Johnson Controls Second-Quarter Earnings Exceed Expectations

Apr 18, 2001, 01:00 ET from Johnson Controls, Inc.

    MILWAUKEE, April 18 /PRNewswire/ -- Johnson Controls, Inc. (NYSE:   JCI)
 today reported second quarter earnings per diluted share of $.89, which were
 above analyst expectations, but 6% below the prior year due to sharply lower
 levels of domestic automotive vehicle production.
     Sales for the three months ended March 31, 2001, rose 6% over the prior
 year, reflecting the company's acquisition of Ikeda Bussan in Japan, new
 automotive programs and increased activity by its nonresidential building
 controls business.  Sales for the March 2001 quarter were $4.6 billion
 compared with $4.4 billion for the prior year.  Operating income for the
 current quarter decreased 1% to $190.6 million compared with the prior year's
 $192.4 million.  Net income, reflecting higher minority interests, decreased
 7% to $83.0 million from $88.8 million for the second quarter of fiscal 2000.
 Diluted earnings per share were $.89 compared with $.95 last year.
 
     Automotive Results
     The Automotive Systems Group had sales of $3.4 billion for the second
 quarter of fiscal 2001, an increase of 5% over the prior year's $3.2 billion.
 North American sales of seating, interior systems and batteries were 10% lower
 than the prior year.  Johnson Controls said that its revenues from the
 domestic market were down less than the 16% decline in domestic industry light
 vehicle production due to new business as well as its mix of customers,
 including transplants, vehicle platforms and its aftermarket battery business.
 European seating and interiors sales were higher than the prior year despite
 adverse currency translation.  The largest contributor to the year-over-year
 increase were revenues associated with Ikeda Bussan, a Japanese seating
 manufacturer, which was acquired in September 2000.
     Automotive group operating income was $137 million for the current period
 versus $147 million last year.  Operating income from domestic seating and
 interiors operations declined 40% on the lower North American sales.  Largely
 offsetting the domestic decrease were improved results from European and South
 American operations, as well as increases in Asia.
 
     Controls Results
     Controls Group sales to the nonresidential buildings market increased 8%
 to $1.2 billion from $1.1 billion last year.  Worldwide sales of installed
 control systems were higher reflecting growth in the new construction and
 existing buildings markets.  Revenues associated with integrated facility
 management contracts were also higher.
     Controls Group operating income was $53 million, 17% higher than the
 $45 million reported for the 2000 period.  Johnson Controls attributed the
 increase to the higher activity levels and improved execution on system
 installation contracts.
 
     First-Half Results and Full-Year Outlook
     Year-to-date, Johnson Controls sales were $9.1 billion or 4% above the
 same period of 2000.  Net income totaled $186 million ($1.99 per diluted
 share), 1% lower than the 2000 first half of $188 million ($2.01 per diluted
 share).
     Johnson Controls said that for the full year of fiscal 2001, it continues
 to anticipate that its Controls Group will achieve sales growth of 10-15% and
 modest margin improvement.  According to Chairman and Chief Executive Officer
 James H. Keyes, the company expects the year-over-year controls sales
 comparison to strengthen in the second half due to its strong backlog of
 orders for installed control systems.  In addition, new and regional add-ons
 to existing facility management contracts are expected to ramp up during the
 last six months of the year.
     Mr. Keyes said that the full-year Automotive Systems Group outlook is
 unchanged, with sales anticipated to exceed the prior year by 5-10%, while
 operating margins are expected to decline modestly.  He explained that sales
 growth in the coming six months should improve unless vehicle production
 levels deteriorate from current industry projections.
     Mr. Keyes commented that, "While overall economic conditions, in
 particular their effect on automotive sales, are limiting our growth for
 fiscal 2001, we continue to believe that we will achieve record sales and net
 income.  This accomplishment will be a credit to our successful growth
 strategies, the diversification of our businesses, customers and geographic
 presence, and the dedication of our employees worldwide."
 
     Following is a summary of supplementary full-year financial estimates for
      2001:
 
                                                        ($s in millions)
                                                    FY2000            FY2001
                                                     Actual          Estimates
     Capital Expenditures                            $547            $575-600
     Depreciation                                    $385            $425-440
     Amortization of intangibles                      $76              $80-85
     Total debt to total capitalization                41%   plus or minus 38%
     Interest expense,
      net of interest income                         $112            $110-115
     Minority interest in net earnings
      of subsidiaries                                 $44             $55-65
 
     Johnson Controls is a global market leader in automotive systems and
 facility management and control.  In the automotive market, it is a major
 supplier of seating and interior systems, and batteries.  For nonresidential
 facilities, Johnson Controls provides building control systems and services,
 energy management and integrated facility management.  Johnson Controls,
 founded in 1885, has headquarters in Milwaukee, Wis.  Its sales for fiscal
 2000 totaled $17.2 billion.
 
     The company has made forward-looking statements in this document that are
 subject to risks and uncertainties.  Forward-looking statements include
 information concerning possible or assumed future risks and may include words
 such as "believes," "expects," "anticipates" or similar expressions.  For
 those statements, the company cautions that numerous important factors,
 including industry vehicle production levels and the assumption of an average
 euro/U.S. dollar exchange rate of $.90 for fiscal 2001, and those discussed in
 the company's Form 8-K (dated October 26, 2000) 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.
 
 
                          CONSOLIDATED STATEMENT OF INCOME
                  (in millions, except per share data; unaudited)
 
 
                                         Three Months          Six Months
                                        Ended March 31,      Ended March 31,
                                        2001      2000      2001        2000
 
      Net sales                       $4,601.6  $4,358.3  $9,056.0    $8,676.6
      Cost of sales                    3,980.4   3,746.3   7,794.8     7,439.5
        Gross profit                     621.2     612.0   1,261.2     1,237.1
 
      Selling, general and
       administrative expenses           430.6     419.6     861.4       829.7
        Operating income                 190.6     192.4     399.8       407.4
 
      Interest income                      4.5       4.3      10.4         7.8
      Interest expense                   (34.6)    (33.4)    (67.9)      (66.6)
      Miscellaneous - net                 (1.6)      2.6       3.0         0.6
        Other income (expense)           (31.7)    (26.5)    (54.5)      (58.2)
 
      Income before income taxes and
       minority interests                158.9     165.9     345.3       349.2
 
      Provision for income taxes          61.6      65.7     133.7       138.3
      Minority interest in net
       earnings of subsidiaries           14.3      11.4      26.1        23.1
 
      Net income                         $83.0     $88.8    $185.5      $187.8
 
      Earnings available for common
       shareholders                      $80.9     $86.4    $180.9      $183.0
 
      Earnings per share
        Basic                            $0.94     $1.01     $2.10       $2.14
        Diluted                          $0.89     $0.95     $1.99       $2.01
 
 
                    CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                   (in millions)
 
                                           March 31, September 30,    March 31,
                                             2001       2000            2000
                                         (unaudited)                (unaudited)
 
     ASSETS
     Cash and cash equivalents               $272.7    $275.6           $244.2
     Accounts receivable - net              2,456.7   2,355.3          2,383.0
     Costs and earnings in excess of
      billings on uncompleted contracts       265.1     222.4            235.4
     Inventories                              569.8     569.5            502.9
     Other current assets                     748.6     854.4            682.5
       Current assets                       4,312.9   4,277.2          4,048.0
 
     Property, plant and equipment - net    2,366.2   2,305.0          2,042.9
     Goodwill - net                         2,134.0   2,133.3          2,058.4
     Investments in partially-owned
      affiliates                              256.8     254.7            226.3
     Other noncurrent assets                  520.1     457.8            406.2
       Total assets                        $9,590.0  $9,428.0         $8,781.8
 
 
     LIABILITIES AND EQUITY
     Short-term debt                         $321.6    $471.4           $475.0
     Current portion of long-term debt         40.5      36.1             44.1
     Accounts payable                       2,265.2   2,308.8          2,131.5
     Accrued compensation and benefits        405.5     452.4            431.3
     Accrued income taxes                     132.4     140.0            125.4
     Billings in excess of costs and
      earnings on uncompleted contracts       182.7     167.8            183.0
     Other current liabilities              1,005.8     933.5            944.4
       Current liabilities                  4,353.7   4,510.0          4,334.7
 
     Long-term debt                         1,464.9   1,315.3          1,229.0
     Postretirement health and other
      benefits                                162.3     168.1            167.7
     Other noncurrent liabilities             624.8     621.8            423.8
     Minority interest in equity of
      subsidiaries                            263.3     236.7            224.5
     Shareholders' equity                   2,721.0   2,576.1          2,402.1
       Total liabilities and equity        $9,590.0  $9,428.0         $8,781.8
 
 
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            (in millions; unaudited)
 
                                            Three Months      Six Months
                                          Ended March 31,   Ended March 31,
                                            2001    2000    2001      2000
     Operating Activities
     Net income                             $83.0   $88.8  $185.5    $187.8
 
     Adjustments to reconcile net income
      to cash provided by operating
      activities
       Depreciation                         109.7    96.7   211.8     194.8
       Amortization of intangibles           20.8    19.8    41.1      39.2
       Equity in earnings of partially-
        owned affiliates, net of dividends
        received                              2.4    (3.5)   (4.7)     (7.0)
       Deferred income taxes                 16.9     0.4    20.2      (1.5)
       Other                                (14.0)  (10.6)  (13.4)    (14.7)
       Changes in working capital,
        excluding acquisition of
        businesses
         Receivables                       (194.4) (126.5) (136.8)   (288.2)
         Inventories                         11.2    25.6     1.4      13.3
         Other current assets                30.9    11.4   107.0      13.4
         Accounts payable and accrued
          liabilities                       197.9   188.4   (34.7)    219.3
         Accrued income taxes               (60.2)  (81.4)  (13.4)    (41.6)
         Billings in excess of costs and
          earnings on uncompleted contracts   4.7     2.1    15.4      23.9
           Cash provided by operating
            activities                      208.9   211.2   379.4     338.7
 
     Investing Activities
     Capital expenditures                  (142.5) (138.3) (281.1)   (266.0)
     Sale of property, plant and equipment
      - net                                   8.1     5.4    13.4       9.4
     Acquisition of businesses, net of
      cash acquired                          (3.0)  (11.0)  (63.3)    (11.0)
     Additions of long-term investments     (11.4)   (0.6)  (32.0)     (3.1)
         Cash used by investing activities (148.8) (144.5) (363.0)   (270.7)
 
     Financing Activities
     Decrease in short-term debt - net     (335.4) (112.6) (155.5)     (1.4)
     Addition of long-term debt             231.9    10.9   236.5      10.9
     Repayment of long-term debt             (3.3)  (12.5)  (68.6)    (72.6)
     Payment of cash dividends              (29.0)  (26.6)  (58.2)    (53.1)
     Other                                   (6.8)    2.4    26.5      16.2
         Cash used by financing activities (142.6) (138.4)  (19.3)   (100.0)
 
     Decrease in cash and cash equivalents ($82.5) ($71.7)  ($2.9)   ($32.0)
 
 
                               ADDITIONAL INFORMATION
 
       Business Segments                  Three Months         Six Months
       (in millions, unaudited)          Ended March 31,     Ended March 31,
                                          2001      2000      2001      2000
       Net Sales
          Automotive Systems Group      $3,372.5  $3,216.3  $6,760.5  $6,554.8
          Controls Group                 1,229.1   1,142.0   2,295.5   2,121.8
       Total                            $4,601.6  $4,358.3  $9,056.0  $8,676.6
 
       Operating Income
          Automotive Systems Group        $137.4    $146.9    $305.5    $324.9
          Controls Group                    53.2      45.5      94.3      82.5
       Total                              $190.6    $192.4    $399.8    $407.4
 
     Earnings per Share
     Basic earnings per share are computed by dividing net income, after
 deducting dividend requirements on the Series D Convertible Preferred Stock,
 by the weighted average number of common shares outstanding.  Diluted earnings
 are computed by deducting from net income the after-tax compensation expense
 which would arise from the assumed conversion of the Series D Convertible
 Preferred Stock, which was $.9 million and $1.1 million for the three months
 ended March 31, 2001 and 2000, respectively, and $1.8 million and $2.2 million
 for the six months ended March 31, 2001 and 2000, respectively.  Diluted
 weighted average shares assume the conversion of the Series D Convertible
 Preferred Stock, if dilutive, plus the dilutive effect of common stock
 equivalents which would arise from the exercise of stock options.
 
                                          Three Months         Six Months
       (in millions)                     Ended March 31,     Ended March 31,
                                          2001      2000      2001      2000
       Weighted Average Shares
       Basic                              86.5      85.6      86.3      85.5
       Diluted                            92.8      91.9      92.4      92.0
 
     Foreign Currency Translation
     The effect of foreign currency translation reduced sales for the three
 months ended March 31, 2001 by $130 million and diluted earnings per share by
 $.02.  Sales were reduced by $398 million and diluted earnings per share by
 $.08 for the six months ended March 31, 2001.
 
 

SOURCE Johnson Controls, Inc.
    MILWAUKEE, April 18 /PRNewswire/ -- Johnson Controls, Inc. (NYSE:   JCI)
 today reported second quarter earnings per diluted share of $.89, which were
 above analyst expectations, but 6% below the prior year due to sharply lower
 levels of domestic automotive vehicle production.
     Sales for the three months ended March 31, 2001, rose 6% over the prior
 year, reflecting the company's acquisition of Ikeda Bussan in Japan, new
 automotive programs and increased activity by its nonresidential building
 controls business.  Sales for the March 2001 quarter were $4.6 billion
 compared with $4.4 billion for the prior year.  Operating income for the
 current quarter decreased 1% to $190.6 million compared with the prior year's
 $192.4 million.  Net income, reflecting higher minority interests, decreased
 7% to $83.0 million from $88.8 million for the second quarter of fiscal 2000.
 Diluted earnings per share were $.89 compared with $.95 last year.
 
     Automotive Results
     The Automotive Systems Group had sales of $3.4 billion for the second
 quarter of fiscal 2001, an increase of 5% over the prior year's $3.2 billion.
 North American sales of seating, interior systems and batteries were 10% lower
 than the prior year.  Johnson Controls said that its revenues from the
 domestic market were down less than the 16% decline in domestic industry light
 vehicle production due to new business as well as its mix of customers,
 including transplants, vehicle platforms and its aftermarket battery business.
 European seating and interiors sales were higher than the prior year despite
 adverse currency translation.  The largest contributor to the year-over-year
 increase were revenues associated with Ikeda Bussan, a Japanese seating
 manufacturer, which was acquired in September 2000.
     Automotive group operating income was $137 million for the current period
 versus $147 million last year.  Operating income from domestic seating and
 interiors operations declined 40% on the lower North American sales.  Largely
 offsetting the domestic decrease were improved results from European and South
 American operations, as well as increases in Asia.
 
     Controls Results
     Controls Group sales to the nonresidential buildings market increased 8%
 to $1.2 billion from $1.1 billion last year.  Worldwide sales of installed
 control systems were higher reflecting growth in the new construction and
 existing buildings markets.  Revenues associated with integrated facility
 management contracts were also higher.
     Controls Group operating income was $53 million, 17% higher than the
 $45 million reported for the 2000 period.  Johnson Controls attributed the
 increase to the higher activity levels and improved execution on system
 installation contracts.
 
     First-Half Results and Full-Year Outlook
     Year-to-date, Johnson Controls sales were $9.1 billion or 4% above the
 same period of 2000.  Net income totaled $186 million ($1.99 per diluted
 share), 1% lower than the 2000 first half of $188 million ($2.01 per diluted
 share).
     Johnson Controls said that for the full year of fiscal 2001, it continues
 to anticipate that its Controls Group will achieve sales growth of 10-15% and
 modest margin improvement.  According to Chairman and Chief Executive Officer
 James H. Keyes, the company expects the year-over-year controls sales
 comparison to strengthen in the second half due to its strong backlog of
 orders for installed control systems.  In addition, new and regional add-ons
 to existing facility management contracts are expected to ramp up during the
 last six months of the year.
     Mr. Keyes said that the full-year Automotive Systems Group outlook is
 unchanged, with sales anticipated to exceed the prior year by 5-10%, while
 operating margins are expected to decline modestly.  He explained that sales
 growth in the coming six months should improve unless vehicle production
 levels deteriorate from current industry projections.
     Mr. Keyes commented that, "While overall economic conditions, in
 particular their effect on automotive sales, are limiting our growth for
 fiscal 2001, we continue to believe that we will achieve record sales and net
 income.  This accomplishment will be a credit to our successful growth
 strategies, the diversification of our businesses, customers and geographic
 presence, and the dedication of our employees worldwide."
 
     Following is a summary of supplementary full-year financial estimates for
      2001:
 
                                                        ($s in millions)
                                                    FY2000            FY2001
                                                     Actual          Estimates
     Capital Expenditures                            $547            $575-600
     Depreciation                                    $385            $425-440
     Amortization of intangibles                      $76              $80-85
     Total debt to total capitalization                41%   plus or minus 38%
     Interest expense,
      net of interest income                         $112            $110-115
     Minority interest in net earnings
      of subsidiaries                                 $44             $55-65
 
     Johnson Controls is a global market leader in automotive systems and
 facility management and control.  In the automotive market, it is a major
 supplier of seating and interior systems, and batteries.  For nonresidential
 facilities, Johnson Controls provides building control systems and services,
 energy management and integrated facility management.  Johnson Controls,
 founded in 1885, has headquarters in Milwaukee, Wis.  Its sales for fiscal
 2000 totaled $17.2 billion.
 
     The company has made forward-looking statements in this document that are
 subject to risks and uncertainties.  Forward-looking statements include
 information concerning possible or assumed future risks and may include words
 such as "believes," "expects," "anticipates" or similar expressions.  For
 those statements, the company cautions that numerous important factors,
 including industry vehicle production levels and the assumption of an average
 euro/U.S. dollar exchange rate of $.90 for fiscal 2001, and those discussed in
 the company's Form 8-K (dated October 26, 2000) 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.
 
 
                          CONSOLIDATED STATEMENT OF INCOME
                  (in millions, except per share data; unaudited)
 
 
                                         Three Months          Six Months
                                        Ended March 31,      Ended March 31,
                                        2001      2000      2001        2000
 
      Net sales                       $4,601.6  $4,358.3  $9,056.0    $8,676.6
      Cost of sales                    3,980.4   3,746.3   7,794.8     7,439.5
        Gross profit                     621.2     612.0   1,261.2     1,237.1
 
      Selling, general and
       administrative expenses           430.6     419.6     861.4       829.7
        Operating income                 190.6     192.4     399.8       407.4
 
      Interest income                      4.5       4.3      10.4         7.8
      Interest expense                   (34.6)    (33.4)    (67.9)      (66.6)
      Miscellaneous - net                 (1.6)      2.6       3.0         0.6
        Other income (expense)           (31.7)    (26.5)    (54.5)      (58.2)
 
      Income before income taxes and
       minority interests                158.9     165.9     345.3       349.2
 
      Provision for income taxes          61.6      65.7     133.7       138.3
      Minority interest in net
       earnings of subsidiaries           14.3      11.4      26.1        23.1
 
      Net income                         $83.0     $88.8    $185.5      $187.8
 
      Earnings available for common
       shareholders                      $80.9     $86.4    $180.9      $183.0
 
      Earnings per share
        Basic                            $0.94     $1.01     $2.10       $2.14
        Diluted                          $0.89     $0.95     $1.99       $2.01
 
 
                    CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                   (in millions)
 
                                           March 31, September 30,    March 31,
                                             2001       2000            2000
                                         (unaudited)                (unaudited)
 
     ASSETS
     Cash and cash equivalents               $272.7    $275.6           $244.2
     Accounts receivable - net              2,456.7   2,355.3          2,383.0
     Costs and earnings in excess of
      billings on uncompleted contracts       265.1     222.4            235.4
     Inventories                              569.8     569.5            502.9
     Other current assets                     748.6     854.4            682.5
       Current assets                       4,312.9   4,277.2          4,048.0
 
     Property, plant and equipment - net    2,366.2   2,305.0          2,042.9
     Goodwill - net                         2,134.0   2,133.3          2,058.4
     Investments in partially-owned
      affiliates                              256.8     254.7            226.3
     Other noncurrent assets                  520.1     457.8            406.2
       Total assets                        $9,590.0  $9,428.0         $8,781.8
 
 
     LIABILITIES AND EQUITY
     Short-term debt                         $321.6    $471.4           $475.0
     Current portion of long-term debt         40.5      36.1             44.1
     Accounts payable                       2,265.2   2,308.8          2,131.5
     Accrued compensation and benefits        405.5     452.4            431.3
     Accrued income taxes                     132.4     140.0            125.4
     Billings in excess of costs and
      earnings on uncompleted contracts       182.7     167.8            183.0
     Other current liabilities              1,005.8     933.5            944.4
       Current liabilities                  4,353.7   4,510.0          4,334.7
 
     Long-term debt                         1,464.9   1,315.3          1,229.0
     Postretirement health and other
      benefits                                162.3     168.1            167.7
     Other noncurrent liabilities             624.8     621.8            423.8
     Minority interest in equity of
      subsidiaries                            263.3     236.7            224.5
     Shareholders' equity                   2,721.0   2,576.1          2,402.1
       Total liabilities and equity        $9,590.0  $9,428.0         $8,781.8
 
 
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            (in millions; unaudited)
 
                                            Three Months      Six Months
                                          Ended March 31,   Ended March 31,
                                            2001    2000    2001      2000
     Operating Activities
     Net income                             $83.0   $88.8  $185.5    $187.8
 
     Adjustments to reconcile net income
      to cash provided by operating
      activities
       Depreciation                         109.7    96.7   211.8     194.8
       Amortization of intangibles           20.8    19.8    41.1      39.2
       Equity in earnings of partially-
        owned affiliates, net of dividends
        received                              2.4    (3.5)   (4.7)     (7.0)
       Deferred income taxes                 16.9     0.4    20.2      (1.5)
       Other                                (14.0)  (10.6)  (13.4)    (14.7)
       Changes in working capital,
        excluding acquisition of
        businesses
         Receivables                       (194.4) (126.5) (136.8)   (288.2)
         Inventories                         11.2    25.6     1.4      13.3
         Other current assets                30.9    11.4   107.0      13.4
         Accounts payable and accrued
          liabilities                       197.9   188.4   (34.7)    219.3
         Accrued income taxes               (60.2)  (81.4)  (13.4)    (41.6)
         Billings in excess of costs and
          earnings on uncompleted contracts   4.7     2.1    15.4      23.9
           Cash provided by operating
            activities                      208.9   211.2   379.4     338.7
 
     Investing Activities
     Capital expenditures                  (142.5) (138.3) (281.1)   (266.0)
     Sale of property, plant and equipment
      - net                                   8.1     5.4    13.4       9.4
     Acquisition of businesses, net of
      cash acquired                          (3.0)  (11.0)  (63.3)    (11.0)
     Additions of long-term investments     (11.4)   (0.6)  (32.0)     (3.1)
         Cash used by investing activities (148.8) (144.5) (363.0)   (270.7)
 
     Financing Activities
     Decrease in short-term debt - net     (335.4) (112.6) (155.5)     (1.4)
     Addition of long-term debt             231.9    10.9   236.5      10.9
     Repayment of long-term debt             (3.3)  (12.5)  (68.6)    (72.6)
     Payment of cash dividends              (29.0)  (26.6)  (58.2)    (53.1)
     Other                                   (6.8)    2.4    26.5      16.2
         Cash used by financing activities (142.6) (138.4)  (19.3)   (100.0)
 
     Decrease in cash and cash equivalents ($82.5) ($71.7)  ($2.9)   ($32.0)
 
 
                               ADDITIONAL INFORMATION
 
       Business Segments                  Three Months         Six Months
       (in millions, unaudited)          Ended March 31,     Ended March 31,
                                          2001      2000      2001      2000
       Net Sales
          Automotive Systems Group      $3,372.5  $3,216.3  $6,760.5  $6,554.8
          Controls Group                 1,229.1   1,142.0   2,295.5   2,121.8
       Total                            $4,601.6  $4,358.3  $9,056.0  $8,676.6
 
       Operating Income
          Automotive Systems Group        $137.4    $146.9    $305.5    $324.9
          Controls Group                    53.2      45.5      94.3      82.5
       Total                              $190.6    $192.4    $399.8    $407.4
 
     Earnings per Share
     Basic earnings per share are computed by dividing net income, after
 deducting dividend requirements on the Series D Convertible Preferred Stock,
 by the weighted average number of common shares outstanding.  Diluted earnings
 are computed by deducting from net income the after-tax compensation expense
 which would arise from the assumed conversion of the Series D Convertible
 Preferred Stock, which was $.9 million and $1.1 million for the three months
 ended March 31, 2001 and 2000, respectively, and $1.8 million and $2.2 million
 for the six months ended March 31, 2001 and 2000, respectively.  Diluted
 weighted average shares assume the conversion of the Series D Convertible
 Preferred Stock, if dilutive, plus the dilutive effect of common stock
 equivalents which would arise from the exercise of stock options.
 
                                          Three Months         Six Months
       (in millions)                     Ended March 31,     Ended March 31,
                                          2001      2000      2001      2000
       Weighted Average Shares
       Basic                              86.5      85.6      86.3      85.5
       Diluted                            92.8      91.9      92.4      92.0
 
     Foreign Currency Translation
     The effect of foreign currency translation reduced sales for the three
 months ended March 31, 2001 by $130 million and diluted earnings per share by
 $.02.  Sales were reduced by $398 million and diluted earnings per share by
 $.08 for the six months ended March 31, 2001.
 
 SOURCE  Johnson Controls, Inc.

RELATED LINKS

http://www.johnsoncontrols.com