Financial Overview

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	Rate of change (%)	Factors
Overall
Sales	41,955	40,833	2.7	1)
Segment income	2,567	2,347	9.4	-
Automotive Experience
Sales	21,334	20,065	6.3	2)
Segment income	803	780	2.9	-
Power Solutions
Sales	5,906	5,875	0.5	3)
Segment income	854	821	4.0	-

Factors
1) Overall  sales
-In FY ended Sep. 30, 2012, consolidated net sales increased by 2.7% year-on-year. Excluding the unfavorable impact of foreign currency translation, consolidated net sales increased by 6.0%. The favorable impacts of increased automotive industry production in North America, strong automotive and buildings demand in China and incremental sales from acquisitions were partially offset by the negative impacts of lower automotive industry production in Europe.

2) Automotive Experience
<North America>
-The increase in North America was primarily due to higher volumes to major OEM customers and incremental sales due to prior year business acquisitions, partially offset by net unfavorable pricing and commercial settlements.

<Europe>
-The decrease in Europe was primarily due to the unfavorable impact of foreign currency translation; net unfavorable pricing and commercial settlements; and lower volumes, partially offset by incremental sales due to business acquisitions.

<Asia>
-The increase in Asia was primarily due to higher volumes; new customer awards; incremental sales due to prior year acquisitions; and the favorable impact of foreign currency translation, partially offset by net unfavorable pricing and commercial settlements, and the negative impact of the flooding in Thailand and related events.

3) Power Solutions
-Net sales increased by 0.5% year-on-year primarily due to favorable pricing and product mix, higher volumes and incremental sales due to business acquisitions, partially offset by the unfavorable impact of foreign currency translation and impact of pass through pricing.

Contracts

-The Company is supplying the complete seating system for the new Ford "B-MAX" minivan. Since the Ford "B-MAX" comes without B-pillars, the Company developed front seats for the minivan with integrated seatbelt mountings. The minivan's passenger seat can be folded over flat, like the split rear seat bench. The Company supplies the seats in either fabric or part leather with a bicolor design. In addition, customers can select an all-leather version. The Company also developed and produces the metal structures for the front and rear seats. In January 2012, the Company opened a seat plant specifically to supply the nearby Ford plant where the "B-MAX" is produced in Craiova, Romania. The Company manufactures the minivan's seat components in Romania, too: the metal components are made in the former C. Rob. Hammerstein plant in Jimbolia; the foam components for the seat pads are made in the former Spumotim factory in Timisoara; and the seat covers are made in Pitesti. (From a press release on September 27, 2012)

-The Company is supplying the complete seating system, floor console and headliner for the new Kia "cee'd", which was developed exclusively for the European market. The seating system is for comparable versions up to 5.7 kg lighter than the previous model. A Keiper Taumel 2000 is used as a backrest adjuster in the front seats. The Company produces the seating system in Zilina, Slovakia. The floor consoles are manufactured at its Slovakian plants in Namestovo (injection moulding) and Zilina (assembly). In the basic version, the floor console is equipped with a mechanical parking brake lever, an upholstered armrest and an open double depression for the cupholder. In the higher trim levels, the armrest is leather-wrapped and the cupholder has a tambour door. In addition, the parking brake lever has been replaced with a switch for an electric parking brake. (From a press release on August 28, 2012)

-The Company announced that it has signed a supply agreement with XL Hybrids, Inc., a U.S.-based developer of low-cost hybrid electric powertrain designed specifically for class 1 to 3 commercial fleet use. XL Hybrids' hybrid electric powertrain integrates seamlessly with the original equipment manufacturer's engine and transmission. The Company will provide complete Lithium-Ion battery packs constructed of Lithium Nickel Cobalt Aluminum (NCA) cells to power light duty commercial vehicles, including the Chevrolet "Express" and GMC "Savana" vans. The battery pack has 1.8 kilowatt-hours (kWh) of energy storage, a peak discharge power rating of 50 kW and a nominal voltage of 260V. By integrating the Company's Lithium-Ion battery packs, the system is capable of reducing fuel consumption by up to 21 percent on urban routes. It will be fully developed and launched from the Company's Lithium-Ion manufacturing facility in Holland, Michigan, the U.S. in early 2013. The hybrid Chevrolet "Express" and GMC "Savana" vans featuring the battery pack from the Company will go on sale in 2013. (From a press release on August 20, 2012)

-The Company announced that for the new Mercedes "B-Class", it supplies the instrument panel and door panels including a leather-wrapped version as option. In 2010, the Company acquired Seton's leather wrapping car interior business. (From a press release on July 24, 2012)

-The Company is providing a series of door panels, seat structures and instrument clusters for the new BMW "3 Series". The door panels are made using a combination of natural fibers and plastic that are 20 percent lighter than conventional components. The non-visible door panel elements for the new BMW "3 Series" sedan and sports wagon models are largely made of wood fiber. The seat structures for the driver's seat save three to four kilograms depending on the model. The basic instrument cluster for the new BMW "3 Series" has day and night design and not only offers high-quality analog displays and LED pilot lights but also a 2.7-inch TFT display. The instrument cluster features an Automotive Pixel Link (APIX) high-speed, point-to-point connection. (From a press release on May 22, 2012)

-The Company announced that it will supply seat components for the new compact sports sedan, Cadillac "ATS". (From a press release on January 26, 2012)

-The Company announced that it will supply the head-up display and the instrument cluster for the new Citroen "DS5". The head-up display is also featured in the Peugeot "3008", "5008" and "508". In addition to electronics, the Company supplies the headliner and the complete seating system for the Citroen "DS5". (From a press release on January 10, 2012)

Restructuring

-To better align its resources with its growth strategies and reduce the cost structure of its global operations to address the softness in certain underlying markets, the Company committed to a significant restructuring plan (2012 Plan) in the third and fourth quarters of fiscal 2012 and recorded a 297 million dollars restructuring charge. The restructuring actions are expected to be substantially complete by the end of 2014.

-The 2012 Plan included workforce reductions of approximately 7,500 employees (5,100 for the Automotive Experience business, 1,700 for the Building Efficiency business and 700 for the Power Solutions business).

-Also, the 2012 Plan included nine plant closures (six for Automotive Experience, two for Power Solutions and one for Building Efficiency). As of Sep. 30, 2012, two of nine plants have been closed.

Acquisitions

-The Company announced that it is acquiring a 24.9 percent share in its Novo Mesto, Slovenia joint venture called TPV Johnson Controls. The acquisition of these additional shares gives Johnson Controls a 74.9 percent ownership stake, making it the majority shareholder in the joint venture. The joint venture, which is between Johnson Controls and Slovenia-based TPV Group, was established in 1998, and produces complete seating systems for the Renault assembly plant in Novo Mesto. (From a press release on April 24, 2012)

-The Company acquired an additional 35 percent equity share in JP Foam Manufacturing, a supplier of automotive foam seat cushions, from Proseat of Germany, making it its wholly owned subsidiary. JP Foam Manufacturing operates two manufacturing facilities, one in Zory, Poland and one in Lucenec, Slovakia. The main customers include Ford, Fiat, Mercedes-Benz and Kia in Eastern Europe. Proseat is a joint venture company between Recticel S.A. and the Woodbridge Group. (From a press release on December 7, 2011)

-The Company announced that it has acquired the automotive division of Romanian Spumotim S.A., a manufacturer of polyurethane foam for automotive seating. The automotive division employs 300 people. The transaction includes the acquired company's headquarters and plant location in Timisoara, as well as a plant in Pitesti. The Company is supplying seats to automakers including Dacia, Ford and Fiat that operate production facilities in the Eastern Europe. Prior to the acquisition, Spumotim was a supplier to the Company. (From a press release on December 2, 2011)

Joint Ventures

-The Company announced that it signed a contract with Shanghai Yanfeng Johnson Controls Seating Co., Ltd. (YFJC) to set up a new seating mechanisms joint venture in Shanghai, China. The new joint venture is expected to become operational in the second half of 2012. The new joint venture will be called Johnson Controls Yanfeng Mechanisms Co., Ltd. (JCYM). It will supply major automakers in China with a comprehensive seating mechanisms portfolio, including tracks, recliners, adjusters and latches, as well as full service capabilities. All current seating mechanisms businesses and capabilities of YFJC and Johnson Controls in China will be transferred and integrated into this new joint venture. (From a press release on May 25, 2012)

-The Company announced that it has formed a joint venture with Pricol Limited, a supplier of automotive instrument clusters in India. The 50/50 joint venture will be called Johnson Controls Pricol Private Limited. Pricol's instrument cluster manufacturing plant in Pune, India, will become the joint venture's primary location. Products developed and manufactured will include instrument clusters, displays and body electronics for both automakers and motorcycle manufacturers that operate businesses in India. (From a press release on March 27, 2012)

Business Partnership

-Tachi-S Co., Ltd. won seat orders for the next generation Honda "Fit". This is Tachi-S's first business with Honda for its global production model. Seats will be delivered to Honda facilities in Mexico, Brazil and China for more than half a million cars a year. To meet this new demand, Tachi-S will set up its supply network in Mexico, Brazil and China by the fall 2013 in tandem with its largest shareholder Johnson Controls Inc. (JCI) based in the U.S. Tachi-S plans to establish jointly plants with an annual production capacity of 200,000 in Mexico and Brazil. In Mexico, it will choose a construction site for its new plant from among three candidates in the neighborhood of Honda's new plant location. In Brazil, JCI already has its own plant, but because it is situated far away from Honda's automobile plant in Sao Paulo, Tachi-S is studying the possibility of building its own new plant. There is an existing plant of JCI also in China. However, Tachi-S will weigh building of a new facility dedicated to Honda. A total investment in projects in Mexico and Brazil combined, which is likely to amount to several billions yen, will be shared with JCI to mitigate investment risks. (From an article in the Nikkan Jidosha Shimbun on December 26, 2011)

Recent Developments in USA

-The Company is launching a line of Absorbent Glass Mat (AGM) batteries in North America to support Start-Stop vehicle technology, as well as the higher electrical loads that are increasingly being required of the battery in vehicles with combustion engines. The Company, which has been manufacturing AGM batteries in Europe since 2002, produces more than 3 million VARTA Start-Stop Plus AGM batteries annually. The Company is installing approximately 6 million in AGM annual capacity for the U.S. market. The Company has started producing AGM batteries for the U.S. at its facility in St. Joseph's, Missouri, and will launch manufacturing later this year at its newly expanded facility near Toledo, Ohio. (From a press release on July 12, 2012)

-The Company is applying its expertise in natural fiber processing technology for interior components to vehicle exteriors. The new process is based on a wet press process to produce wood fiber components for vehicle interiors. In the newly adapted process, a carbon fiber mat pre-moistened with resin is placed between the forming tools and then pressed. During the pressing cycle, the excess resin leaks onto the edge of the mold. This provides a very high fiber density in the body parts and enables series production of carbon components. The Company is already supplying an automotive manufacturer with its new carbon components. (From a press release on May 14, 2012)

Recent Developments Outside USA

<China>
-The Company announced that it will remove lead-processing operations capabilities from its Kangqiao battery plant in response to the Shanghai Municipal government's initiative to remove lead manufacturing from the community. The company will discontinue its attempts to resume any lead-processing production activities in the facility, and will remove associated equipment. Storage, labeling, prepping, and shipping of batteries manufactured in other facilities will continue. The operational change requires the company to reduce the size of the workforce. Customers will not be impacted by this operational decision, as lead-processing manufacturing from the Kangqiao plant has already been redirected to other Johnson Controls facilities in China. (From a press release on September 24, 2012)

<Hungary>
-The Company announced that it launched production at a new facility in Kecskemet, Hungary. The plant supplies complete seat systems for the first and second seat row for the new Mercedes-Benz "B-Class". A large number of different types of seats are manufactured in the plant. The different types include a standard or sport seat, and special equipment, such as airbags or seat heat. This plant currently employs 130 people. An additional 70 jobs will be created in the fall. Johnson Controls Automotive Experience has been in Hungary since 2007. In addition to Kecskemet, the Company operates plants in Mezolak and Mor that produce metal seating components. In 2010, the Company acquired the Seton Group Hungary plant based in Papa, which produces leather-wrapped car interior components. (From a press release on April 13, 2012)

<Japan>
-Johnson Controls K.K., the Japan unit for the Company, will establish a testing and prototype production facility in Yokohama. The new facility will start operations in April 2013, taking over the functions of the Japanese subsidiary's existing plant in Ayase, Kanagawa. Investment in the new project, including spending on land, a building and equipment, is expected to reach 20 million dollars (approximately 1.54 billion yen). The transfer will integrate the Company's development operations into the Yokohama area, close to Tokyo, with a higher competitive edge as a recruiting ground for engineers, as the Company works on increasing business with Japanese automakers. After the transfer project is completed, the Ayase Plant will be closed down and its building and land will be sold. The Company's seat production functions in Japan will be thereafter consolidated into two locations: the Oppama Plant in Yokosuka Kanagawa and a plant in Kyushu.

<Romania>
-The Company announced that it has opened a new seat production facility in Craiova, Romania. The new plant, which will create 160 new jobs, will supply Ford's local assembly plant with complete seat systems for the new "B-MAX" minivan. The Company has a seat assembly plant and five seating component plants in the country. Additionally, the Company recently acquired the automotive business of Romanian company Spumotim SA which included two polyurethane foam plants in Timisoara and Poiana Lacului. (From a press release on January 30, 2012)

Awards

-The Company has been honored by Chrysler Group LLC with its 2012 Supplier of the Year Award in the Diversity Supplier Development category. (From a press release on June 15, 2012)

R&D Expenditures

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	FY ended Sep. 30, 2010
Total	1,025	876	723

R&D Facilities

Technology Centers for Automotive Experience
-Plymouth, Michigan, USA
-Holland, Michigan, USA
-Burscheid, Germany
-Solingen, Germany
-Kaiserslautern, Germany
-Remscheid, Germany
-Monheim, Germany
-Karlsruhe, Germany
-Cergy, France
-Sofia, Bulgaria
-Trencin, Slovakia
-Shanghai, China
-Changchun, China
-Yokohama, Japan
-Ansan, Korea
-Pune, India

-Johnson Controls K.K., the Japan unit for the Company, will establish a testing and prototype production facility in Yokohama. The new facility will start operations in April 2013, taking over the functions of the Japanese subsidiary's existing plant in Ayase, Kanagawa. Investment in the new project, including spending on land, a building and equipment, is expected to reach 20 million dollars (approximately 1.54 billion yen). The transfer will integrate the Company's development operations into the Yokohama area, close to Tokyo, with a higher competitive edge as a recruiting ground for engineers, as the Company works on increasing business with Japanese automakers. After the transfer project is completed, the Ayase Plant will be closed down and its building and land will be sold. The Company's seat production functions in Japan will be thereafter consolidated into two locations: the Oppama Plant in Yokosuka Kanagawa and a plant in Kyushu. The Company will purchase a piece of land for the new facility, which will have a total floor area of 7,858 square meters. Combined with the existing facility, the new Yokohama operation will have a floor space of approximately 9,000 square meters. In addition to having prototyping and testing devices, the new building will have production lines for designing and process assessment operations. All employees at the Ayase Plant will move to the new facility, which will have a workforce of around 100. The new Yokohama operation will also handle research and development activities for seat and interior products. (From an article in the Nikkan Jidosha Shimbun on February 17, 2012)

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

R&D Activities

<Power Solutions>
-In China, the Company is developing breakthrough technology with Beijing University of Science and Technology and Tsinghua University. The Company is continuously working to develop capabilities to better serve its Chinese OEM customers. Currently, more than 100 R&D engineers are employed at its Eureka Battery Technology Center and Test Facility in Shanghai. The total investment in that facility is more than 21 million dollars.

Technological Alliance

<Automotive Experience>
-The Company announced a long-term cooperation agreement with the Fraunhofer Research Institution for Polymeric Materials and Composites PYCO, based in Germany. PYCO is a developer of highly cross-linked polymers for all applications. The Company and Fraunhofer PYCO's research and development initiatives will focus on developing polymer systems that are recyclable, repairable, and have excellent mechanical properties. An area of collaboration includes fiber-reinforced synthetics for the automotive industry. Within the framework of the agreement, the Company and the Fraunhofer Institution will expand the PYCO-Technikum science center in Wildau, Germany. (From a press release on March 14, 2012)

-The Company announced that it has formed a development relationship with luxury mattress manufacturer Harrison Spinks Ltd, based in UK, to integrate pocketed coil spring mattress technology into an automotive seat concept called ComfortThin. The thin profile seats replace conventional urethane foam pads with a 100 percent recyclable alternative, and provide a five to 20 percent weight reduction. Applicable for first, second and third row seats, the ComfortThin seat provides a dramatically thinner seat back with up to a 20 percent reduction at the center of the seat and a 35 percent or more reduction in the bolsters. This technology will be available for 2015 model year vehicles. (From a press release on January 31, 2012)

<Power Solutions>
-The Company is a strategic partner with Penn State, Ford, Argonne National Laboratory and the National Renewable Energy Laboratory.

Product Development

Prismatic lithium-ion cells and sub modules
-Johnson Controls Power Solutions announced that it will present its low profile prismatic lithium-ion cells and sub modules at the Geneva Motor Show 2012. The sub modules feature prismatic cells as compared to today's cylindrical cells, requiring less installation space and making them easier to integrate into cars. The sub modules feature all the necessary components such as storage cells, an electric collector system, monitoring electronics, a cooling system and mechanical mounting options. The Company currently plans to produce sub modules beginning in 2014. In addition, a Ford "Transit Connect Electric" delivery vehicle powered by the Company's lithium-ion battery will also be available for test drives at the Motor Show. (From a press release on February 20, 2012)

Instrument cluster
-The Company has developed a new instrument cluster concept that combines multiple layers of information to generate a three-dimensional (3D) interface. The Multilayer Instrument Cluster concept, which is targeted for full- and mid-size luxury vehicles, employs the thin-film transistor (TFT) technology offering high resolution, brightness and contrast. In addition, the concept presents driver information, including speed, navigation and driver assistance systems information directly in front of the driver as opposed to requiring the driver to look elsewhere on the vehicle dashboard. (From a press release on January 10, 2012)

Lightweight modular front seat structure
-The Company announced that it has developed a lightweight modular front seat structure. The new seat structure offers a weight reduction of 4.0 to 6.4 kilogram per vehicle. This includes lightweight seat rails and electric spindle drives of C. Rob. Hammerstein, using all synthetic materials for the tilt adjustment module rather than the conventional use of steel. The recliner comes from Keiper's Taumel 2000 series. The Company will provide Daimler with more than 30 different versions of the front seat structure for several Mercedes-Benz models. (From a press release on October 26, 2011)

Capital Expenditure

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	FY ended Sep. 30, 2010
Overall	1,831	1,325	777
Automotive Experience	777	638	386
-North America	232	210	123
-Europe	463	383	225
-Asia	82	45	38
Power solutions	875	519	272

Investment Outside USA

Power Solutions
<China>
-The Company announced that it will invest 200 million USD to set up an automotive battery plant in Tianjin, China. The new facility will supply automakers and the aftermarket in China with maintenance-free lead-acid starter batteries and advanced batteries for Start-Stop vehicles. Construction for the Tianjin plant will begin between 2012 and the first half of 2013 with production expected to start in late 2014. The Tianjin Plant will produce more than 6 million batteries annually at full capacity. The Company recently launched production at its Changxing facility, in Zhejiang Province and its Chongqing plant is scheduled to launch later this year. (From a press release on June 6, 2012)