Johnson Controls, Inc. (NYSE: JCI) Predicts Double-Digit Earnings

Johnson Controls, Inc. (NYSE: JCI) announced today that it expects to post solid sales and double-digit earnings improvements in fiscal 2011.

The company is presenting its fiscal 2011 forecast to financial analysts today in New York. Highlights include:

  • Consolidated net sales of approximately $37 billion, up 9%
  • Diluted earnings per share of $2.30 – $2.45, up 17 – 25%
  • Sales and margin improvements in all three of its businesses: Automotive Experience, Power Solutions and Building Efficiency
  • Increased levels of capital investment to support growth opportunities

From a market perspective, Johnson Controls said it expects moderately higher 2011 automotive production in North America, with flat European production versus 2010. China automotive production is expected to increase in the coming year, though at a slower pace than in 2010. The global Building Efficiency market is forecast to improve in 2011 led by the recovery in the emerging markets, especially China and the Middle East, offsetting softness in mature geographic markets.

Johnson Controls said it is positioned to grow faster than its underlying markets with improved profitability over the long term.

“We are substantially increasing our investments to drive organic growth,” said Stephen A. Roell, chairman and chief executive officer of Johnson Controls. “Higher capital expenditures in 2011 will support the significant growth opportunities in our Power Solutions business and further expansion in all of our businesses in the fast-growing geographic markets. Our balance sheet and cash flows are very strong, allowing us to pursue acquisitions that will provide us with platforms for accelerated growth.”

At today’s meeting, the company said its Building Efficiency backlog at the end of the fourth quarter of fiscal 2010 increased 10% over the prior year, while orders were up 31%. With the strong backlog and order rate improvements entering 2011, Johnson Controls said it expects its Building Efficiency business revenues to be 8% – 10% higher in the coming year. The company expects higher demand in emerging markets and Global Workplace Solutions as well as in its energy efficiency and sustainability (greenhouse gas reduction) offerings. A moderate recovery is forecasted for technical services in non-residential buildings. The company’s residential HVAC business is expected to increase at a double-digit pace for the second consecutive year.

Building Efficiency segment margins are expected to increase to 5.6% – 5.8% led by the growth in emerging markets and continued improvements in its residential business. The higher margins will be partially offset by investments in growth opportunities including an expansion in its sales force and the establishment of dedicated energy solutions resources in Europe and Asia.

Johnson Controls said it expects approximately 5% revenue growth by its Automotive Experience business, reflecting the impact of new seating and interiors program launches in addition to the slightly higher production volumes. Much of the new business launching in 2011 is in China where the company operates primarily through unconsolidated joint ventures. The impact of the higher volumes in China, therefore, are not included in the company’s 2011 revenue growth forecast.

The company noted that it continues to improve its global market share, reporting that its backlog of net new business grew 60%, to $4.0 billion, for 2011 – 2013. Segment margins are expected to improve to 4.5% – 4.7% in 2011. The higher margin expectations are the result of the company’s cost improvement initiatives and the improved level of profitability on new business awards.

Power Solutions revenues are expected to increase 10% – 15% due to volume growth across all regions resulting from market share gains and growth in emerging markets. The forecast segment margin of 13.4% – 13.6% reflects manufacturing process efficiencies, the benefits of vertical integration for the recycling of lead and the expansion of local production capacity in China.

Johnson Controls is forecasting an increase in 2011 capital investments to approximately $1.2 billion to support its organic growth opportunities. The higher capital expenditures will be focused on increased manufacturing capacity for SLI and AGM battery manufacturing capacity and expansion of the company’s capabilities in the emerging markets. The increased investments will also support the increased level of Automotive Experience new business awards as well as vertical integration and information technology initiatives.

Today the company also provided profitability forecasts for each of its businesses. Automotive Experience margins are expected to increase by 40 – 60 basis points per year over the mid-term due to the improvements in its cost structure and the positive impact of new business quoting disciplines. For Building Efficiency, the annual margin improvement over the mid-term is forecast to be approximately 50 basis points as its markets recover. Power Solutions margins are expected to increase approximately 100 basis points annually over the mid-term due to the benefits of vertical integration, manufacturing improvements and the increasing mix of higher margin AGM batteries.

“We are well-positioned to outpace the growth of our underlying markets,” Mr. Roell said. “We remain focused on the execution of our growth strategies and improving our cost structure, which we believe will enable us to gain market share across our businesses. With our strong financial position, we plan to take advantage of new growth opportunities to strengthen the company’s leadership positions across multiple markets and geographic regions. We are confident that 2011 will be a year of strong profitable growth for Johnson Controls.”

The Strategic Review and 2011 Outlook Meeting begins at 8:30 a.m. Eastern time today. A webcast of the event and presentation materials are available at http://www.johnsoncontrols.com.

NOTE:  Johnson Controls will release its fiscal 2010 fourth quarter earnings on October 26, 2010.

Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 130,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.

Johnson Controls, Inc. will make forward-looking statements in this presentation pertaining to its financial results for fiscal 2010, fiscal 2011 and beyond that are based on preliminary data and are subject to risks and uncertainties. All statements, other than statements of historical fact, are statements that are, or could be, deemed “forward-looking” statements and include terms such as “outlook,” “expectations,” “estimates” or “forecasts.”  For those statements, the Company cautions that numerous important factors, such as automotive vehicle production levels, mix and schedules, energy and commodity prices, the strength of the U.S. or other economies, currency exchange rates, cancellation of or changes to commercial contracts, changes in the levels or timing of investments in commercial buildings as well as other factors discussed in Item 1A of Part I of the Company’s most recent Form 10-k filing (filed November 24, 2009) could affect the Company’s actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company.

SOURCE Johnson Controls, Inc.

GMAC Mortgage to Review Foreclosure Process

GMAC Mortgage to Review Foreclosure Process

GMAC Mortgage to Review Foreclosure Process-Image via Wikipedia

GMAC Mortgage is committed to preserving the integrity of the foreclosure process and in that spirit has engaged several leading legal and accounting firms to conduct independent reviews of its foreclosure procedures in each of the 50 states.

In addition, foreclosure sale files nationwide receive an additional review by a specialized team to ensure that: home preservation procedures have been fully followed; the timing and substance of the foreclosure is appropriate; and the file itself is in good order and complies with all laws and requirements of the state of jurisdiction.

Foreclosure is a very serious matter and only implemented when all other home preservation options have been fully exhausted.  We are taking these additional steps to restore confidence in the process, which is critical for the stability of the home and mortgage industry.

In addition to the nationwide measures, the review and remediation activities related to cases involving judicial affidavits in the 23 states continues and has been underway for approximately two months.  As each of those files is reviewed, and remediated when needed, the foreclosure process resumes.  GMAC Mortgage has found no evidence to date of any inappropriate foreclosures.

GMAC Mortgage is committed to working through this matter diligently and encourages borrowers with questions to contact a customer service representative at 866-304-4682 or loan.assist@gmacm.com.  Additional information can be found by visiting www.gmacmortgage.com.

Contacts:
Gina Proia
646-781-2692
gina.proia@ally.com
Pfizer Inc.(NYSE:PFE) and King Pharmaceuticals, Inc. (NYSE:KG) to Merge
Pfizer Inc.(NYSE: PFE) and King Pharmaceuticals, Inc. (NYSE: KG) today announced that they have entered into a definitive merger agreement.  Under the terms of the agreement, Pfizer will acquire King, a diversified specialty pharmaceutical discovery and clinical development company, for $3.6 billion in cash, or $14.25 per share, which represents a premium of approximately 40% to King’s closing price as of October 11, 2010, and 46% percent to the one-month average closing price as of the same date.  The transaction was approved by the boards of both companies and is expected to be accretive to Pfizer’s adjusted diluted earnings per share(1) by approximately $0.02 annually in 2011 and 2012, and approximately $0.03 – $0.04 annually from 2013 through 2015.

The transaction will further expand Pfizer’s business profile, providing immediate, incremental diversified revenues generated by King’s portfolio, including a prescription pharmaceutical business focused on delivering new formulations of pain treatments designed to discourage common methods of misuse and abuse, the Meridian auto- injector business for emergency drug delivery, which develops and manufactures the EpiPen® and is a long-term, critical supplier to the U.S. Department of Defense, and an animal health business that offers a variety of feed additive products for a wide range of species.  King’s three key businesses are not only complementary to Pfizer’s businesses, but are also strategically aligned with Pfizer’s Primary Care, Established Products and Animal Health business units, enabling a seamless combination that will maximize King’s assets with Pfizer’s global organization’s scale and resources.

This strategic combination will allow Pfizer to leverage its existing commercial capabilities and expertise to create one of the leading broad portfolios for pain relief and management in the biopharmaceutical industry, offering both currently marketed opioid and non-opioid products, as well as a pipeline spanning stages of clinical development.  In addition to Pfizer’s current treatments for pain – which include Lyrica and Celebrex – King will bring Avinza, the Flector Patch and the recently launched Embeda, the first approved opioid pain product with design features intended to discourage misuse and abuse, two compounds in registration, which have the potential to lower the risk of abuse, as well as other compounds in development.

“We are highly impressed by King’s innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline.  The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management,” stated Jeffrey Kindler, Pfizer’s chairman and chief executive officer.  “In addition, the revenue generated by King’s portfolio will further diversify Pfizer’s business, while at the same time contributing to steady earnings growth and shareholder value.”

“By bringing together King’s capabilities in new formulations of pain treatments, designed to discourage common methods of misuse and abuse, with Pfizer’s commercial, medical and regulatory expertise, global strength in patient services and reimbursement, and global scale and resources, we believe Pfizer can build on our foundation and take our business to the next level,” said Brian Markison, chairman and chief executive officer of King.

The market for pain relief and management treatments is increasing, with physicians in the U.S. writing approximately 320 million prescriptions to treat pain in 2009.  However, the widespread misuse and abuse of prescription pain treatments is a major public health issue and a growing economic burden for the entire industry.  King’s leadership in new formulations of pain treatments designed to discourage common methods of misuse and abuse will provide Pfizer with multiple new drug delivery platforms, while providing potential long-term upside.

In addition, Pfizer anticipates the transaction to yield initial cost savings from operating expenses of at least $200 million, which are expected to be fully realized by the end of 2013.  The transaction is not expected to impact Pfizer’s 2010 financial guidance(2).  Pfizer continues to expect to achieve its 2012 financial targets(2).

Under the terms of the definitive merger agreement, Pfizer will promptly commence a cash tender offer to purchase all of the outstanding shares of King common stock for $14.25 per share in cash.  The agreement also provides for the parties to effect, subject to customary conditions, a merger to be completed following the completion of the tender offer which would result in all shares not tendered in the tender offer being converted into the right to receive $14.25 per share in cash.  As is customary, the completion of the tender offer is conditioned on Pfizer acquiring sufficient shares to own a majority of the shares of King on a fully-diluted basis.

In addition, the tender offer is subject to regulatory approval in the U.S. and other jurisdictions. The companies are targeting a late fourth-quarter 2010 or first-quarter 2011 closing assuming execution of the tender process and receipt of the appropriate regulatory clearances.

Pfizer’s financial advisor for the transaction was J.P. Morgan Securities LLC while Cadwalader, Wickersham & Taft LLP was its legal advisor.  Credit Suisse served as King’s financial advisor, while Covington & Burling LLP served as its legal advisor.

Conference Call/Webcast

Pfizer will be conducting an analyst and investor conference call/webcast Tuesday, October 12, 2010 at 9:30 am Eastern Time to discuss the transaction. To view and listen to the webcast, visit the Investor Presentations section of Pfizer’s website, www.pfizer.com.  You can also listen to the conference call by dialing either (866) 395-3896 in the United States or (706) 634-2365 outside of the United States. The password is “Pfizer.”

(1)  “Adjusted income” and its components and “adjusted diluted earnings per share (EPS)” are defined as reported net income and its components and reported diluted EPS excluding purchase-accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. “Reported net income” is defined as net income attributable to Pfizer Inc. in accordance with U.S. generally accepted accounting principles. “Reported diluted EPS” is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. generally accepted accounting principles.

The adjusted income and its components and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(2) Reconciliations of full-year 2010 guidance and 2012 targets for adjusted income(1) and adjusted diluted EPS(1) to full-year 2010 guidance and 2012 targets for reported net income(1) and reported diluted EPS(1) are set forth in Pfizer’s Current Report on Form 8-K dated August 3, 2010.

300 Foreclosures to be Auctioned

300 Foreclosures to be Auctioned

300 Foreclosures to be Auctioned-Image via Wikipedia

In this buyer’s market, where housing inventory runs high, foreclosures remain sought after properties because they can often be purchased at discounted prices.  Buyers particularly enjoy purchasing bank-owned homes through auction because the process is easy, streamlined and transparent. Hudson & Marshall will auction over 300 homes in the Minneapolis/St. Paul area and Milwaukee October 15th-17th.

All the homes up for auction come with an insurable title and no back taxes or liens. Buyers will be required to make a cash or certified check deposit of $2,500 for each property which they are the winning bidder.

“Because many foreclosed properties have been languishing on the market for several months to a year, by the time they reach the auction process, lenders are eager to quickly sell them,” remarked Dave Webb. “While there are always exceptions, on average foreclosed properties can be purchased 15%-20% below the home’s last list price,” added Webb.

According to RealtyTrac, in the second quarter of 2010 the average sales price of foreclosures that sold while in some stage of foreclosure was 26% less than the sales price of non-foreclosure properties. A total of 151,290 bank-owned properties sold to third parties in the second quarter of 2010.

All homes being auctioned by Hudson & Marshall are sold “as-is” and buyers should inspect properties before placing any bids. Properties can be viewed during the open house scheduled Saturday, October 9th and Sunday, October 10th from 1:00pm-3:00pm or by contacting listing agents to schedule appointments. Complete property details and additional information may be found at www.hudsonandmarshall.com or by calling 866-539-4172.

Hudson & Marshall will auction the homes on the following dates:

October 15th – Minneapolis/St. Paul (100 homes) at 1:00pm-Minneapolis Airport Marriott

October 16th – Minneapolis/St. Paul (198 homes) at 11:00am-Minneapolis Airport Marriott

October 17th – Milwaukee (60 homes) at 1:00pm-Milwaukee Marriott West

Prior to auction, buyers can purchase property online by visiting the website and clicking on the Bid-Now icon. Sellers typically respond to offers within 24 hours. This is a reserve auction, which means sellers have the right to accept, reject or counter any bid; however, in past auctions conducted by Hudson & Marshall, the majority of offers have been accepted.

Having sold over 80,000 homes for sellers in the past ten years, Hudson & Marshall, Inc. is the most experienced, trusted leader in the REO auction industry. The company’s accelerated sales process enables it to swiftly and efficiently sell large volumes of property in a way that minimizes expenses for sellers and maximizes return. Over the past five years alone, Hudson & Marshall’s total sales have topped $2.2 Billion and the company anticipates selling another 15,000 homes in 2010.

About Hudson & Marshall of Texas, Inc.

H&M is America’s Premier Auction Authority. Our 45-year history combined with our continued process enhancements have allowed us to become one of the largest and most respected real estate auction firms in the United States. H&M has set the standard as a full service auction company and continues to consistently raise the bar for our industry. Our number one priority is to provide top-quality service to our customers. Buyers know they can count on H&M to provide value and service from the initial property offering through the closing process. This same approach provides sellers with a one stop single solution to the disposition of real estate assets. Sellers particularly appreciate H&M’s streamlined approach that handles their assets from marketing through closing and funding. The H&M process allows the seller to minimize expenses and maximize return. H&M has assisted clients ranging from individuals to large, medium, and small corporations, government agencies, and financial institutions. Since 1999, H&M has sold and closed over 80,000 homes throughout the country. See more about H&M at www.hudsonandmarshall.com.

SOURCE Hudson & Marshall of Texas, Inc.

Economy Responsible for Grim Housing Market

Economy Responsible for Grim Housing Market

Economy Responsible for Grim Housing Market-Image via Wikipedia

Nearly two-thirds of Americans say the current economic situation is making them less likely to buy a house, according to a new national survey by FindLaw.com (http://www.findlaw.com), the most popular legal information website.

Sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy. Despite record-low mortgage rates and an abundance of houses available on the market, only 8 percent of people say the current economic situation makes them more likely to buy a house.  About a quarter of people – 28 percent – say they are neither more likely nor less likely to buy a house because of the economy.

In particular, the current economy is driving lower-income individuals and families out of the market.  People with annual incomes less than $50,000 were significantly more likely to say they are less inclined to buy a house than people with higher incomes.

“The current economic situation has greatly changed the dynamics of the housing market,” said Stephanie Rahlfs, an attorney and editor with FindLaw.com.  “Although mortgage rates are near record lows, stricter lending requirements are often making it more difficult for many people to obtain mortgages.  High unemployment rates are raising concerns about housing appreciation, affordability and foreclosures.  Together, these factors are causing many people to shy away from the idea of buying a house. Buying a home, selling a home and owning a home are all becoming more complicated, and it’s important to know the ins and outs of contracts, finances and your rights as a buyer, seller or owner.”

Free Internet resources such as the FindLaw Real Estate center (http://realestate.findlaw.com/) can provide helpful information on buying, selling and owning a home, including obtaining a loan, borrowers’ rights, finding the best mortgage, homeowners’ rights, avoiding foreclosure and more. It also has useful information for renters, including negotiating a lease, tenants’ rights, and fair housing and discrimination laws.

The FindLaw.com survey was conducted using a demographically balanced telephone survey of 1,000 American adults and has a margin of error of plus-or-minus 3 percent.

SOURCE FindLaw.com


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