................... 14
Item 4. Results of Votes of Security Holders ...................................... 14
Item 6. Exhibits and Reports on Form 8-K ......................................... 14
SIGNATURES ........................................................................ 15
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JOHNSON CONTROLS, INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In millions)
December 31, September 30, December 31,
2000 2000 1999
----------------- ------------------- -----------------
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents $ 355.2 $ 275.6 $ 315.9
Accounts receivable - net 2,312.3 2,355.3 2,289.3
Costs and earnings in excess of billings on
uncompleted contracts 231.7 222.4 215.6
Inventories 585.1 569.5 532.0
Other current assets 753.2 854.4 635.0
---------- ---------- ----------
Current assets 4,237.5 4,277.2 3,987.8
Property, plant and equipment - net 2,363.2 2,305.0 2,035.9
Goodwill - net 2,159.1 2,133.3 2,081.8
Investments in partially-owned affiliates 252.2 254.7 217.6
Other noncurrent assets 530.4 457.8 470.2
---------- ---------- ----------
Total assets $ 9,542.4 $ 9,428.0 $ 8,793.3
========== ========== ==========
LIABILITIES AND EQUITY
Short-term debt $ 663.9 $ 471.4 $ 583.7
Current portion of long-term debt 39.4 36.1 43.0
Accounts payable 2,095.4 2,308.8 2,005.9
Accrued compensation and benefits 350.1 452.4 380.9
Accrued income taxes 194.0 140.0 207.5
Billings in excess of costs and earnings
on uncompleted contracts 179.7 167.8 181.0
Other current liabilities 1,065.7 933.5 954.6
---------- ---------- ----------
Current liabilities 4,588.2 4,510.0 4,356.6
Long-term debt 1,262.3 1,315.3 1,249.1
Postretirement health and other benefits 164.1 168.1 167.2
Other noncurrent liabilities 633.1 621.8 427.0
Minority interest in equity of consolidated subsidiaries 246.2 236.7 234.1
Shareholders' equity 2,648.5 2,576.1 2,359.3
---------- ---------- ----------
Total liabilities and equity $ 9,542.4 $ 9,428.0 $ 8,793.3
========== ========== ==========
The accompanying notes are an integral part of the financial statements.
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JOHNSON CONTROLS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share data; unaudited)
Three Months
Ended December 31,
-----------------------------------------
2000 1999
----------------- -----------------
Net sales $ 4,454.4 $ 4,318.3
Cost of sales 3,814.4 3,693.2
----------- -----------
Gross profit 640.0 625.1
Selling, general and administrative expenses 430.8 410.1
----------- -----------
Operating income 209.2 215.0
Interest income 5.9 3.4
Interest expense (33.3) (33.2)
Miscellaneous - net 4.6 (1.9)
----------- -----------
Other income (expense) (22.8) (31.7)
----------- -----------
Income before income taxes and minority interests 186.4 183.3
Provision for income taxes 72.1 72.6
Minority interests in net earnings of subsidiaries 11.8 11.7
----------- -----------
Net income $ 102.5 $ 99.0
=========== ===========
Earnings available for common shareholders $ 100.0 $ 96.6
=========== ===========
Earnings per share
Basic $ 1.16 $ 1.13
=========== ===========
Diluted $ 1.10 $ 1.06
=========== ===========
The accompanying notes are an integral part of the financial statements.
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JOHNSON CONTROLS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions; unaudited)
Three Months
Ended December 31,
---------------------------------
2000 1999
-------------- --------------
OPERATING ACTIVITIES
Net income $ 102.5 $ 99.0
Adjustments to reconcile net income to cash provided by operating activities
Depreciation 102.1 98.1
Amortization of intangibles 20.3 19.4
Equity in earnings of partially-owned affiliates, net of dividends received (7.1) (3.5)
Deferred income taxes 3.3 (1.9)
Other 0.6 (4.1)
Changes in working capital, excluding acquisition of business
Receivables 57.6 (161.7)
Inventories (9.8) (12.3)
Other current assets 76.1 2.0
Accounts payable and accrued liabilities (232.6) 30.9
Accrued income taxes 46.8 39.8
Billings in excess of costs and earnings on uncompleted contracts 10.7 21.8
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Cash provided by operating activities 170.5 127.5
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INVESTING ACTIVITIES
Capital expenditures (138.6) (127.7)
Sale of property, plant and equipment - net 5.3 4.0
Acquisition of business, net of cash acquired (60.3) -
Additions of long-term investments (20.6) (2.5)
-------- --------
Cash used by investing activities (214.2) (126.2)
-------- --------
FINANCING ACTIVITIES
Increase in short-term debt - net 179.9 111.2
Addition of long-term debt 4.6 -
Repayment of long-term debt (65.3) (60.1)
Payment of cash dividends (29.2) (26.5)
Other 33.3 13.8
-------- --------
Cash provided by financing activities 123.3 38.4
-------- --------
Increase in cash and cash equivalents $ 79.6 $ 39.7
======== ========
The accompanying notes are an integral part of the financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position,
results of operations, and cash flows for the periods presented. These
financial statements should be read in conjunction with the audited
financial statements and notes thereto contained in the Company's Annual
Report to Shareholders for the year ended September 30, 2000. The results
of operations for the three months ended December 31, 2000 are not
necessarily indicative of the results which may be expected for the
Company's 2001 fiscal year because of seasonal and other factors.
2. CASH FLOW
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all investments with a maturity of three months or less at the
time of purchase to be cash equivalents.
Income tax payments and refunds totaled a net cash receipt of $13 million
during the first three months of fiscal 2001, compared with a net cash
payment of approximately $23 million in the prior year period. The change
between periods reflects a $30 million income tax refund received in the
current quarter. Total interest paid was approximately $32 million for
both the three months ended December 31, 2000 and 1999.
3. INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined
using the last-in, first-out (LIFO) method for most inventories at
domestic locations. The cost of other inventories is determined on the
first-in, first-out (FIFO) method. Finished goods and work-in-process
inventories include material, labor and manufacturing overhead costs.
Inventories were comprised of the following:
December 31, September 30, December 31,
(in millions) 2000 2000 1999
---------------- ----------------- ---------------
Raw materials and supplies $345.4 $323.9 $305.9
Work-in-process 83.5 98.8 72.6
Finished goods 186.9 177.4 187.3
---------------- ----------------- ---------------
FIFO inventories 615.8 600.1 565.8
LIFO reserve (30.7) (30.6) (33.8)
---------------- ----------------- ---------------
LIFO inventories $585.1 $569.5 $532.0
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4. INCOME TAXES
The provision for income taxes is determined by applying an estimated
annual effective income tax rate to income before income taxes. The rate
is based on the most recent annualized forecast of pretax income,
permanent book/tax differences and tax credits. It also includes the
effect of any valuation allowance expected to be necessary at the end of
the year.
5. COMPREHENSIVE INCOME
Comprehensive income is defined as the sum of net income and all other
non-owner changes in equity, such as foreign currency translation,
unrealized gains and losses on equity securities and realized and
unrealized gains and losses on derivatives. Comprehensive income for the
three months ended December 31, 2000 and 1999 was $86 million and $101
million, respectively. The difference between comprehensive income and net
income for the periods presented principally represent foreign currency
translation adjustments.
6. EARNINGS PER SHARE
The following table reconciles the numerators and denominators used to
calculate basic and diluted earnings per share:
Three Months
Ended December 31,
--------------------------
(in millions) 2000 1999
----------- -----------
Income Available to Common Shareholders
Net income $ 102.5 $ 99.0
Preferred stock dividends, net of tax benefit (2.5) (2.4)
----------- -----------
Basic income available to common shareholders $ 100.0 $ 96.6
=========== ===========
Net income $ 102.5 $ 99.0
Effect of Dilutive Securities:
Compensation expense, net of tax benefit, arising from
assumed conversion of preferred stock (0.9) (1.1)
----------- -----------
Diluted income available to common shareholders $ 101.6 $ 97.9
=========== ===========
Weighted Average Shares Outstanding
Basic weighted average shares outstanding 86.1 85.4
Effect of Dilutive Securities:
Stock options 1.0 1.4
Convertible preferred stock 5.0 5.2
----------- -----------
Diluted weighted average shares outstanding 92.1 92.0
=========== ===========
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7. SEGMENT INFORMATION
The Company has two operating segments, the Automotive Systems Group and
the Controls Group, which also constitute its reportable segments.
Financial information relating to the Company's reportable segments was as
follows:
Three Months
Ended December 31,
--------------------------
(in millions) 2000 1999
----------- -----------
Sales
Automotive Systems Group $ 3,388.0 $ 3,338.5
Controls Group 1,066.4 979.8
----------- -----------
Total $ 4,454.4 $ 4,318.3
=========== ===========
Operating Income
Automotive Systems Group $ 168.1 $ 178.0
Controls Group 41.1 37.0
----------- -----------
Total $ 209.2 $ 215.0
=========== ===========
8. ACQUISITION OF BUSINESSES
Effective September 1, 2000, the Company completed the acquisition of a
controlling interest in Ikeda Bussan Co. Ltd. (Ikeda), a Japanese supplier
of automotive seating. Ikeda is the primary supplier of seating to Nissan
and had consolidated net sales in 1999 of approximately $1.2 billion. The
closing followed the expiration of a tender offer for Ikeda's shares, with
the Company paying approximately $70 million (net of cash acquired), plus
the assumption of $115 million of debt, for approximately 90% of the
outstanding shares. The Company has initiated a share exchange to effect
the acquisition of the remainder of the stock, which should be completed
in the fall of 2001. The acquisition was accounted for as a purchase in
the Statement of Financial Position at September 30, 2000. The excess of
the purchase price over the estimated fair value of the acquired net
assets, which approximated $160 million at the date of acquisition, was
recorded as goodwill. Management is continuing the process of assessing
and formulating its integration plans, including restructuring a portion
of the business, and anticipates finalizing these plans by June 30, 2001.
The operating results of Ikeda have been included in the Consolidated
Statement of Income since October 1, 2000.
In July 1998, the Company acquired Becker Group, a major supplier of
automotive interior systems. As part of the acquisition, the Company
recorded a restructuring reserve of $48 million. The reserve was
established for anticipated costs associated with consolidating certain of
Becker Group's European and domestic manufacturing, engineering and
administrative operations with existing capacity of the Company. The
majority of the reserve was attributable to expected employee severance
and other termination costs and plant closure costs. Through December 31,
2000, approximately $25 million of employee severance and other
termination costs associated with the consolidation of European and
domestic operations were incurred. In addition, $9 million of reserves
were reversed during fiscal 1999, with corresponding reductions of
goodwill and prepaid taxes. Accordingly, the reserve balance at December
31, 2000 totaled approximately $14 million. The majority of the
restructuring activities are expected to be completed by the end of fiscal
2001.
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9. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
In the first quarter of fiscal 2001, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and No.
138. The statement requires all derivative instruments to be recorded in
the statement of financial position at fair value. The change in fair
value of a derivative is required to be recorded each period in current
earnings or other comprehensive income, depending on whether the
derivative is designated as part of a hedge transaction and if so, the
type of hedge transaction.
The Company has global operations and enters into derivative contracts,
primarily forward exchange contracts, to manage market risk from changes
in foreign exchange rates. The Company designates its derivatives based
upon the criteria established by SFAS No. 133. For a derivative designated
as a fair value hedge, the gain or loss is recognized in earnings in the
period of change together with the offsetting loss or gain on the hedged
item. For a derivative designated as a cash flow hedge, the effective
portion of the derivative's gain or loss due to a change in fair value is
initially recorded as a component of other comprehensive income and
subsequently reclassified into earnings when the hedged exposure affects
earnings. For a derivative, as well as a foreign-denominated debt
obligation, designated as a hedge of the foreign currency exposure of a
net investment in a foreign operation, the gain or loss is also recorded
as a component of other comprehensive income. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in
earnings in the period of change.
The adoption of SFAS No. 133 did not have a material effect on the
Company's earnings or statement of financial position.
10. CONTINGENCIES
The Company is involved in a number of proceedings and potential
proceedings relating to environmental matters. Although it is difficult to
estimate the liability of the Company related to these environmental
matters, the Company believes that these matters will not have a
materially adverse effect upon its capital expenditures, earnings or
competitive position.
Additionally, 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 materially adverse effect on the Company's financial position,
results of operations or cash flows.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31,
2000 AND DECEMBER 31, 1999
First quarter consolidated net sales increased to $4.5 billion, 3% higher than
the $4.3 billion recorded in the prior year quarter. The effect of currency
translation, primarily associated with the euro, reduced consolidated net sales
by 6%, or approximately $270 million.
Automotive Systems Group sales for the first quarter were $3.4 billion, a 1%
increase from the prior year's $3.3 billion. Sales of automotive seating
systems, other interior systems and batteries in North America were
approximately level with the prior year period. New seating and interiors
programs, customer diversification and higher shipments of automotive batteries
to the aftermarket offset an overall decline of approximately 7% in the North
American vehicle production level. Automotive seating and interior systems sales
in Europe were comparable with the prior year before the effect of currency
translation, which reduced reported sales by approximately 7%. Segment sales
benefited from the addition of Ikeda Bussan Co. Ltd., a new seating subsidiary
in Japan acquired in September 2000, as well as higher seating sales in other
Asian markets and in South America. Sales attributable to these foreign markets
increased segment sales by approximately 8% compared with the prior year period.
Controls Group sales reached $1.1 billion for the current quarter, 9% higher
than the prior period's $1.0 billion. Before the negative effect of currency
translation, segment sales rose 13% compared with the prior year period.
Approximately two-thirds of the increase was associated with increased
integrated facilities management activity in the commercial market, led by new
and expanded contracts in North America. Higher sales of installed control
systems provided the balance of the segment's increase, primarily the result of
higher volumes in North America in both the new construction and existing
buildings markets. Orders for installed control systems were strong in the
current quarter, exceeding the prior year's level, due principally to growth in
North America and Asia.
Management expects Automotive Systems Group sales to increase 5% to 10% in the
current year, despite a forecasted downturn in North American vehicle
production, currently estimated to be 8% to 12% lower than the fiscal 2000
level. Automotive Systems Group sales are projected to benefit from the launch
of new seating and interior systems programs worldwide, customer
diversification, the addition of its Japanese subsidiary and higher unit
shipments of automotive batteries.
Management expects Controls Group sales to increase 10% to 15% for the full
year. Higher installed control systems activity worldwide and expansion of
integrated facility management services in both the commercial and governmental
markets are projected to be the primary sources of the segment increase.
The projected sales increases assume an average euro/U.S. dollar exchange rate
of $.90 for fiscal 2001; sales may differ from the projected range if the actual
exchange rate varies significantly from this rate.
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First quarter consolidated operating income was $209 million, 3% lower than the
prior year's $215 million. The decline reflects the negative effect of currency
translation and the recent weakness in the North American automotive
environment, partially offset by the Automotive Systems Group's results in other
geographic markets and continued growth from the Controls Group.
Automotive Systems Group operating income was $168 million, a 6% decline from
the prior year's $178 million. The decrease was primarily attributable to
currency translation, as well as reduced gross margins in North America and
Europe resulting from the lower production schedules of mature vehicle programs
in those markets. Partially offsetting these factors was the positive impact of
the addition of the Japanese subsidiary and the elimination of operating losses
attributable to seating operations in South America.
Controls Group operating income for the first quarter rose to $41 million, up
11% from the prior year's $37 million. The segment's increase in operating
income was primarily associated with the segment's installed control systems
operations, reflecting higher volume and reduced selling, general and
administrative expenses, as a percentage of sales.
Net interest expense declined slightly, the result of higher interest income
earned during the period. Miscellaneous income (net) of approximately $5 million
was $7 million improved from the prior year's expense. The change was largely
the result of higher equity income earned by the Company's partially-owned
affiliates, including automotive joint ventures in North America and China.
The effective income tax rate was 38.7% for the three-month period ended
December 31, 2000 compared with 39.6% for the comparable quarter last year. The
effective rate declined due principally to global tax reduction initiatives.
Minority interests in net earnings of subsidiaries of $12 million increased
slightly compared with the prior year period. Management anticipates the
minority interest in net earnings of subsidiaries to approximate $50 to $60
million for the full year.
The Company's first quarter net income of $102 million was 4% above the prior
year's $99 million. The increase reflects higher equity income, slightly lower
net interest expense and a lower effective income tax rate, which combined to
offset the decline in operating income previously described. Earnings per share
increased to $1.10 on a diluted basis, up from $1.06 in the prior year. Current
quarter earnings rose despite the effect of currency translation, which reduced
earnings by $.06 per diluted share.
COMPARISON OF FINANCIAL CONDITION
Working Capital and Cash Flow
Working capital at December 31, 2000 was a negative $351 million, compared with
a negative $233 million at September 30, 2000 and a negative $369 million at
December 31, 1999. The decrease in working capital from fiscal year-end
reflects, in part, an increase in short-term debt. Short-term debt increased in
the quarter due to the acquisition of Gylling Optima (see discussion that
follows) and the timing of cash receipts at calendar year-end.
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Working capital, excluding cash and debt, remained at relatively consistent
levels for the periods presented.
The Company's operating activities provided cash of $171 million during the
first three months of fiscal 2001, compared with $128 million generated in the
prior year period. Higher net income and a favorable net change in working
capital in the first three months of the current year, compared to the prior
year, combined to increase cash generated from operations.
Capital Expenditures and Other Investments
First quarter capital spending for property, plant and equipment was $139
million, compared with the prior year's $128 million. The majority of the
spending was associated with the Automotive System Group's expansion. Management
expects capital spending for the full year to approximate $575 to $600 million,
primarily associated with new and expanded automotive seating and interior
systems facilities and product lines worldwide, cost reduction projects, and
battery manufacturing automation projects. Controls Group expenditures are
expected to be focused on information and building systems technology.
Investments in partially-owned affiliates of $252 million were $35 million
higher than the prior year's balance. The increase primarily reflects equity
income earned by the Company's affiliates, principally joint ventures of the
Automotive Systems Group, partially offset by dividend distributions.
The Company completed the acquisition of Gylling Optima (Optima) for
approximately $60 million in the first quarter of fiscal 2001 to augment its
existing lead-acid battery technologies. Optima is a manufacturer of
spiral-wound lead-acid batteries sold globally under the Optima (R) brand name.
Capitalization
The Company's total capitalization of $4.6 billion at December 31, 2000 included
short-term debt of $.7 billion, long-term debt (including the current portion)
of $1.3 billion and shareholders' equity of $2.6 billion. Capitalization at
September 30, 2000 and December 31, 1999 was $4.4 billion and $4.2 billion,
respectively. Total debt as a percentage of total capitalization at December 31,
2000 was 43%, increasing from fiscal year-end's 41% but slightly lower than the
44% level one year ago. The current quarter's increase in the ratio of debt to
total capitalization reflects higher short-term debt associated, in part, with
the Optima acquisition. Management targets using the Company's strong operating
cash flows during the year to reduce the debt to capitalization percentage to
approximately 38% by fiscal year-end.
The Company believes its capital resources and liquidity position at December
31, 2000 are adequate to meet projected needs. Requirements for working capital,
capital expenditures, dividends and debt maturities in fiscal 2001 will continue
to be funded from operations, supplemented by short-term borrowings, if
required.
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Restructuring Activities
In July 1998, the Company acquired Becker Group, a major supplier of automotive
interior systems. As part of the acquisition, the Company recorded a
restructuring reserve of $48 million. The reserve was established for
anticipated costs associated with consolidating certain of Becker Group's
European and domestic manufacturing, engineering and administrative operations
with existing capacity of the Company. The majority of the reserve was
attributable to expected employee severance and other termination costs and
plant closure costs. Through December 31, 2000, approximately $25 million of
employee severance and other termination costs associated with the consolidation
of European and domestic operations were incurred. In addition, $9 million of
reserves were reversed during fiscal 1999, with corresponding reductions of
goodwill and prepaid taxes. Accordingly, the reserve balance at December 31,
2000 totaled approximately $14 million. The majority of the restructuring
activities are expected to be completed by the end of fiscal 2001.
BACKLOG
The Company's backlog relates to the Controls Group's installed control systems
operations, which derive a significant portion of revenue from long-term
contracts that are accounted for using the percentage-of-completion method. At
December 31, 2000, the unearned backlog of installed control systems contracts
(excluding integrated facility management) to be executed within the next year
was $1.4 billion, compared with $1.1 billion at December 31, 1999. The 20%
increase from the prior year period is primarily attributable to new order
growth in North America and Asia, both in the new and existing buildings
markets.
EURO CONVERSION
On January 1, 1999, member countries of the European Monetary Union (EMU) began
a three-year transition from their national currencies to a new common currency,
the euro. In the first phase, the permanent rates of exchange between the
members' national currency and the euro were established and monetary, capital,
foreign exchange, and interbank markets were converted to the euro. National
currencies will continue to exist as legal tender and may continue to be used in
commercial transactions. By January 2002, euro currency will be issued and by
July 2002, the respective national currencies will be withdrawn. The Company has
significant operations in member countries of the EMU and its action plans are
being implemented to address the euro's impact on information systems, currency
exchange rate risk and commercial contracts. Costs of the euro conversion to
date have not been material and management believes that future conversion costs
will not have a material impact on the operations, cash flows or financial
condition of the Company.
CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION
The Company has made forward-looking statements in this document that are
subject to risks and uncertainties. Forward-looking statements include
information concerning possible or assumed future risks and may include words
such as "believes," "expects," "anticipates," "projects" or similar expressions.
For those statements, the Company
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cautions that the numerous important factors, including industry vehicle
production levels and the assumption of an average euro/U.S. dollar exchange
rate of $.90 for fiscal 2001, and those discussed elsewhere in this document and
in the Company's Form 8-K filing (dated October 26, 2000), could affect the
Company's actual results and could cause its actual consolidated results to
differ materially from those expressed in any forward-looking statement made by,
or on behalf of, the Company.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For the period ended December 31, 2000, the Company did not experience any
adverse changes in market risk exposures that materially affect the quantitative
and qualitative disclosures presented in the Company's Annual Report to
Shareholders for the year ended September 30, 2000.
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no significant changes in status since the last Report.
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
The registrant held its Annual Meeting of Shareholders on January 24, 2001.
Proxies for the meeting were solicited pursuant to Regulation 14; there was no
solicitation in opposition to management's nominees for directors as listed in
the Proxy Statement, and all such nominees (William F. Andrews, Robert L.
Barnett, Willie D. Davis and Richard F. Teerlink) were elected. Of the
75,546,480 shares voted, at least 74,437,507 shares granted authority to vote
for these directors and no more than 1,108,973 shares withheld such authority.
The retention of PricewaterhouseCoopers LLP as auditors was approved by the
shareholders with 74,528,710 shares voted for such appointment, 600,485 shares
voted against and 417,285 shares abstained.
The shareholder proposal to adopt global standards was rejected by the
shareholders with 55,006,870 shares voted against approval, 6,853,754 shares
voted for approval, 2,946,055 shares abstained and a broker non-vote of
10,739,801 shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
12 Statement regarding the computation of the ratio of earnings to
fixed charges.
(b) The Company filed a form 8-K, dated October 26, 2000, in order to
take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and to provide updated
disclosure of the factors that could affect any forward-looking
statements made by, or on behalf of, the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHNSON CONTROLS, INC.
Date: February 14, 2001 By: Stephen A. Roell
Senior Vice President and
Chief Financial Officer
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