The video this transcript is based on appeared on December 18.

NEW YORK (TheStreet) -- Johnson Controls CEO Alex Molinaroli says the company's 2014 outlook is conservative and sees the company's three business units posting higher profitability next year.

VIDEO TRANSCRIPT:

Ruben Ramirez:
Alex thanks so much for joining us. Now you recently beat estimates in the latest quarter you raised guidance you, increased the dividend,what are you gonna do in 2014 to create more shareholder value?

Alex Molinari:

You know I think that we're and in pretty good shape to create value in a much different way to cash flows and be strong operationalperformance is strong, and we're do this without really a market that's helping us so it's a lot of internal activities that create value put us in a good position and for the future when the market does come back we'll be in good shape.

Ruben Ramirez:
Now you're projecting free cash flow about 1.6 billion, what you plan to do with that?

Alex Molinari:
Well you probably know we are to have a share buyback that that were put in place, and I think the cash flows that we have today and moving toward is gonna be a very important for us from a strategic standpoint position us to make some investments.

Ruben Ramirez:
Now the guidance that you've given today for your 2014 outlook, some people in the street saying that it's a little conservative maybe that's what shares are down a little bit today as people can't do it in a profit taking, but they're saying that you're saying that you're up for a meet, and then a raise year for 2014 is there something that we don't know that we should know?

Alex Molinari:
Well, I'm probably not as smart as these people give it credit for, but I do think it's important for us to set expectations that we can meet. They probably got the feel as we talked about expectations today they're very confident about our are being there what's your numbers, but we all got a lot going on in the near term I wanna make sure team is not distracted by chasing the street to make sure that we can meet the objectives that we said front of us. We've got a lot to do that sets up really well for the future.

Ruben Ramirez:
Now you've got operations in about a hundred and fifty different country so it gives you good pulse that what's going on globally on the global macroeconomic picture what are you seeing there are you starting to see a pickup globally are you starting to see a pic a pickup in certain pockets certain regions of the world?

Alex Molinari:
I would but I would I can to characterize in a couple different ways in the automotive business North America has been incredibly strong and they were benefiting from that. Europe's been tough but we're seeing last few months said don't know we hit the bottom but I could tell you were kinda bumping along and it feels good to be in a position that that we're actually doing better in Europe than what we expected, and we keep hearing about china to slow down a bit but I see it China's growing very fast for us in the automotive business, actually an all-over businesses. So we've we feel pretty good about most of our businesses, the one thing that I'd be concerned about for us is in the commercial building part of our business. It's a little slower to pick up than we hoped and expected, and that seems to be pushed down a little bit.

Ruben Ramirez:
Now we've got yours up or down today about 7 percent saying they're gonna be some strong headwinds in 2014 here in the US. What does it mean for your business and have we potentially hit the peak the North American autos auto industry cycle.

Alex Molinari:
It's a little incongruent with what we're seeing, we're seeing growth in North America continue are now obviously our portfolios beyond Ford we know we're happy with the transplants and also with that the European automaker so I think we're seeing pretty strong growth in North America our European exposure is one it's mostly with the German automotive luxury vehicle, so that's been strong for us, and then probably different than four were very strong in China and I think that they're still working to gain a foothold in China. So I'm not sure that our we're seeing this same outlook as Ford talked about based on what I've heard today.

Ruben Ramirez:
Now you did say in your outlook for 2014 that you're gonna see about 3 percent decline potentially in the automotive electric unit electronic unit, maybe about 1.5 percent decline in the interiors business. Are these two businesses that you could potentially be looking to exit in 2014?

Alex Molinari:
Yeah I know the electronics is that there's a lot to us there we've announced that we're selling electronics. We've sold part of it so part of what you're seeing as far as a decline is that we've already sold the piece that business, and the rest the businesses were hoping to have an agreement to close at the rest this year. The interiors business is a tough business we're actually a rationalizing our capital and spending less of our dollars in interior, so we're growing that slowly on purpose not by accident, and we've also announced for interiors look in our strategic options.

Ruben Ramirez:
Now you did mention earlier China obviously the big player in this space. You're opening headquarters in Shanghai is China really the place that you're seeing the most potential for growth right now?

Alex Molinari:
For sure me I you know we've been around for 128 years and if you look at that and I'll and I've 128 your view but I have a decade or a 20-year view and there's no way that we can be the leader we are in less where we continue growing in China and so we we've got to move their center of gravity to include China not just be a regional outpost would be part of our headquarter structure. Our automotive business is incredibly strong are building businesses is a leader in that market and we're spending an awful lot of money in investments in our power business. It's a great platform for us and I think for the long term pretty excited about that.

Ruben Ramirez:
How our margins when you compare you know the H Vac business, the energy efficiency business, and then the auto side of the business?

Alex Molinari:
Well on the this is a tough business, you know it's tough from a margin of sampling is also very cyclical and that's why we yeah that we talk about being a more balanced portfolio to make sure that we can get the margins that we needed have sustainable cash flows for investment.

Ruben Ramirez:
Thanks so much for joining us we appreciate it.

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