EXHIBIT 99
[JOHNSON CONTROLS LOGO] NEWS RELEASE
Johnson Controls, Inc., is a global market leader in automotive systems and
facility management and control. In the automotive market, it is a major
supplier of seating and interior systems, and batteries. For nonresidential
facilities, Johnson Controls provides building control systems and services,
energy management and integrated facility management. Johnson Controls (NYSE:
JCI), founded in 1885, has headquarters in Milwaukee, Wisconsin.
CONTACT: Glen Ponczak RELEASE: October 23, 2001
(414) 524-2375
Denise Zutz
(414) 524-3155
JOHNSON CONTROLS 2001 EPS A RECORD $5.11; FOURTH QUARTER A RECORD $1.67
MILWAUKEE, WISCONSIN, October 23, 2001 ... Johnson Controls, Inc. (JCI)
today reported record sales and net income for its year ended September 30,
2001. Fiscal 2001 was the company's 55th consecutive year of sales increases,
its 11th straight year of record earnings and the 26th consecutive year of
dividend increases.
James H. Keyes, Johnson Controls chairman and chief executive officer,
said "We appreciate the support of our customers, employees and suppliers in
this difficult environment. With their support and with the diversity of our
businesses and markets, we are pleased to have achieved another year of
improvement."
Full-Year Consolidated Results
Sales for the full year totaled $18.4 billion, up 7% from $17.2 billion
for 2000. Both of the company's business groups, automotive and controls,
achieved higher revenues. The effect of currency translation reduced Johnson
Controls sales for the year by approximately $600 million. Operating income was
$961 million compared with the prior year's $965 million as a decline in
operating income from the Automotive Systems Group more than offset an increase
in the Controls Group income. Net income for fiscal 2001 was $478 million, up
from $472 million. Net income for 2001 was aided by an increase in equity
income. Diluted earnings per share for 2001 were $5.11 compared with $5.09 for
the prior year.
Johnson Controls said that free cash flow totaled $373 million even
though capital expenditures were a record $621 million. The company's ratio of
total debt to total capitalization declined to 38% at September 30, 2001 from
41% at the end of fiscal 2000.
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October 23, 2001
Page 2
4th Quarter Consolidated Results
Sales for the three months ended September 30, 2001 increased 14% to $4.6
billion from $4.1 billion for the same period of fiscal 2000. Operating income
was $291 million in both years, reflecting an increase in controls income being
offset by a decline in automotive income. Net income rose 3% to $156 million, up
from $151 million for the fourth quarter of fiscal 2000, while diluted earnings
per share increased to $1.67 for 2001 from $1.63.
Automotive Systems Group
(dollars in millions) 4TH QUARTER YEAR
----------- ----
2001 2000 % 2001 2000 %
---- ---- --- ---- ---- ---
Sales $3,330.6 2,898.1 15 $13,620.5 12,738.5 7
Operating Income $204.0 220.3 (7) $720.5 765.2 (6)
The Automotive Systems Group achieved record sales for both the fourth
quarter and full year. Sales increases for both periods reflect new contracts
for interior systems and batteries as well as revenue associated with a Japanese
seat manufacturer acquired at the end of fiscal 2000. These increases in volume
were partially offset by currency translation rates and lower levels of industry
vehicle production. Industry production volumes in North America are estimated
to have declined 10%, and 11% respectively, for the three and 12-month periods.
Volumes in Europe are estimated to have increased slightly over the prior year
for both periods.
Johnson Controls said that for the fourth quarter, its North American
automotive interiors sales increased 7%, primarily associated with higher
shipments of systems for new sport utility vehicles and light trucks. European
sales increased by 4% (after currency translation) in the quarter, largely due
to higher shipment levels in Germany.
The operating margin for the automotive group decreased in both fiscal
2001 periods. The company said that in the quarter it experienced lower margins
that are typically associated with new vehicle programs, as well as one-time
costs associated with changes made to its network of manufacturing operations.
These issues more than offset the inclusion of results from the Japanese seat
manufacturer and an improvement in South American operations.
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October 23, 2001
Page 3
Controls Group
(dollars in millions) 4TH QUARTER YEAR
----------- ----
2001 2000 % 2001 2000 %
---- ---- --- ---- ---- ---
Sales $1,318.5 1,190.6 11 $4,806.7 4,416.1 9
Operating Income $87.0 70.3 24 $240.6 199.8 20
The Controls Group supplies nonresidential buildings with a broad line
of integrated systems, services and facility management to improve the quality
of indoor environments while reducing operating and energy costs. Sales and
operating income for both the year and the fourth quarter were records.
In the fourth quarter, sales in North America increased 9% due to
higher demand for installed systems, services and integrated facility
management. In Europe, sales were 50% higher as a result of double-digit organic
growth and the inclusion of the controls company MC International that was
acquired during the third quarter of fiscal 2001. Revenues in Asia declined by
approximately 40% reflecting the deconsolidation of a joint venture.
The company commented that demand for its controls offerings remains
strong, with orders during the fourth fiscal quarter exceeding the prior year.
Particular areas of strength for North American orders were the health care and
government retrofit markets, while demand for Johnson Controls Metasys(R)
systems was also high in the government and education new construction markets.
The backlog of uncompleted control system installation contracts at the end of
2001 was 20% higher than one year ago.
Operating margins for the Controls Group increased in both the three and
12-month periods. The increases reflect the higher volume and the positive
effect of productivity and quality management tools.
* * * * *
Johnson Controls is a global market leader in automotive systems and facility
management and control. In the automotive market, it is a major supplier of
seating and interior systems, and batteries. For nonresidential facilities,
Johnson Controls provides building control systems and services, energy
management and integrated facility management. Johnson Controls (NYSE: JCI),
founded in 1885, has headquarters in Milwaukee, Wisconsin.
News Release
October 23, 2001
Page 4
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months
Ended September 30, Year Ended September 30,
----------------------------------- ---------------------------------
2001 2000 2001 2000
--------------- ----------------- ------------- ----------------
(unaudited)
Net sales $4,649.1 $4,088.7 $18,427.2 $17,154.6
Cost of sales 3,982.4 3,407.5 15,823.2 14,560.1
-------------- ---------------- ------------ ---------------
Gross profit 666.7 681.2 2,604.0 2,594.5
Selling, general and administrative expenses 375.7 390.6 1,642.9 1,629.5
-------------- ---------------- ------------ ---------------
Operating income 291.0 290.6 961.1 965.0
Interest income 5.3 4.5 19.4 16.1
Interest expense (30.4) (31.7) (129.4) (127.6)
Equity income 12.6 9.4 31.8 26.6
Miscellaneous - net (5.0) (7.3) (15.8) (24.4)
-------------- ---------------- ------------ ---------------
Other income (expense) (17.5) (25.1) (94.0) (109.3)
-------------- ---------------- ------------ ---------------
Income before income taxes and minority interests 273.5 265.5 867.1 855.7
Provision for income taxes 105.8 105.2 335.5 338.9
Minority interests in net earnings of subsidiaries 11.4 9.1 53.3 44.4
-------------- ---------------- ------------ ---------------
Net income $156.3 $151.2 $478.3 $472.4
============== ================ ============ ===============
Earnings available for common shareholders $154.2 $148.7 $469.5 $462.6
============== ================ ============ ===============
Earnings per share
Basic $1.77 $1.73 $5.41 $5.40
============== ================ ============ ===============
Diluted $1.67 $1.63 $5.11 $5.09
============== ================ ============ ===============
See footnotes on page 5.
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News Release
October 23, 2001
Page 5
FOOTNOTES
EARNINGS PER SHARE
Basic earnings per share are computed by dividing net income, after deducting
dividend requirements on the Series D Convertible Preferred Stock, by the
weighted average number of common shares outstanding. Diluted earnings are
computed by deducting from net income the after-tax compensation expense which
would arise from the assumed conversion of the Series D Convertible Preferred
Stock, which was $.8 million and $1.2 million for the three months ended
September 30, 2001 and 2000, respectively, and $3.4 million and $4.4 million for
the year ended September 30, 2001 and 2000, respectively. Diluted weighted
average shares assume the conversion of the Series D Convertible Preferred
Stock, if dilutive, plus the dilutive effect of common stock equivalents which
would arise from the exercise of stock options.
Three Months
(in millions) Ended September 30, Year Ended September 30,
----------------------------------- ------------------------------------
2001 2000 2001 2000
----------------- ----------------- ----------------- -----------------
Weighted Average Shares
Basic 87.4 85.9 86.8 85.7
Diluted 93.8 92.0 93.0 91.9
Outstanding at year end 87.5 86.0
FOREIGN CURRENCY TRANSLATION
The effect of foreign currency translation rates reduced sales for the three
months ended September 30, 2001 by approximately $60 million and diluted
earnings per share by $.01. Sales were reduced by approximately $600 million and
diluted earnings per share by $.12 for the year ended September 30, 2001.
SUPPLEMENTAL DATA
Three Months
(dollars in millions; unaudited) Ended September 30, Year Ended September 30,
----------------------------------- ------------------------------------
2001 2000 2001 2000
----------------- ----------------- ----------------- -----------------
Depreciation $115 $96 $434 $385
Amortization of intangibles $21 $19 $82 $77
Capital expenditures $161 $164 $621 $547
Free cash flow $131 $102 $373 $387
(Net income plus depreciation and
amortization, minus capital expenditures)
Total debt to total capitalization 38% 41% 38% 41%
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News Release
October 23, 2001
Page 6
SUPPLEMENTAL DATA (CONTINUED)
Pro Forma Financial Information
Johnson Controls, Inc. will adopt the FASB's Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" in October 2001, the
beginning of its 2002 fiscal year.
Under the new FASB statement, goodwill will no longer be amortized, however, it
must be tested for impairment at least annually. Amortization will continue to
be recorded for other intangible assets with determinable lives. The Company
anticipates that the goodwill impairment provisions of the statement will not,
upon adoption, have a significant impact on its financial position.
Following is pro forma information, which assumes the application of FAS 142 at
the beginning of fiscal 2000. The elimination of goodwill amortization would
have reduced selling, general and administrative expenses by $70.8 million and
$66.5 million for the years ended September 30, 2001 and 2000, respectively. The
effective income tax rate would have been 36.6% in 2001 and 37.6% in 2000.
PRO FORMA FAS 142
(in millions, except per share data; unaudited)
Year ended September 30,
First Second Third Fourth
2001 Quarter Quarter Quarter Quarter Full Year
------------ ----------- ---------- ------------ -------------
Operating Income
Automotive Systems Group $183.0 $ 152.7 $ 226.0 $ 218.3 $ 780.0
Controls Group 43.7 55.8 62.3 90.1 251.9
------------ ----------- ----------- ------------- -------------
Total $226.7 $ 208.5 $ 288.3 $ 308.4 $1,031.9
Net income $118.2 $ 99.0 $ 152.6 $ 171.9 $ 541.7
Earnings per share
Basic $ 1.35 $ 1.12 $ 1.73 $ 1.94 $ 6.14
Diluted $ 1.27 $ 1.06 $ 1.62 $ 1.84 $ 5.79
2000
Operating Income
Automotive Systems Group $193.0 $ 160.7 $ 234.0 $ 234.6 $ 822.3
Controls Group 39.2 48.0 49.1 72.9 209.2
------------ ----------- ----------- ------------- -------------
Total $232.2 $ 208.7 $ 283.1 $ 307.5 $1,031.5
Net income $114.2 $ 103.3 $ 147.6 $ 166.2 $ 531.3
Earnings per share
Basic $ 1.31 $ 1.18 $ 1.69 $ 1.91 $ 6.09
Diluted $ 1.23 $ 1.11 $ 1.60 $ 1.79 $ 5.73
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