Financial overview

(in million USD)

	FY2008	FY2007	Rate of change (%)	Main Factors
Overall
Sales	38,062	34,624	10	-Higher net sales in the power solutions business (1.2 billion USD) related to higher unit prices resulting from significant increases in the cost of lead during the year -Higher building efficiency net sales (0.8 billion USD) and the favorable impact of foreign currency translation (1.9 billion USD) -Partially offset by lower sales in the automotive experience business (0.5 billion USD) reflecting weaker North American and European automotive markets.
Segment income	2,077	1,884	10	-Higher volumes and margins in the building efficiency business (74 million USD) -Favorable product mix in the power solutions segment despite increased lead costs (12 million USD) and the favorable impact of foreign currency translation (132 million USD) -Partially offset by the impact of lower North American and European automobile production (25 million USD).
Automotive Experience
Sales	18,091	17,552	3	>>>See Automotive Experience (By region)
Segment income	579	519	12
Power solutions
Sales	5,850	4,335	35	-Impact of higher lead costs on pricing (863 million USD) -Improved price/product mix (358 million USD) -Favorable impact of foreign currency translation (262 million USD) -Higher sales volumes (32 million USD).
Segment income	541	515	5	-Higher volumes and operational efficiencies (44 million USD) -Higher equity income from joint ventures mainly in Asia (19 million USD) -Favorable impact of foreign currency translation (14 million USD) -Partially offset by higher lead costs not recovered through pricing (51 million USD)

* Beginning in fiscal 2007, the Company's management adjusted its measurement of business unit performance, changing from operating income to segment income, which represents income from continuing operations before income taxes and minority interests excluding net financing charges, restructuring costs.

Automotive Experience (By region)

(in million USD)

	FY2008	FY2007	Rate of change (%)	Factors
North America
Sales	6,723	7,276	(8)	-Volume reductions with Ford, GM, Chrysler, Nissan and Toyota. -A strike at a U.S. supplier to one of the Company's major customers had an unfavorable impact on net sales of 103 million USD. -Partially offset by the acquisition of the interior product assets of Plastech Engineered Products, Inc., in July 2008, which had a favorable impact of 85 million USD.
Segment income	79	72	10	-Favorable gross margins from purchasing savings (57 million USD) -Operational efficiencies (49 million USD) -Commercial recoveries (44 million USD) -Partially offset by lower production volumes (98 million USD), a strike at a U.S. supplier to one of our major customers (30 million USD) and the unfavorable impact of the acquisition of the interior product assets of Plastech Engineered Products, Inc., in July 2008 (15 million USD).
Europe
Sales	9,854	8,878	11	-Favorable impact of foreign currency translation (1.1 billion USD) -Partially offset by annual pricing adjustments (113 million USD).
Segment income	464	445	4	-Favorable impact of foreign currency translation (85 million USD) -Purchasing savings (110 million USD) -Partially offset by lower platform pricing adjustments and lower economic recoveries of material cost increases (142 million USD) and lower sales volumes (34 million USD).
Asia
Sales	1,514	1,398	8	-Higher volumes with Nissan in Japan and a consolidated joint venture in Korea (155 million USD) -Partially offset by the unfavorable impact of foreign currency translation (39 million USD).
Segment income	36	2	*	-Higher volumes (31 million USD) -Purchasing savings (9 million USD) -Higher equity income from joint ventures in China (14 million USD) -Partially offset by higher employee expenses to support market expansion (20 million USD).

*Measure not meaningful

-In fiscal 2008, the Company's largest customers globally were automobile manufacturers Ford, GM and Daimler AG. For sales originating in the U.S., its largest customers were Ford, GM and Chrysler LLP (the Detroit 3), and Toyota Motor Corporation, which represented approximately 11% of its consolidated net sales in fiscal 2008.


Contracts
-In Jan. 2008, Johnson Controls-Saft Advanced Power Solutions has been selected by SAIC Motor Corporation Ltd. to supply lithium-ion batteries for its demonstration fleet of new energy vehicles.

-In Jan 2008, Johnson Controls-Saft Advanced Power Solutions developed a hybrid battery system that will power Chery Automobile's new A5 ISG sedan which is to be launched in the latter half of 2008.

-In Jan 2008, the Company announced that it is is providing seat systems and batteries for the all-new Dodge Journey crossover model. The global model will be available in North American markets in the first quarter of 2008 and in other world markets by mid-2008.


Joint-ventures
-In July 2008, the Company announced that it has formed a joint venture to acquire the interior product assets of Plastech Engineered Products. Plastech filed for bankruptcy in February 2008. The Company owns 70% of the joint venture. Certain Plastech term lenders hold the minority position. The Company contributed 135 million USD in cash and five injection molding plants to the joint venture. The joint venture includes 29 plants in North America. The products it manufactures include injection molded components and assemblies such as door panels and floor consoles. The Company has negotiated multi-year production contracts with the joint venture's key automotive customers. (From a press release on Jul 1, 2008)

-In April 2008, Johnson Controls (Wuhu) Automotive Interiors Co., Ltd. officially announced its grand opening. Johnson Controls (Wuhu) Automotive Interiors Co., Ltd. was jointly founded by the Company, Chery Technology Co., Ltd. which is under Chery Automobile Co., Ltd., and Shanghai Jiehua Automobile Decorative Research Center. It mainly produces vehicle interiors, including instrument panels and consoles, pillar, and door panels. It also provides R&D service for related products to support the independent development and manufacturing of Chery Automobiles. (From a press release on Apr. 14, 2008)

R&D Structure
Technology Centers for Automotive Experience
-Plymouth, Michigan, USA
-Holland, Michigan, USA
-Burscheid, Germany
-Grefrath, Germany
-Karlsruhe, Germany
-Cergy, France
-Sofia, Bulgaria
-Trencin, Slovakia
-Ayase, Japan

Battery Technology Centers for Power Solutions
-Plymouth, Michigan, USA
-Milwaukee, Wisconsin, USA
-Hannover, Germany
-Monterrey, Mexico
-Sorocaba, Brazil
-Shanghai, China

R&D Expenditures

(in million USD)

	FY2008	FY2007	FY2006
Total	829	767	743
Sponsored by customers	405	276	323

New Product Development
Ecobond Headliner
-In January 2008, the Company announced that the new Ecobond headliner, one of the Company's "environmentally friendly" automotive products, is in the final stages of development. The Ecobond headliner is a lightweight solution, comprised of 50 percent biomaterials by mass, that meets customer requirements for strength, performance and acoustics. The production process for the Ecobond headliner relies on soy-based adhesives, a soy-based urethane core foam, and natural fibers, reducing the need for non-renewable resources. The headliner is made via the use of an existing technology that the Company established for its Polybond (TM) process. The Ecobond headliner satisfies customers' design requirements for stiffness, toughness and acoustics. (From a press release on Jan. 15, 2008)


Technology Alliance
Lithium-ion Battery Electrodes
-In April 2008, Johnson Controls-Saft Advanced Power Solutions and Maxwell Technologies, Inc. announced a development collaboration through which Maxwell will produce lithium-ion battery electrodes for testing and evaluation by Johnson Controls-Saft. Through the collaboration, the two companies will evaluate the integration of Maxwell's proprietary electrode process into the mass production of lithium-ion batteries for hybrid vehicles. (From a press release on Apr. 15, 2008)

Capital Expenditure

(in million USD)

	FY2008	FY2007	FY2006
Overall	807	828	711
Automotive Experience	462	347	425
- North America	143	116	218
- Europe	292	217	182
- Asia	27	14	25
Power solutions	152	336	197

Overseas Investment
-In January 2008, Johnson Controls-Saft Advanced Power Solutions announced the official opening of its new lithium-ion automotive battery manufacturing facility. The plant, based in Nersac, France, is dedicated to the manufacture of advanced lithium-ion batteries for hybrid, plug-in, fuel cell and electric vehicles and is the first of its kind in the world. Johnson Controls-Saft initially invested 15 million euro in the facility, which is producing batteries for global automotive customers. (From a press release on Jan. 31, 2008)