WABCO Reports Q2 2014 Results; Solidly Outperforms Volatile and Decreased Global Commercial Vehicle Market; Updates Guidance

WABCO Reports Q2 2014 Results; Solidly Outperforms Volatile and Decreased 
Global Commercial Vehicle Market; Updates Guidance for 2014 
BRUSSELS, BELGIUM -- (Marketwired) -- 07/25/14 --  *T 
--  Q2 2014 sales of $735.0 million, up 5.9 percent in local currencies and 
up 8.4 percent in U.S. dollars from a year ago  
--  Q2 2014 operating margin of 13.4 percent on a performance basis versus 
13.5 percent a year ago; operating margin of 12.3 percent on a U.S. GAAP 
basis versus 12.7 percent a year ago  
--  Q2 2014 diluted EPS of $1.42 on a performance basis, up from $1.30 a 
year ago; diluted EPS of $1.23 on a U.S. GAAP basis versus $1.31 a year 
ago  
--  In Q2 2014, WABCO generated $116.7 million in net cash from operating 
activities and $93.5 million of free cash flow, excluding payments of 
$4.7 million for streamlining, separation and acquisition items, 
resulting in a conversion rate of 108 percent of performance net income 
attributable to the company  
--  Updates guidance for full year 2014; sales growth to now range from 6 to 
9 percent in local currencies, versus previous guidance to range from 6 
to 11 percent; diluted EPS on a performance basis to now range from 
$5.45 to $5.75, versus previous guidance to range from $5.30 to $5.80, 
and diluted EPS on a U.S. GAAP basis to now range from $4.77 to $5.07, 
versus previous guidance to range from $4.78 to $5.28  
--  Reiterates that WABCO expects in 2014 to convert between 80 and 90 
percent of its net income attributable to the company into free cash 
flow, excluding payments associated with streamlining, separation and 
acquisition items  


WABCO Holdings Inc. (NYSE: WBC), a leading global supplier of
technologies to improve the safety and efficiency of commercial
vehicles, today reported Q2 2014 sales of $735.0 million, up 5.9
percent in local currencies from a year ago and up 8.4 percent in
U.S. dollars, including the Q2 2014 consolidated results in local
currencies of Transics International, WABCO's previously disclosed
acquisition.
 
WABCO reported Q2 2014 performance operating income of $98.2 million,
up from $91.7 million a year ago, and operating income was $90.4
million on a U.S. GAAP basis, up from $86.4 million a year ago.
 
WABCO's performance operating margin for Q2 2014 was 13.4 percent
(which was adversely affected by 0.20 percent from currency
transactional effects year on year) versus 13.5 percent a year ago,
and operating margin was 12.3 percent on a U.S. GAAP basis versus
12.7 percent a year ago.
 
"In Q2 2014, we continued to demonstrate our ability to outperform
the market in every region as we further increased WABCO content per
vehicle and steadily expanded market share in a still volatile and
uncertain market that contracted by 5 percent year on year," said
Jacques Esculier, WABCO Chairman and Chief Executive Officer.
 
"In addition, in Q2 2014, we delivered a new quarterly record of
performance gross profit margin at 31.6 percent, leading to a
performance operating income at $98.2 million," said Esculier.
"Furthermore, we continued to demonstrate our ability to deliver
outstanding value for WABCO's shareowners by setting a new quarterly
record for performance earnings per diluted share at $1.42, exceeding
the previous record by $0.12." 
 
"In Q2 2014, WABCO achieved $19.0 million of materials and conversion
productivity, while also continuing to contain price erosion.
However, as anticipated, performance operating margin continued to be
negatively impacted by headwinds from currency transactional
dynamics," said Esculier. "WABCO's Operating System, our global
management environment, further enabled fast and flexible responses
to market changes during Q2 2014 and generated gross materials
productivity of 5.2 percent and conversion productivity of 6.4
percent, both showing continued robust quarterly gains."
 
For Q2 2014, WABCO reported performance net income attributable to
the company of $86.6 million or $1.42 per diluted share, up from
$82.4 million or $1.30 per diluted share a year ago, and Q2 2014 U.S.
GAAP net income attributable to the company of $75.0 million or $1.23
per diluted share versus $83.2 million or $1.31 per diluted share a
year ago. 
 
During Q2 2014, WABCO generated $116.7 million in net cash from
operating activities and $93.5 million of free cash flow, excluding
payments of $4.7 million for streamlining, separation and acquisition
items, resulting in a conversion rate of 108 percent of performance
net income attributable to the company.
 
Since June 2011, WABCO has repurchased 12,067,889 shares for $820.9
million in open market transactions as of June 30, 2014. WABCO is
authorized to repurchase up to $179.1 million of additional shares
through December 31, 2014.
 
Recent Highlights 
 
On July 17, 2014, WABCO reported the launch of its industry-first
modular braking system platform (mBSP) and disclosed that it has
already won major contracts for this breakthrough technology from two
global commercial vehicle makers headquartered in Europe. WABCO's
latest innovative braking architecture now enables its customers to
interchangeably equip their diverse global truck and bus platforms
with anti-lock braking (ABS) or electronic braking (EBS) systems
based on regional market or regulatory requirements worldwide.
WABCO's next generation mBSP features the industry's highest
standardization across ABS and EBS components and systems software.
One customer contract is WABCO's single largest ever as the company
will provide mBSP with ABS and EBS applications to equip the
customer's next generation of trucks and buses to be manufactured in
Europe, North America, Brazil and India from 2017 through 2021. WABCO
will provide EBS for the other customer's range of commercial
vehicles from 2018 through 2022. WABCO had announced the incremental
business associated with both contracts in April 2014.
 
WABCO announced in July 2014, that its newly acquired fleet
management solutions (FMS) company, Transics International, signed a
ground-breaking contract with Saudi-Arabia based Almarai, one of the
world's largest dairy companies. It marks the global expansion of
Transics, a market leader in Europe, after WABCO acquired the company
in February 2014. Transics will equip Almarai's long-haul fleet of
more than 1,300 trucks with its industry-leading fleet management
system, further enhancing safety performance and operational
efficiency. Starting in August 2014, Transics will upgrade Almarai's
trucks with advanced TX-SKY on-board computers and install its
web-based back office system TX-CONNECT for efficient truck, driver,
trailer and cargo management. Transics expects to furnish Almarai's
entire fleet of long-haul trucks by the second quarter of 2015. 
 
WABCO reported in Q2 2014 that it has expanded its TailGUARD(TM)
safety system to include waste management vehicles for the first
time. TailGUARD helps to improve vehicle and operator safety by
combining rear blind-spot detection and automatic braking. It assists
operators while driving in reverse to detect both stationary and
moving objects in rear blind spots via audio and visual signals.
TailGUARD can also automatically apply the brakes of vehicles
equipped with anti-lock braking to prevent collisions. WABCO
introduced TailGUARD technology in 2010 and today it protects more
than 5,000 trailers across Europe. 
 
In Q2 2014, WABCO disclosed that it rounded off yet another
successful year in China by receiving a record number of 15 awards
from leading industry bodies, customers and peers in recognition of
the company's outstanding performance on improving customer service
through innovation and productivity. Twelve of the awards were
received from leading commercial vehicle manufacturers. WABCO also
won major awards from industry bodies for performance in areas such
as environmental stewardship and innovations in technology. 
 
WABCO announced in July 2014 that the Madras Management Association
(MMA) has granted its 2014 Award for Managerial Excellence in
Manufacturing to WABCO INDIA. The MMA recognized WABCO for excellence
in multiple areas, including financial performance, product
innovation and customer awards. The MMA promotes world-class
standards of management education and training in India since its
founding in 1956. Today, more than 8,000 companies, institutions and
individuals hold membership in the MMA. 
 
In Q2 2014, WABCO announced the opening of a new Application
Engineering Center in Pune, India. The new center, WABCO's second of
its kind in India, will allow WABCO's engineers to work closely with
global commercial vehicle manufacturers in India to jointly develop
customized products and solutions across a broad range of vehicle
platforms. The WABCO team at the new Application Engineering Center
will consist of application engineers and test engineers to provide
custom-tailored support to its broad base of customers. This facility
enables WABCO to further differentiate itself by providing on-demand
and on-time support to all of its original equipment customers. 
 
In Q2 2014, WABCO disclosed that it has successfully acquired the
remaining 3.16 percent of Transics International. As previously
announced in February 2014, WABCO had acquired 96.84 percent of
Transics International shares for a net consideration of EUR 95.8
million. WABCO subsequently made a public offer to acquire the
remaining 3.16 percent of outstanding shares, consistent with Belgian
takeover rules. WABCO now owns 100 percent of the securities issued
by Transics International NV for which WABCO paid in net
consideration a total amount of EUR 99.9 million. 
 
WABCO Updates Full Year 2014 Guidance 
 
Based on our current estimates of future market conditions, WABCO
tightens its previously disclosed guidance for full year 2014. WABCO
expects full year 2014 sales growth to now range from 6 to 9 percent
in local currencies, versus previous guidance to range from 6 to 11
percent; performance operating margin to now range from 12.9 to 13.3,
versus previous guidance to range from 12.8 to 13.6 percent; and
operating margin on a U.S. GAAP basis to now range from 12.2 to 12.6
percent, versus previous guidance to range from 12.4 to 13.2 percent,
resulting in diluted EPS on a performance basis to now range from
$5.45 to $5.75, versus previous guidance to range from $5.30 to $5.80
and diluted EPS on a U.S. GAAP basis to now range from $4.77 to
$5.07, versus previous guidance to range from $4.78 to $5.28.
 
Consistent with its committed framework, WABCO reiterates that it
expects in 2014 to convert between 80 and 90 percent of its net
income attributable to the company into free cash flow, excluding
payments associated with streamlining, separation and acquisition
items.
 
"Looking ahead, our three-pillar strategy of technology leadership,
globalization and excellence in execution will continue to drive
WABCO's differentiation that positions us as preferred supplier in
the global commercial vehicle industry," said Esculier. "Indeed, our
solid results in Q2 2014 proved once again that, despite uncertainty
and volatility in demand across different regions, WABCO continues to
strongly outperform the market while we also maintain our ability to
reliably deliver a robust incremental operating margin," referring to
the ratio of increase in performance operating income and WABCO's
growth in sales.
 
Conference Call 
 
Jacques Esculier, Chairman and Chief Executive Officer, and Prashanth
Mahendra-Rajah, Chief Financial Officer, will discuss WABCO's results
and outlook on a conference call at 9 a.m. Eastern Time today. It
will be webcast at www.wabco-auto.com where the press release and
financial information will be available under "WABCO Q2 2014
Results."
 
The call is also accessible by telephone in listen only mode. Dial-in
number is +1 408 940 3818 and U.S. toll-free dial-in number is 877
844 0834.
 
A replay of the call will be available from 12:00 Noon Eastern Time
on July 25 until midnight July 31, 2014. Replay dial-in number is +1
404 537 3406 and U.S. toll-free dial-in number is 855 859 2056.
Conference ID is 62793636.
 
About WABCO
 
WABCO (NYSE: WBC) is a leading global supplier of technologies and
control systems for the safety and efficiency of commercial vehicles.
Founded nearly 150 years ago, WABCO continues to pioneer breakthrough
electronic, mechanical and mechatronic technologies for braking,
stability and transmission automation systems supplied to the world's
leading commercial truck, bus and trailer manufacturers. With sales
of $2.7 billion in 2013, WABCO is headquartered in Brussels, Belgium.
For more information, visit www.wabco-auto.com
 
Forward-Looking Statements
 
This document contains certain "forward-looking statements" as
defined by the Private Securities Litigation Reform Act of 1995 that
are based on management's good faith expectations and beliefs
concerning future developments. Statements preceded by, followed by
or that otherwise include the words "believes," "expects,"
"anticipates," "strategies," "prospects," "intends," "projects,"
"estimates," "plans," "may increase," "may fluctuate," and similar
expressions or future or conditional verbs such as "will," "should,"
"would," "may" and "could" are generally forward looking in nature
and not historical facts. Actual results may differ materially from
these expectations as a result of many factors. These factors
include, but are not limited to, the actual level of commercial
vehicle production in our end markets, adverse developments in the
business of our key customers, pricing changes to our supplies or
products, our ability to successfully integrate any acquired
businesses or our acquired businesses not performing as planned and
the other risks and uncertainties described in the "Risk Factors"
section and the "Information Concerning Forward Looking Statements"
section of WABCO's Form 10-K, as well as in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Information Concerning Forward Looking Statements"
section of WABCO's Form 10-Q Quarterly Reports. WABCO does not
undertake any obligation to update such forward-looking statements.
All market and industry data are based on company estimates.
 
Non-GAAP Financial Measures
 
To facilitate the understanding of Q2 2014 results, several tables
follow this news release. Sales excluding the effects of foreign
exchange and EBIT are non-GAAP financial measures. Additionally,
operating income, EBIT, net income attributable to the company and
net income attributable to the company per diluted share on a
"performance basis" are non-GAAP financial measures that exclude
streamlining, separation and acquisition items, and discrete and
other one-time tax items, as applicable. Free cash flow presents our
net cash provided by operating activities less net cash used for
purchases of property, plant, equipment, and computer software. These
measures should be considered in addition to, not as a substitute
for, GAAP measures. Management believes that presenting these
non-GAAP measures is useful to shareholders because it enhances their
understanding of how management assesses the operating performance of
the company's business. Certain non-GAAP measures may be used, in
part, to determine incentive compensation for current employees.
 
Attachment 

  
--  Condensed Consolidated Statements of Operations 
--  Condensed Consolidated Balance Sheets 
--  Three Months Ended June 30, 2014 Condensed Consolidated Statements of 
Cash Flows 
--  Six Months Ended June 30, 2014 Condensed Consolidated Statements of Cash 
Flows 
--  Three Months Ended June 30, 2014 Data Supplement Sheet 
--  Six Months Ended June 30, 2014 Data Supplement Sheet 
--  Reconciliation of Net Cash Provided by Operating Activities to Free Cash 
Flow 
--  Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year 2014 
Guidance  
WABCO HOLDINGS INC. AND SUBSIDIARIES                      
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                
(Unaudited)                                  
Three Months Ended         Six Months Ended     
June 30,                  June 30,          
--------------------------  ------------------------
(Amounts in millions,                                                       
 except share and per                                                       
 share data)                 2014         2013         2014         2013    
-------------------------------------  -----------  -----------  ----------- 
Sales                    $     735.0  $     678.2  $   1,464.5  $   1,322.9 
Cost of sales                  505.3        471.6      1,017.0        918.6  
-------------  -----------  -----------  -----------
Gross profit                   229.7        206.6        447.5        404.3 
Costs and expenses:                                                         
  Selling and                                                                
administrative                                                            
expenses                     96.2         89.2        189.1        171.7 
  Product engineering                                                        
expenses                     41.1         29.5         77.4         59.8 
  Other operating                                                            
expense, net                  2.0          1.5          6.4          4.6  
-------------  -----------  -----------  -----------
Operating income                90.4         86.4        174.6        168.2  
Equity income of                                                           
unconsolidated joint                                                      
ventures, net                 5.8          5.3         11.5          8.2 
  Other non-operating                                                        
expense, net                 (0.5)         4.0         (2.8)         3.7 
  Interest                                                                   
income/(expense), net         0.1         (0.2)         0.2         (0.5) 
-------------  -----------  -----------  -----------
Income before income                                                        
 taxes                          95.8         95.5        183.5        179.6  
Income tax expense              17.9          9.7         33.7         17.8  
-------------  -----------  -----------  -----------
Net income including                                                        
 noncontrolling                                                             
 interests                      77.9         85.8        149.8        161.8  
Less: Net income                                                           
attributable to                                                           
noncontrolling                                                            
interests                     2.9          2.6          5.4          4.9  
-------------  -----------  -----------  -----------
Net income attributable                                                     
 to Company              $      75.0  $      83.2  $     144.4  $     156.9  
Net income per common                                                       
 share:                                                                     
  Basic                  $      1.24  $      1.33  $      2.37  $      2.50 
  Diluted                $      1.23  $      1.31  $      2.35  $      2.46 
Cash dividend per share                                                     
 of common stock         $         -  $         -  $         -  $         - 
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                   60,410,581   62,673,044   60,837,176   62,795,504 
  Diluted                 61,041,885   63,500,403   61,516,769   63,790,312  
WABCO HOLDINGS INC.                             
Three Months Ended June 30, 2014 Data Supplement Sheet (Unaudited)      
Three Months Ended June 30,                
---------------------------------------------------------
(Amounts in                                                                 
 millions, except                % of               % of   Chg vs.    % Chg 
 per share data)        2014   Sales/      2013   Sales/      2013      vs.  
Adj                Adj                     
Sales              Sales               2013  
--------- -------- --------- -------- --------- ---------
Sales                                                                       
------------------                                                          
Reported          $    735.0          $   678.2          $    56.8     8.4% 
  Foreign exchange                                                           
translational                                                             
effects            (16.7)                  -             (16.7)           
---------          ---------          ---------          
Adjusted Sales     $   718.3          $   678.2          $    40.1     5.9%  
---------          ---------          ---------           
Gross Profit                                                                
------------------                                                          
Reported          $    229.7    31.3% $   206.6    30.5% $    23.1    11.2% 
  Streamlining                                                               
costs                 2.3                0.3                2.0          
  Separation costs       0.1                0.2              (0.1)           
---------          ---------          ---------          
Performance Gross $                                                         
 Profit                232.1    31.6% $   207.1    30.5% $    25.0    12.1% 
  Foreign exchange                                                           
translational                                                             
effects             (6.2)                  -              (6.2)           
---------          ---------          ---------          
Adjusted Gross                                                              
 Profit            $   225.9    31.4% $   207.1    30.5% $    18.8     9.1%  
---------          ---------          ---------           
Selling,                                                                    
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and                                                               
 Other                                                                      
------------------                                                          
Reported          $    139.3    19.0% $   120.2    17.7% $    19.1    15.9% 
  Streamlining                                                               
costs               (1.7)              (4.3)                2.6          
  Separation costs     (0.9)              (0.5)              (0.4)          
  Acquisition                                                                
related items       (2.8)                  -              (2.8)           
---------          ---------          ---------          
Performance       $                                                         
 Selling,                                                                   
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and                                                               
 Other                 133.9    18.2% $   115.4    17.0% $    18.5    16.0% 
  Foreign exchange                                                           
translational                                                             
effects             (4.5)                  -              (4.5)           
---------          ---------          ---------          
Adjusted Selling,                                                           
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and                                                               
 Other             $   129.4    18.0% $   115.4    17.0% $    14.0    12.1%  
---------          ---------          ---------           
Operating Income                                                            
------------------                                                          
Reported          $     90.4    12.3% $    86.4    12.7% $     4.0     4.6% 
  Streamlining                                                               
costs                 4.0                4.6              (0.6)          
  Separation costs       1.0                0.7                0.3          
  Acquisition                                                                
related items         2.8                  -                2.8           
---------          ---------          ---------          
Performance       $                                                         
 Operating Income       98.2    13.4% $    91.7    13.5%       6.5     7.1% 
  Foreign exchange                                                           
translational                                                             
effects             (1.7)                  -              (1.7)           
---------          ---------          ---------          
Adjusted Operating                                                          
 Income            $    96.5    13.4% $    91.7    13.5% $     4.8     5.2%  
---------          ---------          ---------           
EBIT (Earnings                                                              
 Before Interest                                                            
 and Taxes)                                                                 
------------------                                                          
Reported Net      $                                                         
 Income                                                                     
 Attributable to                                                            
 Company                75.0          $    83.2          $   (8.2)          
  Income tax                                                                 
expense              17.9                9.7                8.2          
  Interest                                                                   
(expense)/incom                                                           
e, net                0.1              (0.2)                0.3           
---------          ---------          ---------          
EBIT              $     92.8    12.6% $    93.1    13.7% $   (0.3)    -0.3% 
  Streamlining                                                               
costs                 4.0                4.6              (0.6)          
  Separation costs       1.0              (2.8)                3.8          
  Acquisition                                                                
related items         2.9                  -                2.9           
---------          ---------          ---------          
Performance EBIT  $                                                         
 (Earnings Before                                                           
 Interest and                                                               
 Taxes)                100.7    13.7% $    94.9    14.0% $     5.8     6.1%  
Pre-Tax Income                                                              
------------------                                                          
EBIT              $     92.8          $    93.1          $   (0.3)          
  Interest                                                                   
(expense)/incom                                                           
e, net                0.1              (0.2)                0.3           
---------          ---------          ---------          
Pre-Tax Income    $     92.9          $    92.9          $       -          
  Streamlining                                                               
costs                 4.0                4.6              (0.6)          
  Separation costs       1.0              (2.8)                3.8          
  Acquisition                                                                
related items         2.9                  -                2.9           
---------          ---------          ---------          
Performance Pre-  $                                                         
 Tax Income            100.8          $    94.7          $     6.1          
  Tax rate on a                                                              
performance                                                               
basis               14.1%              13.0%                             
Net Income                                                                  
 Attributable to                                                            
 Company                                                                    
------------------                                                          
Reported Net      $                                                         
 Income                                                                     
 Attributable to                                                            
 Company                75.0          $    83.2          $   (8.2)          
  Streamlining                                                               
cost, net of                                                              
tax                   0.4                3.1              (2.7)          
  Separation                                                                 
costs, net of                                                             
tax                   0.8              (3.0)                3.8          
  Acquisition                                                                
related items,                                                            
net of tax            1.9                  -                1.9          
  Tax items              8.5              (0.9)                9.4           
---------          ---------          ---------          
Performance Net                                                             
 Income                                                                     
 Attributable to                                                            
 Company           $    86.6          $    82.4          $     4.2           
---------          ---------          ---------          
Performance Net   $                                                         
 Income                                                                     
 Attributable to                                                            
 Company per                                                                
 Diluted Common                                                             
 Share                  1.42          $    1.30                             
Common Shares                                                               
 Outstanding -                                                              
 Diluted                61.0               63.5                              
Incremental Gross Profit and Operating Income                      Operating
 Margin                                         Gross Profit          Income
---------------------------------------------                               
Increase in adjusted sales from '13                     40.1            40.1
Increase in adjusted income from '13                    18.8             4.8 
-------------------------------
Incremental Income as a % of Sales                     46.9%           12.0%
YoY Transactional Foreign Exchange (FX)                                     
 Impact                                                                  1.5 
---------------
Increase in adjusted income from '13                                        
 excluding transactional FX impact                                       6.3
Incremental income excluding transactional FX                               
 as a % of Sales                                                       15.7%
---------------------------------------------------------------------------- 


Note: The presentation of the performance measures above are not in
conformity with generally accepted accounting principles (GAAP).
These measures may not be comparable to similar measures of other
companies as not all companies calculate these measures in the same
manner.

  
WABCO HOLDINGS INC.                             
Six Months Ended June 30, 2014 Data Supplement Sheet (Unaudited)       
Six Months Ended June 30,                
--------------------------------------------------------
(Amounts in                                                                 
 millions, except                 % of               % of   Chg vs.    % Chg
 per share data)         2014   Sales/      2013   Sales/      2013      vs. 
Adj                Adj                    
Sales              Sales               2013 
--------- -------- --------- -------- --------- --------
Sales                                                                       
-------------------                                                         
Reported           $  1,464.5          $ 1,322.9          $   141.6    10.7%
 Foreign exchange                                                           
  translational                                                             
  effects              (19.9)                  -             (19.9)          
---------          ---------          ---------         
Adjusted Sales      $ 1,444.6          $ 1,322.9          $   121.7     9.2% 
---------          ---------          ---------          
Gross Profit                                                                
-------------------                                                         
Reported           $    447.5    30.6% $   404.3    30.6% $    43.2    10.7%
 Streamlining costs       5.3                3.3                2.0         
 Separation costs         0.4                0.5              (0.1)          
---------          ---------          ---------         
Performance Gross  $                                                        
 Profit                 453.2    30.9% $   408.1    30.8% $    45.1    11.1%
 Foreign exchange                                                           
  translational                                                             
  effects               (9.1)                  -              (9.1)          
---------          ---------          ---------         
Adjusted Gross                                                              
 Profit             $   444.1    30.7% $   408.1    30.8% $    36.0     8.8% 
---------          ---------          ---------          
Selling,                                                                    
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and Other                                                         
-------------------                                                         
Reported           $    272.9    18.6% $   236.1    17.8% $    36.8    15.6%
 Streamlining costs     (2.3)              (6.6)                4.3         
 Separation costs       (1.7)              (0.9)              (0.8)         
 Acquisition                                                                
  related items         (3.8)                  -              (3.8)          
---------          ---------          ---------         
Performance        $                                                        
 Selling,                                                                   
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and Other     265.1    18.1% $   228.6    17.3% $    36.5    16.0%
 Foreign exchange                                                           
  translational                                                             
  effects               (7.0)                  -              (7.0)          
---------          ---------          ---------         
Adjusted Selling,                                                           
 Administrative,                                                            
 Product                                                                    
 Engineering                                                                
 Expenses and Other $   258.1    17.9% $   228.6    17.3% $    29.5    12.9% 
---------          ---------          ---------          
Operating Income                                                            
-------------------                                                         
Reported           $    174.6    11.9% $   168.2    12.7% $     6.4     3.8%
 Streamlining costs       7.6                9.9              (2.3)         
 Separation costs         2.1                1.4                0.7         
 Acquisition                                                                
  related items           3.8                  -                3.8          
---------          ---------          ---------         
Performance        $                                                        
 Operating Income       188.1    12.8% $   179.5    13.6%       8.6     4.8%
 Foreign exchange                                                           
  translational                                                             
  effects               (2.1)                  -              (2.1)          
---------          ---------          ---------         
Adjusted Operating                                                          
 Income             $   186.0    12.9% $   179.5    13.6% $     6.5     3.6% 
---------          ---------          ---------          
EBIT (Earnings                                                              
 Before Interest                                                            
 and Taxes)                                                                 
-------------------                                                         
Reported Net Income$                                                        
 Attributable to                                                            
 Company                144.4          $   156.9          $  (12.5)         
 Income tax expense      33.7               17.8               15.9         
 Interest                                                                   
  (expense)/income,                                                         
  net                     0.2              (0.5)                0.7          
---------          ---------          ---------         
EBIT               $    177.9    12.1% $   175.2    13.2% $     2.7     1.5%
 Streamlining costs       7.6                9.9              (2.3)         
 Separation costs         2.9              (1.7)                4.6         
 Acquisition                                                                
  related items           5.4                  -                5.4          
---------          ---------          ---------         
Performance EBIT   $                                                        
 (Earnings Before                                                           
 Interest and                                                               
 Taxes)                 193.8    13.2% $   183.4    13.9% $    10.4     5.7% 
Pre-Tax Income                                                              
-------------------                                                         
EBIT               $    177.9          $   175.2          $     2.7         
 Interest                                                                   
  (expense)/income,                                                         
  net                     0.2              (0.5)                0.7          
---------          ---------          ---------         
Pre-Tax Income     $    178.1          $   174.7          $     3.4         
 Streamlining costs       7.6                9.9              (2.3)         
 Separation costs         2.9              (1.7)                4.6         
 Acquisition                                                                
  related items           5.4                  -                5.4          
---------          ---------          ---------         
Performance Pre-Tax$                                                        
 Income                 194.0          $   182.9          $    11.1         
 Tax rate on a                                                              
  performance basis     14.5%              14.0%                            
Net Income                                                                  
 Attributable to                                                            
 Company                                                                    
-------------------                                                         
Reported Net Income$                                                        
 Attributable to                                                            
 Company                144.4          $   156.9          $  (12.5)         
 Streamlining cost,                                                         
  net of tax              2.9                7.4              (4.5)         
 Separation costs,                                                          
  net of tax              2.3              (2.2)                4.5         
 Acquisition                                                                
  related items,                                                            
  net of tax              3.8                  -                3.8         
 Tax items               12.5              (4.8)               17.3          
---------          ---------          ---------         
Performance Net                                                             
 Income                                                                     
 Attributable to                                                            
 Company            $   165.9          $   157.3          $     8.6          
---------          ---------          ---------         
Performance Net    $                                                        
 Income                                                                     
 Attributable to                                                            
 Company per                                                                
 Diluted Common                                                             
 Share                   2.70          $    2.47                            
Common Shares                                                               
 Outstanding -                                                              
 Diluted                 61.5               63.8                             


Note: The presentation of the performance measures above are not in
conformity with generally accepted accounting principles (GAAP).
These measures may not be comparable to similar measures of other
companies as not all companies calculate these measures in the same
manner.

  
WABCO HOLDINGS INC. AND SUBSIDIARIES                     
CONDENSED CONSOLIDATED BALANCE SHEETS                    
June 30,       December 31,
(Amounts in millions, except share data)             2014               2013
---------------------------------------------------------------------------- 
(Unaudited)                   
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents              $          400.8   $          472.8
  Short-term investments                             54.8               55.2
  Accounts receivable, less allowance for                                    
doubtful accounts: $4.5 in 2014; $5.0                                     
in 2013                                          400.9              346.2
  Inventories:                                                               
Finished products                               107.5               93.9 
Products in process                               8.9                7.2 
Raw materials                                   106.3              106.1
  Future income tax benefits                         14.5               10.4
  Restricted cash                                    30.8               34.6
  Guaranteed notes receivable                        61.9               51.4
  Other current assets                               66.1               56.8 
----------------------------------- 
Total current assets                          1,252.5            1,234.6 
Property, plant and equipment, less                                         
 accumulated depreciation                           428.7              422.5
Goodwill                                            469.8              381.2
Long-term future income tax benefits                242.2              248.9
Investments in unconsolidated joint                                         
 ventures                                            20.3               19.9
Intangible assets, net                               93.3               44.3
Other Assets                                         41.9               41.4 
----------------------------------- 
Total Assets                         $        2,548.7   $        2,392.8 
=================================== 
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Loans payable to banks                 $           26.5   $           40.1
  Accounts payable                                  177.4              149.3
  Accrued payroll                                   114.6              118.8
  Current portion of warranties                      30.4               29.8
  Taxes payable                                      16.6                3.8
  Accrued expenses                                   52.5               58.7
  Other accrued liabilities                         100.0               84.9 
----------------------------------- 
Total current liabilities                       518.0              485.4 
Long-term debt                                      200.4               47.0
Post-retirement benefits                            431.9              438.6
Deferred tax liabilities                            133.2              120.1
Long-term income tax liabilities                     47.2               45.3
Other liabilities                                    58.9               59.0 
----------------------------------- 
Total Liabilities                             1,389.6            1,195.4
Shareholders' equity:                                                       
  Preferred stock, 4,000,000 shares                                          
authorized; none issued and                                               
outstanding                                          -                  - 
Common stock, $.01 par value,                                              
400,000,000 shares authorized; shares                                     
issued: 77,860,236 in                                                    
  2014; 77,471,174 in 2013; and shares                                       
outstanding: 59,835,541 in 2014;                                          
61,359,025 in 2013                                 0.8                0.8
  Capital surplus                                   816.2              800.2
  Treasury stock, at cost: 18,024,695                                        
shares in 2014; 16,112,149 shares in                                      
2013                                         (1,097.1)            (896.6)
  Retained earnings                               1,516.2            1,371.8
  Accumulated other comprehensive income                                     
Foreign currency translation                                             
adjustments                                   (18.7)             (14.4) 
Unrealized losses on benefit plans,                                      
net of tax                                   (107.3)            (109.0) 
Unrealized gains on investments                   0.2                  - 
----------------------------------- 
Total shareholders' equity                    1,110.3            1,152.8 
Noncontrolling interests                         48.8               44.6 
----------------------------------- 
Total equity                                1,159.1            1,197.4 
----------------------------------- 
Total Liabilities and Equity        $       2,548.7   $        2,392.8 
=================================== 
WABCO HOLDINGS INC. AND SUBSIDIARIES                    
 THREE MONTHS ENDED JUNE 30, 2014 CONDENSED CONSOLIDATED STATEMENTS OF CASH  
FLOWS                                    
(Unaudited)                                 
Three Months Ended    
June 30,         
------------------------ 
2014        2013     
------------------------
(Amounts in millions)                                                       
----------------------------------------------------                         
Operating activities:                                                       
  Net income including noncontrolling interests             77.9        85.8
  Adjustments to reconcile net income to net cash                            
provided by operating activities:                                         
Depreciation                                            19.4        18.9 
Amortization of intangibles                              5.9         3.0 
Equity in losses of unconsolidated joint                                 
ventures, net of dividends received                   (0.4)       (0.6) 
Non-cash stock compensation                              4.3         3.4 
Deferred income tax benefit                            (1.5)         0.9 
Loss on sale or disposal of property, plant and                          
equipment                                                 -         0.1 
Changes in assets and liabilities:                                       
Accounts receivable, net                              21.7       (1.5) 
Inventories                                          (2.5)       (6.9) 
Accounts payable                                     (3.6)         3.3 
Other accrued liabilities and taxes                 (10.5)         5.9 
Other current and long-term assets                     2.2      (17.8) 
Other long-term liabilities                            3.8       (2.4) 
------------------------
Net cash provided by operating activities                 $116.7       $92.1 
------------------------ 
Investing activities:                                                       
  Purchases of property, plant and equipment              (24.5)      (18.3)
  Investments in capitalized software                      (3.4)       (2.3)
  Acquisitions, net                                        (1.3)           - 
------------------------
Net cash used in investing activities                    ($29.2)     ($20.6) 
------------------------ 
Financing activities:                                                       
  Net borrowings/(repayments) of revolving credit                            
facilities                                               82.0      (32.7)
  Net repayments of debt                                   (1.1)       (8.2)
  Dividends to noncontrolling interest holders             (1.4)       (1.4)
  Purchase of subsidiary shares from noncontrolling                          
interest                                                (5.7)           -
  Proceeds from exercise of stock options                    0.9        20.0
  Purchases of treasury stock                            (102.4)      (56.9) 
------------------------
Net cash used in financing activities                    ($27.7)     ($79.2) 
------------------------ 
Effect of exchange rate changes on cash and cash                            
 equivalents                                               (1.0)       (1.6)
  Net increase in cash and cash equivalents                 58.8       (9.3)
  Cash and cash equivalents at beginning of period         342.0       175.7 
------------------------
  Cash and cash equivalents at end of period              $400.8      $166.4 
======================== 
WABCO HOLDINGS INC. AND SUBSIDIARIES                    
  SIX MONTHS ENDED JUNE 30, 2014 CONDENSED CONSOLIDATED STATEMENTS OF CASH   
FLOWS                                    
(Unaudited)                                 
Six Months Ended     
June 30,         
------------------------ 
2014        2013     
------------------------
(Amounts in millions)                                                       
----------------------------------------------------                         
Operating activities:                                                       
  Net income including noncontrolling interests            149.8       161.8
  Adjustments to reconcile net income to net cash                            
provided by operating activities:                                         
Depreciation                                            40.8        37.2 
Amortization of intangibles                              8.9         6.0 
Equity in (losses)/earnings of unconsolidated                            
joint ventures, net of dividends received             (1.0)         0.1 
Non-cash stock compensation                              7.6         6.6 
Deferred income tax benefit/(expense)                  (0.6)       (0.1) 
Loss on sale or disposal of property, plant and                          
equipment                                               0.2         0.1 
Changes in assets and liabilities:                                       
Accounts receivable, net                            (38.5)      (54.7) 
Inventories                                         (12.8)      (21.7) 
Accounts payable                                      22.5        48.4 
Other accrued liabilities and taxes                  (2.5)         2.1 
Other current and long-term assets                  (16.5)      (26.0) 
Other long-term liabilities                            4.8       (3.7) 
------------------------
Net cash provided by operating activities                 $162.7      $156.1 
------------------------ 
Investing activities:                                                       
  Purchases of property, plant and equipment              (44.0)      (33.8)
  Investments in capitalized software                      (7.1)       (7.2)
  Acquisitions, net                                      (125.9)           - 
------------------------
Net cash used in investing activities                   ($177.0)     ($41.0) 
------------------------ 
Financing activities:                                                       
  Net borrowings/(repayments) of revolving credit                            
facilities                                              152.0      (45.8)
  Net repayments of debt                                  (14.8)       (5.9)
  Dividends to noncontrolling interest holders             (2.5)       (2.7)
  Purchase of subsidiary shares from noncontrolling                          
interest                                                (5.7)           -
  Proceeds from exercise of stock options                   11.2        35.7
  Purchases of treasury stock                            (194.4)     (100.7) 
------------------------
Net cash used in financing activities                    ($54.2)    ($119.4) 
------------------------ 
Effect of exchange rate changes on cash and cash                            
 equivalents                                               (3.5)       (4.3)
  Net increase in cash and cash equivalents               (72.0)       (8.6)
  Cash and cash equivalents at beginning of period         472.8       175.0 
------------------------
  Cash and cash equivalents at end of period              $400.8      $166.4 
======================== 
WABCO HOLDINGS INC.                             
Reconciliation of Net Cash Provided                     
By Operating Activities to Free Cash Flow                  
(Unaudited)                                 
Three months ended       Six months ended   
(Amounts in millions)                 June 30,                June 30,       
------------------------------------------------ 
2014        2013        2014        2013 
------------------------------------------------ 
Net Cash Provided by                                                        
 Operating Activities        $     116.7 $      92.1 $     162.7 $     156.1 
Deductions or Additions to                                                  
 Reconcile to Free Cash                                                     
 Flow:                                                                      
  Net purchases of property,                                                 
plant, equipment and                                                      
computer software              (27.9)      (20.6)      (51.1)      (41.0) 
------------------------------------------------ 
Free Cash Flow               $      88.8 $      71.5 $     111.6 $     115.1 
------------------------------------------------ 
Less: Streamlining &                                                       
separation payments             (4.0)       (6.5)       (8.7)      (12.4)
  Less: Acquisition related                                                  
payments                        (0.7)           -       (1.2)           - 
------------------------------------------------ 
Free Cash Flow excluding                                                    
 streamlining, separation &                                                 
 acquistion related payments $      93.5 $      78.0 $     121.5 $     127.5 
------------------------------------------------ 


Note: This statement reconciles net cash provided by operating
activities to free cash flow. Management uses free cash flow, which
is not defined by US GAAP, to measure the Company's operating
performance. Free cash flow is also one of the several measures used
to determine incentive compensation for certain employees.

  
Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year 2014   
Guidance                                   
(Unaudited)                                 
(Amounts in millions, except        Previous                 Updated        
 per share data)             Full Year 2014 Guidance Full Year 2014 Guidance 
------------------------------------------------ 
Operating Income                                                            
----------------------------                                                 
Reported Operating Income                                                   
 Margin                           12.4% - 13.2%           12.2% - 12.6%     
  Streamlining cost, impact                                                  
to margin                          0.2%                    0.2%          
  Separation costs, impact                                                   
to margin                          0.2%                    0.2%          
  Acquisition related items,                                                 
impact to margin                     -                     0.3%           
------------------------------------------------
Performance Operating Income                                                
 Margin                           12.8% - 13.6%           12.9% - 13.3%      
================================================ 
Net Income Attributable to                                                  
 Company                                                                    
----------------------------                                                 
Reported Net Income                                                         
 Attributable to Company             $291.5 - $322.0         $290.7 - $309.0
  Streamlining cost, net of                                                  
tax                                          12.8                    10.9
  Tax items                                     18.0                    19.1
  Acquisition related items,                                                 
net of tax                                      -                     7.0
  Separation costs, net of                                                   
tax and separation                                                        
related taxes                                 1.0                     4.8 
------------------------------------------------
Performance Net Income                                                      
 Attributable to Company             $323.3 - $353.8         $332.5 - $350.8 
================================================ 
Reported Net Income                                                         
 Attributable to Company per                                                
 Diluted Common Share                  $4.78 - $5.28           $4.77 - $5.07 
Performance Net Income                                                      
 Attributable to Company per                                                
 Diluted Common Share                  $5.30 - $5.80           $5.45 - $5.75 
Diluted common shares                                                       
 outstanding                              approx. 61              approx. 61 


Note: The presentation of the performance measures above are not in
conformity with generally accepted accounting principles (GAAP).
These measures may not be comparable to similar measures of other
companies as not all companies calculate these measures in the same
manner.
 
Contacts:
Media, investors and analysts contact
Christian Fife
+1 732 369 7465
christian.fife@wabco-auto.com


 
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