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 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 1 of the company's most recent Form 10-K filing, 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.In just a few moments here, Steve Roell, Chairman and Chief Executive Officer of Johnson Controls, will give an overview of our second quarter results and take a brief look at the balance of the year. He’ll be followed by Bruce McDonald, Executive Vice President and Chief Financial Officer, who will give a more detailed review of the business results by segment and a financial review. That will be followed by questions and answers, and we expect to conclude the call at the top of the hour. And with that, Steve. Stephen A. Roell Okay. Thanks, Glen, and good morning, everyone. Our second quarter financial results were consistent with the guidance that we provided earlier to you this year. Before we comment on those results and provide you with our outlook, I'd like to take just a minute to thank the Johnson Controls employees who are listening for their continued contributions to our success. Well, let's start with the business environment for each of the 3 segments. North American automotive production was stronger than we anticipated, and several of the U.S.-based automakers increased their output in response to higher sales. The benefit of this increase was partially offset by the continuing weakness in Europe. However, our sales in the region were not significantly different from the expectations we had coming into the period.
Industry production of passenger cars in China were 2% higher and again, in line with what we had planned. And I know that we've talked in the past that there's varying numbers coming out of China, and again, our number references specifically passenger cars, as opposed to the overall vehicle production.Our Power Solutions business had overcome the mild weather conditions in North America, that I'm sure all of you are well aware off. As we discussed in January, the period just ended is dependent upon restocking by our aftermarket customers. And unlike the prior year or probably even the past 4 years, the lack of a winter did not allow that to occur. We were fortunate that European -- that Europe experienced a more normal weather pattern in January and February, and we did see demand recover quickly in that market. We believe that the inventories in the aftermarket channel in the U.S. are lower than they were a year ago, and therefore, we would expect our shipments to normalize. And in fact, we could see some upside in late summer time period as a result of that. Turning to Building Efficiency. The nonresidential markets remain mixed, while growth rates have slowed. And in China, we continue to see expansion of the Tier 2 and Tier 3 cities. The same really holds true in the Middle East across Saudi Arabia, Qatar and Turkey, and of course, those markets are driven by infrastructure projects. In North America, the overall market is showing some signs of recovery, but at a very modest level. Some of you follow the American Institute of Architects Billing Index, which has shown slight growth in the past 5 months, after 4 years of decline. The most recent data from McGraw-Hill forecast also suggest that nonresidential institutional markets will not grow the remainder of 2012 and be fairly flattish.
But now, I guess I want to share with you what we're seeing in our own data, which is more optimistic given the bidding activity that we see, which we often refer to as our pipeline. In our systems business in North America, we're seeing good year-over-year activity at health care, higher ed. and K-12. And really, the only segment that we see that is soft or down from last year is really the state government activity, which, I think, we all could probably assume what that's attributed to.Read the rest of this transcript for free on seekingalpha.com