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Johnson Controls Anticipates Growth in its 2001 Financial Results

6 October 2000

Johnson Controls Anticipates Double-Digit Growth in its Financial Results for Fiscal Year 2001

    MILWAUKEE, Oct. 5 Johnson Controls, Inc. (JCI)
told analysts today at a meeting in New York that it expects double-digit
growth in sales and net income for fiscal year 2001.
    Chairman and Chief Executive Officer James H. Keyes said that he
anticipates the higher results for fiscal year 2001 to come from both its
automotive and controls businesses, as they sustain the successful growth
strategies of the past decade into the future.  Since 1990, Johnson Controls
has had annualized sales growth of 16% and earnings growth of 22%.
    Mr. Keyes stated, "During the past decade, Johnson Controls has achieved
strong growth and improved its return on invested capital.  We have shown that
if our employees continue to do more for our customers, increase our use of
technology and increase our share in global markets, there are enormous growth
opportunities available to us."
    For fiscal year 2001, the company said it is anticipating that its
automotive segment sales will increase by 10-15% over the prior year primarily
due to new contracts as well as its acquisition of a Japanese seating supplier
in September 2000.  Johnson Controls explained that it expects this range of
increase even though it is assuming that vehicle production levels in North
America and Europe will decline slightly over the next 12 months.  Before the
effect of the Japanese automotive acquisition, the operating margin for the
automotive segment is expected to improve, primarily due to quality
initiatives throughout its seating, interiors and battery operations
worldwide.  An additional contributor is its seating operation in South
America, which is anticipated to improve to a break-even performance
reflecting operating efficiencies and a stronger industry environment.
    Johnson Controls also said that its incremental backlog of new orders for
its interior systems should generate additional revenue for its automotive
segment of approximately $3.0 billion by the end of fiscal year 2003.  Mr.
Keyes noted that the strength of the backlog reflects positively on the
company's offerings of innovative interior systems that help automakers
differentiate their vehicles to consumers.
    He added that Johnson Controls' investments in technology, especially
electronics, is key to the company's success in providing integrated interiors
that enhance passenger safety, comfort and convenience.  The backlog amount,
covering fiscal 2001 through 2003, includes activity by certain
non-consolidated affiliates and assumes relatively stable automotive
conditions worldwide over the three-year period.
    For the controls segment, Johnson Controls expects revenue to also
increase by 10-15% over fiscal year 2000, reflecting positive demand for its
systems and services that improve indoor building comfort, reduce energy costs
and improve the environment.  It also expects growth from providing integrated
facility management to a higher number of corporations and government entities
worldwide as they increasingly recognize the value associated with reliable
operating systems and employee productivity.  The operating margin for the
controls segment is expected to increase modestly on the higher volume of
activity as well as quality improvements and E-business initiatives.
    Johnson Controls also commented that the 2001 outlook for its financial
position remains strong as free cash flow (net income plus depreciation and
amortization, minus capital expenditures) is anticipated to be a record.
    On September 19, 2000, Johnson Controls, a global leader in automotive
systems and facility management and control, announced that it anticipated its
earnings per diluted share for fiscal year 2000 would total $5.06 - $5.09, at
least 23% higher than $4.13 per diluted share for fiscal 1999.  It said that
it intends to release its final results for the three months and year ended
September 30, 2000 on October 19.
    A summary of supplementary financial estimates provided by the company on
October 5 follows:


                                                    FY2000          FY2001
                                                       ($S in millions)
                                                   Estimates       Estimates

    Capital expenditures                            $525-550       $575-600
    Depreciation                                 + or - $390       $425-440
    Amortization of intangibles                         $ 80        $ 80-85
    Total debt to total capitalization             + or - 40%     + or - 35%
    Interest expense,                               $110-115       $105-110
     net of interest income
    Minority interests in net earnings
     of subsidiaries                              + or - $45         $55-65