Johnson Controls Reports First Quarter Fiscal 2013 Financial Results

     Johnson Controls Reports First Quarter Fiscal 2013 Financial Results

PR Newswire

MILWAUKEE, Jan. 18, 2013

MILWAUKEE, Jan. 18, 2013 /PRNewswire/ -- Johnson Controls (NYSE: JCI)today
reported its financial results for the first quarter of fiscal 2013.
Highlights include:

  oNet sales of $10.4 billion, level with the 2012 first quarter.
  oIncome from business segments of $541 million vs. $621 million, down 13
  oNet income of $354 million, or $0.52 per diluted share, compared with net
    income of $424 million, or $0.62 per diluted share in the 2012 first


"Our first quarter results were in-line with the expectations we announced
during our earnings release last October. Global demand in our markets was
softer than a year ago, but we benefitted from the strong backlog of business
we had entering the fiscal year," said Stephen A. Roell, chairman and chief
executive officer of Johnson Controls. "European demand continued to soften
and we began restructuring initiatives in the third and fourth quarters of
fiscal 2012 to improve our performance in the region. We expect to realize the
benefits of those actions in the second half of the year."

Business results

Building Efficiency sales in the fiscal first quarter of 2013 were $3.5
billion, comparable to the 2012 first quarter as higher sales in Asia and
Global Workplace Solutions were offset by lower demand in Europe and North
America. Backlog was level compared to the first quarter of last year at $5.1
billion, with higher demand in Asia offset by softness in North America.
Orders were lower, with a double-digit increase in China more than offset by
other geographic regions.

Segment income of $172 million was up 19 percent compared with last year,
consistent with the company's expectations, as the company continued to
implement cost reduction and pricing initiatives.

Automotive Experience revenues in the fiscal first quarter of 2013 were $5.2
billion, comparable to the 2012 quarter, as higher automotive production in
North America and Asia was offset by lower production in Europe. Automotive
industry production in the quarter increased 11 percent in North America and 3
percent in Asia versus a decline of 9 percent in Europe. Seating and Interiors
sales were equal to last year while Electronics revenues declined due to lower
auto production rates in Europe where the company has a higher level of
electronics content. Revenues in China, which are primarily related to seating
and generated through non-consolidated joint ventures, increased 21 percent to
$1.4 billion. Johnson Controls has 29 joint ventures in China operating 56
manufacturing plants and expects to open 10 additional facilities in the next
18 months.

Automotive Experience segment income was $101 million, 50 percent lower than
in the first quarter of 2012. The decrease was a result of improvements in
North America being more than offset by higher engineering and product
development costs, the impact of lower volumes in Europe, as well as
operational inefficiencies the company is taking steps to address.
Profitability improved in the Interiors segment as a result of the company's
cost reduction initiatives.

At its North American auto show exhibit in Detroit this week, Johnson Controls
showcased more than 30 innovative seating, interior and electronics
technologies designed to help automakers differentiate future vehicle models.

Power Solutions sales in the first quarter of 2013 increased 4 percent to $1.7
billion led by a double-digit increase in unit shipments in Asia as well as
higher demand in Europe. Original equipment battery shipments in North America
were higher year-over-year, while aftermarket unit shipments were lower. Power
Solutions segment income was $268 million, down 3 percent versus $275 million
in the first quarter of 2012.

The company said that the ramp up of its recycling facility in South Carolina
and construction of its second Chinese battery plant are proceeding on
schedule. At the North American auto show, Johnson Controls introduced a
unique lithium ion / lead acid battery module for the micro-hybrid vehicles
that automakers are expected to launch later in the decade.

2013 Outlook

"Uncertainties remain in our global markets, and we expect earnings in the
first half of fiscal 2013 to be significantly lower than 2012, consistent with
our earlier forecast. We continue to have confidence in our full-year guidance
for higher revenues and earnings in fiscal 2013," said Mr. Roell. "The
long-term growth opportunities for our businesses are intact. We believe we
have the right strategies and investments in place to outperform in our
industries as the markets improve."

Johnson Controls expects earnings per share of $0.40 - $0.42 in the second
quarter of fiscal 2013. The forecast reflects the current European automotive
production environment and short-term delays in flexing labor in the region as
well as a high level of launch activity. The company also reaffirmed its
guidance for the full fiscal year.

Johnson Controls, Inc. has made statements in this document that are
forward-looking and, therefore, are subject to risks and uncertainties. All
statements in this document other than statements of historical fact are
statements that are, or could be, deemed "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. In this
document, statements regarding future financial position, sales, costs,
earnings, cash flows, other measures of results of operations, capital
expenditures or debt levels and plans, objectives, outlook, targets, guidance
or goals are forward-looking statements. Words such as "may," "will,"
"expect," "intend," "estimate," "anticipate," "believe," "should," "forecast,"
"project" or "plan" or terms of similar meaning are also generally intended to
identify forward-looking statements. Johnson Controls cautions that these
statements are subject to numerous important risks, uncertainties, assumptions
and other factors, some of which are beyond Johnson Controls' control, that
could cause Johnson Controls' actual results to differ materially from those
expressed or implied by such forward-looking statements. These factors include
the strength of the U.S. or other economies, automotive vehicle production
levels, mix and schedules, energy and commodity prices, availability of raw
materials and component products, currency exchange rates, and cancellation of
or changes to commercial contracts, as well as other factors discussed in Item
1A of Part I of Johnson Controls' most recent Annual Report on Form 10-K for
the year ended September 30, 2012 and Johnson Controls' subsequent Quarterly
Reports on Form 10-Q. Shareholders, potential investors and others should
consider these factors in evaluating the forward-looking statements and should
not place undue reliance on such statements. The forward-looking statements
included in this document are only made as of the date of this document, and
Johnson Controls assumes no obligation, and disclaims any obligation, to
update forward-looking statements to reflect events or circumstances occurring
after the date of this document.

About Johnson Controls

Johnson Controls is a global diversified technology and industrial leader
serving customers in more than 150 countries. Our 170,000 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 2012, Corporate
Responsibility Magazine recognized Johnson Controls as the #5 company in its
annual "100 Best Corporate Citizens" list. For additional information, please

(in millions, except per share data; unaudited)
                                          Three Months Ended December 31,
                                          2012         2011 (Revised)
Net sales                                 $ 10,422     $        10,417
Cost of sales                             8,914        8,881
 Gross profit                          1,508        1,536
Selling, general and administrative       (1,052)      (1,035)
Net financing charges                     (61)         (49)
Equity income                             85           120
Income before income taxes                480          572
Provision for income taxes                96           113
Net income                                384          459
Less: income attributable to              30           35
noncontrolling interests
Net income attributable to JCI            $   354   $          
Diluted earnings per share               $   0.52   $         
Diluted weighted average shares           687          689
Shares outstanding at period end          684          680

(in millions; unaudited)
                                    December 31,   September 30,  December 31,
                                    2012           2012           2011
Cash and cash equivalents           $        $        $     
                                    314           265            241
Accounts receivable - net           7,090          7,308          6,888
Inventories                         2,260          2,227          2,283
Other current assets                3,164          2,873          2,425
 Current assets     12,828         12,673         11,837
Property, plant and equipment -     6,553          6,440          5,743
Goodwill                            7,016          6,982          6,955
Other intangible assets - net       1,031          947            941
Investments in partially-owned      1,015          948            896
Other noncurrent assets             2,809          2,894          3,311
 Total assets        $          $          $    
                                    31,252         30,884         29,683
Short-term debt and current         $         $        $     
portion of long-term debt           1,035          747            457
Accounts payable and accrued        6,811          7,204          6,859
Other current liabilities           2,922          2,904          2,787
Current            10,768         10,855         10,103
Long-term debt                      5,413          5,321          5,526
Other noncurrent liabilities        2,776          2,752          2,494
Redeemable noncontrolling           270            253            282
Shareholders' equity attributable   11,870         11,555         11,137
to JCI
Noncontrolling interests            155            148            141
Total liabilities  $          $          $    
and equity                          31,252         30,884         29,683

(in millions; unaudited)
                                               Three Months Ended December 31,
                                               2012            2011 (Revised)
Operating Activities
Net income attributable to JCI                 $         $       
                                                354          424
Income attributable to noncontrolling          30              35
Net income                                     384             459
Adjustments to reconcile net income to cash
provided (used) by operating activities:
   Depreciation and amortization               223             196
   Pension, postretirement health and other    (16)            7
   benefit expense
   Pension, postretirement health and other    (16)            (342)
   benefit contributions
   Equity in earnings of partially-owned       (48)            (102)
   affiliates, net of dividends received
   Deferred income taxes                       (8)             69
   Other                                      13              18
   Changes in assets and liabilities,
   excluding acquisitions and divestitures:
           Accounts receivable                 241             206
           Inventories                         (20)            5
           Restructuring reserves              (34)            (10)
           Accounts payable and accrued        (167)           (305)
           Change in other assets and          (254)           (298)
                 Cash provided (used) by       298             (97)
                 operating activities
Investing Activities
Capital expenditures                           (371)           (538)
Sale of property, plant and equipment         17              3
Acquisition of businesses, net of cash         -               (11)
Other                                         (11)            (85)
                 Cash used by investing        (365)           (631)
Financing Activities
Increase in short and long-term debt - net     373             808
Payment of cash dividends                      (253)           (109)
Other                                         35              (18)
                 Cash provided by financing    155             681
Effect of exchange rate changes on cash and    (39)            31
cash equivalents
Increase (decrease) in cash and cash           $         $       
equivalents                                      49          (16)

1. Business Unit Summary
In the fourth quarter of fiscal 2012, the Company changed its method of
accounting for pension and postretirement benefits which required
retrospective application to prior year financial statements. As a result of
this accounting change, the segment income amounts shown below reflect a
pension and postretirement expense reduction of $23 million ($0.03) for the
fiscal 2012 first quarter.
                             Three Months Ended
                             December 31,
(in millions)                (unaudited)
                             2012                2011 (Revised)         %
Net Sales
Building Efficiency          $ 3,532            $      3,542     0%
Automotive Experience        5,214               5,261                  -1%
Power Solutions              1,676               1,614                  4%
 Net Sales     $10,422             $     10,417
Segment Income(1)
Building Efficiency          $   172           $               19%
Automotive Experience        101                 201                    -50%
Power Solutions              268                 275                    -3%
 Segment       $   541           $       
Income                                           621
Restructuring costs          $     -        $        
Mark-to-market charge for
pension and postretirement   -                   -
Net financing charges        (61)                (49)
Income before income taxes   $   480           $       
Net Sales
Products and systems         $ 8,357            $      8,334     0%
Services                     2,065               2,083                  -1%
                             $10,422             $     10,417
Cost of Sales
Products and systems         $ 7,215            $      7,159     1%
Services                     1,699               1,722                  -1%
                             $ 8,914            $      8,881

(1) Management evaluates the performance of the business units based primarily
on segment income, which represents income from continuing operations before
income taxes and noncontrolling interests, excluding net financing charges,
significant restructuring costs, and the net mark-to-market adjustments
related to pension and postretirement plans.
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 2013 and fiscal 2012 is
20 percent.
3. Earnings Per Share
                                 Three Months Ended
                                 December 31,
                                 2012                 2011 (Revised)
Income Available to Common
Basic income available to common
shareholders                     $   354            $        424
Interest expense, net of tax     -                    1
Diluted income available to
shareholders                     $   354            $        425
Weighted Average Shares
Basic weighted average shares    683.1                679.8
Effect of dilutive securities:
 Stock options               3.6                  5.6
 Equity units                -                    3.7
Diluted weighted average shares  686.7                689.1


Glen L. Ponczak (Investors)
(414) 524-2375

David L. Urban (Investors)
(414) 524-2838

Fraser Engerman (Media)
(414) 524-2733

SOURCE Johnson Controls, Inc.

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