The Feuling action adds DaimlerChrysler AG to the federal action for infringement of the multiple Feuling patents on three-valve technology. Specifically, the suit involves over 360,000 Mercedes cars and SUVs sold in the United States since 1997. "We put Daimler on notice back in 1997, but it would appear that Daimler did not disclose this very serious issue to Chrysler Corporation and its stockholders prior to the merger." Jim Feuling, President, Feuling Advanced Technologies, stated, "Stuttgart's knowing and willful infringement of four United States patents places not only DaimlerChrysler at risk, but also its stockholders, dealers and customers. It's unfortunate that Daimler has chosen to ignore the integrity and authority of the United States Patent and Trademark Office."

Feuling has been a leading automotive engineering design firm for over 25 years with clients including Ford, General Motors and Harley Davidson.

James H. Keyes, chairman and chief executive officer, said "We are pleased that our employees delivered another quarter of improved performance for our shareholders. Underlying the results was organic revenue growth by our automotive and controls businesses of 15-20% as well as improvements in quality and productivity. Acquisitions, which added the balance of the consolidated revenue growth, are strengthening our customer offerings and market penetration, and are performing on plan."

Sales for the third quarter of fiscal 1999 ended June 30 increased 31% to $4,191.0 million from $3,189.5 million for the same quarter of fiscal 1998. Operating income rose 32% to $238.9 million from the prior year's $181.1 million. Net income totaled $111.1 million, up 32% from $83.9 million for the third quarter of fiscal 1998. On a diluted basis, earnings per share rose to $1.19 from $.90 for the 1998 period.

Sales by the company's automotive systems group increased 34% to $3,187.1 million versus $2,370.4 million a year ago. Operating income for the group rose at a rate comparable with sales. Organic growth of seating and interior systems sales worldwide was 30% higher than for the prior year period. This strength reflects Johnson Controls added presence on new or newly redesigned vehicles as industry car and light truck production in North America and Europe is estimated at 8% above the 1998 quarter. The acquisition of a major interior systems supplier to the European automotive market also added to the year-over-year growth in sales. Sales of automotive batteries increased due to a record level of unit shipments to the North American aftermarket.

Controls group sales of facility management and building control systems for the third quarter increased 23% to $1,003.9 million from 1998's $819.1 million. Operating income rose at a slightly higher rate reflecting the higher volume and improved productivity. The company said that its expanded presence in Japan was the primary source of the sales increase, however it also achieved growth in the nonresidential buildings market worldwide. North American sales of installed Metasys control systems increased and integrated facility management revenue rose due to new and expanded contract activity. The backlog of orders for systems increased by 15% versus 12 months ago due to higher demand in North America and Europe. Johnson Controls added that the outlook for sizeable new integrated facility management contracts also is strong.

Johnson Controls said that it has launched a new growth initiative, Energy System Management, which enables nonresidential building owners to leverage information to improve their energy usage and purchasing in the deregulating U.S. electric utility environment. Energy System Management integrates Johnson Controls' Metasys Enterprise Management and Control Systems with advanced energy usage monitoring, load management capabilities and pricing information as well as supply-side procurement services.

Sales for the first nine months of fiscal 1999 rose 29% to $11,944.4 million from $9,253.1 million for the same period of fiscal 1998. Operating income increased 28% to $581.8 million from the prior year's $456.2 million. Net income rose to $256.6 million, up 27% from $201.7 million for the first nine months of fiscal 1998. Diluted earnings per share were $2.75 versus $2.16 for 1998. Income amounts exclude a one-time gain realized in the second quarter of fiscal 1999 associated with the sale of businesses.

The company also noted that its ratio of total debt to total capital declined to 45% at June 30 as compared with 55% at September 30, 1998, following the acquisition of European interior systems-supplier Becker. Johnson Controls said that its strengthened financial position is due to positive cash flow from its operations and proceeds from divestitures of non- core businesses.

"Growth in sales to all customers, coupled with the results from our aggressive portfolio management, generated significant value to our shareholders," said J.T. Battenberg III, Delphi's chairman, chief executive officer and president. "The results from our second quarter validate our plan to grow profitability by reducing costs and diversifying our customer base."

The results represent an increase of 290 percent over pro forma, strike- impacted, second quarter 1998 earnings of $101 million,** and a 283 percent increase over pro forma 1998 second quarter diluted earnings per share of $0.18**.

Sales revenue climbed 17 percent over 1998 strike-impacted levels, from $6.6 billion to $7.7 billion, after adjusting for the impact of businesses divested in late 1998 (divested businesses had average annual sales of about $2 billion).

* Delphi CFO Alan Dawes will host a media conference call to discuss earnings beginning at 10:15 a.m. today. See bottom of release for details.

** See attached highlights for description of 1998 pro forma net income and 1998 shares outstanding calculations.

Sales to customers other than General Motors Corp. (GM) increased $174 million, or 11.4 percent, from $1.523 billion in the second quarter of 1998 (excluding the impact of divestitures) to $1.697 billion during the comparable period in 1999. This is the second consecutive quarter where the company has exceeded the stated goal of a 10 percent annual increase in non-GM sales growth. Sales to GM rose 18.4 percent (adjusted for the impact of divestitures) from strike depressed 1998 levels.

Cash Generation Enhances Capital Structure

Delphi generated $751 million in operating cash during the quarter, resulting from working capital improvements, timing of capital expenditures, and strong profitability. This strong year-to-date cash flow provided Delphi the flexibility to make a $600 million voluntary contribution to its hourly pension fund on June 14, while improving its overall liquidity position. Additionally, the Delphi Board of Directors on June 9 declared a quarterly dividend on Delphi $0.01 par value common stock of $0.07 per share. The dividend -- Delphi's first -- is payable July 20, 1999 to shareholders of record as of June 21, 1999.

Taking into account the strong cash flow during the quarter, Delphi's Board of Directors approved a treasury stock program to purchase up to 19 million shares of Delphi Common Stock from time to time to pre-fund the requirements of employee incentive, stock option and stock purchase plans over the next 12 months.

New Business

Booked business for the six-month period ending June 30, 1999, totaled $15 billion over an average 5-year contract life. The impact of these sales will be reflected in the revenue base from 2001 forward. Contracts signed during the quarter include significant expansion of business with Nissan Motor Co., Ltd., which awarded Delphi a contract to provide STEER-LITE(TM) lightweight integral steering gears for all Nissan trucks, including the Nissan Frontier and Xterra sport utility vehicles, beginning with Nissan's 2000 model year.

Additional agreements signed during the quarter include:

- A contract with Ford Motor Company to serve as the electrical electronic vehicle system integrator for a future Ford vehicle.

- The award of 21 occupant protection system contracts totaling over $750 million, and the expansion of five existing contracts to incorporate Delphi's Adaptive Restraint Technologies(TM) or "smart" airbag technology.

- A contract with Ferrari to provide complete HVAC responsibility on the new 360 Modena model.

- A contract to provide wiring for Mack Trucks, Inc.'s entire fleet of Class 8 heavy-duty trucks.

- The $28 million award of new contracts to supply brake and suspension components, modules and systems to two vehicle manufacturers in the Asian markets and one in Europe.

- A contract to supply complete thermal management systems for a vehicle program Daewoo Motor Polska Corporation will build in Europe.