Financial Overview

(in million USD)	FY2007	FY2006 (*1)	Rate of change	Remarks
Overall
Sales	6,449	6,415	0.5%	50% of FY2007 sales from continuing operations were outside North America.
EBITDA (*2)	257	351	(26.8%)	Total EBITDA margin was 4.0%, down from 5.5% a year ago.
Net Income	(219)	(175)	-	-
Commercial Vehicle Systems (CVS)
Sales	4,205	4,179	0.6%	-Sales in North America decreased primarily due to the downturn in Class 8 commercial vehicle truck markets due to new emissions standards adopted in 2007. The impact of the downturn in the North American heavy-duty truck market was partially offset by strong volumes in the Western European and Asia Pacific heavy and medium duty markets.
EBITDA	221	293	(24.6%)	-
Light Vehicle Systems (LVS)
Sales	2,244	2,236	0.4%	-Sales in North America decreased primarily due to lower sales in its suspension systems and modules business. -The closure of its door module facility in Brussels, Belgium unfavorably impacted 2007 sales by 77 million USD when compared to the prior year. -Strong sales volumes in the Asia Pacific markets partially offset the lower volumes in North America and Europe.
EBITDA	36	58	(37.9%)	-

*1 : Prior period amounts have been restated for discontinued operations.
*2 : EBITDA : Earnings Before Interest, Tax, Depreciation, and Amortization

New Companies
The Company and Chery announced that the parties have entered into a joint venture partnership to design and manufacture chassis systems and components. (From a press release on Jul. 24, 2007)

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Divestitures
The Company announced that it has completed the sale of its Emissions Technologies business group to One Equity Partners (OEP), an equity investment firm based in New York.

Plant Closure
The Company announced it would close its Commercial Vehicle Systems (CVS) assembly operation in St. Thomas, Ontario, Canada by Nov. 23, 2007.The closure is part of previously announced restructuring actions in North America and Europe which the company expects to affect 13 plants and 2,800 employees, resulting in an estimated annual run rate savings of 130 -140 million USD by 2012. The facility in St. Thomas serves as an assembly site of the company's drivelines. Operations based in St. Thomas will be transferred to the Company's facility in Laurinburg, N.C. (From a press release on Jul. 25, 2007)

The Company announced it's consolidating its three North American ride control facilities into one, including the closure of its Toronto, Ontario original equipment shock absorber operation, and its Chickasha, Oklahoma packaging and distribution center. The closure is part of a previously announced restructuring plan affecting 2,800 employees from 13 North American and European plants. A majority of the shock absorber production will be transferred from Toronto to Queretaro, Mexico by June 2008, with an anticipated closure by June 2009. (From a press release on Sep. 7, 2007)

Contracts
Meritor WABCO has entered into an agreement with International Truck and Engine Corporation to supply its new hydraulic power brake system as standard equipmenet on selected models of the truck maker's medium-duty models. The new Meritor WABCO Hydraulic Power Brake (HPB) which is the next generation of the company's hydraulic actuation and Anti-lock Braking System (ABS), provides full-power braking performance functions and Electronic Brake Force Distribution (EBD). (From a press release by the company on Nov. 8, 2006)

New Products
The Company has added a major new component to its portfolio of quality remanufactured components - trailer axles, initially targeted at the North American intermodal motor carriers. Production began earlier in September 2007 at the manufacturing facility in Plainfield, Indiana, USA. (From a press release on Sep. 6, 2007)

R&D Structure
-As of September 30, 2007, the Company employed approximately 1,050 professional engineers and scientists.

-Technical Center in Detroit, Michigan, USA

-Engineering Centers in USA, Brazil, China, France, Germany, India and UK

R&D Expenditure

(in million USD)	FY2007	FY2006	FY2005
Amount	124	114	114

R&D Development
The Company shared its latest sunroof innovation, the Next Generation Sunroof (NGS), with OEM customers and media during 2007 IAA Frankfurt Motor Show. The NGS reduces the number of sub-components by as much as 50 percent when compared to conventional products. This reduction in parts also provides notable weight savings. In addition to improved headroom, the next generation sunroof provides unsurpassed levels of NVH during operation, and increases the amount of ambient lighting in the interior. (From a press release on Sep. 11, 2007)

Overseas Investments

The Company and Chery announced that the parties have entered into a joint venture partnership to design and manufacture chassis systems and components. The new joint venture, ArvinMeritor Chassis Systems Wuhu Co., will evolve to a 150-million USD full-systems chassis supplier by 2010. Production of shocks and struts will begin as early as 2008.The new chassis systems joint venture plant in Wuhu will be one of several China-based facilities the Company is adding to its network over the next 18 months. (From a press release on Jul. 24, 2007)