Johnson Controls Announces a Third-Quarter Restructuring Charge and Non- Recurring Tax Benefits
MILWAUKEE, June 29 -- As part of its continuing efforts to reduce costs and improve the efficiency of its global operations, Johnson Controls, Inc. today announced it plans to initiate restructuring activities in its third quarter which will result in an estimated after-tax charge of $130 to $140 million, or $0.66 to $0.71 per diluted share.
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The restructuring charge relates to cost reduction initiatives mainly in its interior experience and building efficiency businesses and includes workforce reductions and plant consolidations. The company expects to substantially complete the initiatives over the next 12 months.
The automotive-related restructuring is focused on improving the profitability associated with the manufacturing and supply of instrument panels, headliners and other interior components in North America. In Europe, it reflects actions intended to increase the efficiency of its seating component operations. The charges associated with the building efficiency business mostly relate to Europe where the company is launching its systems redesign initiative. Systems redesign was successfully completed in the North American building efficiency branch offices last year, resulting in improved profitability and increased market opportunities.
Johnson Controls also said it expects to record non-recurring tax benefits in the third quarter of approximately $135 million, or approximately $0.68 per share. The tax benefits principally result from the reversal of a German deferred tax asset valuation allowance, due to the sustained profitability and expectations for future profitability of the company's operations in that country.
The company's third quarter ends on June 30, 2006. Johnson Controls will report earnings on July 19, 2006.
The company will hold an analyst conference call on Friday, June 30, 2006, from 8:30 to 9:00 a.m. Eastern time. A live webcast of the call, as well as a recorded archive, can be accessed at http://www.johnsoncontrols.com/financial/ .
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. Founded in 1885, the company has its headquarters in Milwaukee, Wisconsin. For additional information, please visit http://www.johnsoncontrols.com/ .
Johnson Controls, Inc. ("the Company") has made forward- looking statements in this document 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, including information concerning possible or assumed future risks. For those statements, the Company cautions that numerous important factors, such as currency exchange rates, the ability to execute on restructuring actions according to anticipated timelines and costs and the ability to deliver planned levels of profitability in Germany, as well as those factors discussed in the Company's Form 8-K filing (dated January 19, 2006) and the risk factors as filed with the SEC January 9, 2006, 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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