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AKRON, Ohio, April 25 /PRNewswire-FirstCall/ —
— Quarterly sales up 10 percent to record $4.9 billion

— Net income of $147 million, 60 cents per share, up $321 million from
last year

— International businesses achieve record sales, segment operating income

— Substantial segment operating income improvement in all four businesses

— Cost savings programs on target, more than $1.2 billion achieved to
date

— Investor meeting planned for June 26 in New York

The Goodyear Tire & Rubber Company today reported record first quarter sales and its highest first quarter net income in several years.
(Photo: )
(Logo: )

Goodyear’s first quarter 2008 sales were $4.9 billion, a 10 percent increase compared with the 2007 quarter, offsetting lower volumes with higher prices, a richer product mix and favorable currency translation.
Improved pricing and product mix in all four businesses drove revenue per tire up 7 percent over the 2007 quarter, reflecting the company’s successful strategy to focus on high-value-added tires. Lower volume primarily resulted from weak original equipment markets in North America as well as soft consumer replacement demand in North America and Europe, particularly for low-value-added tires.
“Our excellent first quarter results demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt,” said Robert J. Keegan, chairman and chief executive officer.
“Each of our four businesses improved margins and operating income as we capitalized on attractive growth opportunities in targeted market segments,” he said.
“While the economy remains a concern, we continue to be confident about the opportunities we see in the market and our ability to take advantage of them,” Keegan said. “Over the last five years, our strategic decisions have better positioned Goodyear to face an economic downturn and to emerge as a stronger competitor.”
Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8 billion to $2 billion in gross cost savings by the end of 2009. “We have now achieved more than $1.2 billion in savings since beginning this plan and remain on target to reach our four-year goal,” Keegan said.
Segment operating income set a first quarter record at $367 million in 2008, up 62 percent from $226 million in the strike-affected 2007 first quarter. Gross margin was 19.9 percent for the 2008 first quarter compared to 16.8 percent last year.
Segment operating income benefited from improved pricing and product mix of $157 million, which more than offset increased raw material costs of $13 million.
Favorable currency translation positively impacted sales by $341 million and segment operating income by $27 million in the quarter.
First quarter 2008 net income from continuing operations was $147 million (60 cents per share). This compares to a loss from continuing operations of $110 million (61 cents per share) in the year-ago quarter. Including discontinued operations, Goodyear had a net loss of $174 million (96 cents per share) in 2007’s first quarter. All per share amounts are diluted.
The 2008 quarter included after-tax financing fees related to debt repayment of $43 million (18 cents per share), $13 million (5 cents per share) in after-tax rationalization charges, an after-tax gain on asset sales of $33 million (13 cents per share) and an after-tax gain on an excise tax settlement in Latin America of $8 million (3 cents per share).
The 2007 quarter was impacted by after-tax charges of $64 million (35 cents per share) due to salaried benefit plan changes, an estimated $34 million (19 cents per share) related to the 2006 United Steelworkers strike and $31 million (17 cents per share) in rationalization and accelerated depreciation charges.
See the table at the end of this release for a list of significant items impacting continuing operations from the 2008 and 2007 quarters.
Business Segments
All three of the company’s businesses outside of North America achieved record sales for any quarter during the 2008 first quarter as the emerging markets businesses continued to grow.
Segment operating income increased in all four businesses. Segment operating income for the Latin America and Asia Pacific businesses were records for any quarter. Segment operating income for the Europe, Middle East and Africa business was a first quarter record.
See the note at the end of this release for further explanation and a segment operating income reconciliation table.
North American Tire First Quarter
(in millions) 2008 2007
Tire Units 17.8 19.3
Sales $ 1,997 $ 2,017
Segment Operating Income (Loss) 32 (20)
Segment Operating Margin 1.6% (1.0)%

North American Tire’s first quarter sales decreased 1 percent from last year. The 2007 quarter included approximately $150 million in sales from T&WA, which was divested in December 2007. Sales in the 2008 quarter were impacted by reduced original equipment volume resulting from lower vehicle production and a decline in the consumer replacement tire market, particularly for low-value-added tires. Sales benefited from strong pricing and product mix as well as market share gains for Goodyear and Dunlop brand tires in the consumer replacement market.
Segment operating income increased $52 million primarily due to improved pricing and product mix of $67 million, which more than offset increased raw material costs of $5 million. Lower selling, administrative and general expenses and structural cost savings, including savings from the 2006 contract with the USW, were partially offset by lower volume and transitional manufacturing costs.
The company estimates the USW strike reduced 2007 first quarter sales by $102 million and segment operating income by $34 million.
Europe, Middle East and Africa Tire First Quarter
(in millions) 2008 2007
Tire Units 20.0 20.1
Sales $ 1,950 $ 1,688
Segment Operating Income 172 139
Segment Operating Margin 8.8% 8.2%

Europe, Middle East and Africa Tire’s first quarter sales were a record for any quarter and increased 16 percent over last year due to favorable currency translation, improved pricing and product mix and market share gains in the consumer replacement and commercial replacement markets.
Segment operating income was a first quarter record and up 24 percent due to improved pricing and product mix of $40 million, which more than offset increased raw material costs of $4 million. Favorable currency translation and lower selling, administrative and general expenses offset higher manufacturing costs related to ongoing labor issues in France and higher transportation costs.
Latin American Tire First Quarter
(in millions) 2008 2007
Tire Units 5.2 5.3
Sales $ 530 $ 410
Segment Operating Income 114 78
Segment Operating Margin 21.5% 19.0%

Latin American Tire’s first quarter sales were a record for any quarter and increased 29 percent over 2007 due to improved pricing and product mix and favorable currency translation.
Segment operating income was a record for any quarter, increasing 46 percent compared to the prior year. Improved pricing and product mix of $37 million, a $12 million gain from the settlement of an excise tax case and favorable currency translation more than offset higher manufacturing costs and selling, administrative and general expenses.
Asia Pacific Tire First Quarter
(in millions) 2008 2007
Tire Units 4.9 4.5
Sales $ 465 $ 384
Segment Operating Income 49 29
Segment Operating Margin 10.5% 7.6%

Asia Pacific Tire’s first quarter sales were a record for any quarter and up 21 percent over last year due to favorable currency translation, higher volume and improved pricing and product mix.
Segment operating income increased 69 percent and was a record for any quarter. The improvement was due to improved pricing and product mix of $13 million, which more than offset $4 million in increased raw material costs, as well as higher volume, favorable currency translation and lower selling, administrative and general expenses.
Conference Call
Goodyear will hold an investor conference call at 9 a.m. today. Prior to the call, the company will post the financial and other statistical information that will be presented on its investor relations Web site: investor.goodyear.com.
Participating in the conference call with Keegan will be W. Mark Schmitz, executive vice president and chief financial officer, and Darren R. Wells, senior vice president, finance and strategy.
Shareholders, members of the media and other interested persons may access the call on the Web site or via telephone by calling (706) 634-5954 before 8:55 a.m. A replay will be available at 3 p.m. by calling (706) 634-4556. The replay will also be available on the Web site.
Investor Meeting
Goodyear will hold an investor meeting in New York on June 26. Participating in the meeting will be Keegan and Schmitz, along with leaders of the company’s strategic business units and key functions.
Further details, as well as information on accessing the meeting via webcast or telephone, will be announced at a later date.
Goodyear is one of the world’s largest tire companies. Fortune magazine named Goodyear the World’s Most Admired Motor Vehicle Parts Company in its 2008 list of the World’s Most Admired Companies. The publication ranked Goodyear No. 1 in innovation, people management, use of assets and global orientation. The company is also listed on Forbes magazine’s list of the Most Trustworthy Companies in America and CRO magazine’s ranking of the 100 Best Corporate Citizens. Goodyear employs about 70,000 people and manufactures its products in more than 60 facilities in 25 countries around the world. For more information about Goodyear, go to .
Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, which affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: actions and initiatives taken by both current and potential competitors; increases in the prices paid for raw materials and energy; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; whether or not the various contingencies and requirements are met for the establishment of a Voluntary Employees’ Beneficiary Association (VEBA) to provide healthcare benefits for current and future USW retirees; potential adverse consequences of litigation involving the company; pension plan funding obligations; as well as the effects of more general factors such as changes in general market or economic conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
The Goodyear Tire & Rubber Company and Subsidiaries
Consolidated Statement of Operations (unaudited)
(In millions, except per share amounts) Three Months Ended
March 31,
2008 2007

NET SALES $4,942 $4,499

Cost of Goods Sold 3,961 3,741
Selling, Administrative and General 635 663
Expense
Rationalizations 13 15
Interest Expense 89 125
Other (Income) and Expense (6) (20)

Income (Loss) from Continuing Operations 250 (25)
before Income Taxes and Minority Interest
United States and Foreign Taxes 77 63
Minority Interest 26 22

Income (Loss) from Continuing Operations 147 (110)

Discontinued Operations — (64)

NET INCOME (LOSS) $ 147 $ (174)

Income (Loss) Per Share - Basic
Income (Loss) from Continuing Operations $ 0.61 $(0.61)
Discontinued Operations — (0.35)
Net Income (Loss) Per Share - Basic $ 0.61 $(0.96)

Weighted Average Shares Outstanding 240 180

Income (Loss) Per Share - Diluted
Income (Loss) from Continuing Operations $ 0.60 $(0.61)
Discontinued Operations — (0.35)
Net Income (Loss) Per Share - Diluted $ 0.60 $(0.96)

Weighted Average Shares Outstanding 244 180

The Goodyear Tire & Rubber Company and Subsidiaries
Consolidated Balance Sheet (unaudited)
(In millions) March December
31, 31,
2008 2007
Assets:
Current Assets:
Cash and Cash Equivalents $ 2,216 $ 3,463
Restricted Cash 190 191
Accounts Receivable, less Allowance - $88
($88 in 2007) 3,629 3,103
Inventories:
Raw Materials 576 591
Work in Process 159 147
Finished Products 2,797 2,426
3,532 3,164

Prepaid Expenses and Other Current Assets 257 251
Total Current Assets 9,824 10,172
Goodwill 783 713
Intangible Assets 165 167
Deferred Income Tax 81 83
Other Assets 439 458
Property, Plant and Equipment less Accumulated
Depreciation - $8,586 ($8,329 in 2007) 5,808 5,598
Total Assets $17,100 $17,191

Liabilities:
Current Liabilities:
Accounts Payable-Trade $ 2,513 $ 2,422
Compensation and Benefits 925 897
Other Current Liabilities 752 753
United States and Foreign Taxes 246 196
Notes Payable and Overdrafts 300 225
Long Term Debt and Capital Leases due
within one year 92 171
Total Current Liabilities 4,828 4,664
Long Term Debt and Capital Leases 3,684 4,329
Compensation and Benefits 3,327 3,404
Deferred and Other Noncurrent Income Taxes 295 274
Other Long Term Liabilities 662 667
Minority Equity in Subsidiaries 1,087 1,003
Total Liabilities 13,883 14,341

Commitments and Contingent Liabilities

Shareholders’ Equity:
Preferred Stock, no par value:
Authorized, 50 shares, unissued — –
Common Stock, no par value:
Authorized, 450 shares, Outstanding shares
- 241 (240 in 2007) after deducting 10
treasury shares (10 in 2007) 241 240
Capital Surplus 2,668 2,660
Retained Earnings 1,749 1,602
Accumulated Other Comprehensive Loss (1,441) (1,652)
Total Shareholders’ Equity 3,217 2,850
Total Liabilities and Shareholders’ Equity $17,100 $17,191

Non-GAAP Financial Measures

This earnings release presents total segment operating income and net debt, each of which are important financial measures for the company but are not financial measures defined by GAAP.
Total segment operating income is the sum of the individual strategic business units’ segment operating income as determined in accordance with Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information.” Management believes that total segment operating income is useful because it represents the aggregate value of income created by the company’s SBUs and excludes items not directly related to the SBUs for performance evaluation purposes. See the table below for the reconciliation of total segment operating income.
Net debt is total debt (the sum of long term debt and capital leases, notes payable, and long-term debt and capital leases due within one year) minus cash and cash equivalents. Management believes net debt is an important measure of liquidity, which it uses as a tool to assess the company’s capital structure and measure its ability to meet its future debt obligations. Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce our debt obligations. See the table below for the reconciliation of net debt.
Total Segment Operating Income Reconciliation Table
(In millions) Quarter Ended
March 31,
(unaudited)
2008 2007
Total Segment Operating Income $ 367 $ 226
Rationalizations (13) (15)
Accelerated depreciation — (17)
Interest expense (89) (125)
Corporate incentive and stock-based
compensation plans (4) (16)
Intercompany profit elimination (9) (17)
Curtailment — (64)
Retained expenses of
discontinued operations — (4)
Other income and (expense) 6 18
Other (8) (11)
Income (Loss) from continuing
operations before income taxes
and minority interest 250 (25)
US and foreign taxes 77 63
Minority interest in net
income of subsidiaries 26 (22)
Income (Loss) from continuing operations 147 (110)
Discontinued operations — (64)
Net Income (Loss) $ 147 $( 174)

Net Debt Reconciliation Table
(In millions)
March 31, Dec. 31,
2008 2007
Long term debt and capital leases $ 3,684 $ 4,329
Notes payable and overdrafts 300 225
Long term debt and capital leases
due within one year 92 171
Total debt 4,076 4,725
Less: cash and cash equivalents 2,216 3,463
Net Debt $ 1,860 $ 1,262

Change in Net Debt $ 598

First Quarter Significant Items (after tax) Impacting Continuing Operations
2008

— Financing fees related to debt repayment, $43 million (18 cents per
share)
— Rationalization charges, $13 million (5 cents per share)
— Gain on asset sales, $33 million (13 cents per share)
— Gain on excise tax settlement in Latin America, $8 million (3 cents per
share)

2007

— Curtailment charge related to salaried benefit plan changes, $64
million (35 cents per share)
— Estimated impact of USW strike, $34 million (19 cents per share)
— Rationalization charges including accelerated depreciation, $31 million
(17 cents per share)
— Loss due to a plant fire in Asia, $3 million (2 cents per share)
— Gain on a property sale in Asia, $6 million (3 cents per share)

MEDIA CONTACT: Keith Price
330-796-1863

ANALYST CONTACT: Greg Dooley
330-796-6704

The Goodyear Tire & Rubber Company

PLANO, Texas, April 24 /PRNewswire/ —

- Germany’s HighQ-IT deepens company’s expertise and capability to
support expanding global clients

Perot Systems Corporation (NYSE: PER) announced today that it
has signed a definitive agreement to acquire HighQ-IT for the manufacturing
industry GmbH (HighQ-IT), a leading German IT services provider with SAP
expertise.

The Munich-based company is one of nine special expertise
partners in the automotive industry to be globally certified by SAP. With a
delivery center in Bratislava, Slovakia, HighQ-IT is a business driven, IT
innovation partner for select manufacturing industries, with a clear emphasis
on delivering IT services in the SAP and enterprise solutions market.

The acquisition is projected to close during the second quarter
of this year following approval from the Federal Cartel Office in Germany.
Financial details of the acquisition were not disclosed.

“With its proven expertise in SAP implementation services,
HighQ-IT is an excellent fit for Perot Systems,” said Peter Altabef,
President and CEO of Perot Systems Corporation. “Increasingly, our clients
are demanding enterprise solutions, and this acquisition significantly
enhances our global capacity to deliver them. We are delighted to welcome
HighQ-IT to the Perot Systems team.”
Klaus Holzhauser, senior consultant, Pierre Audoin Consultants
(PAC) GmbH, commented on the acquisition: “The good positioning of HighQ-IT
in the German SAP market in the sector of manufacturing, especially
automotive, allows Perot Systems to significantly improve its own positioning
in this environment. Furthermore Perot Systems increases its chance of also
realizing larger projects with a broader delivery basis.”
This acquisition underscores Perot Systems’ commitment to the
German and wider European marketplace, and will enable further growth in
Germany, supporting local and global clients by leveraging the combined
strength of both companies.

“HighQ-IT will complement our existing portfolio by bringing
valuable domain expertise in the automotive, engineering and technology-based
manufacturing industries,” said Andreas Stein, Managing Director of Perot
Systems Germany. “High client satisfaction and long-term relationships have
earned it a strong reputation in the market. HighQ-IT is a great addition of
talented people to Perot Systems.”
“We are pleased to be joining forces with Perot Systems. Our
spectrum of services, our exclusive client base, and our talented employees
fit exceptionally well into the business model and culture of Perot Systems,”
said Hans Josef Nagel, Managing Director of HighQ-IT. “Working together we
will be able to provide our services on a significantly broader basis and
with greater flexibility, to better meet the requirements of our global
clients. By joining the Perot Systems family we will be able to support our
clients worldwide and offer better advancement opportunities for our
hard-working team.”
HighQ-IT, founded in 1989, brings a strong European presence
servicing both global and local clients such as Audi, BMW, Daimler, General
Motors Europe/Opel, Gildemeister, OSRAM, Pari Medical and Siemens.

In 2007, HighQ-IT reported revenue of euro 14.9 million.

Hans Josef Nagel and Thomas Popp will remain as the managing
directors of HighQ-IT, charged with further developing an expanded market
presence throughout Europe and delivering expanded value solutions to its
clients.

In Germany, Perot Systems is headquartered in Frankfurt/Main and
concentrates on business and IT solutions for clients in a wide range of
industries, including telecommunications, manufacturing, travel and
transport.

About HighQ-IT

As an IT service provider, HighQ-IT for the manufacturing
industry GmbH focuses on the automotive, manufacturing and medical devices
industries. HighQ-IT is specialized in process optimization within the field
of product development and logistics — major branches are sales, maintenance
and service as well as finance and controlling management. HighQ-IT offers
expertise in the fields of SAP consulting, software engineering,
implementation and training as well as maintenance and support for IT
solutions. HighQ-IT is a service partner and special expertise partner of SAP
for automotive and product lifecycle management.

HighQ-IT for the manufacturing industry GmbH was established in
1989. The IT service provider employs more than 120 people in Munich and
Bratislava. Customers include mid-sized as well as large companies such as
Audi, BMW, Daimler, General Motors Europe / Opel, Gildemeister, Maha, MAN,
Miba Group, OSRAM, Pari Medical, Siemens and VW.

About Perot Systems

Perot Systems is a worldwide provider of information technology
services and business solutions. Through its flexible and collaborative
approach, Perot Systems integrates expertise from across the company to
deliver custom solutions that enable clients to accelerate growth, streamline
operations, and create new levels of customer value. Headquartered in Plano,
Texas, Perot Systems reported 2007 revenue of US$2.6 billion. The company has
more than 23,000 associates located in North America, Europe, MENA and Asia.
Additional information on Perot Systems is available at
http://www.perotsystems.com/.

This press release contains forward-looking statements that are
subject to known and unknown risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by such
statements. For factors that could affect our business and cause actual
results to differ materially, please refer to our Annual Report on Form 10-K
for the fiscal year ended December 31, 2007, as filed with the U.S.
Securities and Exchange Commission and available at http://www.sec.gov/, as
updated in our Quarterly Reports on Form 10-Q filed after such Form 10-K, for
additional information regarding risk factors. We disclaim any intention or
obligation to revise any forward-looking statements whether as a result of
new information, future developments, or otherwise.

Media Contacts:
Perot Systems Corporation
US - Global
Jonathan Moss
1-972-577-6395
jonathan.moss@ps.net

Joe McNamara
1-972-577-6165
joe.mcnamara@ps.net

UK
Charlie Richards
44-20-7892-1071
Charlie.richards@ps.net

LEWIS - Global PR

Germany
Ruth Streder
49-89-173019-21
49-176-10-11-96-08 cell
ruths@lewispr.com

Web site: http://www.perotsystems.com

Perot Systems Corporation

SOUTHFIELD, Mich., April 29 /PRNewswire-FirstCall/ — Lear Corporation , a leading global supplier of automotive seating systems, electrical distribution systems and related electronic products today reported financial results for the first quarter of 2008 and confirmed its full-year 2008 earnings outlook.
First-Quarter Highlights:

— Net sales in core businesses of $3.9 billion, up 2% vs. year ago

— Core operating earnings of $187 million, up 10% vs. year ago

— Established global operating structure for business units

— Grew international sales and expanded low-cost footprint

— Received numerous customer and industry awards

— Full-year 2008 earnings outlook unchanged

For the first quarter of 2008, Lear reported net sales of $3.9 billion and pretax income of $109.5 million, including restructuring costs of $23.6 million. This compares with net sales of $4.4 billion and pretax income of $82.3 million for the first quarter of 2007, including restructuring costs of $15.8 million and other special items totaling $10.7 million. Net income was $78.2 million, or $1.00 per share, for the first quarter of 2008. This compares with net income of $49.9 million, or $0.64 per share, for the first quarter of 2007.
Income before interest, other expense, income taxes, restructuring costs and other special items (core operating earnings) was $186.5 million in the first quarter of 2008. This compares with core operating earnings of $170.2 million in the first quarter of 2007, excluding the divested Interior business. A reconciliation of core operating earnings to pretax income as determined by generally accepted accounting principles is provided in the supplemental data page.
“Although we are facing significant challenges in North America, Lear’s underlying operating fundamentals remain strong,” said Bob Rossiter, Lear Chairman, Chief Executive Officer and President. “The Lear team remains very focused on delivering outstanding quality and customer service to our customers. At the same time, we are putting in place a global operating structure for our business units and taking aggressive actions to improve our longer-term competitiveness.”
The decline in net sales for the quarter reflects the divestiture of the Interior business and lower industry production in North America, due in part to the impact of a strike at a major supplier, offset in part by favorable foreign exchange and new business.
In the seating segment, net sales increased slightly driven by favorable foreign exchange and the benefit of new business, offset by lower industry production in North America. Operating margins improved slightly, reflecting favorable cost performance and increased savings from restructuring actions, as well as the timing of commercial settlements, largely offset by lower industry production in North America.
In the electrical and electronic segment, net sales increased slightly driven by favorable foreign exchange, partially offset by lower industry production in North America. Operating margins improved, reflecting favorable operating performance, including savings from restructuring actions and the net impact of legal and commercial claims, partially offset by lower industry production in North America.
In the first quarter of 2008, free cash flow was negative $31.4 million, compared with negative $32.1 million in the first quarter of 2007. (Net cash provided by operating activities was $125.8 million in the first quarter of 2008 as compared to net cash used in operating activities of $41.8 million in the first quarter of 2007. A reconciliation of free cash flow to net cash provided by (used in) operating activities is provided in the supplemental data page.)
During the quarter, the Company implemented a global operating structure for its two business units, naming Lou Salvatore, President - Global Seating Systems, and Ray Scott, President - Global Electrical and Electronic Systems. This new structure is consistent with the global strategies of the Company’s major customers, allows Lear to take full advantage of its global scale, leverages Lear’s worldwide engineering and product development resources and enables Lear to access the lowest cost manufacturing and sourcing available.
Additionally, Lear continued to grow its sales outside of North America and expand its low-cost footprint in Asia, including a new foam plant in Wuhu, China and a new seat trim facility in Hai Phong, Vietnam. The Company was also the recipient of numerous customer and industry awards. This recognition included “Supplier of the Year” from GM, three “World Excellence Awards” from Ford and awards from several other automakers, including BMW, Toyota, Volkswagen and Hyundai, as well as industry recognition for Lear’s ProTec PLuS(TM) whiplash protection system and SoyFoam(TM) products.
Full-Year 2008 Outlook
Lear expects 2008 net sales of approximately $15.5 billion, compared with prior guidance of $15.0 billion. The increase reflects the positive impact of foreign exchange, mainly the strong Euro, partially offset by lower industry production in North America. Lear’s 2008 earnings outlook remains unchanged, reflecting favorable operating performance and foreign exchange, offset by lower industry production in North America and increasing commodity costs.
Lear anticipates 2008 income before interest, other expense, income taxes, restructuring costs and other special items (core operating earnings) of $660 to $700 million. Restructuring costs in 2008 are estimated to be about $100 million.
Interest expense for 2008 is estimated between $185 and $195 million. Pretax income before restructuring costs and other special items is estimated in the range of $430 to $470 million. Tax expense is expected to be approximately $135 million, depending on the mix of earnings by country.
Capital spending in 2008 is estimated in the range of $255 to $275 million. Depreciation and amortization expense is estimated at about $300 million. Free cash flow is expected to be solidly positive, at about $250 million, for the year.
Key assumptions underlying Lear’s financial outlook include expectations for industry vehicle production of approximately 14.1 million units in North America compared with a prior forecast of 14.4 million units. In Europe, our forecast for industry production is 20.2 million units. Lear expects production for the Domestic Three to be down about 10% in North America, compared with a prior forecast of a 9% decline. In addition, we are assuming an exchange rate of $1.52/Euro, compared with a prior forecast of $1.45/Euro.
Lear will webcast its first-quarter earnings conference call through the Investor Relations link at at 9:00 a.m. EDT on April 29, 2008. In addition, the conference call can be accessed by dialing 1-800-789-4751 (domestic) or 1-706-679-3323 (international). The audio replay will be available two hours following the call at 1-800-642-1687 (domestic) or 1-706-645-9291 (international) and will be available until May 14, 2008, with a Conference I.D. of 37038451.
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 press release, the Company has provided information regarding “income before interest, other expense, income taxes, restructuring costs and other special items, excluding the divested Interior business” (core operating earnings), “pretax income before restructuring costs and other special items” and “free cash flow” (each, a non-GAAP financial measure). Other expense includes, among other things, non-income related taxes, foreign exchange gains and losses, discounts and expenses associated with the Company’s asset-backed securitization and factoring facilities, minority interests in consolidated subsidiaries, equity in net income of affiliates and gains and losses on the sale of assets. Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivable, less capital expenditures. The Company believes it is appropriate to exclude the net change in sold accounts receivable in the calculation of free cash flow since the sale of receivables may be viewed as a substitute for borrowing activity.
Management believes the non-GAAP financial measures used in this press release 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 core operating earnings and pretax income before restructuring costs and other special items are useful measures in assessing the Company’s financial performance by excluding certain items (including those items that are included in other expense) that are not indicative of the Company’s core operating earnings or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also believes that these measures are useful to both management and investors in their analysis of the Company’s results of operations and provide improved comparability between fiscal periods. Management believes that free cash flow is useful to both management and investors in their analysis of the Company’s ability to service and repay its debt. Further, management uses these non- GAAP financial measures for planning and forecasting in future periods.
Core operating earnings, pretax income before restructuring costs and other special items and free cash flow should not be considered in isolation or as a substitute for pretax income, net income, cash provided by (used in) operating activities or other income statement or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and therefore, does not reflect funds available for investment or other discretionary uses. Also, 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.
For reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, see the supplemental data page which, together with this press release, has been posted on the Company’s website through the Investor Relations link at . Given the inherent uncertainty regarding special items, other expense and the net change in sold accounts receivable in any future period, a reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is not feasible. The magnitude of these items, however, may be significant.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties, including but not limited to, general economic conditions in the markets in which the Company operates, including changes in interest rates or currency exchange rates, the financial condition of the Company’s customers or suppliers, changes in the Company’s current vehicle production estimates, fluctuations in the production of vehicles for which the Company is a supplier, the loss of business with respect to, or the lack of commercial success of, a vehicle model for which the Company is a significant supplier, disruptions in the relationships with the Company’s suppliers, labor disputes involving the Company or its significant customers or suppliers or that otherwise affect the Company, the outcome and duration of the American Axle strike, the Company’s ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions, the outcome of customer productivity negotiations, the impact and timing of program launch costs, the costs, timing and success of restructuring actions, increases in the Company’s warranty or product liability costs, risks associated with conducting business in foreign countries, competitive conditions impacting the Company’s key customers and suppliers, the cost and availability of raw materials and energy, the Company’s ability to mitigate any increases in raw material, energy and commodity costs, the outcome of legal or regulatory proceedings to which the Company is or may become a party, unanticipated changes in cash flow, including the Company’s ability to align its vendor payment terms with those of its customers and other risks described from time to time in the Company’s Securities and Exchange Commission filings. In particular, the Company’s financial outlook for 2008 is based on several factors, including the Company’s current vehicle production and raw material pricing assumptions. The Company’s actual financial results could differ materially as a result of significant changes in these factors.
The forward-looking statements in this press release are made as of the date hereof, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof.
Lear Corporation is one of the world’s largest suppliers of automotive seating systems, electrical distribution systems and related electronic products. The Company’s world-class products are designed, engineered and manufactured by a diverse team of 91,000 employees at 215 facilities in 35 countries. Lear’s headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Further information about Lear is available on the internet at .
Lear Corporation and Subsidiaries
Consolidated Statements of Income

(Unaudited; in millions, except per share amounts)

Three Months Ended

March 29, March 31,
2008 2007

Net sales $3,857.6 $4,406.1

Cost of sales 3,561.5 4,095.2
Selling, general and administrative
expenses 133.2 126.5
Divestiture of Interior business - 25.6
Interest expense 47.4 51.5
Other expense, net 6.0 25.0

Income before income taxes 109.5 82.3
Income tax provision 31.3 32.4

Net income $78.2 $49.9

Basic net income per share $1.01 $0.65

Diluted net income per share $1.00 $0.64

Weighted average number of shares
outstanding
Basic 77.2 76.4
Diluted 78.4 78.0

Lear Corporation and Subsidiaries
Consolidated Balance Sheets

(In millions)

March 29, December 31,
2008 2007
ASSETS (Unaudited) (Audited)
Current:
Cash and cash equivalents $701.9 $601.3
Accounts receivable 2,380.1 2,147.6
Inventories 669.8 605.5
Other 382.1 363.6
4,133.9 3,718.0
Long-Term:
PP&E, net 1,402.1 1,392.7
Goodwill, net 2,087.5 2,054.0
Other 660.1 635.7
4,149.7 4,082.4

Total Assets $8,283.6 $7,800.4

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current:
Short-term borrowings $13.5 $13.9
Accounts payable and drafts 2,497.2 2,263.8
Accrued liabilities 1,311.4 1,230.1
Current portion of long-term debt 99.6 96.1
3,921.7 3,603.9
Long-Term:
Long-term debt 2,345.5 2,344.6
Other 766.6 761.2
3,112.1 3,105.8

Stockholders’ Equity 1,249.8 1,090.7

Total Liabilities and Stockholders’
Equity $8,283.6 $7,800.4

Lear Corporation and Subsidiaries
Supplemental Data

(Unaudited; in millions, except content per vehicle and share
data)

Three Months Ended

March 29, March 31,
2008 2007

Net Sales
North America $1,448.8 $2,225.8
Europe 1,930.2 1,766.7
Rest of World 478.6 413.6
Total $3,857.6 $4,406.1

Net Sales - Core Businesses
North America $1,448.8 $1,645.4
Europe 1,930.2 1,732.8
Rest of World 478.6 404.7
Total $3,857.6 $3,782.9

Content Per Vehicle *
North America $421 $584
North America - core businesses $421 $432
Europe $374 $336
Europe - core businesses $374 $329

Free Cash Flow **
Net cash provided by (used in) operating
activities $125.8 $(41.8)
Net change in sold accounts receivable (111.7) 38.9
Net cash provided by (used in) operating
activities before net change in sold accounts
receivable 14.1 (2.9)
Capital expenditures (45.5) (29.2)
Free cash flow $(31.4) $(32.1)

Depreciation and Amortization $74.5 $74.5

Basic Shares Outstanding at end of
quarter 77,303,615 76,658,409

Diluted Shares Outstanding at end
of quarter *** 78,271,486 78,080,260

Core Operating Earnings **
Pretax income $109.5 $82.3
Interest expense 47.4 51.5
Other expense, net 6.0 21.1 ****
Restructuring costs and other special items -
Costs related to restructuring actions 23.6 15.8
Costs related to divestiture of Interior
business - 33.8
U.S. salaried pension plan curtailment gain - (36.4)
Costs related to merger transaction - 9.4
Loss on joint venture transaction - 3.9
Less: Interior business - (11.2)
Core Operating Earnings $186.5 $170.2

* Content Per Vehicle for 2007 has been updated to reflect actual
production levels.

** See “Non-GAAP Financial Information” included in this press release.

*** Calculated using stock price at end of quarter. Excludes certain
shares related to outstanding convertible debt, as well as certain
options, restricted stock units, performance units and stock
appreciation rights, all of which were antidilutive.

**** Reported 2007 other expense, net of $25.0 million includes losses of
$3.9 million related to restructuring costs and other special items
detailed below.

Lear Corporation

TROY, Mich., April 29 /PRNewswire-FirstCall/ — ArvinMeritor, Inc. today reported financial results for its second quarter ended March 31, 2008.
Highlights for Second-Quarter Fiscal Year 2008

— Sales of $1.8 billion - approximately $150 million higher than the same
period last year primarily due to the effects of changes in foreign
currency.
— Net income was $20 million, or $0.28 per diluted share, compared to a
net loss of $94 million, or $1.34 per diluted share in the second
quarter of fiscal year 2007.
— Income from continuing operations, before special items, was $27
million, or $0.37 per diluted share, compared to $12 million, or $0.17
per diluted share one year ago.
— Cash flow from operations, net of capital expenditures, was $134
million compared to an outflow of $71 million in the same period last
year.
— Commercial Vehicle Systems (CVS) EBITDA margins increased by 1.5
percentage points, before special items, in the second quarter of
fiscal year 2008 compared to the same period last year, despite lower
commercial vehicle volumes in North America.
— Performance Plus initiatives were implemented during the second quarter
that will result in savings of $32 million on an annual run-rate basis.
The company continues to expect Performance Plus cost reductions of $75
million this year net of known risks; growth opportunities previously
announced will provide incremental profit opportunities.

“In spite of the downturn in the North American commercial vehicle market that has lasted longer than we anticipated, and volume declines in the light vehicle market in North America, we delivered strong results this quarter,” said Chairman, CEO and President Chip McClure. “Initiatives driven through Performance Plus, including lean improvements in our global manufacturing operations, are helping us put in place a solid foundation for continued earnings growth.”
Results for the Second-Quarter Fiscal Year 2008
In the second quarter of fiscal year 2008, ArvinMeritor posted sales from continuing operations of $1.8 billion, up from the same period last year. Excluding the impact of foreign currency translation, sales were approximately flat due to a continued weak economy in North America, offset by strong sales growth in South America, Europe and Asia.
EBITDA, before special items, was $104 million, up $27 million from the same period last year. This increase is primarily due to improved pricing and commodity cost recovery actions; cost reductions in direct material, overhead, labor and burden; increased throughput in the company’s European facilities resulting from improved operational performance; stronger volumes in South America and higher sales of off-highway products in China and U. S. military products - all partially offset by lower vehicle volumes in North America and sharply rising commodity prices.
On a GAAP basis, the company’s income from continuing operations was $24 million or $0.33 per diluted share, compared to a loss from continuing operations of $13 million or $0.19 per diluted share in the same period last year.
Income from continuing operations, before special items, was $27 million, or $0.37 per diluted share, compared to $12 million, or $0.17 per diluted share, a year ago. The only special item for the quarter was a $3 million after-tax charge associated with the company’s previously announced restructuring program, compared to special items totaling $25 million after- tax in the same quarter of last year.
Free cash flow (cash flow from operations net of capital expenditures) was $134 million in the second quarter. Excluding non-recourse sales of receivables, free cash flow was $52 million this quarter compared to an outflow of $88 million one year ago. Free cash flow included $28 million in proceeds from the termination of interest rate swaps, but did not include $28 million received in connection with the final purchase price adjustment from the sale of our Emissions Technologies business.
Update on Performance Plus
As previously announced, ArvinMeritor expects cost reductions driven by its Performance Plus transformation program to generate $150 million in net savings by 2009, with $75 million occurring by the end of fiscal year 2008.
The company originally defined three areas of Performance Plus as cost reduction targets: Direct Material Optimization, Manufacturing and Overhead. In the second quarter, achievements in each of these areas contributed to the company’s cost reduction targets including:
— In-sourced manufacturing for certain CVS products to result in annual
savings of $7 million.
— Continued performance improvements resulting from implementation of the
ArvinMeritor Production System.
— Selected a single source provider for North American industrial labor
and global professional and clerical labor resulting in annual savings
of $4 million.

Performance Plus also included initiatives to enhance the company’s profitable growth. The following growth actions were implemented this quarter:
— Awarded a long-term, multi-million dollar, supply agreement to provide
remanufactured transmissions and axle carriers to Navistar Parts.
— Launched remanufactured transmissions in the Plainfield, Ind.,
aftermarket facility.
— Entered into a multi-year agreement with Tata Consultancy Services in
India to enhance Light Vehicle Systems (LVS) engineering capabilities
including product development and support in Asia Pacific.
— Re-established the company’s off-highway original equipment and
aftermarket components business in North America, South America, Europe
and Africa.
— Awarded new business in conjunction with 2,200 new MRAP orders since
January 2008.
— Booked new business with an Asian manufacturer to supply more than two
million additional window regulator motors in China beginning in mid-
2008.
— Announced new products designed specifically for the Asian market
including the New Asian Latch product range of modular door latch
designs, and a new sliding door latch system.

Manufacturing Footprint Improvements

In addition, several actions were implemented in the second quarter of fiscal year 2008 to improve the company’s global manufacturing footprint.
— Building three new light vehicle manufacturing plants in Asia Pacific
to support increased business in the region.
— Began production at the LVS facility in Salonta, Romania, to supply
window regulators, cables, latches and actuators directly to Dacia - as
well as for export to Western European customers.
— On track for July 2008 completion of the company’s new commercial
vehicle Monterrey, Mexico facility; also upgrading the company’s
Asheville, N.C. axle facility to include a new carrier assembly line
for the NG14X - the next generation line haul axle to be launched in
February 2009.

Mitigating Rising Steel Prices

The commodity markets are currently experiencing unprecedented volatility. Scrap steel, iron ore, and coking coal prices have simultaneously risen faster and higher than levels seen in the past. One of the world’s largest steel producers has recently announced a $250 per short ton surcharge on contract sales of sheet steel.
Other factors contributing to the volatility include:

— Weak dollar resulting in a decline in imported steel
— Global consolidation in the steel industry
— Fuel and energy costs
— Global demand

The combined impact of these factors has created a situation more significant to the global transportation industry than the effect of steel price increases encountered in 2004.
While ArvinMeritor continues to drive lean improvement actions throughout the company’s global operations, and strives to implement Performance Plus initiatives to gain additional efficiencies, it will not be possible to mitigate increases of this proportion through existing cost reduction programs alone. The company has steel cost recovery programs with most major OEMs, and will aggressively pursue additional recovery actions to address these extraordinary costs.
Outlook
The company’s calendar year 2008 forecast for light vehicle sales is 15.2 million vehicles in North America, down from the previous forecast. The company’s forecast for Western Europe is 17.1 million vehicles, unchanged from the prior forecast.
ArvinMeritor’s fiscal year 2008 forecast for North American Class 8 truck production is in the range of 200,000 to 220,000 units. The company’s fiscal year 2008 forecast for heavy and medium truck volumes in Western Europe is 565,000 to 575,000. On a calendar year basis, the company anticipates North America Class 8 truck production to be in the range of 220,000 to 240,000 units; and heavy and medium truck volumes in Western Europe to be in the range of 580,000 to 590,000.
The company now expects sales from continuing operations in fiscal year 2008 in the range of $7.1 billion to $7.3 billion, up $200 million from the previous guidance primarily due to foreign exchange movements and continued growth outside the U.S.
The outlook for full-year EBITDA from continuing operations, before special items, is expected to be in the range of $385 million to $405 million for the fiscal year. ArvinMeritor reaffirms its forecast for diluted earnings per share from continuing operations, before special items, to be in the range of $1.40 to $1.60. This guidance is based on the assumption of 1.4 percent U.S. GDP growth, and excludes gains or losses on divestitures and restructuring costs. ArvinMeritor reaffirms its forecast for free cash flow to be in the range of negative $75 million to negative $125 million.
“Commodity prices are spiking in a dramatic fashion,” said McClure. “These increases, combined with resulting higher energy costs, require us to take additional recovery actions to mitigate future impact. For fiscal year 2008, we remain focused on our strategy to deliver results and are confident we will achieve our full-year guidance.”
About ArvinMeritor
ArvinMeritor, Inc. is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. Headquartered in Troy, Mich., ArvinMeritor employs approximately 18,000 people in 24 countries. ArvinMeritor common stock is traded on the New York Stock Exchange under the ticker symbol ARM. For more information, visit the company’s Web site at: .
Forward-Looking Statements
This press release 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 1995. 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; availability and sharply rising cost of raw materials, including steel and oil; 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); 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; potential adjustment of the value of deferred tax assets; 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; the outcome of actual and potential product liability and warranty and recall claims; 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 forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.
All earnings per share amounts are on a diluted basis. The company’s fiscal year ends on the Sunday nearest Sept. 30, and its fiscal quarters end on the Sundays nearest Dec. 31, March 31 and June 30. All year and quarter references relate to the company’s fiscal year and fiscal quarters, unless otherwise stated.
Non-GAAP Measures
In addition to the results reported in accordance with accounting principles generally accepted in the United States (”GAAP”) included throughout this press release, the company has provided information regarding income from continuing operations, diluted earnings per share and operating income 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 operating income or loss plus or minus special items. Other non-GAAP financial measures include EBITDA and EBITDA, before special items, and free cash flow. EBITDA is defined as income (loss) from continuing operations before income taxes, depreciation and amortization and loss of sale on receivables. EBITDA, before special items, is defined as EBITDA, plus or minus special items. Free cash flow represents net cash provided by operating activities, less capital expenditures.
Management believes that the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the company’s financial position and results of operations. Management uses EBITDA as the primary basis to evaluate the performance of each of its reportable segments.
Management believes EBITDA is a meaningful measure of performance as it is commonly utilized by management and investors to analyze operating performance and entity valuation. Management, the investment community and the banking institutions routinely use EBITDA, together with other measures, to measure operating performance in our industry. 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. EBITDA should not be considered as an alternative to net income as an indicator of our operating performance or to cash flows as a measure of liquidity. Free cash flow should not be considered a substitute for cash provided by operating activities or other cash flow statement data prepared in accordance with GAAP or as a measure of liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt or cash received from the divestitures or businesses or sales of other assets and thus does not reflect funds available for investment or other discretionary uses.
These non-GAAP measures should not be considered a substitute for the reported results prepared in accordance with GAAP. 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.
Set forth on the following pages are reconciliations of these non-GAAP financial measures, if applicable, to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Second-Quarter Results Conference Call
ArvinMeritor will host a conference call and Web cast to present its fiscal year 2008 second-quarter financial results on Tuesday, April 29, 2008, at 8 a.m. (ET).
To participate, call (617) 213-4859, ten minutes prior to the start of the call. Please reference Passcode 50118706 when dialing in. Investors can also listen to the conference call in real time - or for 90 days by recording - by visiting .
A replay of the call will be available from 10 a.m. April 29, 2008, until 11:59 p.m. May 2, 2008, by calling (888) 286-8010 within the United States and Canada, or (617) 801-6888 for international callers. Please reference Passcode 35483669.
To access the listen-only audio Web cast, visit the ArvinMeritor Web site at and select the Web cast link from the home page or the investor page.
ARVINMERITOR, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share amounts)

Quarter Ended Six Months Ended
March 31, March 31,
2008 2007 2008 2007
(Unaudited) (Unaudited)

Sales $1,781 $1,627 $3,444 $3,195
Cost of sales (1,614) (1,484) (3,147) (2,948)
GROSS MARGIN 167 143 297 247
Selling, general and
administrative (105) (99) (197) (172)
Restructuring costs (5) (37) (15) (37)
Other income (expense), net (1) 10 (1) 12
OPERATING INCOME 56 17 84 50
Equity in earnings of
affiliates 6 7 17 14
Interest expense, net (20) (34) (47) (61)
INCOME (LOSS) BEFORE INCOME
TAXES 42 (10) 54 3
Provision for income taxes (14) - (24) (1)
Minority interests (4) (3) (7) (5)

INCOME (LOSS) FROM CONTINUING
OPERATIONS 24 (13) 23 (3)
LOSS FROM DISCONTINUED
OPERATIONS (4) (81) (15) (84)
NET INCOME (LOSS) 20 (94) 8 (87)

DILUTED EARNINGS (LOSS)
PER SHARE
Continuing operations $0.33 $(0.19) $0.32 $(0.04)
Discontinued operations (0.05) (1.15) (0.21) (1.20)
Diluted earnings (loss) per
share $0.28 $(1.34) $0.11 $(1.24)

Diluted average common shares
outstanding 72.5 70.2 72.5 69.8

ARVINMERITOR, INC.
CONSOLIDATED BALANCE SHEET
(in millions)

March 31, September 30,
2008 2007
(Unaudited)

ASSETS:
Cash and cash equivalents $377 $409
Receivables, trade and other, net 1,229 1,223
Inventories 621 541
Other current assets 229 216
Net property 752 738
Goodwill 526 520
Other assets 1,117 1,142
TOTAL ASSETS $4,851 $4,789

LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term debt $229 $18
Accounts payable 1,282 1,342
Other current liabilities 567 719
Long-term debt 1,070 1,130
Retirement benefits 782 763
Other liabilities 245 209
Minority interests 72 65
Shareowners’ equity 604 543
TOTAL LIABILITIES AND SHAREOWNERS’ EQUITY $4,851 $4,789

ARVINMERITOR, INC.
CONSOLIDATED business SEGMENT INFORMATION
(in millions)

Quarter Ended Six Months Ended
March 31, March 31,
2008 2007 2008 2007
(Unaudited) (Unaudited)

Sales:
Commercial Vehicle Systems $1,192 $1,075 $2,272 $2,121
Light Vehicle Systems 589 552 1,172 1,074
Total sales $1,781 $1,627 $3,444 $3,195

EBITDA:
Commercial Vehicle Systems $84 $60 $155 $123
Light Vehicle Systems 19 8 21 22
Total Segment EBITDA 103 68 176 145
Unallocated Corporate Costs (4) (1) (5) (1)
ET Corporate Allocations - (11) - (18)
Total EBITDA 99 56 171 126
Loss on Sale of Receivables (5) (1) (9) (3)
Depreciation and Amortization (36) (34) (68) (64)
Interest Expense, Net (20) (34) (47) (61)
Provision for Income Taxes (14) - (24) (1)
Income (Loss) Continuing
Operations $24 $(13) $23 $(3)

ARVINMERITOR, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Six Months
Ended March 31,
2008 2007
(Unaudited)

OPERATING ACTIVITIES
Income (loss) from continuing operations $23 $(3)
Adjustments to income (loss) from continuing operations:
Depreciation and amortization 68 64
Gain on divestitures - (2)
Adjustment to impairment reserves, net - (10)
Restructuring costs, net of payments (5) 20
Loss on debt extinguishment 3 6
Pension and retiree medical expense 52 67
Other adjustments to income (loss) from continuing
operations (8) 1
Pension and retiree medical contributions (43) (136)
Proceeds from terminations of interest rate swaps 28 -
Changes in off-balance sheet receivable securitization
and factoring 197 20
Changes in assets and liabilities (409) (81)
Cash flows used for continuing operations (94) (54)
Cash flows used for discontinued operations (14) (9)
CASH USED FOR OPERATING ACTIVITIES (108) (63)
INVESTING ACTIVITIES
Capital expenditures (63) (48)
Acquisitions of businesses and investments, net of
cash acquired (41) (2)
Proceeds from disposition of property and businesses 8 11
Proceeds from investments and marketable securities 5 5
Net investing cash flows provided by (used for)
discontinued operations 55 (23)
CASH USED FOR INVESTING ACTIVITIES (36) (57)
FINANCING ACTIVITIES
Borrowings on senior secured revolving credit
facility - 74
Borrowings (payments) on accounts receivable
securitization program 128 (40)
Issuance of convertible notes - 200
Repayment of notes (5) (227)
Borrowings (payments) on lines of credit and
other, net 4 (1)
Net change in debt 127 6
Debt issuance and extinguishment costs (6) (10)
Proceeds from exercise of stock options - 6
Cash dividends (15) (14)
Other financing activities - (1)
Net financing cash flows used for discontinued
operations - (1)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 106 (14)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES
ON CASH AND CASH EQUIVALENTS 6 6
CHANGE IN CASH AND CASH EQUIVALENTS (32) (128)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 409 350
CASH AND CASH EQUIVALENTS AT END OF PERIOD $377 $222

ARVINMERITOR, INC.
SELECTED FINANCIAL INFORMATION - RECONCILIATION
Non-GAAP
(Unaudited, in millions, except per share amounts)

Q2 FY 08
Before
Q2 FY 08 Special
Reported Restructuring Items

Sales $1,781 $- $1,781
Gross Margin 167 - 167
Operating Income 56 5 61
Income from Continuing Operations 24 3 27
Diluted Earnings Per Share - Continuing
Operations $0.33 $0.04 $0.37

Segment EBITDA:
Commercial Vehicle Systems $84 $- $84
Light Vehicle Systems 19 5 24
Total Segment EBITDA $103 $5 $108

Segment EBITDA Margins
Commercial Vehicle Systems 7.0% 7.0%
Light Vehicle Systems 3.2% 4.1%
Total Segment EBITDA Margins 5.8% 6.1%

ARVINMERITOR, INC.
SELECTED FINANCIAL INFORMATION - RECONCILIATION
Non-GAAP
(Unaudited, in millions, except per share amounts)

Ride Control
Q2 FY 07 Fair Value Product
Reported Adjustments Disruptions Restructuring

Sales $1,627 $- $- $-
Gross Margin 143 - (6) -
Operating Income 17 (10) (6) 37
Income (Loss) from
Continuing Operations (13) (6) (4) 23

Diluted Earnings (Loss)
Per Share - Continuing
Operations $(0.19) $(0.08) $(0.05) $0.32

Segment EBITDA:
Commercial Vehicle Systems $60 $- $(9) $8
Light Vehicle Systems 8 (10) 3 29
Total Segment EBITDA $68 $(10) $(6) $37

Segment EBITDA Margins
Commercial Vehicle Systems 5.6%
Light Vehicle Systems (1) 1.4%
Total Segment EBITDA Margins 4.2%

Debt Q2 FY 07 Before
Extinguishment Income Taxes Special Items

Sales $- $- $1,627
Gross Margin - - 137
Operating Income - - 38
Income (Loss) from Continuing
Operations 4 8 12
Diluted Earnings (Loss) Per
Share - Continuing
Operations $0.06 $0.11 $0.17

Segment EBITDA:

Commercial Vehicle Systems $- $- $59
Light Vehicle Systems - - 30
Total Segment EBITDA $- $- $89

Segment EBITDA Margins
Commercial Vehicle Systems 5.5%
Light Vehicle Systems (1) 5.2%
Total Segment EBITDA Margins 5.4%

(1) LVS margins before special items are adjusted to reflect the impact of
reduced volumes in our Brussels operation.

ARVINMERITOR, INC.
EBITDA Before Special Items Reconciliation
Non-GAAP
(Unaudited, in millions)

Quarter Ended
March 31,
2008 2007

Total EBITDA - Before Special Items $104 $77
Restructuring Costs (5) (37)
Ride Control Fair Value Adjustment - 10
Product Disruptions - 6
Loss on Sale of Receivables (5) (1)
Depreciation and Amortization (36) (34)
Interest Expense, net (20) (34)
Provision for Income Taxes (14) -
Income (Loss) From Continuing Operations $24 $(13)

ARVINMERITOR, INC.
FREE CASH FLOW - RECONCILIATION
Non-GAAP
(Unaudited, in millions)

Quarter Ended
March 31,
2008 2007

Cash provided by (used for) operating activities $163 $(30)
Less: Capital expenditures (1) (29) (41)
Free cash flow $134 $(71)

(1) Includes capital expenditures of discontinued operations of $13
million in the prior year.

ArvinMeritor, Inc.

COVINGTON, Ky., April 29 /PRNewswire-FirstCall/ — Ashland Inc. today announced preliminary* net income for the quarter ended March 31, 2008, the second quarter of its fiscal year, of $72 million, or $1.13 per share. In the prior-year quarter, net income was $49 million, or 77 cents per share. Net income in the March 2008 quarter benefited from a gain of $23 million, or 37 cents per share, from the partial resolution with Marathon Oil Corp. of certain tax matters related to the MAP Transaction. Discontinued operations in the March 2007 quarter benefited from net income of $18 million, or 28 cents per share, reflecting the improved credit quality of a significant portion of Ashland’s asbestos insurance receivable. Also in the March 2007 quarter, net income was reduced by an after-tax charge of $15 million, or 24 cents per share, for costs associated with Ashland’s voluntary severance offer (VSO).
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Operating income for the March 2008 quarter totaled $52 million, or $56 million when excluding a $4.5 million write-off related to a joint venture project to manufacture bio-based propylene glycol. Operating income for the March 2007 quarter was $41 million, or $66 million when adjusted to exclude the $25 million pre-tax charge related to the VSO. Ashland believes the use of these adjusted operating income figures enhances understanding of its performance.
Business Summary
Commenting on Ashland’s second-quarter results, Chairman and Chief Executive Officer James J. O’Brien said, “Valvoline continued to perform well and achieved record second-quarter and first-half operating income, despite some pressure on margins. While operating income was below prior year for our Ashland Distribution and Ashland Performance Materials businesses, we’re encouraged that both divisions showed strongly improved earnings on a sequential basis versus the prior period. These improvements more than offset a $2.0 million loss in our Ashland Water Technologies business, which experienced both higher selling, general and administrative costs and contracting margins during the quarter.”
Business Performance
Performance Materials’ operating income of $19.5 million compares with $22.7 million for the March 2007 quarter, a 14-percent decline. Sales and operating revenues of $398 million increased 6 percent, and volume per day increased 2 percent, both as compared with the March 2007 quarter. Revenue and volume growth were aided by the elimination of a one-month non-North American- entity reporting lag in the fourth fiscal quarter last year, but reduced by the transfer of certain sales from Performance Materials to Water Technologies. Excluding these effects and the impact of currency translation, volume per day would have declined by 1 percent, and revenue would have declined 2 percent. Performance Materials’ results versus the prior year largely reflect weak margins in the Specialty Polymers and Adhesives business unit.
Distribution’s operating income declined to $13.1 million for the March 2008 quarter as compared with $20.1 million in the same prior-year quarter. Volume per day declined 5 percent, while sales and operating revenues increased 7 percent versus the prior-year quarter to $1,082 million. The volume decline reflects primarily the combination of a maintenance shutdown at a major supplier; last year’s termination of the Dow North American plastics supply agreement; and the decision to forego certain low-margin business. Gross profit as a percent of sales declined to 7.7 percent from 9.0 percent in the prior-year quarter, while average unit selling price increased by 14 percent.
Valvoline achieved record second-quarter operating income of $24.1 million as compared with $22.4 million in the year-ago quarter. Sales and operating revenues of $401 million increased 5 percent over the March 2007 quarter, due primarily to price increases. Strong profit growth from both the Valvoline Instant Oil Change(R) business and Valvoline International drove results for the quarter. Valvoline’s total lubricant volume increased 1 percent, essentially all from private-label business, which carries a lower margin. In addition, raw material cost increases received in November impacted the entire second quarter, whereas the benefit of price increases to customers was not fully realized in the quarter. As a result, gross profit as a percent of sales declined 1.2 percentage points versus the 2007 March quarter.
Water Technologies reported an operating loss of $2.0 million for the March 2008 quarter as compared with operating income of $6.2 million in the prior-year quarter. Sales and operating revenues of $217 million increased 14 percent over the 2007 March quarter. Excluding the effect of currency translation, the elimination of the non-North American reporting lag and the impact of the transfer of certain sales from Performance Materials, revenues increased by 2 percent. Gross profit as a percent of sales declined by 1.5 percentage points versus the year-ago quarter. The margin decline primarily reflects rising costs for hydrocarbon and derivative materials, along with the impact of serving a global market from production facilities situated in the strong Euro-currency region. Significant selling, general and administrative expense increases were another major contributor to the earnings decline.
Other Items
For the 2008 second quarter, Unallocated and Other was a net expense of $3.1 million. This amount includes the $4.5 million write-off related to the bio-based propylene glycol joint venture project. Due to persistently high glycerine input costs, this project has been suspended for the time being. Unallocated and Other in the 2007 March quarter was a net expense of $30.5 million, which included the $25 million charge related to the VSO.
Net interest income was $8 million in the March 2008 quarter as compared with $9 million in the same prior-year-quarter. During the 2008 second quarter, favorable developments regarding a certain foreign tax matter reduced Ashland’s tax expense by $10 million. The effective tax rate for the second quarter was 12.3 percent. Excluding the effects of this foreign tax matter and the previously mentioned tax-related settlement with Marathon, the effective tax rate for the quarter was 33 percent.
Outlook
Commenting on the outlook for the remainder of fiscal 2008, O’Brien said, “While we are reasonably pleased with Ashland’s progress in a difficult economic environment, we are obviously disappointed with Water Technologies’ results.
“We started making changes in the Water Technologies business over a year ago and the progress has been slower than we would like. We are focused on improvements in several key areas, including pricing, cost to serve and product line profitability. This will require substantial work, but I believe this is essential to get the business turned around. This business provides significant upside potential once these improvements are made.
“Performance Materials’ results will continue to reflect the softness in the North American construction and transportation markets. Our European and Asian sales remain strong. We received some significant raw material cost increases this month and have countered with price increases in our Composite Polymers business effective May 1. In addition, as part of a broader examination of all of our businesses for opportunities to optimize pricing and cost structures, we have already taken steps to reduce selling, general and administrative costs in our Specialty Polymers and Adhesives business. The June quarter is historically Performance Materials’ strongest quarter. That said, our optimism for the June quarter is tempered by uncertainty in our end markets.
“While Distribution’s third-quarter performance will likely continue to be affected by weakness in North American industrial output, the business also traditionally benefits from seasonality. Distribution has made significant strides in pricing discipline and inventory reductions. Our focus on gross profit yielded an increase of 0.2 percentage point over the December 2007 quarter and 0.7 percentage point over the September quarter. While rising chemical and plastics costs remain a concern, we continue to be focused on achieving both margin improvement and volume growth and are positioned well within the distribution marketplace. In addition, the discontinuance of the Dow North American plastics supply agreement, which occurred March 1 a year ago, will no longer impact subsequent quarterly comparisons.
“As the summer driving season commences, we are entering Valvoline’s traditionally stronger half, but we face some headwinds in the form of raw material cost increases relative to our announced price increases. Even so, we expect our Valvoline Instant Oil Change and Valvoline International segments to continue the positive trends of the first half, and we remain generally positive about the outlook for Valvoline.
“Our continued focus on working capital management produced tangible benefits in the quarter. While revenues increased 8 percent versus the December 2007 quarter, we were able to reduce working capital employed in the business by $57 million. We are pleased with this progress, but we still have much work to do to achieve our goals.”
Concluding his comments, O’Brien said, “Although we face a challenging economic environment, we believe our businesses are generally well-positioned to compete. We are taking decisive action to improve Water Technologies and Performance Materials. Our solid balance sheet enables us to strengthen our competitive position in the quarters ahead, and we look to the remainder of the year with measured optimism.”
Conference Call Webcast
Today at 10 a.m. (EDT), Ashland will provide a live webcast of its second- quarter conference call with securities analysts. The webcast will be accessible through Ashland’s website, . Following the live event, an archived version of the webcast will be available for 12 months at .
Ashland Inc. , a diversified, global chemical company, provides quality products, services and solutions to customers in more than 100 countries. A FORTUNE 500 company, it operates through four divisions: Ashland Performance Materials, Ashland Distribution, Valvoline and Ashland Water Technologies. To learn more about Ashland, visit .
(R) Registered trademark, Ashland Inc.
FORTUNE 500 is a registered trademark of Time Inc.
* Preliminary Results Financial results are preliminary until Ashland’s quarterly report on Form 10-Q is filed with the U.S. Securities and Exchange Commission.
Forward-Looking Statements This news release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, with respect to Ashland’s operating performance. These estimates are based upon a number of assumptions, including those mentioned within this news release. Such estimates are also based upon internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, weather, operating efficiencies and economic conditions, such as prices, supply and demand, cost of raw materials, and legal proceedings and claims (including environmental and asbestos matters). Although Ashland believes its expectations are based on reasonable assumptions, it cannot assure the expectations reflected herein will be achieved. This forward-looking information may prove to be inaccurate and actual results may differ significantly from those anticipated if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized or if other unexpected conditions or events occur. Other factors and risks affecting Ashland are contained in Ashland’s Form 10-K for the fiscal year ended Sept. 30, 2007. Ashland undertakes no obligation to subsequently update or revise the forward-looking statements made in this news release to reflect events or circumstances after the date of this release.
Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME
(In millions except per share data - preliminary and unaudited)

Three months ended Six months ended
March 31 March 31
——————– ——————
2008 2007 2008 2007
——- ——- ——- ——-
SALES AND OPERATING REVENUES $ 2,059 $ 1,915 $ 3,964 $ 3,717

COSTS AND EXPENSES
Cost of sales and operating
expenses 1,725 1,575 3,314 3,064
Selling, general and
administrative expenses (a) 292 309 573 574
——- ——- ——- ——-
2,017 1,884 3,887 3,638
EQUITY AND OTHER INCOME 10 10 21 20
——- ——- ——- ——-
OPERATING INCOME 52 41 98 99
Gain (loss) on the MAP
Transaction (b) 22 (4) 22 (4)
Net interest and other financing
income 8 9 21 25
——- ——- ——- ——-
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 82 46 141 120
Income tax expense 10 15 31 36
——- ——- ——- ——-
INCOME FROM CONTINUING OPERATIONS 72 31 110 84
Income (loss) from discontinued
operations (net of income taxes)
(c) - 18 (5) 14
——- ——- ——- ——-
NET INCOME $ 72 $ 49 $ 105 $ 98
======= ======= ======= =======
DILUTED EARNINGS PER SHARE
Income from continuing operations $ 1.13 $ .49 $ 1.74 $ 1.30
Income (loss) from discontinued
operations - .28 (.09) .22
——- ——- ——- ——-
Net income $ 1.13 $ .77 $ 1.65 $ 1.52
======= ======= ======= =======
AVERAGE COMMON SHARES AND ASSUMED
CONVERSIONS 63 64 63 64

SALES AND OPERATING REVENUES
Performance Materials $ 398 $ 376 $ 769 $ 742
Distribution 1,082 1,008 2,072 1,956
Valvoline 401 382 781 734
Water Technologies 217 190 423 368
Intersegment sales (39) (41) (81) (83)
——- ——- ——- ——-
$ 2,059 $ 1,915 $ 3,964 $ 3,717
======= ======= ======= =======
OPERATING INCOME
Performance Materials $ 20 $ 23 $ 31 $ 48
Distribution 13 20 19 34
Valvoline 24 22 44 40
Water Technologies (2) 6 3 12
Unallocated and other (a) (3) (30) 1 (35)
——- ——- ——- ——-
$ 52 $ 41 $ 98 $ 99
======= ======= ======= =======

(a) The three and six months ended March 31, 2007 includes a $25 million
charge for costs associated with Ashland’s voluntary severance offer.
(b) “MAP Transaction” refers to the June 30, 2005 transfer of Ashland’s
38% interest in Marathon Ashland Petroleum LLC (MAP) and two other
businesses to Marathon Oil Corporation. The income for the current
periods presented is primarily due to a $23 million gain associated
with a tax settlement agreement entered into with Marathon Oil
Corporation, relating to four specific tax areas, that supplement the
original Tax Matters Agreement from the initial MAP Transaction. The
loss in the prior periods presented reflects adjustments in the
recorded receivable for future estimated tax deductions related
primarily to environmental and other postretirement reserves.
(c) The three and six months ended March 31, 2007 includes income of $18
million, net of income taxes, from an increase in Ashland’s asbestos
insurance receivable.

Ashland Inc. and Consolidated Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions - preliminary and unaudited)

March 31
——————-
2008 2007
——- ——-
ASSETS
Current assets
Cash and cash equivalents $ 847 $ 584
Available-for-sale securities 74 371
Accounts receivable 1,498 1,448
Inventories 545 576
Deferred income taxes 68 86
Other current assets 83 79
——- ——-
3,115 3,144

Investments and other assets
Auction rate securities 254 -
Goodwill and other intangibles 385 375
Asbestos insurance receivable (noncurrent portion) 443 449
Deferred income taxes 145 194
Other noncurrent assets 421 438
——- ——-
1,648 1,456

Property, plant and equipment
Cost 2,178 2,045
Accumulated depreciation and amortization (1,163) (1,088)
——- ——-
1,015 957
——- ——-
$ 5,778 $ 5,557
======= =======
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt $ 3 $ 10
Trade and other payables 1,129 1,143
Income taxes 4 22
——- ——-
1,136 1,175

Noncurrent liabilities
Long-term debt (less current portion) 64 67
Employee benefit obligations 259 318
Asbestos litigation reserve (noncurrent portion) 539 569
Other noncurrent liabilities and deferred credits 484 507
——- ——-
1,346 1,461

Stockholders’ equity 3,296 2,921
——- ——-
$ 5,778 $ 5,557
======= =======

Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In millions - preliminary and unaudited)
Six months ended
March 31
——————-
2008 2007
——- ——-
CASH FLOWS FROM OPERATING ACTIVITIES FROM
CONTINUING OPERATIONS
Net income