23 slides from Johnson Controls International's merger presentation, Aug 25, 2005
Slide 1: Johnson Controls Acquisition of York International Investor Presentation
Exhibit 99.2 Johnson Controls Acquisition of York International Investor Presentation August 25, 2005
Slide 2: Forward-looking statements
Forward-looking statements Johnson Controls has made forward-looking statements in this document pertaining to the planned acquisition of York by Johnson Controls, Inc. that are based on preliminary data and are subject to risks and uncertainties. Such statements include expected synergies, pro- for
Slide 3: Speakers
John M. Barth Johnson Controls Chairman and Chief Executive Officer Speakers C. David Myers York International President and Chief Executive Officer R. Bruce McDonald Johnson Controls Vice President and Chief Financial Officer Stephen A. Roell Johnson Controls Vice Chairman and Executive Vice Presid
Slide 4: A new chapter in our success story
A new chapter in our success story Johnson Controls to acquire York International -- the largest independent supplier to the global heating/cooling market Acquisition provides New technology New customers Expanded access to growing geographic markets Large installed base which yields a huge service
Slide 5: Strategic rationale
Strategic rationale Increases the rate of our future organic sales growth in the buildings market Bundle controls/HVAC&R equipment Doubles our service network Enlarges our addressable market A growing, $200 billion global building environments industry Even higher growth rates, especially in service
Slide 6: Transaction overview
Transaction overview Johnson Controls will acquire York for $56.50 per share Transaction value of approximately $3.2 billion (including debt) All cash transaction York's Board of Directors has unanimously recommended that York shareholders vote in favor of the transaction Transaction expected to clo
Slide 7: Financial performance
Financial performance Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 1995 30 1996 35 1997 40 1998 45 1999 55 2000 60 2001 65 2002 70 2003 80 2004 95 Sales 30 consecutive years of dividend increase
Slide 8: Acquisition philosophy
Acquisition philosophy Sales synergies to accelerate growth Cost synergies Capital utilization Footprint rationalization Increased purchasing power Efficiency improvements Global Best Business Practices (BBP) Six Sigma/Lean manufacturing Process technologies At Johnson Controls... Acquisition integr
Slide 9: Overview of Johnson Controls - Controls business
Overview of Johnson Controls - Controls business Business description 2005 Sales (est.) by line of business 2005 Sales (est.) by geography The Controls Group is a major worldwide supplier of installed control systems and technical and facility management services The Controls Group engineers, manufa
Slide 10: Overview of York International
Overview of York International *Source: First Call consensus estimates Business description York is a global leader in heating, ventilating, air- conditioning and refrigeration products and services The company is organized into three divisions: Global Applied, Unitary Products Group, and Bristol co
Slide 11: Powerful combination
Powerful combination The combination of Johnson Controls and York will produce a number of important benefits: Competing in a larger, and growing, $200 billion global market Increases capability for even faster growing service market Improves global reach Complementary capabilities that enable suppl
Slide 12: Global building environments market
Global building environments market Global market growth of 4-5% Equipment 2-3%, services 5-6% Higher growth in China, Latin America, Middle East, and Central Europe Trend toward integration of controls and mechanical equipment $200 billion global market HVAC / Mechanical services 44 HVAC / Mecahnic
Slide 13: Service opportunity
Service opportunity $130 billion global market Rapidly growing markets Both Johnson Controls and York services revenue up double digits in 2005 year-to-date Highly fragmented No competitor has more than 5% of the global building services market Stable recurring revenues Strong margins "Local" leader
Slide 14: Improves Johnson Controls global reach
Improves Johnson Controls global reach Combined revenues* York McQuay 0.07 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 More than 500 sales/service offices Serving more than 125 countries Expanded presence China Central Europe South America Middle Ea
Slide 15: Highly complementary capabilities
Highly complementary capabilities Product Design Manufacturing & Distribution Installation & Service Mechanical (HVAC&R) service capability Controls fire, and service capability Service delivery system Supply chain benefit to customers HVAC&R equipment design capability Controls design capability Bu
Slide 16: Transaction summary
Transaction summary (Including assumption of debt) *2005 First Call consensus estimates
Slide 17: Financing strategy
Financing strategy Initially finance with $2.8 billion in commercial paper Issue term debt to replace acquisition-related commercial paper issuance Well distributed maturity profile Fixed/floating target ratio of 50/50 Blended all-in interest rate of approximately 5.25% Strong cash flows will enable
Slide 18: Synergies from the transaction
Synergies from the transaction Total synergies of over $275 Million by 2008
Slide 19: Financial targets
Financial targets Fiscal 2006 guidance will be provided on October 11, 2005 Acquisition of York will help us reach our long-term targets Sales growth >10% Earnings growth 10 to 15% ROIC 15 to 16% Debt / cap 35 to 40%
Slide 20: Johnson Controls and York
Johnson Controls and York Creates unique and strong position in global building environments industry -- $11 billion in sales Leverages Johnson Controls manufacturing expertise Provides end-to-end capabilities to enhance service growth Proven integration process resulting in meaningful cost and reve
Slide 21: Improves balance of Johnson Controls businesses
Conrols 0.32 Automotive 0.593 Batteries 0.08 York 0.12 McQuay 0.07 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 Controls 0.23 Automotive 0.53 Batteries 0.24 McQuay 0.07 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slic
Slide 22: An even stronger, more diversified Johnson Controls
An even stronger, more diversified Johnson Controls " New " Controls Battery Seating/Interiors Market leadership in three businesses Customer focus Systems integration and services Innovation Operational excellence Global Financial strength to support growth strategies for each business Benefiting c
Slide 23: Appendix: GAAP reconciliation
Appendix GAAP reconciliation Controls 2005 Estimate Reconciliation Group ($ in millions) GAAP Operating Income Nine Months Ended June 30, 2005 $128 Restructuring Costs 51 Estimated Fourth Quarter Operating Income 131 2005 Estimated Non-GAAP Operating Income $310