2. Forward-looking statement
Johnson Controls, Inc. (quot;the Companyquot;) has made forward-looking statements in this presentation
pertaining to its financial results for fiscal 2009 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 quot;outlook,quot;
quot;expectations,quot; quot;estimates,quot; or quot;forecasts.quot; For those statements, the Company cautions that numerous
important factors, such as automotive vehicle production levels, mix and schedules, financial distress of
key customers, energy prices, the strength of the U.S. or other economies, currency exchange rates,
cancellation of or changes to commercial contracts, liquidity, the ability to execute on restructuring
actions according to anticipated timelines and costs as well as other factors discussed in Item 1A of Part
II of the Company's most recent Form 10-k filing (filed November 25, 2008) could affect the Company's
actual results and could cause its actual consolidated results to differ materially from those expressed in
any f forward- l ki statement made b or on b h lf of, th C
d looking t t t d by, behalf f the Company.
Contact: Glen L. Ponczak
Director, Investor Relations
414-524-2375
Glen.L.Ponczak@jci.com
@j
2
3. Keith W d ll
K ith Wandell
President and Chief Operating Officer
3
4. Johnson Controls
Johnson Controls
Three world-class businesses
Power solutions Interior experience
Building efficiency
Providing the highest Delivering world-class
Creating quality indoor
quality, lowest cost technologies that
environments that are
automotive batteries to
differentiate vehicle
energy efficient,
help customers grow their
interiors and increase
comfortable and safe market shares and to
consumer demand
power the vehicles of
tomorrow
4
5. Johnson Controls Inc.
2008 financial results
Sales Earnings
$38.1 B
$ $1.4 B
$
Power
oe
15% Power
Buildings 26% Buildings
37% 46%
Automotive
Automotive
48%
28%
5
6. Automotive Experience
Leading global provider: systems and 2008 sales
components for seats, overheads,
$18.1
$18 1 Billion
doors, cockpits and electronics
d k it dlt i
– Supplying over 30 million cars per year
from 250 locations in 30 countries (1/3 in
Europe North
low-cost
low cost countries) Transplants
l
54% America Detroit 3
37% 48%
– Over 60% of revenues generated outside Asia
9%
of North America
*Excludes $1.5B unconsolidated revenue in China
6
7. 2009: Automotive Experience strengths
Record backlog of new seating and Backlog of new business*
interior programs
– $4 5 billion to launch between
$4.5
2009 and 2011
– 85% outside North America
– Reflects increasing market share in
Europe, Asia
– Primarily cars, CUVs
Winning new business,
increasing market share
Expanding leading market position in
China and Eastern Europe
Strong partner in a weakening
*Announced 10/08. Net of discontinued programs, includes
Announced
supply base unconsolidated sales, assumes stable production levels.
7
8. Historic changes in our markets
North American auto production
2009 estimated production forecast of 9.2million vehicles; lowest level since 1983
Down 34% in one year vs. 13.2 million vehicles in 2008
47% decline from the 2001 peak of 17.7 million units
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
F
51
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
87
89
91
93
95
97
99
01
03
05
07
09
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
8
9. Historic changes in our markets
European automotive production
Rapid deterioration; European markets
European automotive production
were stable through August 2008
Western Europe car registrations down 25
26% vs. last year 20
15
– December: Worst quarter since 1993
10
Eastern Europe registrations
5
down 23% in December quarter
0
Production still heading lower 2005 2006 2007 2008 2009 (e)
6.2
6.0 5.8
5.8
ion units
5.6 5.6
5.6
5.4
5.1
5.2
In milli
5.0
4.8
4.6
4.4 4.2
4.2
4.0
3.8
Q
Q1 Q
Q2 Q
Q3 Q
Q4 Q
Q1
FY 2008 FY 2009
9
10. Power Solutions
Largest global provider of
automotive batteries
Lead acid batteries
– #1 global market share of 36%
• Americas (50%)
• Europe (35%)
– Largest provider to the automotive
aftermarket
– Original equipment (OE) batteries
for the top automakers worldwide
– New entrants into Asia
• “China First” strategy
Lithium-ion batteries for hybrid
vehicle applications
10
11. 2009: Power Solutions strengths
Winning new OE and aftermarket
customers globally
Lowest cost, highest quality provider
– World-class manufacturing processes
and technologies (
g (PowerFrame) )
– Best Business Practices
Aftermarket (76% of sales) less economically
sensitive
sensiti e
Growing demand for AGM demand for micro-hybrid vehicles
Financial strength vs. economically distressed competitors
g y
Lithium-ion hybrid battery launch in 2009 (Nersac, France)
– First in the industry
11
12. 2009: Power solution strengths
Increasing market share
O’Reilly Auto Parts
More than 1,000 Checker Auto Parts, Kragen
Auto P t
A t Parts, and Schuck’s A t Supply stores
d S h k’ Auto S lt
Full line of automotive Super Start batteries
Optima® high performance automotive
batteries
Shipments to commence in February
Lithium-Ion production contracts
Azure Dynamics
Commercial delivery vehicles for FedEx,
Purolator, AT+T, Con Edison, etc.
Production to begin in 2010
Ford Plug-In contract announced 2/4/09
Production to begin in 2012
12
14. Building Efficiency
Largest global supplier of commercial building 2008 Sales:
services, HVAC equipment, building control $14.1 Billion
systems
Highly diversified: 1 million customers
Non-
in 125 countries Residential
94%
A huge installed base leading to repeat business Residential
Moderate cyclicality due to large service/renovation
volume
Asia
19%
North
Europe America
53%
29%
14
15. Building Efficiency
A growth industry
Demand for energy efficiency and sustainability
continues to expand g
p globally
y
Increased integration of building, business,
security and IT systems continues
Our competitive advantages
Industry-leading HVAC service business
– 13,000 service providers, twice the size of #2
competitor
Well positioned in growing emerging markets
Unique product and service offerings
Expertise and capability across the entire building
lifecycle
lif l
Strength in “institutional” vertical market
Renewable energy participation
– More than 400 active projects
15
16. Historic changes in our markets
Building Efficiency
Began to see softness in U.S.
commercial new construction markets in
Q4 2008
New construction slow-downs and
deferrals in Middle East due to low oil
prices and high vacancy rates
U.S. housing starts and existing-home
sales continue to decline
– U.S. housing starts dropped by 47%
year over year and 19% in the month
of December
f
16
17. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
Recurring revenues d i
R i driven b d
by demand
d
for increased energy efficiency,
greenhouse gas reductions, occupant
Service and
recurring comfort
revenues
Low overall economic sensitivity
75%
Economic sensitivity More
Less
New Global Technical Solutions Retrofit
Workplace Services
p
Construction
Solutions
25%
17
18. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
Technical services
– Van-based repair, maintain services via local
Johnson Controls branch offices
– Typically contracts: one or more years
Service and
– Not highly economically sensitive; deferred
recurring
maintenance leads to higher energy costs,
revenues
equipment failure
75%
– High renewal rates
– Highest service penetration in N. America
– Service culture developing in China, Middle
East
New
Construction
25%
18
19. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
Global Workplace Solutions
– On-site management and operation of facilities
– Primary customers: Global 1000
Service and
recurring – Multi year contracts
Multi-year
revenues
– Counter-cyclical: companies looking to cut
75%
costs turn to outsourcing
New
Construction
25%
19
20. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
Solutions
– Bundled offerings, driven by energy
efficiency improvements / alt. energy
Service and
– HVAC equ p e and controls installations,
C equipment a d co o s s a a o s,
recurring
revenues coupled with multi-year service contracts
75%
– Popular in government and education
buildings as it requires no capital outlay and
provides positive cash flow; offsets bonding,
tax revenue issues
New
Construction – Primarily North America
25% – Clinton Climate Initiative bringing
performance contracting to new markets
20
21. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
Retrofit
– Primarily replacement of HVAC
Service and equipment and controls at end of life or
recurring
failure
revenues
– Not generally deferrable for prolonged
75%
periods
– Includes engineering and installation
services
New
Construction
25%
21
22. Building Efficiency
High level of recurring revenues
Building Efficiency commercial building sales
North America
– High concentration in quot;institutionalquot;
buildings
Service and
recurring -Government, healthcare education
Government healthcare,
revenues
-Institutional sector historically
75%
performs significantly better than
overall construction market; true this
cycle as well
-Slowing, but no radical decline
New
Construction International
It ti l
25%
– Europe down mid-single digits
– Middle East significantly lower
– China up low double digit
double-digit
22
23. Non-residential buildings
High level of visibility
Backlog Visibility of future
performance
Updated quarterly
$4.7 B backlog ( 8%) at
(+8%)
Signed contract; work not yet completed
Si d k ld December 31, 2008
Converts to revenue in 6-9 months Pipeline stable
Not included: Workplace Solutions or Unitary -New construction down
(residential) Products businesses -Existing buildings up single digits
Historically low backlog cancellation rate -Strength in federal, healthcare
and higher education
– Contracts typically awarded after financing is in
place & work has begun
p g
– Tighter credit could have impact, but no atypical
cancellations to date
Pipeline
“Pipeline” tracking of bid activity
Precursor to backlog. 6-9 months of additional
visibility
23
24. Building Efficiency positives
Federal investments in energy efficiency
American Recovery and
“We would prefer spending money on things
Reinvestment Bill (ARRP) of 2009
like making sure all Federal buildings are energy
efficient so that taxpayers are saving money over
ffi i t th t t i
Significant funds for government and
the long term.
school building energy efficiency
“We will modernize more than 75% of federal
Johnson Controls advantaged to win
buildings and improve the energy efficiency of
two million American homes. new business
“In the process, we will put Americans to work
– Government procurement processes
in new jobs—jobs constructing fuel efficient cars
j j g
in place
and buildings.”
– Long history of successful projects
-President Barack Obama
January 8, 2009
8
Positive impact likely not until FY 2010
24
25. Building Efficiency positives
Federal investments in energy efficiency
Prepared to take advantage of the new opportunities
Existing Federal government business unit
– Expanded sales force
Enhanced vertical segment teams
– Expertise and focus around State government higher education
government, education,
K-12 schools and hospitals; all are slated to receive funding
through the ARRP
Unmatched sales/service branch office network
Renewable Energy Center of Excellence
– Positions Johnson Controls to capture integrated renewables
opportunities contemplated under the ARRP
Structure in place to support government accountability,
transparency and assured outcomes
25
26. 2009: uncertainties continue
Withdrew quarterly and full year
Remainder of 2009
guidance December 16, 2008
Our i d t i
O industries remain volatile
i l til
Forecast a loss for Q1 2009
Uncertainties remain
Rapidly deteriorating automotive
p
production g
globally
y
Expecting a 2009 Q2 loss of
similar scale to Q1 operating
Financial viability of North American
automotive customers uncertain loss
Worsening residential markets
W i id ti l kt – Improved performance by
Building Efficiency and
Uncertainties and industry volatility
Power Solutions
makes it difficult to provide meaningful
businesses
bi
guidance
26
27. Taking action
Aligning our cost structure with the market environment
$495 million restructuring Additional actions
announced in Q4 2008
General hiring freeze
g
Expected payback in less than 2.5 years
Wage freeze/reductions
Workforce reductions
Elimination of annual bonuses for
corporate executives
Plant consolidations
Investigating alternative work schedules
– 18 Automotive Experience
(4-day weeks, etc)
– 2 Power Solutions
– 1 Building Efficiency
27
28. Taking action
Protecting liquidity
Protection actions
Liquidity
5 year $2.05B revolver expires Capital spending outlook reduced from
December 2011
$900 million to approximately $600-
Minimal debt maturities in next 2 years
$650 million
$1B of additional committed /
uncommitted bank lines Held dividend payout steady
Debt covenant – Uncertainties around financial viability of
– Minimum shareholder equity of $1.3 billion U.S. auto manufacturers
– Shareholder equity at 12/31/08: $8.3 billion
$8 3
Halted acquisition activity
Reduced voluntary pension contribution
Conservative financial
management to ensure we – $100 million contribution i Q1 will d f
illi t ib ti in Q1; ill defer
manage the short-term further payments while uncertainties
environment while assuring remain
long-term success
28
29. Managing through the current environment
Taking advantage of the
Maintain our long-term, sustainable growth
philosophy opportunities created by
this economic cycle to
– Balance near term performance while ensuring
robust long-term business success
Gain share
– Invest in innovation
Improve
p
–M
Manage the short-term environment in concert
th h t t i ti t
competitiveness
with long-term goals
Enhance our
Aligning our cost structure with the realities of the
leadership position
market
Benefit from global mega-trends
– Energy efficiency
– Sustainability / Greenhouse gas reduction
– Emerging markets
Protect liquidity
29
