Johnson Controls Reports Record Sales, Earnings for Fourth Quarter

BUSCHEID, Germany and MILWAUKEE, Wisconsin, October 24 -- Johnson Controls, Inc. (JCI) today reported that its fourth quarter 2005 earnings from continuing operations rose 15% on a sales increase of 7%.

John M. Barth, Chairman and Chief Executive Officer, said "We are pleased to report record quarterly and full-year results, continuing our track record for growth. In 2005 we broadened our capabilities, expanded our addressable markets and strengthened the foundation for improved profitability. Our company enters 2006 as the global leader in each of our businesses and with a strong financial position. We appreciate the efforts of our employees and their commitment to increase the value we deliver to our customers and our shareholders."

Johnson Controls sales for the 2005 fourth quarter totaled USUS$6.9 billion, up 7% from US$6.4 billion last year. Operating income was US$436 million, up 14% from US$384 million last year. Income from continuing operations totaled US$293 million, up 15% from US$255 million in the 2004 period. Diluted earnings per share from continuing operations for the 2005 fourth quarter were US$1.50 versus US$1.31 in the prior year.

During the fourth quarter, the company recorded an US$8.7 million adjustment, net of tax, reducing the gain on sale of discontinued operations in the second quarter of 2005. Including this one-time reduction, diluted earnings per share were US$1.45, up from US$1.41.

Interior experience sales were US$4.5 billion, up 4% from the US$4.4 billion in the prior year. The increase was associated with the launch of new business which was partially offset by the deconsolidation of a North American joint venture during the third quarter of 2005.

Excluding the deconsolidation, sales for the fourth quarter would have increased 9%. Industry light vehicle production in North America is estimated to have been approximately 3% higher than the prior year amount while European production is estimated to have been 2-3% lower. Operating income declined 13%, to US$206 million versus US$238 million for the 2004 fourth quarter, primarily due to higher commodity costs which more than offset the benefit of operational improvements.

Power solutions sales increased 37% to US$864 million from US$632 million last year as a result of organic growth in North America and Europe, the impact of the Delphi battery acquisition and the consolidation of a Latin American joint venture in late 2004. Operating income rose 79% to US$114 million from US$64 million, reflecting the higher volume, favorable product mix, improved quality and operational efficiencies.

Building efficiency sales increased 5% to US$1.5 billion for the fourth quarter from US$1.4 billion in 2004, primarily due to higher North American systems and services activity for both new construction and existing buildings. Operating income was US$115 million, 40% above the 2004 amount of US$83 million, reflecting growth of higher-margin service business and the timing of benefits associated with efficiency and cost improvement initiatives in the North American branch office network. The backlog of uncompleted contracts at the end of 2005 was 5% higher than one year ago.

Financial Position

Capital expenditures for the 2005 fiscal year decreased to US$675 million, in line with earlier guidance. At September 30, 2005, the company's total debt to total capitalization declined to 28% from 34% at the prior year-end, despite funding acquisitions and the company's voluntary US$180 million contribution to its U.S. pension plans in July.

Fiscal 2006 Guidance

On October 11, 2005, Johnson Controls issued guidance on its expected performance for 2006. Fiscal 2006 sales are anticipated to increase approximately 15%, to US$32 billion.

Earnings per share from continuing operations are estimated to increase 13 to 17%, to a range of US$5.00 to US$5.15.

For the first quarter of 2006, Johnson Controls said it anticipates sales of US$6.8 billion and earnings per share from continuing operations of US$0.82 to US$0.85.

The company said it expects that its previously announced acquisition of York International will be completed in December 2005.

Further information is available from:

    
    Johnson Controls GmbH                   Johnson Controls GmbH
    Automotive Group                        Automotive Group
    Astrid Schafmeister                     Ina Longwitz
    Industriestrasse 20-30                  Industriestrasse 20-30
    51399 Burscheid                         51399 Burscheid

    Tel.: +49-2174-65-3189                  Tel.: +49-2174-65-4343
    Fax: +49-2174-65-3219                   Fax: +49-2174-65-3219
    E-Mail: astrid.schafmeister@jci.com     E-Mail: ina.longwitz@jci.com

Johnson Controls is a global leader in interior experience, building efficiency and power solutions. The company provides innovative automotive interiors that help make driving more comfortable, safe and enjoyable. For buildings, it offers products and services that optimize energy use and improve comfort and security. Johnson Controls also provides batteries for automobiles and hybrid electric vehicles, along with systems engineering and service expertise. Johnson Controls , founded in 1885, is headquartered in Milwaukee, Wisconsin. For additional information, please visit www.johnsoncontrols.com.

Johnson Controls GmbH, Automotive Group, Astrid Schafmeister, Industriestrasse 20-30, 51399 Burscheid, Tel.: +49-2174-65-3189, Fax: +49-2174-65-3219, E-Mail: astrid.schafmeister@jci.com; Johnson Controls GmbH, Automotive Group, Ina Longwitz, Industriestrasse 20-30, 51399 Burscheid, Tel.: +49-2174-65-4343, Fax: +49-2174-65-3219, E-Mail: ina.longwitz@jci.com