Forward-Looking Statements

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2 Forward-Looking Statements This presentation contains statements relating to future results of the company (including certain projections and business trends) that are forward-looking statements as defined in the Private Securities Litigation Reform Act of Forward-looking statements are typically identified by words or phrases such as believe, expect, anticipate, estimate, should, are likely to be, will and similar expressions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to global economic and market cycles and conditions; the demand for commercial, specialty and light vehicles for which the company supplies products; risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of production and supply due to terrorist attacks or acts of aggression); availability and cost of raw materials, including steel; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products; reliance on major OEM customers; labor relations of the company, its suppliers and customers, including potential disruptions in supply of parts to our facilities or demand for our products due to work stoppages; the financial condition of the company s suppliers and customers, including potential bankruptcies; possible adverse effects of any future suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations and the ability to achieve the expected benefits of restructuring actions; success and timing of potential divestitures; potential impairment of long-lived assets, including goodwill; competitive product and pricing pressures; the amount of the company s debt; the ability of the company to continue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company s debt; the outcome of existing and any future legal proceedings, including any litigation with respect to environmental or asbestos-related matters; rising costs of pension and other post-retirement benefits and possible changes in pension and other accounting rules; as well as other risks and uncertainties, including but not limited to those detailed herein and from time to time in other filings of the company with the SEC. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forwardlooking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. 2

3 Fiscal Year 2006 Third Quarter Highlights Delivered $0.73 EPS from continuing operations, excluding special items, exceeding guidance range and consensus GAAP results were affected by a labor disruption at our Tilbury, Ontario brakes facility Closed on a new secured credit facility with attractive terms and features Raised fiscal year 2006 guidance from continuing operations, excluding special items, to a range of $ per share Generated strong free cash flow of $155 million ($92M excluding receivable sales) and finished the quarter with $365 million of cash Revised full-year free cash flow guidance to $200 $225 million including non-recourse, off-balance sheet receivables sales Continued pace of LVA divestitures with sales of Gabriel South Africa Ride Control and North America Motion Control 3

4 Segment Operating Income Before Special Items (1) (in millions) Operating Income Light Vehicle Systems Commercial Vehicle Systems Segment Operating Income Other Unallocated Costs Operating Income 2006 $ (4) $ 88 Quarter Ended June 30, Better/(Worse) 2005 $ % $ 27 $ 5 19% 73 (13) -18% 100 (8) -8% (2) (2) $ 98 $ (10) -10% Operating Margins Light Vehicle Systems 2.4% 2.1% 0.3 pts Commercial Vehicle Systems 5.2% 6.5% (1.3) pts Segment Operating Margin 3.7% 4.2% (0.5) pts Total Operating Margins 3.6% 4.1% (0.5) pts 4 (1) See Slide 20 Non-GAAP Financial Information

5 Balance Sheet Strengthening Net debt (1) (millions) Debt-to-capitalization ratio $1,647 $1,354 $1,378 61% 59% 63% $ E Unfunded pension liability (millions) E Term debt due within 5 years (millions) $948 $659 $696 $561 $469 $ E E 5 (1) Excludes any potential divestiture proceeds

6 FY 2006 Outlook Continuing Operations Before Special Items (in millions, except EPS) FY 2006 Full Year Outlook (1) Sales $ 9,000 - $ 9,100 Operating Margin 2.9% - 3.0% Interest Expense (125) - (124) Effective Tax Rate 24% - 23% Income from Continuing Operations $ $ 123 Diluted Earnings Per Share $ $ 1.75 Free Cash Flow (Total Company) $ $ (1) Outlook does not include the impact of any future acquisitions or divestitures, the impact of additional restructuring actions and any other special items.

7 FY 2006 Fourth Quarter Outlook Continuing Operations Before Special Items (in millions, except EPS) FY 2006 Fourth Quarter Outlook (1) Sales $ 2,100 - $ 2,200 Operating Margin 2.7% - 3.0% (2) Interest Expense (30) - (29) Effective Tax Rate 24% - 24% Income from Continuing Operations $ 25 - $ 32 Diluted Earnings Per Share $ $ (1) Outlook does not include the impact of any future acquisitions or divestitures, the impact of additional restructuring actions and any other special items. (2) CVS margin higher than Q3 (>5.3%)

8 24 Joint Ventures In 12 Countries Unconsolidated Joint Ventures (millions) $843 Revenues $1,100 $19 $1,488 $28 Equity in earnings Below the line No benefit in EBITDA $ E 8 Key Joint Ventures Products Key Customers Meritor WABCO (50%) Heavy duty ABS Freightliner, Volvo/Mack, Int l Arvin Sango (50%) Light vehicle exhaust Toyota Master Sistemas (49%) Brakes (Brazil) VW, Ford, Volvo Suspensys Sistemas (24%) CV suspension (Brazil) Randon, VW, DCX Sisamex (50%) CV axles (Mexico) Kenmex, International Ege Fren Sanayil ve Ticaret (49%) Brakes (Turkey) Ford Otosan, Volvo, Mack ArvinMeritor Sejong (50%) Emissions (U.S., Korea) Hyundai, Kia Shanghai ArvinMeritor (50%) Roof systems (China) Volkswagen

9 Footprint Evolution Including JVs - FY Region Facilities Closed/Exited Facilities Opened U.S./Canada Greenfield, IN (Coil Coating 2005) Belvidere, IL (Suspension Modules 2005) Kingsbury, IN (Coil Coating 2005) Fort Deposit, AL (Exhaust 2005) Hawesville, KY (Coil Coating 2005) Montgomery, AL (Doors 2005) Weirton, WV (Coil Coating 2005) Columbus, IN (Exhaust 2005) Pulaski, TN (Shock Absorbers 2006) Cleveland, OH (Parts Dist. 2006) Fayetteville, NC (Filters 2006) Marion, SC (Motion Control 2006) Hopkinsville, KY (Suspension 2006) Chatham, ON (Suspension 2006) Milton, ON (Suspension 2006) Europe Asia/Other Augsburg, Germany #2 & 3 (Exhaust 2005) St. Priest, France (Axles 2005) Valladolid, Spain (Doors 2005) Venisseux, France (Axles 2005) Villaverde, Spain CVC (Exhaust 2005) Poznan, Poland (Doors 2005) Asti, Italy (LV Ride Control 2005) Bratislava, Slovakia (Roofs 2005) Sheffield, UK (Suspension 2006) Eastern Europe (LVS Soon to be announced) Mosciano, Italy (Exhaust 2006) Eastern Europe (LVS Soon to be announced) Redditch UK (Exhaust 2006) Wrexham, UK (Trailers 2006) Joigny, France (Exhaust 2006) Birmingham, UK (Doors/Roofs 2006) Blackpool, UK (Exhaust 2007) Cambui, Brazil (Exhaust 2005) Shanghai ArvinMeritor (Roofs 2005) Ga-Rankuwa, S. Africa (Exhaust 2005) Changchun, China (Brakes 2005) Cape Town, South Africa (Ride Control 2006) Anting Shanghai, China (Exhaust 2005) Thomastown, Australia (Doors 2006) Yantai, China (Exhaust 2005) Pu Dong, China CVC (Exhaust 2005) Choongnam, Korea (Exhaust 2005) Xuzhou, China (Axle 2006) India (LVS Soon to be announced) Wuxi, China (Axles 2006) Monterrey, Mexico (CVA Distribution 2006) New 9 Excludes Chennai, India, new state of the art facility replaced previous plant

10 Divestiture Status CVS Off-Highway Brakes Equity share in Purolator India N.A. Purolator filters N.A. Exhaust S. Africa Ride Control N.A. Motion Control N.A. Ride Control LVS MSSC suspension components LVA Europe Status Sold Sold Sold Sold Announced Announced In Process Announced In Process Proceeds $39 million $9 million $198 million Close 4Q Close 4Q 10

11 Question #1: Please explain your various programs for the sale of receivables. (in millions) FCF Impact Balance Q3 YTD June 30 Program Size U.S. on-balance sheet $ - $ - $ 46 $ 250 European securitization European factoring Sub-total off-balance sheet Total $ 63 $ 105 $ 179 $ 465 U.S. accounts receivable securitization is included in short-term debt European programs are off-balance sheet and non-recourse the ultimate working capital improvement Levels of funding through these programs depend on cash needs We are working on additional accounts receivable programs outside the U.S. 11

12 Question #2: What was your working capital change without the sale of receivables? (in millions) Income from Continuing Operations Depreciation and Amortization Capital Expenditures Gain on Divestitures Timing differences and other Sub-total before working capital Change in working capital Off-balance sheet receivable sales Total free cash flow (1) Q3 $ (31) (5) 22 $ $ 155 Nine Months $ (110) (28) 20 $ $ (1) See Slide 20 Non-GAAP Financial Information

13 Question #3: What factors caused CVS to be down year-over-year, even excluding the Tilbury disruption? CVS (in millions) 2005 Q3 operating income (1) $ 73 Higher retiree costs (7) Warranty costs (8) Dispositions (4) Productivity, pricing, restructuring and other Q3 operating income (1) $ 60 (1) Continuing operations, before special items 13

14 Question #4: Are you at risk of a major re-pricing of stainless steel contracts? Stainless steel: Significant upward pressure seen in stainless market prices Annual buy of about 160K tons, almost all in LVS Long-term contracts, generally 12 months We have already been paying some surcharges for nickel, chromium and molybdenum Customer recoveries have been and will continue to be a partial offset Other commodities: Moderate upward pressure on prices of other types of steel Upward pressure on prices of other metals, paint and energy Customer recoveries have been and will continue to be a partial offset 14

15 Question #5: How do you arrive at a 0% tax rate for the third quarter? In any quarter, taxes at statutory rates will be reduced by various ongoing credits and deductions Expenses from the Tilbury disruption reduced full-year income, reducing the full-year effective rate Q3 included adjustment to income taxes recorded in Q1 and Q2 at the higher anticipated effective rate There may be some opportunity in our full-year rate 15

16 Productivity LVS Sales Per Employee (000) CVS Sales Per Employee (000) $500 $400 $300 $200 $100 $500 $400 $300 $200 $100 Per Permanent Employee Per Employee $ $ LVS improvement due to benefits of restructuring actions and ongoing incremental efficiency gains CVS improvement due to record truck production, but at higher-thanoptimal levels 16

17 Quality LVS CVS Q Q % Filtered Out 19% Improvement Q Q % Filtered Out 32% Improvement 17 = Supplier PPM = Customer PPM

18 Safety Year-to-Date Incidents Per 100 Employees 19% Year-over-year Improvement FY00 FY02 FY04 FY05 FY06 18

19 Executing Actions to Improve Short- and Long-Term Financial Outlook Continue to lower cost structure through restructuring efforts, increased productivity and Leading Cost-Competitive Country (LCCC) sourcing Strengthening technology and R&D to improve competitive position and value to customers Control capital allocation with majority going to low-cost countries Manage customer mix factor risks into quotes Refuse unprofitable programs Avoid low-value add programs Drive material recovery strategies Collaborate and partner as appropriate Continue to evaluate business mix strategically Manage for 2007 downturn in N.A. trucks 19

20 Use of Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States ( GAAP ) included throughout this presentation, the Company has provided information regarding income from continuing operations, diluted earnings per share and segment operating income and margins before special items, which are non-gaap financial measures. These non-gaap measures are defined as reported income or loss from continuing operations, reported diluted earnings or loss per share and segment operating income plus or minus special items. Other non-gaap financial measures include net debt and free cash flow. Net debt is defined as total debt less the fair value adjustment of notes due to interest rate swaps, less cash. Free cash flow represents net cash provided by operating activities less capital expenditures. Management believes that the non-gaap financial measures used in this presentation are useful to both management and investors in their analysis of the Company s financial position and results of operations. In particular, management believes that net debt is an important indicator of the Company s overall leverage and free cash flow is useful in analyzing the Company s ability to service and repay its debt. Further, management uses these non-gaap measures for planning and forecasting in future periods. These non-gaap measures should not be considered a substitute for the reported results prepared in accordance with GAAP. Neither net debt nor free cash flow should be considered substitutes for debt, cash provided by operating activities or other balance sheet or cash flow statement data prepared in accordance with GAAP or as a measure of financial position or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and thus, does not reflect funds available for investment or other discretionary uses. These non-gaap financial measures, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies. Non-GAAP measures displayed in this presentation are reconciled to their nearest equivalent GAAP measures in the company s fiscal 2006 third quarter earnings presentation and other materials available at 20

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