Johnson Controls, Inc. F4Q08 (Qtr End 09/30/08) Earnings Call Transcript

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2008-10-24 20:27:12.0

Tags: J.P. Morgan Chase & Co., Call Transcript, Johnson Controls Inc., Earnings, Performance Management, Human Resources, Workforce Management, Seeking Alpha, J.P. Morgan Chase & Co., Call Transcript, Johnson Controls Inc., Earnings, Performance Management, Human Resources, Workforce Management, Seeking Alpha

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question, Ryan Brinkman of JPMorgan, your line is open.

Himanshu Patel - JPMorgan

Hi, it's Himanshu Patel of JPMorgan.

Steve Roell

Hi, Himanshu. We can hear you, we're getting a little bit of an echo, but go ahead.

Himanshu Patel - JPMorgan

Two questions. First, on the services business, what percentage of that would you say is discretionary?

Steve Roell

How much of it's discretionary? I don't know how to answer that question. I guess -- there's two -- maybe me try to -- let me breakout the service, okay? If you were to think about issues like retro -- the retrofit side, do you want to go all the way to that definition of service or a finer definition, Himanshu?

Himanshu Patel - JPMorgan

The retrofit side broadly speaking.

Steve Roell

Okay. The retrofit is a -- it would certainly be discretionary. That's really where we do a lot of our work, that and what we call performance contracting would be work that we do directly with owners. We also have what's called prime. Those would be the categories that I guess I would describe to you, are truly discretionary. The service side is -- there's two elements there or three elements, really. There's truck based, which is some of that is under contract. Some of that which is basically we charge a labor material on a call basis, as you can imagine.

And then we have what's called facilities management. I'm not sure -- I guess the part that you might consider to be discretionary is probably the strongest part of our backlog right now in our pipeline, and that's the acuity we're seeing in prime retrofit with our building owners, as well as performance contracting. Keith talked about the fact that we're seeing good demand in our backlog. We're seeing it in what we call our pipeline, as well.

Himanshu Patel - JPMorgan

The prime retrofit, that would show up in the systems division, right? That's not part of service, right?

Steve Roell

No, no, prime is our definition of where we have retrofit activity, which is direct with the owner retrofit, it’s not new construction.

Himanshu Patel - JPMorgan

Got it, okay.

Steve Roell

That's probably our strongest element right now.

Himanshu Patel - JPMorgan

Okay. And then secondly, I know you mentioned revenues in North American systems were down, I mean were up 4%, I think. Did you guys talk about -- you mentioned profits were down, any -- and could you give us some rough numbers on in sort of how much they were down?

 

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