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Exhibit 99.1

LOGO

 

FOR IMMEDIATE RELEASE

 

CONTACT:  

Glen L. Ponczak (Investors)

(414) 524-2375

 

David L. Urban (Investors)

(414) 524-2838

 

Paul Mason (Media)

(414) 524-6114

   January 19, 2012

Johnson Controls Reports Record Sales and Earnings for Q1 2012; Company Full-Year Forecast Revised to 13-19% Growth

MILWAUKEE, Jan. 19, 2012 . . . For the first quarter of fiscal 2012, Johnson Controls reported record revenues and earnings. Highlights of the company’s first quarter of 2012 include:

 

   

Record net sales of $10.4 billion vs. $9.5 billion in Q1 2011, up 9%

 

   

Record income from business segments of $598 million vs. $533 million, up 12%

 

   

Record net income of $410 million or $0.60 per diluted share compared with net income of $375 million, or $0.55 per diluted share in the 2011 first quarter

“Our first quarter results were in line with the expectations we announced at the beginning of the year. The automotive and buildings markets were stable in the quarter and we benefitted from our record backlogs in both businesses,” said Stephen A. Roell, Johnson Controls Chairman and Chief Executive Officer. “Automotive Experience revenues grew at a double-digit pace across all geographic regions and Building Efficiency commercial revenues and backlog were higher in a challenged global market. Power Solutions improved sales and income despite the soft demand for aftermarket batteries resulting from unseasonably warm winter temperatures globally.”

Mr. Roell added, “Our growth in the first quarter is evidence of continued market share gains as we sustainably outperform our underlying industries. We took steps to improve our execution and added resources to improve quality and productivity. At the same time, we continued to invest in order to support our global growth and margin expansion opportunities.”

Business results

Automotive Experience sales in the 2012 quarter increased 15% to $5.3 billion versus $4.6 billion last year due primarily to the incremental revenues associated with the 2011 acquisitions as well as launches of new automotive seating and interior programs. Revenues increased 15% in each geographic market. Automotive industry production in the quarter increased 16% in North America, declined 4% in Europe and was level with the 2011 period in Asia. Revenues in China, which are mostly generated through non-consolidated joint ventures, increased 10% to $1.1 billion. Johnson Controls has 28 joint ventures in China operating 47 manufacturing plants. It holds a 45% share of the Chinese auto seating market.

 

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LOGO

 

Automotive Experience reported segment income of $194 million in the current quarter, up 10% due to significant increases in Europe and Asia. European segment income benefitted from the positive impact of the 2011 acquisitions, improving to $21 million versus break-even performance last year. In Asia, the higher profitability of the company’s joint ventures resulted in a segment income increase of 69%, to $103 million, compared to $61 million last year.

As previously indicated, North America first quarter earnings were negatively impacted by costs associated with a new metals plant as well as higher engineering and launch costs associated with new business wins.

The company has increased resources dedicated to improving its launch efficiencies and quality, including adding management capacity in its automotive metals business and the hiring of more than 300 Six Sigma Blackbelts and quality experts. Johnson Controls said it believes these actions will make an increasingly positive impact on earnings starting in the second half of fiscal 2012.

Building Efficiency sales in the 2012 first quarter were $3.5 billion, up 4% compared with last year, led by a 13% revenue increase in Asia and 10% increase in Global Workplace Solutions. Sales in Europe and residential HVAC declined in the quarter. First quarter backlog increased 8% to a record $5.3 billion versus $4.9 billion in the year-ago quarter, with gains in all geographic regions. Orders in the quarter were slightly up compared with last year.

Segment income of $133 million was down 4% compared with last year, consistent with the company’s expectations. Higher income in North America Systems was offset by lower results in North America Service, Asia and Global Workplace Solutions. The company said the return on sales in the current quarter was depressed by unusually high profitability in Asia last year as well as increased investments in growth initiatives.

Johnson Controls said it has launched its new Panoptix offering. The Panoptix solution is an industry-first technology combining software, services and expertise to help customers optimize building performance.

Power Solutions sales in the first quarter of 2012 increased 4% to $1.6 billion due to a favorable product mix. Unit shipments were lower than expected. The company attributed the soft demand to unseasonably warm winter temperatures which negatively impacted shipments starting in December and are expected to further impact Q2 results.

Power Solutions segment income was $271 million, up 25% versus $217 million in the first quarter of 2011 as a result of a favorable product mix, the benefits of increased vertical integration and a non-recurring equity income benefit. The increases were partially offset by costs associated with the shutdown of the company’s Shanghai battery plant and the incremental costs associated with the consolidation of its hybrid battery joint venture.

 

Page 2 of 4


LOGO

 

Johnson Controls said that the construction of its recycling facility in South Carolina and of its third Chinese battery plant are proceeding on schedule. Demand continues to grow as expected for the company’s higher-margin AGM lead-acid batteries and plans to increase capacity are is progressing as expected.

Revised sales, earnings guidance for 2012

Johnson Controls today announced it was lowering its earnings expectations for fiscal 2012 to due to several factors:

 

   

Euro assumption lowered to $1.30 from original forecast of $1.35

 

   

Lower automotive production in Europe (now 19.6 million units, down 3.5% versus original assumption of 20.1 million, up 1.5%)

 

   

Weather-related softness in Q2 aftermarket battery demand

 

   

Assumes indefinite shut-down of Shanghai, China battery plant (discussions with the Chinese government are continuing)

 

   

Automotive North America metals start-up costs impact extending into Q2

 

   

Lower residential HVAC demand

As a result of these changes, the company said it believes its second quarter 2012 earnings will be approximately $0.52 - $0.54. For the full year, the earnings expectation is revised to a range of $2.70 - $2.85 (up 13% - 19%) versus earlier guidance of $2.85 - $3.00.

Johnson Controls said it was confident in its second half of 2012 outlook, noting that the 2011 second half earnings were significantly impacted by the Japan tsunami-related automotive disruption. In addition, the company’s second half 2012 earnings will benefit from the full-year impact of the automotive acquisitions, cost reduction initiatives and investments in Power Solutions .

“While there are some short-term changes to our original 2012 expectations, our primary growth and profitability story is intact,” said Mr. Roell. “We believe actions we have taken to improve our execution and profitability will provide momentum through the balance of the year and beyond. Despite the near-term challenges, we believe Johnson Controls will deliver double-digit earnings increases in 2012.”

###

About Johnson Controls

Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 162,000 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. In 2011, Corporate

 

Page 3 of 4


LOGO

 

Responsibility Magazine recognized Johnson Controls as the #1 company in its annual “100 Best Corporate Citizens” list. For additional information, please visit http://www.johnsoncontrols.com.

###

Johnson Controls, Inc. has made forward-looking statements in this document pertaining to its financial results for fiscal 2012 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 include 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 and commodity 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 as well as other factors discussed in Item 1A of Part I of the Company’s most recent Form 10-k filing (filed November 22, 2011) 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.

 

Page 4 of 4


 

Johnson Controls

January 19, 2012

Page 5

 

JOHNSON CONTROLS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data; unaudited)

 

     Three Months Ended December 31,  
             2011                     2010          
     Actual     Actual  

Net sales

   $ 10,417      $ 9,537   

Cost of sales

     8,885        8,123   
  

 

 

   

 

 

 

Gross profit

     1,532        1,414   

Selling, general and administrative expenses

     (1,054     (947

Net financing charges

     (49     (35

Equity income

     120        66   
  

 

 

   

 

 

 

Income before income taxes

     549        498   

Provision for income taxes

     104        95   
  

 

 

   

 

 

 

Net income

     445        403   

Less: income attributable to noncontrolling interests

     35        28   
  

 

 

   

 

 

 

Net income attributable to JCI

   $ 410      $ 375   
  

 

 

   

 

 

 

Diluted earnings per share

   $ 0.60      $ 0.55   
  

 

 

   

 

 

 

Diluted weighted average shares

     689        688   
  

 

 

   

 

 

 

Shares outstanding at period end

     680        677   
  

 

 

   

 

 

 


 

Johnson Controls

January 19, 2012

Page 6

 

JOHNSON CONTROLS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in millions; unaudited)

 

     December 31,
2011
     September 30,
2011
     December 31,
2010
 

ASSETS

        

Cash and cash equivalents

   $ 241       $ 257       $ 321   

Accounts receivable - net

     6,888         7,151         6,142   

Inventories

     2,283         2,316         1,939   

Other current assets

     2,425         2,291         2,313   
  

 

 

    

 

 

    

 

 

 

Current assets

     11,837         12,015         10,715   

Property, plant and equipment - net

     5,743         5,616         4,215   

Goodwill

     6,955         7,016         6,523   

Other intangible assets - net

     941         945         751   

Investments in partially-owned affiliates

     896         811         766   

Other noncurrent assets

     3,311         3,273         3,023   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 29,683       $ 29,676       $ 25,993   
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

        

Short-term debt and current portion of long-term debt

   $ 457       $ 613       $ 850   

Accounts payable and accrued expenses

     6,859         7,474         6,296   

Other current liabilities

     2,787         2,695         2,643   
  

 

 

    

 

 

    

 

 

 

Current liabilities

     10,103         10,782         9,789   

Long-term debt

     5,526         4,533         2,684   

Other noncurrent liabilities

     2,494         2,921         2,768   

Redeemable noncontrolling interests

     282         260         204   

Shareholders' equity attributable to JCI

     11,137         11,042         10,431   

Noncontrolling interests

     141         138         117   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

   $ 29,683       $ 29,676       $ 25,993   
  

 

 

    

 

 

    

 

 

 


 

Johnson Controls

January 19, 2012

Page 7

 

JOHNSON CONTROLS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

 

     Three Months Ended December 31,  
             2011                     2010          

Operating Activities

    

Net income attributable to JCI

   $ 410      $ 375   

Income attributable to noncontrolling interests

     35        28   
  

 

 

   

 

 

 

Net income

     445        403   

Adjustments to reconcile net income to cash provided (used) by operating activities:

    

Depreciation and amortization

     196        169   

Equity in earnings of partially-owned affiliates, net of dividends received

     (102     (22

Deferred income taxes

     60        —     

Other

     37        18   

Changes in assets and liabilities, excluding acquisitions:

    

Accounts receivable

     206        47   

Inventories

     5        (99

Restructuring reserves

     (10     (30

Accounts payable and accrued liabilities

     (636     (280

Other assets and liabilities

     (298     (113
  

 

 

   

 

 

 

Cash provided (used) by operating activities

     (97     93   
  

 

 

   

 

 

 

Investing Activities

    

Capital expenditures

     (538     (260

Sale of property, plant and equipment

     3        11   

Acquisition of businesses, net of cash acquired

     (11     (95

Other - net

     (85     (12
  

 

 

   

 

 

 

Cash used by investing activities

     (631     (356
  

 

 

   

 

 

 

Financing Activities

    

Increase in short and long-term debt - net

     808        13   

Payment of cash dividends

     (109     (87

Other - net

     (18     80   
  

 

 

   

 

 

 

Cash provided by financing activities

     681        6   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     31        18   
  

 

 

   

 

 

 

Decrease in cash and cash equivalents

   $ (16   $ (239
  

 

 

   

 

 

 


 

January 19, 2012

Page 8

 

FOOTNOTES

1. Business Unit Summary

 

(in millions)    Three Months Ended
December 31,

(unaudited)
 
     2011     2010     %  

Net Sales

      

Building efficiency

   $ 3,542      $ 3,397        4

Automotive experience

     5,261        4,585        15

Power solutions

     1,614        1,555        4
  

 

 

   

 

 

   

Net Sales

   $ 10,417      $ 9,537     
  

 

 

   

 

 

   

Segment Income (1)

      

Building efficiency

   $ 133      $ 139        -4

Automotive experience

     194        177        10

Power solutions

     271        217        25
  

 

 

   

 

 

   

Segment Income

   $ 598      $ 533     
  

 

 

   

 

 

   

Net financing charges

     (49     (35  
  

 

 

   

 

 

   

Income before income taxes

   $ 549      $ 498     
  

 

 

   

 

 

   

Net Sales

      

Products and systems

   $ 8,334      $ 7,595        10

Services

     2,083        1,942        7
  

 

 

   

 

 

   
   $ 10,417      $ 9,537     
  

 

 

   

 

 

   

Cost of Sales

      

Products and systems

   $ 7,162      $ 6,528        10

Services

     1,723        1,595        8
  

 

 

   

 

 

   
   $ 8,885      $ 8,123     
  

 

 

   

 

 

   

(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.

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. Income Taxes

The effective tax rate for the first quarter of fiscal 2012 and fiscal 2011 is 19 percent.

3. Debt and Financing Arrangements

In the first quarter of fiscal 2012, the Company issued $400 million aggregate principal amount of 2.6% senior unsecured fixed rate notes due in fiscal 2017, $450 million aggregate principal amount of 3.75% senior unsecured fixed rate notes due in fiscal 2022, and $250 million aggregate principal amount of 5.25% senior unsecured fixed rate notes due in fiscal 2042. Aggregate net proceeds of $1.1 billion from the issues were used for general corporate purposes including the retirement of short-term debt.

4. 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
December 31,
 
     2011      2010  
     (unaudited)  

Income Available to Common Shareholders

     

Basic income available to common shareholders

   $ 410       $ 375   

Interest expense, net of tax

     1         1   
  

 

 

    

 

 

 

Diluted income available to common shareholders

   $ 411       $ 376   
  

 

 

    

 

 

 

Weighted Average Shares Outstanding

     

Basic weighted average shares outstanding

     679.8         675.4   

Effect of dilutive securities:

     

Stock options

     5.6         7.9   

Convertible senior notes

     —           —     

Equity units

     3.7         4.5   
  

 

 

    

 

 

 

Diluted weighted average shares outstanding

     689.1         687.8