Johnson Controls A global diversified company in the building and automotive industries

February 10, 2011

Megan McNamara ‘10 Gerard Marciano ‘82, ‘97

Johnson Controls is a globally diversified company in the building and automotive industries

Johnson Controls2

Automotive Experience

A global leader in automotive

seating, overhead systems,

door and instrument panels,

and interior electronics.

Building Efficiency

A leading provider of

equipment, controls and

services for heating, ventilating,

air-conditioning , refrigeration,

and security systems for

buildings.

Power Solutions

The global leader in lead-acid

starter batteries, advanced

lead-acid batteries for Start-

Stop vehicles and Lithium-ion

batteries for hybrid and electric

vehicles.

Our success is enabled by the commitment and dedication of our 142,000 employees serving customers in more than 150 countries

Johnson Controls3

Awards and Recognition

Johnson Controls4

Our Businesses

5

Automotive Experience: Consumers have enjoyed the comfort and style of our products, from single components to complete interiors

Johnson Controls6

Interiors ElectronicsSeatingSeating

Instrument Panels

Floor Consoles

Door Panels

Headliners

Overhead Systems

Overhead Consoles

Sun Visors

Functional Plastics

Complete Seat Systems

Seating Components

Metal Structures

Mechanisms

Foam & Trim

Just-In-Time Manufacturing

Components and Systems for

Driver Information

Connectivity

Telematics

HomeLink

Compass

Body Electronics

Battery Monitoring Systems

Power Solutions has global leadership in the development of advanced energy storage solutions

Johnson Controls7

$299.2 million grant from the U.S. Department of Energy to build a sustainable advanced vehicle industry in America

World’s first li-ion manufacturing facility in Nersac, France; 1st U.S. plant began shipping September, 2010

Mercedes Benz S-Class, BMW 7 Series, Azure Dynamics hybrid commercial vehicles

Market leader for start-stop batteries

Produced more than 2.6 million absorbent glass mat (AGM) lead-acid batteries

5%-12% fuel savings

Ford Transit Connect Electric launching in 2011

Volkswagen EV program

SeatingAdvanced Lead-Acid Micro Hybrid Start-Stop Vehicles

Li-Ion Hybrid Electric Vehicles

Li-Ion Electric Vehicles

Building EfficiencyExpertise across the building lifecycle

Johnson Controls8

Building Lifecycle

Plan & Assess Acquire & Design Construct Operate/Maintain

Strategic Consulting

Portfolio Management

Customers want sustainable facilities

Acquisition Services

Workplace Design

Optimize / Reconfigure Space

HVAC Equipment

Controls & Integration

Security & Fire

HVAC Services

Maintain, Repair, Replace

Facility ManagementGreen buildings affect lease rates, occupancy

and sales per sq. ft.

Must use less energy

Link multiple systems to reduce consumption

Protect assets

Required maintenance on equipment lowers cost and emissions

Portfolio spend identifies improvement

opportunities

Efficiency Now at an Empire Scale Empire State Building Sustainability Program

Project Summary

MISSION: Develop integrated sustainability program for the Empire State Building to transform the global real estate industry by transparently demonstrating how to create a competitive advantage for building owners and tenants through profitably retrofitting existing buildings.

MOTIVATION: 1.The world needs to reduce greenhouse gases by approximately 75% by 2050, and

retrofits in existing commercial buildings are a critical component of the solution. 2.Building owners can gain competitive advantage from sustainability programs by

reducing costs, providing superior environments, and capturing higher potential rents.

PROGRAM SUMMARY: The program includes energy efficiency retrofits, build-out design standards, a tenant energy management program, leasing and marketing initiatives

At current energy costs, ESB will cost-effectively reduce energy use by 38% and save 105,000 metric tons of CO2 over the next 15 years. The net present value of these actions is $22 million.

The cornerstone of the program is energy efficiency retrofits including 8 key measures ranging from base building infrastructure improvements to tenant engagement.

Historic Project at a Historic Building

To create a replicable model for profitably reducing the climate impacts of buildings, our team has developed an sustainability program for the Empire State Building

Recognized throughout the world

3.8 million visitors per year

102 stories and 2.8 million square feet

CO2 emissions of 24,000 tons per yr

$11 million in annual energy costs

Peak office building demand of 9.5 MW

88 kBtu per SF per yr for the office building

Program Motivation 1: Create Replicable Climate Solution

The observed growing buildup of greenhouse gas concentrations in the atmosphere is causing global climatic disruption

Source: Stern Review (2006), IPCC Fourth Assessment Report

Target 20 GtCO2e by 2050 to mitigate risk

2008 2030 20500

20

40

60

80

100

5562

85

Bu

sin

ess

As

Usu

al

Em

issi

on

s (G

tCO

2e

/yr)

-64%

-68%

The world needs to reduce greenhouse gas emissions by ~75% by 2050

-72%

Program Motivation 2: Build Competitive Advantage

“The goal with ESB has been to define intelligent choices which will either save money, spend the same money more efficiently, or spend additional sums for which there is reasonable payback through savings.  Addressing these investments correctly will create a competitive advantage for ownership through lower costs and better work environment for tenants.”  - Anthony E. Malkin, Empire State Building

Demonstrate leadership, innovation to preserve ESB’s iconic reputation

Improve tenant comfort and building’s

marketability

Reduce opex and capex for owner and

for tenants

Invest in Energy Efficiency the cheapest, cleanest, fastest energy source

Innovative Approach

Identifying Opportunities

Modeling Measures

• 60+ energy efficiency ideas were narrowed to 17 implementable projects.

• Team estimated theoretical minimum energy use

• Calculate NPV, GHG savings, and $/ton-reduced for each measure.

• Measures grouped into packages balancing carbon and and economic impact:

• NPV Max• NPV Mid• NPV Neutral• CO2 Max

Creating PackagesEnergy & Financial

Modeling

• An iterative energy and financial modeling process led to the best case solution.

• Define theoretical minimum energy use

• Use comprehensive set of tools and benchmarks

• Guide design with whole building energy simulation modeling to capture interactive effects

• Evaluate financial and carbon impact through iterations

Innovative Approach:Whole-building energy simulation modeling

Guide design and perform M&V with whole building energy simulation modeling to capture interactive effects

en Shot

Innovative Solutions:Comprehensive program of sustainability measures

Building Automation

Chiller Retrofit

Radiator Insulation

Windows Tenant Energy Management

Power Generation

VAV AHU’s

Tenant Day/Lighting,

Plugs

Green Cleaning and Pest Control

Recycled Content

Carpeting

Low-Emitting Covering Materials

Build-out Design

Standards

JCI will guarantee and deliver the largest fraction of the energy savings through near-

term building improvement measures

JCI 51%

ESB 26%

Tenants 24%

Accountability for Energy

Cost Savings

Adjusted Base-line

JCI ESB Tenant Sustainability Program De-

sign Case

$0

$2

$4

$6

$8

$10

$12

$11.4M

$7.2M

19% Savings

10% Savings

9% Savings

38% Annual Energy Cost Savingsonce fully implemented

An

nu

al E

ne

rgy

Sp

en

d (

$M

/ye

ar

)I. PROGRAM SUMMARYInnovative Solutions:

Shared Responsibility for Implementation

Achieving all the savings requires action by 3 key partners

Short-term <2yr projects:

• Windows• Radiator

Insulation• Building

Controls• Chiller• Tenant

Energy Mgmt

Near-to-mid term <9yr projects:

• Variable Air Volume (VAV) Air Handler Units

• Tenant Energy Mgmt

Near-to-long term <12yr projects:

• Lighting• Daylighting• Plug Load

Efficiency

Innovative Solutions:Financial solution for guaranteed cost savings

Johnson Controls is responsible for design, construction, cost, and overall delivery of desired benefits to the owners

Performance contract includes 5 projects:• guaranteed maximum cost of $18.5 million• guaranteed annual energy cost savings of $2.1 million per year

Benefits of performance contract model• Unambiguous accountability and performance• Is flexible to address unique working conditions; • Provides transparency through open book GMP contracting

Net Savings (Positive Cash Flow)BaseEnergySpend

New Energy SpendBenefi

t

Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Project Payment

Innovative Solutions:Near-term measures in JCI performance contract

$0

$2

$4

$6

$8

$10

$12

$11.4M

$9.3M

3%2%

8%

6%0.2%

19% Annual Energy Cost Savingsonce fully implemented

Ann

ual E

nerg

y S

pend

( $

M/y

ear

)

Anticipated Program Outcomes for ESB

$22M NPV over 15 years

$4.4M/yr opex savings

$4.6M capex Savings

38% Energy & GHG reduction

Reduced tenant utility bills

Fewer tenant comfort complaints

90 Energy Star rating

12 energy points for LEED-EBOM rating

3 Green Globes rating

Decreased vacancy

Increased rent

Efficiency now.

Johnson Controls Site http://www.johnsoncontrols.com/publish/us/en/products/building_efficiency/HVAC_Design_Center.htmlASHRAE sitehttp://www.ashraeregion1.org/