1. The Urban Building Market and Johnson Controls’ MetroMarkets Strategy

2. Consistent Growth Johnson Controls is a $32 billion company:
Increasing sales - 59 consecutive years
Increasing earnings - 15 consecutive years
Increasing dividends - 30 consecutive years

3. Diversified Business Seating and interior systems
Power solutions (batteries)
Building efficiency systems and services

4. Sustainability: Triple Bottom Line
Johnson Controls is committed to environmental, social and financial success
This influences how we approach the urban building market
Corporate Sustainability is
a business approach that creates long-term shareholder value by embracing
opportunities and managing risks deriving from economic, environmental and
social developments.

5. Population Trends – Look Back
Fact: Older generations experienced less diversity with customers and co-workers
Fact: Ratio 1:1
of Caucasians to People of Color born today
we did research as we moved toward the metro markets
Age
Source: U.S. Census Bureau, 2000 Census

6. “Inner City 100” Research
Inner City 100 from Inc Magazine: Top 100 entrepreneurial companies headquartered in economically distressed urban areas
Findings:
#1 advantage to inner city location: workforce diversity
#1 factor limiting inner city business growth: ability to recruit qualified employees
Only 13% of these growth-oriented entrepreneurs are in construction trades
Source: Inner City 100; Requirements: Have had 10 or more employees in 2004, a five-year history that includes sales of over $200,000 in 2000 and over $1 million in 2004

7. How To Attract Business
Critical factors for a city’s economic development:
transportation
available and appropriate work force
affordable housing
strong healthcare options
quality of schools
reputation as a good place to live
proximity to restaurants and retail
municipal reputation for economic development
physical attractiveness of area
MetroMarkets strategy includes catalysts for solutions to many of these factors!
Source: Center for Urban Planning, Northeastern University, 2005

8. Majority of construction spend in urban centers
Urban Building Market
Majority of construction spend in urban centers
$326 billion construction market in U.S.
Majority of the market is in the 50 largest cities
definition of inner city; if we fill 2.5 million houses the schools, hospitals, retail outlets will follow

9. Drivers in the Urban Segment
Supply and Demand
Metro communities demand that investments lead to jobs and prosperity
Drivers in the Urban Segment
Increase in population
Increase in buying power
Increase in political power
Increased drive to reinvest in community
Increased corporate investment

10. MetroMarkets Strategy
Creating a model for our business in areas where we see growth potential – urban centers
Goals:
grow our business
expand our customer base
create long-term, sustainable solutions

11. Disconnected Players What Happens Today
Government
Faith-based organizations
Neighborhood initiatives
Non-Profits
Training facilities
Vocational Schools
Higher Education
Public Schools
Charter Schools
Only one element
addressed
Not addressing skills
needed for local jobs
Small Business
Corporations
Entrepreneurs
Big 3 train for manufacturing jobs but decreasing base
Low corporate
investment

12. Three Elements Working Together
Program Management is Key
If we bring elements together effectively, we will drive economic development in the community
Catalyst for Economic Development
Larger Customer Base for Johnson Controls
Great Buildings and More Prosperous Community

13. MM is… Solutions for Buildings
small, decentralized
large, centralized
add graphic here
Apartment units
Higher Education
Lodging
Schools
Large Commercial
High Technology
Government
Homes
Food Sales
Shopping Malls
Life Sciences
Airports
Hospitals
Recreation
Industrial Plants
Apartments
Medical Clinics
Small Commercial

14. Why is MetroMarkets relevant to you?
» Shifting Employee Base
» Shifting Customer Base
» Urban Building Market

15. A corporate culture which fosters diversity
can also foster profitability