Financial Overview

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	Rate of change(%)	Factors
Overall
Sales	4,418	4,622	(4.4)	-
EBITDA	351	358	(2.0)	-
Commercial Truck
Sales	2,717	2,806	(3.2)	1)
EBITDA	190	171	11.1	-

Factors
1)
Commercial Truck
-Sales of commercial truck section in FY 2012 was 3.2% lower than that of previous fiscal year. This is due to low demand of commercial trucks in Europe and South America, and currency exchange effects. North American sales, however, increased by 13.6%.

Contracts

-In August 2012, Meritor WABCO announced that its anti-lock braking system (ABS) is now standard equipment on all International ProStar+ and LoneStar Class 8 trucks. These vehicles from Navistar Inc. will now add to the more than seven million Meritor WABCO ABS systems on the road today. The inclusion of Meritor WABCO ABS on these two International trucks allows for other optional safety-related products including automatic traction control (ATC), rollover stability control (RSC), electronic stability control (ESC) and the OnGuard collision safety system. (From a press release on August 2, 2012)

-In February 2012, Meritor WABCO Vehicle Control Systems has announced the release of Electrically Controlled Air Dyers (ECAD) for use on a major OEM's trucks beginning in late February of the year. ECAD includes two solenoid valves which facilitates pressure control and regeneration, controlled by the vehicle ECU and monitors dryer working cycles and flow rate. It also detects cartridge change requirement and displays on control panel. (From a press release on February 16, 2012)

-In January 2012, the Company announced that U.S.-based Dorsey Trailer has chosen the Meritor Tire Inflation System (MTIS) by Pressure Systems International (PSI) as their standard automatic tire inflation option. (From a press release on January 16, 2012)

Diverstitures

-In January 2012, the Company announced that it has completed the sale of the assets of its axle operation in Saint Priest, France, to Renault Trucks SAS. The divestiture affects nearly 400 employees at the France facility who will transfer to Renault Trucks. The Company will retain and continue to invest in its Lindesberg, Sweden, and Cameri, Italy, axle facilities. (From a press release on January 2, 2012)

Business Partnership

-In October 2011, Meritor WABCO Vehicle Control Systems and Takata Corp.'s U.S. subsidiary, TK Holdings, Inc. have signed a letter of intent to establish a strategic alliance in which the companies will work together to develop new active safety systems products for North American commercial vehicles. Under this agreement, Meritor WABCO will market Takata's SafeTrak lane departure warning systems. (From a press release on October 17, 2011)

Awards

-In July 2012, the Company announced that four of its manufacturing facilities in the U.S. were awarded the 2011 Quality Achievement Award from PACCAR, Inc. The Meritor facilities to achieve PACCAR's "50 PPM" standard are: Forest City, North Carolina; Newark, Ohio; Laurinburg, North Carolina; and Manning, South Carolina. Meritor supplies axles, braking systems, and other drivetrain components for PACCAR's Kenworth, Peterbilt and DAF trucks. (From a press release on July 23, 2012)

-In November 2011, Meritor WABCO Vehicle Control Systems received the 2011 Platinum Supplier Award from Wabash National Corp, a U.S.-based manufacturer of semi trailers. It is the fourth consecutive year Meritor WABCO has received this award. Meritor WABCO supplies trailer anti-lock braking systems (ABS), roll stability systems (RSS) and InfoLink data gateway systems and the Meritor Tire Inflation System (MTIS) to Wabash National. (From a press release on November 17, 2011)

R&D Expenditure

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	FY ended Sep. 30, 2010
Overall	73	73	66

R&D Facilities

Name	Location
Technical Center	Troy, Michigan, U.S.A. Cameri, Italy Cwmbran, UK Bangalore, India
Engineering Center	Brazil, China, India and Mexico

Product Development

Collision safety system
-In August 2012, Meritor WABCO introduced the next generation of its OnGuard collision safety system, featuring various advancements in its radar-based technology. This improved system, which integrates collision warning, adaptive cruise with active braking and collision mitigation, will be available on every vehicle ordered with OnGuard after October 1, 2012. (From a press release on August 15, 2012)

Electronic stability control
-In August 2012, Meritor WABCO introduced ESCsmart technology that will help advance the performance of Electronic Stability Control (ESC) for the North American commercial vehicle market. ESCsmart, to be included in Meritor WABCO's next generation ESC when it is released in 2014, builds upon the "self-learning" capability whereby the system is designed to automatically adapt to changes in vehicle characteristics and wear without the need to reprogram a separate Electronic Control Unit (ECU). (From a press release on August 15, 2012)

Tandem axle
-In March 2012, the Company unveiled the FUELite 6x2 tandem axle, which is the first member of its SoloDrive Series axles. Based on the Meritor 160 series drive axle, the FUELite tandem axle is designed for line-haul applications. The Meritor FUELite tandem axle delivers nearly 400 pounds in weight savings and approximately a two-percent increase in fuel efficiency when compared to a traditional 6x4 configuration. (From a press release on March 21, 2012)

Trailer safety system
-In February 2012, Meritor WABCO Vehicle Control Systems developed the new trailer safety systems Roll Stability Support (RSS) 1M. The new system provides the benefits of both ABS and trailer stability control integrated into a single compact unit. If the system detects a potential rollover during the brake check process, a full brake application is put into effect. (From a press release on February 16, 2012)

Capital Expenditure

(in million USD)

	FY ended Sep. 30, 2012	FY ended Sep. 30, 2011	FY ended Sep. 30, 2010
Overall	89	105	55
Commercial Truck	66	72	29

 

Investment Outside USA

-In September 2012, the Company announced an incremental investment of 16 million USD in its European brake operations. This builds on a 42 million USD investment the Company announced in 2010. The initial investment led to the expansion of the ELSA air disc brake and S-Cam brake product lines, and the development of future braking technologies. The Company's earlier investment also included vehicle and lab performance testing, validation improvements, such as a new noise, vibration and harshness and thermal imaging dynamometer. In addition, Meritor recently began an extensive modernization of the Cwmbran, Wales, site to enhance its production efficiency. (From a press release on September 19, 2012)