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Exhibit 99.1
     
News release   (JHONSON LOGO)
FOR IMMEDIATE RELEASE
         
CONTACT:
  Glen L. Ponczak (Investors)   July 23, 2010
 
  (414) 524-2375    
 
       
 
  Jacqueline F. Strayer (Media)    
 
  (414) 524-3876    
Johnson Controls Q3 2010 revenues increase 22% with significantly higher net income; Company guides to high end of previous full-year EPS range
MILWAUKEE, July 23, 2010 . . . For the third quarter of fiscal 2010, Johnson Controls reported a 22% increase in revenues with higher sales in each of its three businesses. Net income and segment margin increased significantly. The company also said earnings for fiscal 2010 are expected to be at the high end of its previously disclosed guidance.
Highlights for the company’s third quarter of 2010 include:
n   Net sales of $8.5 billion vs. $7.0 billion in Q3 2009, up 22%
 
n   Income from business segments of $496 million compared with $282 million a year ago, up 76%
 
n   Net income of $418 million vs. $163 million in Q3 2009
 
n   Diluted earnings per share of $0.61 vs. $0.26 last year
The 2010 quarter includes a non-cash tax benefit of $51 million, or $0.07 per share. The 2009 quarter included a non-cash tax benefit of $9 million, or $0.01 per share. Excluding these non-recurring items, net income in the current quarter was $367 million or $0.54 per share, while net income in the prior year quarter was $154 million or $0.25 per share. The company said it believes that using the adjusted numbers provide a more meaningful comparison of its underlying operating performance.
The company said that the quarter was negatively impacted by approximately $0.03 per share due to both the weaker Euro and a non-cash impairment charge in its automotive business in Japan.
“We are pleased with our third quarter results. We capitalized on the recovery in several of our markets, leveraging our market leadership and improved cost structure to gain share and improve profitability,” said Stephen A. Roell, Johnson Controls Chairman and Chief Executive Officer. “Sales in our automotive and power businesses grew at a double-digit pace, and our Building Efficiency business generated top-line growth for the

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News release   (JHONSON LOGO)
first time in more than a year. In addition, the Building Efficiency order rate increased 9%, nearly double the pace of the second quarter, which exceeded our expectations.”
Mr. Roell said the current market environment has presented opportunities for growth investments.
“To support our growth strategies in Asia, we will purchase the remaining shares of our Korean Power Solutions joint venture,” Mr. Roell said. “We also made an equity investment in Tachi-S to enable greater collaboration with this important automotive seating and interiors supplier and to ultimately expand our relationships with Asian automakers. Additionally, we continue to accelerate our investments in Power Solutions manufacturing capacity and vertical integration. In Building Efficiency, increased investments are focused on significantly increasing our service sales and delivery capabilities, especially in the areas of clean technologies and energy efficiency.”
Automotive Experience sales in the quarter increased 43% to $4.2 billion versus $3.0 billion last year due primarily to higher production volumes and new program launches. North American revenues increased 76% to $1.7 billion from $1.0 billion last year, while European sales were up 19% to $2.0 billion from $1.7 billion in the 2009 quarter. Sales in Asia increased to $440 million from $262 million in 2009. China revenues, which are mostly generated through unconsolidated joint ventures, rose 40% to $774 million compared with $553 million a year ago. Johnson Controls has a 45% share of the Chinese automotive seating market and is launching multiple new interiors programs over the next three years.
Automotive Experience reported segment income of $171 million in the current quarter, compared with a loss of $14 million last year due to higher volumes, operational efficiencies and higher profitability of its automotive joint ventures. The North America segment margin of 5.6% reflects the increased production volumes and benefits of cost reduction initiatives. Asia segment margin, including the non-consolidated joint ventures in China, was 5.7%. Europe segment margin was 2.4%, lower than other geographic regions due to the magnitude of new program launches. The company said it expected launch costs in Europe to continue at a heightened level through 2011.
Johnson Controls increased its forecast for North American auto production in its 2010 fiscal year to 11.4 million units (vs. previous estimate of 10.9 million units). The company’s production assumption for Europe is unchanged at 16.7 million units.
Power Solutions sales in the third quarter of 2010 increased 30% to $1.1 billion from $0.9 billion last year reflecting higher aftermarket and original equipment unit shipments as well as the impact of higher lead prices. Excluding the lead impact, sales increased 16%. Aftermarket unit shipments increased 9%, including the initial incremental volume associated with the award of all of Walmart’s automotive battery business, which began shipping in June. Higher global automotive production resulted in a 36% increase in original equipment battery shipments.

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News release   (JHONSON LOGO)
Power Solutions segment income was up 27% to $135 million versus $106 million in the third quarter of 2009. The higher income is primarily the result of the higher volumes and non-recurring charges incurred in the prior year.
Johnson Controls has accelerated investments to expand lead acid battery production capacity in China where it expects to add a new manufacturing plant annually for the next few years. In addition, the construction of a new lead recycling facility in Mexico is nearing completion. Initial production is expected to launch in the fiscal 2011 first quarter, ramping to full production over the course of the year. The company said its plans to build a recycling facility in the United States are progressing as expected, with an expected launch of production in mid-2012. Upon completion of these facilities, Johnson Controls expects to be able to internally recycle more than 50% of its lead requirements versus 15% today.
The company said that in conjunction with Volkswagen, it introduced a new technology innovation for absorbent glass mat (AGM) lead-acid batteries that improves performance and life in high heat environments. The AGM batteries are designed specifically for Start-Stop vehicles. Industry forecasts predict that more than 60 percent of vehicles made in Europe by mid-decade will feature Start-Stop technology. Due to the increasing consumer demand, Johnson Controls is expanding its AGM manufacturing capacity in Europe by nearly 70%. Johnson Controls currently supplies approximately 70% of the AGM original equipment batteries in Europe and supplies replacement batteries to the aftermarket under the VARTA™ Start-Stop brand.
Building Efficiency sales in the 2010 third quarter were $3.2 billion, up 2% compared with last year. Higher Global Workplace Solutions, Rest of World and residential HVAC sales more than offset declines in Europe and North America. Johnson Controls reported that its third quarter orders increased by 9% globally. Sequentially, the order rate was significantly higher than the 5% order increase reported for second quarter of 2010. The backlog of uncompleted contracts in the 2010 third quarter was up 1% to $4.4 billion. This represents the third sequential quarterly improvement in the backlog and the first positive year-over-year backlog number since March 2009.
Building Efficiency reported segment income of $190 million, level with the 2009 quarter. Strong double-digit income improvements in North America Systems, Rest of World, Global Workplace Solutions and residential HVAC segments were offset by lower results in Europe and North America Service. North America Service income declined 66%, due to the continued revenue softness in discretionary project work and the final costs associated with its NexGen service technology deployment.
Johnson Controls updated its financial guidance for 2010:
n   Net sales expectation unchanged at $33.5 billion (up 18%), with a revised Euro assumption of $1.30 versus the prior Euro assumption of $1.35.
 
n   Earnings for the 2010 fiscal year are now expected to approximate $1.95 per diluted share. The company had previously guided to $1.90 — $1.95 per diluted share. Johnson Controls said that higher automotive production estimates will be partially offset by the negative impact of the lower Euro.

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News release   (JHONSON LOGO)
The company will provide a detailed review of its fiscal year 2011 market expectations and growth strategies at its annual analyst day in New York on October 12, 2010.
“As we enter the final quarter of our fiscal year, automotive production forecasts along with the higher buildings order rate and backlog support our expectations for continued improvements in sales and income,” said Mr. Roell. “We will continue to use our strong balance sheet and cash flows to make strategic investments that will help us further outpace the growth rates of our markets. We believe we are positioned to deliver sustainable, profitable growth.”
###
About Johnson Controls
Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 130,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.
###
Forward Looking Statement
Johnson Controls, Inc. (“the Company”) has made forward-looking statements in this presentation pertaining to its financial results for fiscal 2010 and beyond that are based on preliminary data and are subject to risks and uncertainties. All statements other than statements of historical fact are statements that are or could be deemed forward-looking statements and included terms such as “outlook,” “expectations,” “estimates,” or “forecasts.” For those statements, the Company cautions that numerous important factors, such as automotive vehicle production levels, mix and schedules, energy prices, the strength of the U.S. or other economies, currency exchange rates, cancellation of or changes to commercial contracts, changes in the levels or timing of investments in commercial buildings, the ability to execute on restructuring actions according to anticipated timelines and costs as well as other factors discussed in Item 1A of Part I of the Company’s most recent Form 10-k filing (filed November 24, 2009) 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.
###

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July 23, 2010
Page 5
JOHNSON CONTROLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data; unaudited)
                 
    Three Months Ended June 30,  
    2010     2009  
Net sales
  $ 8,540     $ 6,979  
Cost of sales
    7,201       5,940  
 
           
Gross profit
    1,339       1,039  
 
               
Selling, general and administrative expenses
    (895 )     (787 )
Net financing charges
    (39 )     (65 )
Equity income
    52       30  
 
           
 
               
Income from continuing operations before income taxes
    457       217  
 
               
Provision for income taxes
    31       50  
 
           
 
               
Net income
    426       167  
 
               
Less: income attributable to noncontrolling interests
    8       4  
 
           
 
               
Net income attributable to JCI
  $ 418     $ 163  
 
           
 
               
Diluted earnings per share
  $ 0.61     $ 0.26  
 
           
 
               
Diluted weighted average shares
    684       676  
 
           
Shares outstanding at period end
    673       595  
 
           


 

July 23, 2010
Page 6
JOHNSON CONTROLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data; unaudited)
                 
    Nine Months Ended June 30,  
    2010     2009  
Net sales
  $ 25,265     $ 20,630  
Cost of sales
    21,467       18,224  
 
           
Gross profit
    3,798       2,406  
 
               
Selling, general and administrative expenses
    (2,625 )     (2,449 )
Restructuring costs
          (230 )
Net financing charges
    (117 )     (167 )
Equity income (loss)
    156       (104 )
 
           
Income (loss) from continuing operations before income taxes
    1,212       (544 )
 
               
Provision for income taxes
    123       109  
 
           
 
               
Net income (loss)
    1,089       (653 )
 
               
Less: income (loss) attributable to noncontrolling interests
    47       (15 )
 
           
 
               
Net income (loss) attributable to JCI
  $ 1,042     $ (638 )
 
           
 
               
Diluted earnings (loss) per share
  $ 1.53     $ (1.07 )
 
           
 
               
Diluted weighted average shares
    682       594  
 
           
Shares outstanding at period end
    673       595  
 
           


 

July 23, 2010
Page 7
JOHNSON CONTROLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions; unaudited)
                         
    June 30,     September 30,     June 30,  
    2010     2009     2009  
ASSETS
                       
Cash and cash equivalents
  $ 908     $ 761     $ 543  
Accounts receivable — net
    5,452       5,528       4,910  
Inventories
    1,644       1,521       1,561  
Other current assets
    2,114       2,016       1,725  
 
                 
Current assets
    10,118       9,826       8,739  
 
                       
Property, plant and equipment — net
    3,706       3,986       3,969  
Goodwill
    6,217       6,542       6,420  
Other intangible assets — net
    695       746       745  
Investments in partially-owned affiliates
    766       718       713  
Other noncurrent assets
    2,584       2,270       1,880  
 
                 
Total assets
  $ 24,086     $ 24,088     $ 22,466  
 
                 
 
                       
LIABILITIES AND EQUITY
                       
Short-term debt and current portion of long-term debt
  $ 727     $ 798     $ 777  
Accounts payable and accrued expenses
    5,928       5,306       4,633  
Other current liabilities
    2,377       2,612       2,533  
 
                 
Current liabilities
    9,032       8,716       7,943  
 
                       
Long-term debt
    2,638       3,168       4,001  
Other noncurrent liabilities
    2,771       2,865       2,093  
Shareholders’ equity attributable to JCI
    9,424       9,138       8,227  
Noncontrolling interests
    221       201       202  
 
                 
Total liabilities and equity
  $ 24,086     $ 24,088     $ 22,466  
 
                 


 

July 23, 2010
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JOHNSON CONTROLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                 
    Three Months Ended June 30,  
    2010     2009  
Operating Activities
               
Net income attributable to JCI
  $ 418     $ 163  
Income attributable to noncontrolling interests
    8       4  
 
           
 
               
Net income
    426       167  
 
               
Adjustments to reconcile net income to cash provided by operating activities:
               
Depreciation and amortization
    168       180  
Equity in earnings of partially-owned affiliates, net of dividends received
    6       (4 )
Deferred income taxes
    (51 )     (20 )
Impairment charges
    11        
Other — net
    17       47  
Changes in working capital, excluding acquisitions:
               
Accounts receivable
    (182 )     (27 )
Inventories
    (111 )     135  
Restructuring reserves
    (32 )     (53 )
Accounts payable and accrued liabilities
    219       87  
Change in other assets and liabilities
    (44 )     (18 )
 
           
Cash provided by operating activities
    427       494  
 
           
 
               
Investing Activities
               
Capital expenditures
    (215 )     (103 )
Sale of property, plant and equipment
    10       5  
Acquisition of businesses, net of cash acquired
    (17 )      
Other — net
    (63 )     (41 )
 
           
Cash used by investing activities
    (285 )     (139 )
 
           
 
               
Financing Activities
               
Decrease in short and long-term debt — net
    (5 )     (30 )
Payment of cash dividends
    (87 )     (77 )
Other — net
    88       (16 )
 
           
Cash used by financing activities
    (4 )     (123 )
 
           
 
Increase in cash and cash equivalents
  $ 138     $ 232  
 
           

 


 

July 23, 2010
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JOHNSON CONTROLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
                 
    Nine Months Ended June 30,  
    2010     2009  
Operating Activities
               
Net income (loss) attributable to JCI
  $ 1,042     $ (638 )
Income (loss) attributable to noncontrolling interests
    47       (15 )
 
           
 
               
Net income (loss)
    1,089       (653 )
 
               
Adjustments to reconcile net income (loss) to cash provided by operating activities:
               
Depreciation and amortization
    524       561  
Equity in earnings of partially-owned affiliates, net of dividends received
    (38 )     207  
Deferred income taxes
    (95 )     202  
Impairment charges
    30       156  
Other — net
    79       89  
Changes in working capital, excluding acquisitions:
               
Accounts receivable
    (218 )     1,297  
Inventories
    (208 )     476  
Restructuring reserves
    (156 )     (22 )
Accounts payable and accrued liabilities
    595       (1,666 )
Change in other assets and liabilities
    (154 )     (288 )
 
           
Cash provided by operating activities
    1,448       359  
 
           
 
               
Investing Activities
               
Capital expenditures
    (526 )     (529 )
Sale of property, plant and equipment
    34       8  
Acquisition of businesses, net of cash acquired
    (32 )     (32 )
Other — net
    (131 )     (121 )
 
           
Cash used by investing activities
    (655 )     (674 )
 
           
 
               
Financing Activities
               
Increase (decrease) in short and long-term debt — net
    (574 )     704  
Payment of cash dividends
    (251 )     (231 )
Other — net
    179       1  
 
           
Cash provided (used) by financing activities
    (646 )     474  
 
           
 
               
Increase in cash and cash equivalents
  $ 147     $ 159  
 
           

 


 

July 23, 2010
Page 10
FOOTNOTES
1. Business Unit Summary
                                                 
    Three Months Ended     Nine Months Ended  
    June 30,     June 30,  
    (unaudited)     (unaudited)  
(in millions)   2010     2009     %     2010     2009     %  
Net Sales
                                               
Building efficiency
  $ 3,217     $ 3,167       2 %   $ 9,208     $ 9,219       0 %
Automotive experience
    4,213       2,956       43 %     12,482       8,532       46 %
Power solutions
    1,110       856       30 %     3,575       2,879       24 %
 
                                       
Net Sales
  $ 8,540     $ 6,979             $ 25,265     $ 20,630          
 
                                       
 
                                               
Segment Income (1)
                                               
Building efficiency
  $ 190     $ 190       0 %   $ 398     $ 259       54 %
Automotive experience
    171       (14 )     *       481       (618 )     *  
Power solutions
    135       106       27 %     450       212       *  
 
                                       
Segment Income
  $ 496     $ 282             $ 1,329     $ (147 )        
 
                                       
 
Net financing charges
    (39 )     (65 )             (117 )     (167 )        
Restructuring costs
                              (230 )        
 
                                       
Income from continuing operations before income taxes and noncontrolling interests
  $ 457     $ 217             $ 1,212     $ (544 )        
 
                                       
 
Net Sales
                                               
Products and systems
  $ 6,798     $ 5,304       28 %   $ 20,116     $ 15,668       28 %
Services
    1,742       1,675       4 %     5,149       4,962       4 %
 
                                       
 
  $ 8,540     $ 6,979             $ 25,265     $ 20,630          
 
                                       
 
Cost of Sales
                                               
Products and systems
  $ 5,783     $ 4,608       25 %   $ 17,254     $ 14,243       21 %
Services
    1,418       1,332       6 %     4,213       3,981       6 %
 
                                       
 
  $ 7,201     $ 5,940             $ 21,467     $ 18,224          
 
                                       
 
*   Metric not meaningful
 
(1)   Management evaluates the performance of the segments based primarily on segment income, which represents income from continuing operations before income taxes and noncontrolling interests, excluding net financing charges and restructuring costs.
Building efficiency — Provides facility systems and services including comfort, energy and security management for the non-residential buildings market and provides heating, ventilating, and air conditioning products and services for the residential and non-residential building markets.
Automotive experience — Designs and manufactures interior systems and products for passenger cars and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles.
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.
2. Restructuring Costs
As part of its continuing efforts to reduce costs and improve the efficiency of its global operations, the Company announced a restructuring plan in the second quarter of fiscal year 2009 and recorded a $230 million restructuring charge. This restructuring charge included a $46 million impairment charge 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.
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 initiatives in 2010. The automotive-related restructuring is in response to the fundamentals of the European, North American and Japanese 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. Power solutions’ actions are focused on optimizing its regional manufacturing capacity to reflect lower overall demand for original equipment batteries resulting from lower vehicle production levels.

 


 

July 23, 2010
Page 11
3. Impairment Charges
The Company reviews long-lived assets, including property, plant and equipment and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable.
At June 30, 2010, the Company recorded a $11 million impairment charge related to property, plant and equipment in the Asia automotive experience segment.
At March 31, 2010, the Company recorded a $19 million impairment charge related to property, plant and equipment in the North America automotive experience segment as part of the Company’s revised restructuring actions. This impairment charge was offset by a decrease in the Company’s restructuring reserve for $19 million due to lower employee severance and termination benefit cash payouts than previously calculated.
At December 31, 2008, the Company recorded a $77 million and $33 million impairment charge related to property, plant and equipment in the automotive experience business in North America and Europe, respectively. The impairment charges are included in cost of sales in the accompanying Condensed Consolidated Statements of Income. At December 31, 2008, the Company also recorded a $152 million charge related to an impairment of an equity investment in a 48%-owned joint venture with US Airconditioning Distributors, Inc. in the Company’s building efficiency business. This impairment charge is included in equity loss in the accompanying Condensed Consolidated Statements of Income.
4. Income Taxes
The Company’s annual estimated effective tax rate before consideration of discrete tax items for the year ending September 30, 2010 is 18 percent. The effective tax rate inclusive of discrete tax items for the third quarter of fiscal 2010 is 6.8 percent, as compared to 23.0 percent for the third quarter of fiscal 2009. The third quarter of fiscal 2010 reflects a $51 million ($.07/share) tax benefit related to the resolution of tax audits and a valuation allowance release and the third quarter of fiscal 2009 reflects a net $9 million ($.01/share) tax benefit.
5. Earnings per Share
The following table reconciles the numerators and denominators used to calculate basic and diluted earning per share (in millions):
                                 
    Three Months Ended     Nine Months Ended  
    June 30     June 30  
    2010     2009     2010     2009  
    (unaudited)     (unaudited)  
Income Available to Common Shareholders
                               
 
                               
Basic income (loss) available to common shareholders
  $ 418     $ 163     $ 1,042     $ (638 )
 
                               
Financing costs related to the convertible senior notes and equity units, net of tax
    1       13       4        
 
                               
 
                       
Diluted income (loss) available to common shareholders
  $ 419     $ 176     $ 1,046     $ (638 )
 
                       
 
                               
Weighted Average Shares Outstanding
                               
Basic weighted average shares outstanding
    672.7       594.7       671.6       593.9  
Effect of dilutive securities:
                               
Stock options
    6.2       1.8       6.1        
Convertible senior notes
    0.1       36.0       0.1        
Equity units
    4.5       43.7       4.5        
 
                       
Diluted weighted average shares outstanding
    683.5       676.2       682.3       593.9