WABCO Europe BVBA
Jul 30, 2008

WABCO Reports Q2 2008 Results; Sets Another Quarterly Sales and Net Income Record; Raises Full-Year Earnings Projections

- 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, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- WABCO Holdings Inc. (NYSE: WBC) 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.

About WABCO

WABCO Vehicle Control Systems is one of the world's leading providers of electronic braking, stability, suspension and transmission automation systems for heavy duty commercial vehicles. Customers include the world's leading commercial truck, trailer, and bus manufacturers. Founded in the U.S. in 1869 as Westinghouse Air Brake Company, WABCO was acquired by American Standard in 1968 and spun off in 2007. Headquartered in Brussels, Belgium, WABCO employs more than 7,700 people in 31 countries worldwide. In 2007, WABCO's total sales were $2.4 billion. WABCO is a publicly traded company and is listed on the New York Stock Exchange with the stock symbol WBC. Website: www.wabco-auto.com

Forward-Looking Statements

Comments in this document contain certain forward-looking statements, which are based on management's good faith expectations and beliefs concerning future developments. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the risks and uncertainties described in the "Risk Factors" section and the "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 understanding of Q2 2008 results, several tables follow this news release. Sales excluding the effects of foreign exchange are a non-GAAP financial measure. Additionally, operating income, net income and net income per diluted share on a "performance basis" are non-GAAP financial measures that exclude separation costs, operational streamlining expenses, and one-time and discrete tax items, as applicable. Lastly, "free cash flow" presents our net cash provided by operating activities less net cash used in investing activities. 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.


    Media, investors and financial analysts contact:

    Mike Thompson, +32 (2) 663 9854, mike.thompson@wabco-auto.com

    Jason Campbell, +1 732 369 7477, jason.campbell@wabco-auto.com




                             WABCO HOLDINGS INC.
                       Consolidated Statement of Income

                                Three Months Ended         Six Months Ended
                                     June 30,                  June 30,
                                  2008        2007        2008        2007

    (Amounts in millions,
      except share data)     (Unaudited) (Unaudited) (Unaudited) (Unaudited)
    Sales                       $772.9      $582.3    $1,478.3    $1,141.1
    Cost of sales                560.6       430.4     1,070.0       836.5
    Gross profit                 212.3       151.9       408.3       304.6
    Cost and expenses:
      Selling and
        administrative
        expenses                  97.9        74.4       180.9       143.1
      Product engineering
        expenses                  27.2        19.9        51.5        41.2
      Other operating
        expense, net               2.8         8.1         7.9         8.1
    Operating income              84.4        49.5       168.0       112.2

      Equity (income) of
        unconsolidated joint
        ventures                  (2.5)       (4.0)       (3.1)       (8.8)
      Other non-operating
        expense, net               1.9         2.3         4.4         6.4
      Interest
        (income)/expense, net     (0.4)        0.6        (1.0)        3.0
    Income before income
      taxes                       85.4        50.6       167.7       111.6

    Income taxes                  18.4        19.5        39.4        40.4
    Net income                   $67.0       $31.1      $128.3       $71.2

     Net income per common
       share
       Basic                     $1.02                   $1.94
       Diluted                   $1.00                   $1.91

     Pro-forma net income
       per common share
       Basic                                 $0.46                   $1.05
       Diluted                               $0.45                   $1.02

     Common shares
       outstanding
       Basic                65,551,460              66,003,846
       Diluted              66,683,775              67,051,329

     Pro-forma common shares
       outstanding
       Basic                            67,867,159              67,867,159
       Diluted                          69,696,428              69,696,428



                             WABCO HOLDINGS INC.
                     Condensed Consolidated Balance Sheet

                                                  June 30,        December 31,
    (Amounts in millions)                           2008             2007
    ASSETS                                      (Unaudited)
    Current assets:
          Cash and cash equivalents                 $309.8            $183.2
          Accounts receivable, less
            allowance for doubtful
            accounts:  $7.4 in 2008; $6.4
            in 2007                                  544.1             464.6
          Inventories                                201.7             177.4
          Future income tax benefits                   7.9               8.0
          Other current assets                        60.5              54.2
          Total current assets                     1,124.0             887.4

    Facilities, less accumulated
      depreciation                                   361.8             336.2
    Goodwill                                         403.4             376.8
    Capitalized software costs, net of
      accumulated amortization: $137.9 in
      2008; $129.1 in 2007                            31.7              35.1
    Long-term future income tax benefits              40.8              40.7
    Investments in unconsolidated joint
      ventures                                        84.5              83.0
    Other assets                                      33.7              35.0
    Total Assets                                  $2,079.9          $1,794.2

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
          Loans payable to banks                      $6.1             $10.2
          Accounts payable                           209.7             193.5
          Accrued payroll                            119.4             100.1
          Current portion of warranties               60.2              49.7
          Taxes on income                             10.7              12.8
          Indemnification liabilities                 10.1              26.4
          Other accrued liabilities                  126.8              91.6
          Total current liabilities                  543.0             484.3

    Long-term debt                                   212.0             116.0
    Post-retirement benefits                         358.6             334.1
    Deferred tax liabilities                          25.6              25.6
    Minority interests                                14.4              13.5
    Long-term indemnification liabilities             51.2              55.6
    Long-term income tax liabilities                 107.0              95.6
    Other liabilities                                 61.5              61.9
    Total Liabilities                              1,373.3           1,186.6

    Total Shareholders' Equity                       706.6             607.6
    Total Liabilities & Shareholders'
      Equity                                      $2,079.9          $1,794.2


                             WABCO HOLDINGS INC.
                     Consolidated Statement of Cash Flows
                                 (Unaudited)

                                                 Three Months Ended June 30,
    (Amounts in millions)                            2008              2007


    Operating activities:
      Net income                                     $67.0             $31.1
      Adjustments to reconcile net income
        to net cash provided by operating
        activities:
          Depreciation                                18.3              15.6
          Amortization of capitalized software
            and other intangibles                      7.2               7.4
          Equity in earnings of unconsolidated
            joint ventures, net of dividends
            received                                  (1.7)             (2.0)
          Non-cash stock compensation                  2.9               0.7
          Loss on disposal of facilities              (0.8)              1.3
      Changes in assets and liabilities:
          Accounts receivable                        (12.4)           (179.8)
          Inventories                                 11.7              (3.8)
          Accounts payable                             8.6               5.5
          Other accrued liabilities
            and taxes                                (13.8)            (34.8)
          Post-retirement benefits                     2.5              (3.3)
          Other current and long-term assets          (1.1)             14.2
          Other long-term liabilities                  2.4             (29.4)

    Net cash provided by operating activities         90.8            (177.3)

    Investing activities:
      Purchases of property, plant and equipment     (16.9)            (14.0)
      Investments in capitalized software             (1.9)             (1.8)

    Net cash used in investing activities            (18.8)            (15.8)

    Financing activities:
      Borrowings of long-term debt                    66.0              27.9
      Repayments of long-term debt                      -              (40.3)
      Net borrowings of short-term debt                0.3              (6.6)
      Purchases of treasury stock                    (65.8)
      Dividend payments                               (4.6)
      Proceeds from exercise of stock options         12.8
      Net change in balance due from/to Trane or
        Trane affiliated entities                       -              234.2

    Net cash used in financing activities:             8.7             215.2

    Effect of exchange rate changes on
      cash and cash equivalents                        2.2               0.6

    Net increase/(decrease) in cash and
      cash equivalents                                82.9              22.7
    Cash and cash equivalents at beginning
      of period                                      226.9              31.6
    Cash and cash equivalents at end of period      $309.8             $54.3


                             WABCO HOLDINGS INC.
      Reconciliation of GAAP Reported Financial Measures to Performance
                              Financial Measures
                                 (Unaudited)

                                              Quarter Ended June 30,

    (Amounts in millions, except per   2008      % of    2007   % of    % Chg.
      share data)                               Sales/          Sales/    vs.
                                                 Adj             Adj.    2007
                                                Sales           Sales
    Sales
    Reported                          $772.9            $582.3          32.7%
         Foreign exchange translation
           effects                     (96.1)              -
    Adjusted Sales                    $676.8            $582.3          16.2%

    Operating Income Reported          $84.4     10.9%   $49.5   8.5%   70.5%
         Streamlining costs              5.8               7.8
         Separation costs                3.0               8.1
    Performance Operating Income       $93.2     12.1%    65.4  11.2%   42.5%

         Foreign exchange
           translational effects       (12.4)              -
    Adjusted Operating Income          $80.8     11.9%   $65.4  11.2%   23.5%

    Net Income
    Reported                           $67.0             $31.1         115.4%
         Streamlining costs, net of
           tax                           5.1               5.7
         Tax items                       0.5              (2.9)
         Separation costs, net of tax
           and separation related
           taxes                         2.9              13.3
    Performance Net Income             $75.5             $47.2          60.0%

    Performance Net Income per
     Diluted Common Share              $1.13             $0.68          66.5%

    Common shares outstanding -
      diluted                           66.7

    Pro-forma common shares
      outstanding - diluted                               69.7

    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



                             WABCO HOLDINGS INC.
                     Reconciliation of Net Cash Provided
                  By Operating Activities to Free Cash Flow
                                 (Unaudited)

    (Amounts in millions)                       Three Months Ended June 30,
                                                  2008              2007

    Net Cash Provided by Operating
      Activities                                 $90.8            $(177.3)

    Deductions or Additions to
      Reconcile to Free Cash Flow:
    Purchases of property, plant,
      equipment and computer software            (18.8)             (15.8)

    Free Cash Flow                               $72.0            $(193.1)


    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 several measures used to determine
           incentive compensation for certain employees.


                             WABCO HOLDINGS INC.
   Reconciliation of Projected US GAAP Net Income to Performance Net Income
                                   and EPS
                        for Full Year 2008 Projections
                                 (Unaudited)

                                           (1 EURO = 1.47    (1 EURO = 1.54
                                                USD)              USD)

    (Amounts in millions, except per
      share data)                             Previous          Revised
                                                2008              2008

    Net Income

    Projected US GAAP Net Income            $237.5 - $246.8   $246.8 - $256.1
      Streamlining costs, net of tax                   7.2               10.5
      Tax items                                        5.0                5.0
      Separation costs, net of tax and
        separation related taxes                      10.7               12.4
    Performance Net Income                 $260.4 - $269.7    $274.7 - $284.0

    Performance Net Income per Diluted
      Common Share                           $3.91 - $4.05      $4.12 - $4.26

    Projected diluted common shares
      outstanding                                     66.6              66.6

    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


SOURCE WABCO Holdings Inc.

http://www.wabco-auto.com

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