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 L. Ponczak RELEASE: January 18, 2002
(414) 524-2375
Denise M. Zutz
(414) 524-3155
JOHNSON CONTROLS FIRST QUARTER EARNINGS OF $1.27 REPORTED
MILWAUKEE, WISCONSIN, January 18, 2002 ... Johnson Controls, Inc. (JCI)
today reported a sales increase of 8%, an increase in operating income of 5%,
and level diluted earnings per share of $1.27 for the first quarter of fiscal
2002. The comparisons are with last year's first-quarter results that have been
adjusted to exclude the effects of goodwill amortization expense.
Sales for the three months ended December 31, 2001 were $4.8 billion, up
from $4.5 billion for the prior year. Operating income for the current quarter
increased to $239 million compared with the prior year's $227 million. Net
income increased 1% to $120 million from $118 million for the first quarter of
fiscal 2001. Diluted earnings per share were $1.27 in both periods.
Fiscal 2002 income amounts reflect Johnson Controls adoption of FASB's
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets." All income comparisons to prior year are to amounts that
assume the application of FAS 142 for fiscal 2001.
As anticipated, total debt to total capitalization increased to 43% from
38% at September 30, 2001 as a result of acquisitions completed in the first
fiscal quarter. Excluding acquisitions, total debt to total capitalization would
have declined by nearly two percentage points as a result of strong free cash
flow in the quarter.
Chairman and Chief Executive Officer James H. Keyes said, "We are pleased
that our first-quarter results were slightly above our plan, especially given a
period of such uncertainty. I wish to thank our customers, employees and
suppliers for their support and cooperation."
Automotive Systems Group
(dollars in millions)
Three Months Ended
December 31, 2001 2000
---- ----
Adjusted % Reported
-------- --- --------
Sales $3,656.2 $3,388.0 8 $3,388.0
Operating Income $190.7 $183.0 4 $168.1
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Johnson Controls, Inc.
January 18, 2002
Page 2
Automotive Systems Group sales for the first quarter of fiscal 2002
increased 8% over the prior year's $3.4 billion. North American sales of
interior systems increased 4% whereas industry light vehicle production is
estimated to have declined 3%. Johnson Controls explained that its increase in
market share reflects its penetration of the interiors market combined with its
presence on a variety of transplant and domestic automaker vehicles where demand
year-over-year was above the industry average. Also in North America, sales of
automotive batteries were higher than in the prior year primarily due to
shipments to new customers.
Automotive sales in Europe were 23% higher reflecting the inclusion of an
electronics business and a battery business which were acquired October 1, 2001.
Excluding the electronics business acquisition, European interiors systems sales
were 6% higher, which compares with European industry vehicle production
estimated as comparable to the prior year. The increase primarily reflects new
seating and interiors programs for the company.
Johnson Controls sales in Asia and South America, which account for less
than 10% of total automotive revenues, decreased somewhat due to negative
currency effects and lower customer production schedules.
Operating income for the Automotive Systems Group increased 4% from the
prior year amount. The increase primarily reflects cost reductions, which more
than offset the negative effect of lower production levels of mature, more
profitable vehicle programs in North America, Japan and South America.
Controls Group
- --------------
(dollars in millions)
Three Months Ended
December 31, 2001 2000
---- ----
Adjusted % Reported
-------- --- --------
Sales $1,161.5 $1,066.4 9 $1,066.4
Operating Income $47.8 $43.7 9 $41.1
Controls Group sales to the nonresidential buildings market increased 9%
over the prior year. The largest sales increase was achieved in Europe due to
higher revenues associated with integrated facility management contracts as well
as the inclusion of an acquired systems and services company. Excluding the
acquisition, European sales were 35% above the prior year.
In North America, sales increased 5% reflecting increased facility
management and systems installation activity. Sales in Asia declined 40% due to
the deconsolidation of a joint venture in Japan during the fourth quarter of
fiscal 2001.
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Johnson Controls, Inc.
January 18, 2002
Page 3
Controls Group operating income for the current quarter was 9% above the
prior year amount. Johnson Controls attributed the increase to the higher volume
of activity.
The company commented that its orders for control systems were strongest
from the new non-residential construction market, particularly in the office,
airport, health care and government sectors. The backlog of uncompleted control
system installation contracts at the end of the quarter was 15% higher than one
year ago.
Full-Year Outlook
Johnson Controls said that for the full fiscal year of 2002, it continues
to anticipate that the Controls Group will achieve sales growth of 8-12% and
modest operating margin improvement. The outlook for Automotive Systems Group
sales growth also is unchanged at approximately 5% which reflects new contracts
and recently completed acquisitions. Expectations are also unchanged for a
decline in automotive operating margin due to lower industry volumes of higher
margin programs and the competitive environment. The company said that it
continues to expect its full-year earnings to approach the fiscal 2001 record.
A summary of supplementary full-year financial estimates provided by
the company follows:
FY2001 FY2002
($s in millions)
Actual Estimate
------ --------
Capital expenditures $621 $575-600
Depreciation $434 $490-510
Amortization of intangibles $13* +/-$20
Total debt to total capitalization 38% +/-38%
Interest expense,
net of interest income $110 $125-130
Minority interests in net earnings
of subsidiaries $53 $60-70
*Adjusted for FAS 142 "Goodwill and Other Intangible Assets"
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. Its sales for
fiscal 2001 totaled $18.4 billion.
* * * * *
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" or similar expressions. For those
statements, the company cautions that numerous important factors, including
industry vehicle production levels, US dollar exchange rates and those discussed
in the company's Form 8-K (dated November 9, 2001), 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.
News Release
January 18, 2002
Page 4
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data; unaudited)
Three Months Ended December 31,
-------------------------------------------------------
Adjusted
2001 2000* 2000
----------- ----------- ----------
Net sales $ 4,817.7 $ 4,454.4 $ 4,454.4
Cost of sales 4,141.4 3,814.4 3,814.4
----------- ----------- -----------
Gross profit 676.3 640.0 640.0
Selling, general and administrative expenses 437.8 413.3 430.8
----------- ----------- -----------
Operating income 238.5 226.7 209.2
Interest income 3.2 5.9 5.9
Interest expense (32.1) (33.3) (33.3)
Equity income 4.1 -- --
Miscellaneous - net (3.4) 4.6 4.6
----------- ----------- -----------
Other income (expense) (28.2) (22.8) (22.8)
----------- ----------- -----------
Income before income taxes and minority interests 210.3 203.9 186.4
Provision for income taxes 75.5 73.9 72.1
Minority interests in net earnings of subsidiaries 14.9 11.8 11.8
----------- ----------- -----------
Net income $ 119.9 $ 118.2 $ 102.5
=========== =========== ===========
Earnings available for common shareholders $ 117.8 $ 115.7 $ 100.0
=========== =========== ===========
Earnings per share
Basic $ 1.35 $ 1.35 $ 1.16
=========== =========== ===========
Diluted $ 1.27 $ 1.27 $ 1.10
=========== =========== ===========
* The adjusted information for the three months ended December 31, 2000 is
presented as if FAS 142 (see Note 1) had been adopted October 1, 2000. Results
have been adjusted to exclude goodwill amortization expense of $17.5 million and
the related income tax effect.
News Release
January 18, 2002
Page 5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in millions)
December 31, September 30, December 31,
2001 2001 2000
----------- ------------ -------------
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents $ 261.0 $ 374.6 $ 355.2
Accounts receivable - net 2,776.9 2,673.4 2,312.3
Costs and earnings in excess of billings on
uncompleted contracts 264.1 254.9 231.7
Inventories 659.7 577.6 585.1
Other current assets 636.9 663.5 753.2
----------- ---------- ----------
Current assets 4,598.6 4,544.0 4,237.5
Property, plant and equipment - net 2,446.1 2,379.8 2,363.2
Goodwill - net 2,580.6 2,247.3 2,159.1
Investments in partially-owned affiliates 318.0 300.5 252.2
Other noncurrent assets 556.5 439.9 530.4
----------- ---------- ----------
Total assets $ 10,499.8 $ 9,911.5 $ 9,542.4
=========== ========== ==========
LIABILITIES AND EQUITY
Short-term debt $ 354.4 $ 379.9 $ 663.9
Current portion of long-term debt 45.2 45.3 39.4
Accounts payable 2,417.4 2,437.3 2,095.4
Accrued compensation and benefits 363.2 436.3 350.1
Accrued income taxes 124.4 137.8 194.0
Billings in excess of costs and earnings
on uncompleted contracts 165.3 163.0 179.7
Other current liabilities 1,103.8 980.1 1,065.7
----------- ---------- ----------
Current liabilities 4,573.7 4,579.7 4,588.2
Long-term debt 1,927.4 1,394.8 1,262.3
Postretirement health and other benefits 168.5 162.5 164.1
Minority interests in equity of subsidiaries 203.1 207.3 246.2
Other noncurrent liabilities 571.4 581.8 633.1
Shareholders' equity 3,055.7 2,985.4 2,648.5
----------- ---------- ----------
Total liabilities and equity $ 10,499.8 $ 9,911.5 $ 9,542.4
=========== ========== ==========
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News Release
January 18, 2002
Page 6
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions; unaudited)
Three Months
Ended December 31,
---------------------------------
2001 2000
------------ ---------
OPERATING ACTIVITIES
Net income $ 119.9 $ 102.5
Adjustments to reconcile net income to cash provided by operating activities
Depreciation 119.9 102.1
Amortization of intangibles 4.7 20.3
Equity in earnings of partially-owned affiliates, net of dividends received (3.1) (7.1)
Minority interests in net earnings of subsidiaries 14.9 11.8
Noncurrent deferred income taxes 10.3 3.3
Other (4.8) 0.6
Changes in working capital, excluding acquisition of businesses
Receivables 73.4 57.6
Inventories 12.1 (9.8)
Other current assets 32.9 76.1
Accounts payable and accrued liabilities (258.9) (232.6)
Accrued income taxes (16.6) 46.8
Billings in excess of costs and earnings on uncompleted contracts 2.8 10.7
-------- --------
Cash provided by operating activities 107.5 182.3
-------- --------
INVESTING ACTIVITIES
Capital expenditures (94.0) (138.6)
Sale of property, plant and equipment 8.0 5.3
Acquisition of businesses, net of cash acquired (592.0) (60.3)
Changes in long-term investments - net (9.3) (32.4)
-------- --------
Cash used by investing activities (687.3) (226.0)
-------- --------
FINANCING ACTIVITIES
(Decrease)/Increase in short-term debt - net (48.0) 179.9
Addition of long-term debt 600.5 4.6
Repayment of long-term debt (43.7) (65.3)
Payment of cash dividends (31.3) (29.2)
Other (11.3) 33.3
-------- --------
Cash provided by financing activities 466.2 123.3
-------- --------
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS $ (113.6) $ 79.6
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News Release
January 18, 2002
Page 7
FOOTNOTES
1. The Company adopted Statement of Financial Accounting Standards (FAS) No. 142
"Goodwill and Other Intangible Assets", effective October 1, 2001. Under FAS 142
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's financial statements
include comparative adjusted information which assumes FAS 142 had been adopted
October 1, 2000.
2. Effective October 1, 2001, the Company completed the acquisition of the
automotive electronics business of France-based Sagem SA and the German
automotive battery manufacturer Hoppecke Automotive GmbH & Co. KG. Both
acquisitions were accounted for as purchases. The acquisitions, with an initial
combined purchase price of approximately $575 million, were financed with
long-term debt. The Company is obtaining independent appraisals and performing
other studies necessary to allocate the purchase price to the acquired net
assets. Pending completion of the appraisals and studies, the excess of the
purchase price over the estimated fair value of the acquired net assets has been
reported as goodwill.
3. 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 $0.7 million and $0.9 million for the three months ended
December 31, 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 December 31,
------------------------------------
2001 2000
----------------- -----------------
Weighted Average Shares
Basic 87.6 86.1
Diluted 94.0 92.1
Outstanding at period end 87.7 86.1
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