While some large suppliers are currently issuing profit warnings, Johnson Controls has today announced that it expects to achieve record sales and earnings for fiscal 2005. The company confirmed its previous guidance for fiscal 2004 sales to increase by 14-16%, and for double-digit growth in operating and net income. Johnson Controls plans to release its 2004 financial results on October 26, 2004.
 
John M. Barth, Chairman and Chief Executive Officer, said that 2005 sales are expected to increase in a range of 8-10% and that a double-digit increase in net income is anticipated.

Mr. Barth said that growth by both its automotive and controls businesses, together with improvements in operational quality and cost, are expected to lead to a 10-12% increase in operating income. "While the business environment is challenging, our employees around the world continue to find innovative and more efficient ways to respond to our customers expectations. "

Johnson Controls said that it anticipates the increase in net income and earnings per share to outpace the growth in operating income due to a reduction in its base effective tax rate.

Automotive Group sales of seating, interiors and batteries are projected to increase 8-10%, primarily due to the addition of $2.3(1) billion in new seating and interiors business and higher battery sales. This growth is expected to more than offset the assumption of a slight reduction in vehicle production in North America and Europe.

Over the next three years, the company's incremental backlog of new interiors business totals $4.7 billion. Operating income as a percentage of automotive sales is expected to increase slightly due to the sales growth and increased efficiencies. The anticipated combination of lower pricing and higher raw material costs will negatively affect operating income.

Johnson Controls said that it anticipates its financial position to strengthen in 2005 with total debt to total capitalization decreasing to below 30%, excluding the impact of any acquisitions.

Mr. Barth stated that the company continues to target annual sales and earnings growth of 10-15% and the achievement of a 15-16% ROIC.

"Johnson Controls commitment to support its customers during this challenging environment is unrelenting," said Mr. Barth. "The ability to also improve our returns to shareholders -- while reinvesting to ensure we can exceed customer expectations in the future -- is testament to the quality of Johnson Controls people."

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