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arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
arvinmeritor UBS_Debt_Conference_050907
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arvinmeritor UBS_Debt_Conference_050907

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  • 1. UBS 2007 Leveraged Finance Conference May 9, 2007 UBS 2007 Leveraged Finance Conference Mary Lehmann, Vice President and Treasurer May 9, 2007 1
  • 2. UBS 2007 Leveraged Finance Conference May 9, 2007 Forward-Looking Statements This presentation contains statements relating to future results of the company (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 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; risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of production and supply due to terrorist attacks or acts of aggression); availability and cost of raw materials, including steel; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products; reliance on major OEM customers; labor relations of the company, its suppliers and customers, including potential disruptions in supply of parts to our facilities or demand for our products due to work stoppages; the financial condition of the company’s suppliers and customers, including potential bankruptcies; possible adverse effects of any future suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations and the ability to achieve the expected benefits of restructuring actions; success and timing of potential divestitures; potential impairment of long-lived assets, including goodwill; competitive product and pricing pressures; the amount of the company’s debt; the ability of the company to continue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company’s debt; the outcome of existing and any future legal proceedings, including any litigation with respect to environmental or asbestos-related matters; rising costs of pension and other post-retirement benefits and possible changes in pension and other accounting rules; as well as other risks and uncertainties, including but not limited to those detailed herein and from time to time in other filings of the company with the SEC. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. 2
  • 3. UBS 2007 Leveraged Finance Conference May 9, 2007 Highlights • FY 2007 EPS guidance before special items of $0.70 to $0.80 • Optimistic about 2008-2009 commercial vehicle volumes • Light Vehicle Systems margins on improving trend • Performance Plus profit improvement plan will add $150 million to EBITDA by 2009 with restructuring and cost reductions alone • Incremental opportunity from growth initiatives • Sale of Emissions Technologies unit on track to close this quarter 3
  • 4. UBS 2007 Leveraged Finance Conference May 9, 2007 Status of Emissions Technologies Sale • Transaction is on track to close this quarter • Received anti-trust approvals from all jurisdictions • All major elements of the deal are as reported on February 2 • Proceeds to be used to improve balance sheet and fund restructuring and growth initiatives 4
  • 5. UBS 2007 Leveraged Finance Conference May 9, 2007 Second Quarter Income Statement from Continuing Operations – Before Special Items(1) (in millions, except per share amounts) Three Months Ended March 31, Better/(Worse) 2007 2006 $ % Sales $ 1,627) $ 1,629) $ (2) 0% Cost of Sales (1,490) (1,477) (13) -1% GROSS MARGIN 137) 152) (15) -10% SG&A (99) (89) (10) -11% OPERATING INCOME 38) 63) (25) -40% Equity in Earnings of Affiliates 7) 7) -) 0% Interest Expense, Net and Other (28) (35) 7) 20% INCOME BEFORE INCOME TAXES 17) 35) (18) -51% Provision for Income Taxes (2) (7) 5) 71% Minority Interests (3) (4) 1) 25% INCOME FROM CONTINUING OPERATIONS $ 12) $ 24) $ (12) -50% DILUTED EARNINGS PER SHARE Continuing Operations $ 0.17) $ 0.34) $ (0.17) -50% (1) See Appendix – “Non-GAAP Financial Information” 5
  • 6. UBS 2007 Leveraged Finance Conference May 9, 2007 Segment EBITDA Before Special Items(1) Quarter Ended March 31, (in millions) Better/(Worse) 2007 2006 $ % EBITDA Light Vehicle Systems $ 30) $ 16) $ 14) 88% Commercial Vehicle System 59) 88) (29) -33% Segment EBITDA 89) 104) (15) -14% Unallocated Corporate Costs (1) -) (1) -100% ET Corporate Allocations (11) (6) (5) -83% Total EBITDA $ 77) $ 98) $ (21) -21% EBITDA Margins Light Vehicle Systems (2) 5.2% 2.8% 2.4 pts Commercial Vehicle System 5.5% 8.3% -2.8 pts Segment EBITDA Margins 5.4% 6.4% -1.0 pts Total EBITDA Margins 4.7% 6.0% -1.3 pts (1) See Appendix – “Non-GAAP Financial Information” 6 (2) Adjusted to reflect the impact of reduced volumes in our Brussels operation
  • 7. UBS 2007 Leveraged Finance Conference May 9, 2007 LVS EBITDA Margin Improvement Showcases Improving Operational Excellence(1) Fiscal Q2 2007 Compared to Fiscal Q2 2006 EBITDA Margin (2) Fiscal Q2 2006 2.8 % 1.6 Cost Reductions Net of Pricing North America Volume (1.1) Other Volume 1.5 Other Improvements 0.4 Net Improvement 2.4% Fiscal Q2 2007 5.2% (1) See Appendix – “Non-GAAP Financial Information” (2) Excluding gains or losses on divestitures, restructuring costs, and other special items 7
  • 8. UBS 2007 Leveraged Finance Conference May 9, 2007 Discontinuation of Emissions Technologies In millions; excludes asset impairment 1H After Divestiture 1H Before Divestiture Revenue COGS 38 Continuing ET Specific SG&A Operations Corporate Costs (18) Corporate Costs (18) x EBITDA 20 EBITDA (18) Revenue Discontinued COGS 38 Operations ET Specific SG&A EBITDA 0 EBITDA 38 8
  • 9. UBS 2007 Leveraged Finance Conference May 9, 2007 Free Cash Flow(1) Quarter Ended In millions March 31, 2007 2006 Income (Loss) from Continuing Operations $ (13) $ 32 Net Spending (D&A less Capital Expenditures) 6 9 Pension and Retiree Medical Net of Contributions (63) 12 Performance Working Capital (2) (7) (56) Off Balance Sheet Securitization and Factoring 17 5 Restructuring, Disc. Ops. and Other (11) (67) Free Cash Flow $ (71) $ (65) (1) See Appendix – “Non-GAAP Financial Information” (2) Change in payables less changes in receivables, inventory and customer tooling 9
  • 10. UBS 2007 Leveraged Finance Conference May 9, 2007 Balance Sheet Is a Competitive Strength(1) Net debt Debt-to-capitalization ratio (millions) 63% 61% $1,629 Book value 59% $1,368 56% $1,338 55% 57% 56% $1,007 $872 54% 51% Market value 2003 2004 2005 2006 Mar. 31 2003 2004 2005 2006 Mar. 31 Unfunded pension liability Term debt due within 5 years (millions) (millions) $659 $948 $561 8-3/4% due $696 March 2012 $469 $409 $368 $299 $265 Projected $93 status at 9/30/07 2003 2004 2005 2006 2007 2003 2004 2005 2006 Mar. 31 (1) See Appendix – “Non-GAAP Financial Information” 10
  • 11. UBS 2007 Leveraged Finance Conference May 9, 2007 Global Pension Plan Funded Status In millions 2006 Year-End Underfunded Status $ (409) Discount Rate (-50 bps in U.S and Canada) (85) UK Elective Contribution (1) 40 Other Plan Year Activity (2) 124 Plan Freeze 30 ET Divestiture 35 Estimated 2007 Underfunded Status $ (265) (1) $10 million pull-ahead and $30 million incremental 2007 contributions applied to significantly reduce underfunding levy over next six years (2) Includes other plan contributions and asset returns net of interest and service cost 11
  • 12. UBS 2007 Leveraged Finance Conference May 9, 2007 Fiscal Year 2007 Outlook Continuing Operations Before Special Items FY 2007 Full Year Outlook (1) (in millions except tax rate and EPS) ̶ Sales $ 6,000 $ 6,200 ̶ EBITDA 275 295 ̶ Interest Expense (95) (105) ̶ Effective Tax Rate 8% 12% Income from Continuing ̶ $ 50 $ 57 Operations ̶ Diluted Earnings Per Share 0.70 0.80 ̶ Free Cash Flow 50 100 (1) Excluding gains or losses on divestitures, restructuring costs, and other special items 12
  • 13. UBS 2007 Leveraged Finance Conference May 9, 2007 FY 2007 Outlook vs. Prior Continuing Operations Before Special Items Sales Estimated (millions) EPS (1) Previous Guidance $5,900 – $6,100 $1.00 – $1.10 Weaker North America Truck Market (50) – (75) (0.10) – (0.15) Lower Achievement of NA Offsets (25) – (50) (0.05) – (0.10) Stronger European Truck Volumes 125 – 175 0.10 – 0.15 Lower EU Productivity & Volume Penalties (0.15) – (0.20) Unrecovered Commodity Cost Increases (0.05) Updated FY 2007 Guidance Range $6,000 – $6,200 $0.70 – $0.80 (1) Excluding gains or losses on divestitures, restructuring costs, and other special items 13
  • 14. UBS 2007 Leveraged Finance Conference May 9, 2007 Improvement Factors 2007 2008 2009 CY -48% +47% +20% North America Class 8 Demand FY -35% +12% +25% Performance Plus Cost +$75 +$75 Baseline Initiatives (YOY) million million Performance Plus Baseline +$TBD +$TBD Growth Initiatives EBITDA EBITDA Profitability Profitable +50% +30% Cash Flow Positive Improved Improved 14
  • 15. UBS 2007 Leveraged Finance Conference May 9, 2007 Factors Affecting 2008-2009 Upturn Tonnage Trends Improving 3.3 3.3 4.9 3.2 Industrial Real 3.4 2.6 2.3 3.7 Production(1) GDP 2.6 2.1 Growth(1) '05 '06 '07 '08 '09 '05 '06 '07 '08 '09 8.0 7.9 1.9 8.0 1.6 2.1 Housing Fleet 7.9 1.5 1.5 Starts(1) Age(2) 7.7 '05 '06 '07 '08 '09 '05 '06 '07 '08 '09 Operating Light 16.8 17.3 Cost of Vehicle 16.4 16.4 16.5 2005 Truck Sales(1) '05 '06 '07 '08 '09 '05 '06 '07 '08 '09 15 (1) (2) Global Insight April 2007 MacKay & Co.
  • 16. UBS 2007 Leveraged Finance Conference May 9, 2007 Performance Plus Goal Top Quartile Financial Performance Among Peer Companies Steering Committee Corporate Officers Operational Excellence Commercial Excellence Approach Cost Improvements Revenue Enhancement Product Strategy & Aftermarket Materials Mfg. Overhead ER&D Growth C. P. Martens & Sponsors C. Reinhardt J. Craig P. Martens J. Craig Reinhardt M. Lehmann Talent Excellence Foundation Sponsor: R. Ostrov Program Office Sponsors: J. Craig and J. Donlon 16
  • 17. UBS 2007 Leveraged Finance Conference May 9, 2007 Performance Plus Profit Improvements Run rate by 2009 in millions Base Risk Net COST Reduce 8%-10% $200-300 $150 Elements ~$350-$450 $5 Billion Base (Addressable Costs) REVENUE Grow $1.2 Billion ~$50-$150 TBD TBD 7-13% Margins Elements Improvement ~$400-$600 17
  • 18. UBS 2007 Leveraged Finance Conference May 9, 2007 Performance Plus High-Confidence Improvement – Adjusted for Emissions Technologies EBITDA Before Special Items 2006 2007 2008 2009 Updated $365 $275-$295 $335-$380 $385-$445 Baseline High-Confidence 75 150 Cost Savings Growth Actions TBD TBD Total $365 $275-$295 $410-$455 $535-$595 18
  • 19. UBS 2007 Leveraged Finance Conference May 9, 2007 Restructuring is a Subset of Performance Plus Calendarization of Restructuring Expenses and Benefits 2007 2008 2009 Total (millions) Restructuring Expense $65 $115 $100 $325 Restructuring Cash $50 $100 $80 $280 Cumulative Annual Run- $5 $25-$30 $75-$80 $130-$140 Rate Benefits by 2011 A Portion Manufacturing Optimization Run Rate In millions $45-$55 Engineering Research & 2009 EBITDA Lever/Sub-Team Development Target In millions Restructuring $35-$40 A 2009 EBITDA Lever/Sub-Team Lean 25-30 Target Portion Total $60-$70 Efficiency TBD Consolidation TBD Overhead In millions Portfolio Net of transition Rationalization/ TBD Net of transition 2009 EBITDA costs, but not Lever/Sub-Team Optimization costs, but not Target restructuring costs Total $TBD restructuring costs Non-Manufacturing $35-$40 Indirect Materials 10-20 Activity/Process Labor 45-50 19 Total $90-$100
  • 20. UBS 2007 Leveraged Finance Conference May 9, 2007 Performance Plus Restructuring North (millions except plants) Europe Total America Restructuring Expense $170 $155 $325 Restructuring Cash $155 $125 $280 Number of Plants Affected 9 4 13 Cumulative Annual Run- $80 - 85 $50 - 55 $130 - $140 Rate Benefits by 2012 20
  • 21. UBS 2007 Leveraged Finance Conference May 9, 2007 Calendarization of Expenses and Benefits (millions) 2007 2008 2009 Total Restructuring Expense $65 $115 $100 $325 Restructuring Cash $50 $100 $80 $280 Cumulative Annual Run- $5 $25-$30 $75-$80 $130-$140 Rate Benefits by 2011 21
  • 22. UBS 2007 Leveraged Finance Conference May 9, 2007 Personnel Reductions Include Manufacturing and White Collar Workers Manufacturing White Collar Total High-Cost Sites Positions Eliminated (2,400) (400) (2,800) ̶ Positions Added 900 900 Net (1,500) (400) (1,900) Low-Cost Sites Positions Added 800 TBD TBD 22
  • 23. UBS 2007 Leveraged Finance Conference May 9, 2007 Detailed Cost Reduction Targets Cost Reductions (millions) 2008 2009 Overhead $ 65 $ 100 Materials 100 200 Manufacturing (20) 65 Risk (70) (215) High Confidence Net of Risk $ 75 $ 150 23
  • 24. UBS 2007 Leveraged Finance Conference May 9, 2007 Overhead In millions 2009 EBITDA Lever / Sub-Team Opportunities Target - Travel and Entertainment Non-Manufacturing $35 – $40 - Reduction in Energy Consumption - Temp Labor - Supplier Consolidation - Re-bid Contracts Indirect Materials 10 – 20 - Demand Management - Commonization (SKU Reduction) - Outsourcing Activity / Process - Outsourcing 45 – 50 Labor - Foot Print Rationalization Total $90 - $110 24
  • 25. UBS 2007 Leveraged Finance Conference May 9, 2007 Material Optimization In millions Lever / Sub- 2009 EBITDA Opportunities Team Target - Material / process standardization - Design improvements for lower cost Design $70 – $75 - Key tools: competitive teardowns and Optimization supplier conferences - Leverage spend across regions and product lines to gain scale 55 – 60 LCCC Sourcing - Invest time and resources to develop world- class suppliers - Understand detailed supplier cost structure and “should-be” costs Clean-Sheet 40 – 45 - Take a total cost approach Negotiations - Transparent and stable relationships with suppliers to jointly eliminate waste - Reduce freight rates across all modes 25 – 30 Freight - Reduce frequency, costly modes, expedites Total $190 – $210 25
  • 26. UBS 2007 Leveraged Finance Conference May 9, 2007 Manufacturing Optimization In millions 2009 EBITDA Lever / Sub-Team Opportunities Target Restructuring $35 – $40 - Optimize manufacturing footprint - Improve productivity through consistent Lean 25 – 30 implementation of lean manufacturing principles Total $60 - $70 26
  • 27. UBS 2007 Leveraged Finance Conference May 9, 2007 Progress to Revenue Improvement Target Revenue growth in millions by 2010 Target Identified $1,000 Initiatives Being $400 Implemented $0 $200 $400 $600 $800 $1,000 $1,200 27
  • 28. UBS 2007 Leveraged Finance Conference May 9, 2007 Product Strategy & Growth: $1 Billion Identified Growth Initiatives • LVS New Products 30% • Chassis systems: wheels, electronic ride control • Apertures: joint product development (roofs/doors) • Asia/Pacific 20% • Increased China LVS OEM growth • Global program awards manufactured in Asia • Specialty and Trailer 20 % • Strong organic growth • Aftermarket/Other 30 % • Global expansion underway • Strong remanufacturing operations • 100% Clear Focus on Higher Margin Products and Growth in Asia 28
  • 29. UBS 2007 Leveraged Finance Conference May 9, 2007 Engineering, Research & Development: Increasing PD Capability and Throughput • Achieve and sustain a competitive cost and technology position • “One ArvinMeritor” Product Development system focused on global synergies • Underlying competencies in engineering delivery being strengthened to support cost reduction efforts • Focus on quality paramount in all technical areas • Deliver “gotta have” products with increased focus on value add • Electronic motors/electronic control systems common focus • Technical acquisitions aimed at accelerating controls/ software development under study • Consolidate and leverage corporate technical capabilities to increase speed to market • Global capability being expanded and realigned to support new product introductions and growth initiatives 29
  • 30. UBS 2007 Leveraged Finance Conference May 9, 2007 Aftermarket Growth: Building on an Existing Strength • Double in three years, triple in five • Leverage strong distribution channel for further organic growth in North America • Strengthen capability and offering in Europe and Asia, replicating successful North American formula • Expand remanufacturing scale and scope 30
  • 31. UBS 2007 Leveraged Finance Conference May 9, 2007 2008-2009 Opportunities Success factors… Market Addressing Pension and Healthcare Issues • Rebounding truck volumes ahead of 2010 emissions • Changed U.S. retirement plan change effective Jan. 1, 2008 • Implemented consumer-driven Launched Performance healthcare initiatives in Jan. Plus Initiatives 2007 • Significant cost savings Solid Balance Sheet • Improve operating efficiency • Develop products and • Reduced debt technologies • Increased liquidity Restructuring Diversified • Enhanced global footprint • Customer base • Consolidate LVS/CVS • Global presence engineering facilities • Product portfolio • Overhead Sound Investment 31
  • 32. UBS 2007 Leveraged Finance Conference May 9, 2007 32
  • 33. UBS 2007 Leveraged Finance Conference May 9, 2007 Appendix 33
  • 34. UBS 2007 Leveraged Finance Conference May 9, 2007 Use of Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included throughout this presentation, the Company has provided information regarding income from continuing operations and diluted earnings per share before special items, which are non-GAAP financial measures. These non-GAAP measures are defined as reported income or loss from continuing operations and reported diluted earnings or loss per share from continuing operations plus or minus special items. Other non-GAAP financial measures include “EBITDA,” “net debt” and “free cash flow”. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and losses on sales of receivables, plus or minus special items. Net debt is defined as total debt less the fair value adjustment of notes due to interest rate swaps, less cash. Free cash flow represents net cash provided by operating activities less capital expenditures. Management believes that the non-GAAP financial measures used in this presentation are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that net debt is an important indicator of the Company’s overall leverage and free cash flow is useful in analyzing the Company’s ability to service and repay its debt. EBITDA is a meaningful measure of performance commonly used by management, the investment community and banking institutions to analyze operating performance and entity valuation. Further, management uses these non-GAAP measures for planning and forecasting in future periods. These non-GAAP measures should not be considered a substitute for the reported results prepared in accordance with GAAP. Neither net debt nor free cash flow should be considered substitutes for debt, cash provided by operating activities or other balance sheet or cash flow statement data prepared in accordance with GAAP or as a measure of financial position or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and thus, does not reflect funds available for investment or other discretionary uses. EBITDA should not be considered an alternative to net income as an indicator of operating performance or to cash flows as a measure of liquidity. 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 slides are reconciliations of these non-GAAP financial measures, if applicable, to the most directly comparable financial measures calculated and presented in accordance with GAAP. 34
  • 35. UBS 2007 Leveraged Finance Conference May 9, 2007 Non-GAAP Financial Information 2nd Qtr FY 2006 Results before Special items Q2 FY 06 Q2 FY 06 Debt BeforeSpecial (in millions, except per share amounts) Reported Environmental Restructuring Extinguishment Income Taxes Items Sales $ 1,629 $ - $ - $ - $ - $ 1,629 Gross Margin 152 - - - - 152 Operating Income 53 3 7 - 63 Income from Continuing Operations 32 2 4 6 (20) 24 Diluted Earnings Per Share - Continuing Operations $ 0.46 $ 0.03 $ 0.06 $ 0.09 $ (0.30) $ 0.34 Segment EBITDA Light Vehicle Systems $ 10 $ - $ 6 $ - $ - $ 16 - 1 - $ - 88 Commercial Vehicle Systems 87 Total Segment EBITDA $ 97 $ - $ 7 $ - $ - $ 104 Segment EBITDA Margins Light Vehicle Systems 1.7% 2.8% Commercial Vehicle Systems 8.3% 8.3% Total Segment EBITDA Margins 6.0% 6.4% 35
  • 36. UBS 2007 Leveraged Finance Conference May 9, 2007 Non-GAAP Financial Information 2nd Qtr EBITDA Reconciliation Quarter Ended (in millions) March 31, 2007 2006 $ 77 $ 98 Total EBITDA - Before Special Items (37) (7) Restructuring Costs 10 - Fair Value Adjustment 6 - Impact of Work Stoppages - (3) Environmental Remediation Costs Loss on Sale of Receivables (1) - Depreciation and Amortization (34) (32) Interest Expense, Net and Other (34) (44) Benefit for Income Taxes - 20 Income (Loss) From Continuing Operations $ (13) $ 32 36
  • 37. UBS 2007 Leveraged Finance Conference May 9, 2007 Non-GAAP Financial Information Free Cash Flow (in millions) Three Months Ended March 31, 2007 2006 Cash Used For Operating Activities $ (30) $ (25) Less: Capital expenditures (41) (40) Free Cash Flow $ (71) $ (65) 37
  • 38. UBS 2007 Leveraged Finance Conference May 9, 2007 Non-GAAP Financial Information Net Debt (in millions) 03/31/07 12/31/06 09/30/06 06/30/06 03/31/06 Short-term debt $ 17 $ 137 $ 56 $ 65 $ 217 Long-term debt 1,220 1,174 1,174 1,275 1,133 Total Debt 1,237 1,311 1,230 1,340 1,350 Less: Cash (222) (369) (350) (365) (236) Less: Fair value adjustment of notes (8) (8) (8) (3) (7) Net Debt $ 1,007 $ 934 $ 872 $ 972 $ 1,107 38
  • 39. UBS 2007 Leveraged Finance Conference May 9, 2007 39

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