Johnson Controls International Office Costs Index
[See Chart B]

The Johnson Controls International Office Costs Index is based on a detailed model of a medium grade air-conditioned office building, which operates reasonably efficiently with no unusually high service standards or demands. The building is 160,000 rentable sq. ft. (14,800 sq. m.) in size, and houses 750 occupants working between 8 a.m. and 6 p.m. five days a week. This model is used to compare the cost variance for each country from the average. Figures reported reflect input costs at 4th Quarter 1999.

The average is calculated using costs for each of the following facility services, which must normally be provided to ensure a productive working environment -- maintenance, cleaning, security, utilities, reception, communications, reprographics, internal moves, stationery and mail room services. These are then weighted to take account of the relative significance each one has on the overall service. For example, a fluctuation in maintenance costs will have a greater effect on overall costs than reception services.

ANALYSIS AND COMMENTARY

• Denmark has the highest overall costs
• The Netherlands and the UK have the lowest overall costs
• Spain has the second highest costs
• Sweden has the third lowest costs

Denmark
Denmark is the most expensive country in the Index overall. If utilities and cleaning were not included, Denmark would be one of the lower cost countries. Denmark is the most expensive country in the areas of cleaning and internal moves and is also very high for utilities.

France
France is once again the fourth lowest cost country in the index, its relative position to Sweden having deteriorated over the last six months. France is the cheapest country for stationery.

Germany
Germany is pegged at 11 percent above the average cost, compared to 10 percent six months ago. It is the most expensive country in the areas of security, external landscaping and communications, but is lowest for reprographics. Despite this last service, it is second highest for office services overall.

Italy
Italy has moved closer to the average at 3 percent below the average, compared to 6 percent below six months ago. Costs have broadly risen by 2 percent over the past six months. Italy is the cheapest country in the area of communications.

The Netherlands
Although still the lowest cost overall with the UK, The Netherlands relative position to the other countries has deteriorated by 1 percent. The most significant cost change has been in food services, which has increased by over 5 percent. This underpins its position as the most expensive country in this area. It is the lowest-cost country for office services overall despite not having a lowest cost in any of the individual services.

Spain
Spanish costs have been fairly static over the last period, although they are expected to rise again shortly. Improvements by other high-cost countries have left it the most expensive for utilities, as well as reprographics, and it is second highest for communications. It is the lowest cost for seven other categories, though, where labor costs are significant.

Sweden
Sweden's relative position has improved; it once again is third-lowest cost despite some cost increases to maintenance, reception, communications and mail room. Sweden has the highest cost for mail room.

United Kingdom
The UK is still the joint lowest overall country in the Index. Despite increases in maintenance costs by approximately 1 percent, it has the lowest cost in this area, and indeed for property operations overall.

USA
The relative positioning of the USA has improved slightly over the last six months following a previous deterioration, and is now at +3 percent above the group average. It is the most expensive for maintenance, reception and stationery, but significant reductions in electricity costs have reinforced its position as the lowest for utilities.

How Can Johnson Controls Provide This Information?

Johnson Controls is one of the largest facility management companies in the world. It operates in more than 500 locations in 40 countries and employs over 18,000 staff.

By building on this strength, it has developed International Performance Management (IPM), a process to accurately measure and compare the performance of facilities, not only from a cost perspective, but perhaps more significantly in terms of service efficiency and effectiveness. At the heart of IPM is a sophisticated knowledge-base with information stored on thousands of buildings across the globe, occupying more than 440 million sq. ft. (41 million sq. m.). This database can be accessed and used by Johnson Controls managers and professionals around the world.

Information for the USA Indices, as well as similar ones in the UK and Europe, is drawn from the IPM database.    SS