WABCO Reports Q2 2008 Results

- Record quarterly sales of $773 million, up 33 percent over prior year; up 16 percent in local currencies; all organic growth

- U.S. GAAP operating margin of 10.9 percent, an expansion of 242 basis points over prior year; performance operating margin of 12.1 percent, an expansion of 70 basis points over prior year in local currencies

- Quarterly diluted EPS of $1.00 on U.S. GAAP basis; diluted EPS of $1.13 on performance basis, up 66 percent over prior year

- Raising full-year 2008 earnings projections; U.S. GAAP diluted EPS range raised to $3.71 - $3.85; performance diluted EPS range raised to $4.12 - $4.26, an increase of $0.21

BRUSSELS, Belgium, July 30 -- WABCO Holdings Inc. today reported record Q2 2008 sales of $773 million, up 33 percent over prior year and up 16 percent in local currencies, continuing the Company's long track record of quarterly growth.

"Marking yet another quarterly record for sales and income, these results show our continued ability to outperform the global commercial vehicle industry and generate productivity," said Jacques Esculier, WABCO Chief Executive Officer. "We outpaced truck and bus growth in every region of the world, led by our 42 percent growth in Asia. Our aftermarket sales rose by 12 percent, as customer demand rebounded from slower growth in the previous quarter. In North America, where the industry expanded by 3 percent, our continuously improving market position resulted in sales growth of 11 percent. In Europe, we grew by 22 percent, outperforming a very strong market."

WABCO reported Q2 2008 operating income of $84.4 million, up 71 percent over prior year on a U.S. GAAP basis. Performance operating income, which excludes separation and streamlining costs, rose to $93.2 million, up 43 percent over prior year and up 24 percent over prior year in local currencies.

WABCO's U.S. GAAP operating margin in Q2 2008 increased to 10.9 percent, expanding 242 basis points over prior year. Performance operating margin increased to 12.1 percent, expanding 70 basis points over prior year in local currencies.

"Our WABCO Operating System continues to improve our income performance through operational gains in efficiency and quality across our value chain. This quarter alone we not only achieved $28 million in further productivity but also three globally operating customers publicly presented us with their top awards for quality and commercial excellence," said Esculier.

On a U.S. GAAP basis, Q2 2008 net income increased by 115 percent to $67.0 million or $1.00 per diluted share from $31.1 million or $0.45 cents per diluted share a year ago. Excluding separation costs, operational streamlining expenses, and one-time and discrete tax items, Q2 2008 performance net income increased by 60 percent to $75.5 million or $1.13 per diluted share versus $47.2 million or $0.68 per diluted share a year ago.

WABCO generated $90.8 million in net cash from operating activities in Q2 2008 and $72.0 million of free cash flow. Continuing its share buy-back program announced on August 1, 2007, the Company repurchased approximately 1.4 million shares for $65.8 million in open market transactions in Q2 2008, bringing the total number of repurchased shares to 4.7 million or 6.7 percent of diluted shares outstanding at the time of spin-off. WABCO also paid $4.6 million in dividends in Q2 2008.

Q2 2008 Highlights

As stated during Q2 2008, WABCO won the top supplier award for commercial excellence from Volkswagen (VW) Commercial Vehicles in Brazil where VW's global headquarters for its truck and bus division is located. In addition, WABCO earned a top quality award from KAMAZ, Russia's largest manufacturer of commercial vehicles. Also, Tata Motors, India's largest manufacturer of commercial vehicles, presented their best quality award to the joint venture WABCO-TVS (India) Ltd. (WABCO-TVS), in recognition of its zero-defects-per- million-parts performance over the past three years.

In Q2 2008, WABCO reported a new contract to provide braking products and aftermarket services for the Beijing Public Transport Corporation, the world's largest municipal bus service, before and during the Beijing 2008 Olympic and Paralympics Games. WABCO also disclosed that Maverick USA, one of North America's largest motor carriers, completed its first year of truck and trailer fleet operations equipped with nearly 1,000 WABCO IVTM systems, marking North America's first fleet fully integrated with vehicle tire pressure monitoring and resulting in significantly improved fuel efficiency.

WABCO also reported in Q2 2008 the inauguration of two manufacturing facilities located in India and the extension of an existing software design center that are owned by WABCO-TVS, further expanding WABCO's global capabilities in India. Another WABCO-TVS-owned manufacturing facility located in Ambattur, Chennai, received the prestigious Total Productive Maintenance Excellence Award from the Japan Institute of Plant Maintenance, in recognition of production performance at world-beating levels of efficiency and quality.

Updated Full-Year 2008 Projections

WABCO confirmed its expectation for sales growth in 2008 between 9 and 12 percent in local currencies. Additionally, WABCO has raised its full-year U.S. GAAP and performance diluted EPS projections. The revised range for U.S. GAAP diluted EPS is $3.71 to $3.85; the revised range for performance diluted EPS is $4.12 to $4.26, up $0.21 from the Company's prior guidance. EPS on a performance basis excludes separation costs, operational streamlining expenses, and one-time and discrete tax items.

"With outstanding progress in the first half and our continuing capability to realize operational improvements resulting from the WABCO Operating System, we are confident in our ability to deliver the raised EPS projections for 2008," said Esculier.

Conference Call

WABCO CEO Jacques Esculier and CFO Ulrich Michel will discuss WABCO's results and outlook on a conference call at 8 a.m. Eastern Time today. It will be webcast at www.wabco-auto.com/investor-relations where the press release and financial information will be available under "WABCO Q2 2008 Results."

The call is also accessible by telephone in listen only mode. Dial-in number is +1 719 325 4891 and U.S. toll-free dial-in number is 877 548 7906.

A replay of the call will be available from 11:00 a.m. Eastern Time on July 30 until midnight August 7, 2008. Replay dial-in number is +1 719 457 0820 and U.S. toll-free dial-in number is 888 203 1112. Pass code is 3142974.