Financial Overview

(in million USD)

	FY ended Sep. 30, 2013	FY ended Sep. 30, 2012	Rate of change (%)	Factors
Overall
Sales	42,730	41,955	1.8	1)
Segment income	3,293	2,497	31.9	-
Automotive Experience
Sales	21,781	21,334	2.1	2)
Segment income	1,299	803	61.8	-
Power Solutions
Sales	6,358	5,906	7.7	3)
Segment income	1,006	784	28.3	-

Factors
1) Overall  sales
-In FY ended Sep. 30, 2013, consolidated net sales increased by 1.8% year-on-year. Excluding the unfavorable impact of foreign currency translation, consolidated net sales increased by 2.0%. The increase was due to higher sales in the Automotive Experience business and Power Solutions business, partially offset by the unfavorable impact on foreign currency translation and lower sales in the Building Efficiency business.

2) Automotive Experience
<Seating business>
-The increase in Seating business was due to higher volumes to the Company's major OEM customers, incremental sales due to business acquisitions, favorable sales mix. It was partially offset by the unfavorable impact of foreign currency translation and lower volumes due to a business divestiture.

<Interior business>
-The increase in Interior business was due to higher volumes to the Compnay's major OEM customers and the favorable impact of foreign currency translation.

<Electronics business>
-The decrease in Electronics business was due to net unfavorable pricing and commercial settlements and the unfavorable impact of foreign currency translation, partially offset by higher volumes to the Company's major OEM customers.

3) Power Solutions
-Net sales increased primarily due to favorable pricinig and product mix, higher sales volumes and the impact of higher lead costs on pricing, partially offset by the unfavorable impact of foreign currency translation.

Divestiture

Divestiture of the automotive electronics business
-In 2014, the Company announced that it has agreed to sell the automotive electronics business to Visteon Corporation for USD 265 million. The divestiture is expected to be completed in the second quarter of 2014. Under the terms of the agreement, the Company will sell its instrument cluster, infotainment, display, and body electronics products. The transaction involves about 4,800 employees, including about 1,000 engineers at seven research and development centers in Europe, North America and Asia. The Company previously sold the HomeLink product portion of its electronics portfolio to Gentex Corporation in September 2013. This transaction will complete the Company's divestiture of the automotive electronics business.

-In September 2013, the Company announced that it has completed the divestiture of its HomeLink business to Gentex Corporation. The amount of transaction is USD 701 million. HomeLink is a vehicle-based control system that enables drivers to remotely activate garage door openers, entry door locks, home lighting, security systems, entry gates, and other radio frequency convenience products.

Acquisition

-The Copmany has acquired full ownership of Tata Johnson Controls (TJC). The former 50-50-percent joint venture between Tata AutoComp and Johnson Controls is a supplier of automotive seat systems and components in India, serving major OEMs. Eleven locations across India, including an engineering center in Pune, and approximately 2,100 employees are associated with this transaction. (From a press release on May 28, 2013)

Joint Venture

-The Company signed an agreement with Zhejiang Wanfang New Materials Co., Ltd. to set up a new automotive fabrics joint venture in Haining City, Zhejiang Province, China. The new joint venture will be called Zhejiang Johnson Controls Wanfang Textile Technology Co., Ltd. It will supply major automakers in China and abroad with automotive and functional fabrics for automotive seating and interior products. The joint venture formation is expected to be completed by the end of 2013. (From a press release on August 28, 2013)

Recent Development Outside USA

<China>
-The Company plans to increase its number of production locations from 57 to 68 in China over the next few years. Since beginning operations in China in 1997, the Company is now engaged in 32 joint ventures with 24 strategic partners. The Company operates 57 production plants in 27 cities and 10 engineering sites in 8 cities in China. (From a press release on September 12, 2013)

Contracts

-The Company supplied an advanced cluster display to the all-new 2014 GM "Chevrolet Corvette Stingray."

-The Company is providing its advanced Absorbent Glass Mat (AGM) battery technology to power Chevrolet's 2014 Malibu featuring Start Stop technology. The technology will increase the 2014 Malibu's fuel economy by an estimated 5 percent. The batteries that will power the Malibu will be manufactured in St. Joseph, Missouri and Toledo, Ohio, USA.

-The Company will supply Lithium-ion batteries to power large plug-in hybrid trucks as part of a U.S. Department of Energy (DOE) electrification initiative. About 120 work trucks, to be used by publicly owned utilities and municipal electric companies, will utilize advanced plug-in hybrid power systems by Odyne Systems, LLC, using Johnson Controls' batteries. Depending on use, Odyne's hybrid power system can enable large trucks to obtain fuel economy improvements of up to 50 percent compared to traditional diesel or gasoline engines. The Lithium-ion batteries for these trucks will be made at Johnson Controls' manufacturing facility in Holland, Michigan. (From a press release on June 6, 2013)

-The Company will provide its Absorbent Glass Mat (AGM) advanced battery technology to power the Chery Jaguar Land Rover Start-Stop and other vehicles made in China. (From a press release on April 19, 2013)

-The Company supplied complete seats, door panels, instrument panels, floor consoles and rear quarter panels to Fiat "500L" through its two manufacturing facilities in Serbia.

-The Company is supplying the following components to GM "Cadillac ATS":

• Seat assemblies
• Seat foam
• Seat trim
• Headliners
• Overhead consoles
• Rear parcel shelves
• HomeLink wireless car-to-home technology
• Absorbent Glass Mat (AGM) battery

The leather seats supplied to GM "Cadillac ATS" include heat and ventilation, cushion thigh extender, lumbar adjustment and four-way adjustable headrest, as well as touch feedback to warn if the driver unexpectedly departs a lane.

-The Company is supplying the following components to Chrysler "Ram 1500":

• Seat assemblies
• Seat metal
• Seat foam
• Seat trim
• Instrument panels
• Door panels
• Hard trim
• Floor consoles
• HomeLink wireless car-to-home technology
• Absorbent Glass Mat (AGM) battery

Contracts

-The Company announced that it was awarded Ford Motor Company's "Q1" quality award for its plant in Matamoros, Mexico. The facility, which opened in 2006, supplies metal front-row seat adjusters for a variety of Ford vehicles. This is the first time the Matamoros plant has received Ford's quality award. (From a press release on February 7, 2013)

R&D Expenditures

(in million USD)

	FY ended Sep. 30, 2013	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011
Total	1,006	1,025	876

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

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

Product Development

Advanced cluster display
-The Company has been tapped by General Motors to co-develop an advanced cluster display that redefines the Human Machine Interface (HMI) for the all-new 2014 "Chevrolet Corvette Stingray". The cluster display features many advanced technologies and can provide up to 69 unique sources of information, such as an interactive performance timer and tire temperature gauge. The 8-inch LCD screen located in the center of the cluster is organized using configurable themes that are designed to prioritize information for specific driving scenarios. The driver can reconfigure gauges using three different themes: track; tour; and sport. (From a press release on September 12, 2013)

Headliner
-The Company and Adam Opel AG jointly developed a headliner that features LED elements that twinkle, similar to stars. This feature, available as optional equipment for the new Opel "Adam", is unique for the entry level auto segment in Europe. The dimmable lighting can be switched on when stopped as well as while on the road since it will not cause glare for the driver. The weight is comparatively low at only 200 grams, including the wiring. In addition, power consumption of 4 watts has minimal impact on the energy management of the Opel "Adam" compared to a car radio which consumes around 60 watts. Johnson Controls is manufacturing the headliner for all variants in Uberherrn located in Germany, and delivers them to the Opel plant in Eisenach. (From a press release on May 6, 2013)

48-volt Micro Hybrid battery
-The Company is premiering its new 48-volt Micro Hybrid battery demonstration module in Europe at the Hannover Messe. The 48-volt hybrid battery would be used in vehicles in conjunction with a 12-volt starter battery. The 48-volt Micro Hybrid battery enables greater fuel savings than Start-Stop systems and is much more cost-effective than hybrid or electric vehicle systems. By using the 48-volt battery vehicles can save between 15 and 20 percent in fuel. (From a press release on April 10, 2013)

Hip-point mannequin
-The Company developed a hip-point mannequin that complies with three different international standards that define the characteristics and dimensions of mannequins in the engineering and production of automotive seating. The new hip-point mannequin from Johnson Controls meets standards set by the Society of Automotive Engineers (standard SAE J 826) and the GLORIA standard for EuroNCAP tests. It also satisfies recommendations of the German Association of the Automotive Industry VDA (recommendation VDA 304). Using a hip-point mannequin, the position of the driver and passengers can be measured in prototypes and as well as in the actual vehicle and then compared with the design plans. The measuring mannequin from Johnson Controls, with its carbon torso, can also be fitted with a head restraint measurement device (HRMD). This determines the position of the head in relation to the head restraints. Johnson Controls has been using the hip-point mannequin since June 2011. The Company is now offering the mannequin to automakers, other manufacturers of automotive seating and external testing organizations. (From a press release on February 19, 2013)

Capital Expenditure

(in million USD)

	FY ended Sep. 30, 2013	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011
Overall	1,377	1,831	1,325
-Automotive Experience	754	777	638
・Seating	467	549	446
・Interiors	235	171	146
・Electronics	52	57	46
Power solutions	425	875	519

Investment Outside USA

<Germany>
-The Company's Power Solutions has expanded its Zwickau, Germany AGM (Absorbent Glass Mat) battery plant with a 100 million euro investment. The expansion project included the addition of a new production hall, a new logistics building and four new assembly lines. The plant's increased production capacity is now 6.6 million batteries a year – four times the plant's output prior to the expansion. The expansion has allowed the Company to double its employment at the site, from roughly 200 employees prior to the renovation to 400 employees currently. (From a press release on September 30, 2013)

<South Africa>
-The expansion of its interiors plant in East London, South Africa has completed. The East London plant currently supplies interior components, including headliners and instrument panels for the Mercedes Benz "C-Class". It will create 200 new jobs and will also supply door panels in the future. The new building has 13,000 square meters of space for three assembly lines. (From a press release on March 19, 2013)

<Serbia>
-The Company has inaugurated the following two new plants in Serbia. Both plants supply the Fiat Automobiles Serbia (FAS) facility in Kragujevac, where the 500L is assembled:

• Seating plant: Located in the Grosnica Supplier Park near the city of Kragujevac, the Company manufactures complete seats in a new just-in-time (JIT) system.
• Interiors plant: A joint venture between the Company and Magneti Marelli, is located within the FAS facility. The joint venture supplies complete interiors, including door panels, instrument panels, floor consoles and rear quarter panels.

(From a press release on February 6, 2013)

<Hungary>
-The Company has opened a new facility at its metals and mechanisms plant in Mezolak, Hungary. The plant's new building offers 1,500 square meters of space for a new height adjuster and recliner production line, 1,500 square meters of storage space and 400 square meters of additional space. In the last two years, the Company has created around 200 new jobs in its Mezolak facility and increased the number of employees there to more than 600. The plant will create an additional 50 jobs in the next six months.  (From a press release on October 2, 2012)