8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2004

ARVINMERITOR, INC.
(Exact name of registrant as specified in its charter)

Indiana
(State or other jurisdiction
of incorporation)
1-15983
(Commission
File No.)
38-3354643
(IRS Employer
Identification No.)

2135 West Maple Road
Troy, Michigan
(Address of principal executive offices)

48084-7186
(Zip code)

Registrant’s telephone number, including area code: (248) 435-1000

Item 7. Financial Statements and Exhibits

              (c) Exhibits

              99a – Press release of ArvinMeritor, Inc., dated July 28, 2004.

              99b – Presentation made on earnings conference call, July 28, 2004

Item 12. Results of Operations and Financial Condition

              On July 28, 2004, ArvinMeritor, Inc. issued a press release reporting its financial results for the quarter ended June 30, 2004. The release is furnished as Exhibit 99a to this Form 8-K.

              On July 28, 2004, ArvinMeritor, Inc. held a web-cast conference call, available to the public, to discuss its financial results for the quarter ended June 30, 2004. The presentation made on the conference call is posted on the ArvinMeritor website (www.arvinmeritor.com) and is furnished as Exhibit 99b to this Form 8-K.

SIGNATURES

              Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ARVINMERITOR, INC.


By: /s/ Vernon G. Baker, II
       —————————————
            Vernon G. Baker, II
            Senior Vice President and General Counsel

Date: July 28, 2004

EXHIBIT INDEX

Exhibit No.	Description
99a	Press release of ArvinMeritor, Inc., dated July 28, 2004.
99b	Presentation made on earnings conference call, July 28, 2004

EX-99.A

Exhibit 99a

CONTACTS: Media Inquiries
Lin Cummins
(248) 435-7112
linda.cummins@arvinmeritor.com

Investor Inquiries
Alice McGuire
(248) 655-2159
alice.mcguire@arvinmeritor.com

ArvinMeritor Reports Fiscal Year 2004 Third-Quarter Results

              TROY, Mich., (July 28, 2004) — ArvinMeritor, Inc. (NYSE:ARM) today reported record sales of $2.4 billion and net income of $53 million, or $0.77 per diluted share, for its third fiscal quarter ended June 30, 2004, compared to the prior fiscal year’s third-quarter net income of $47 million, or $0.69 per diluted share.

              Sales increased $279 million, or 13 percent, from the prior year’s third quarter. On a constant currency basis, sales would have been up approximately 10 percent on stronger North American commercial vehicle truck and trailer volumes and new business awards in the Light Vehicle Systems business. Net income in the quarter increased 13 percent from a year ago, despite higher raw material costs, primarily steel of approximately $18 million, after tax. Operating income for the quarter was $102 million, a five-percent improvement compared to the same period last year.

              ArvinMeritor Chairman and Chief Executive Officer Larry Yost said, “We are pleased to report a substantial improvement in sales and net income, compared to the same period last year. This improvement was driven by our Commercial Vehicle Systems business group, which continued to benefit from stronger North American Class 8 truck and trailer volumes.”

              Specific business segment financial results include:

  • Light Vehicle Systems (LVS) sales were $1,250 million, up $55 million, or five percent, from the third quarter of fiscal year 2003. Excluding the effect of currency and dispositions, LVS sales would have been higher by approximately six percent. Operating income of $38 million was down $8 million from the same period last year, and was unfavorably impacted by $10 million of higher steel costs. Operating margin was 3.0 percent, down from 3.8 percent in the prior year.

  • Commercial Vehicle Systems (CVS) sales were $862 million, up $217 million, or 34 percent, from last year’s third quarter, primarily as a result of stronger North American commercial vehicle truck and trailer volumes. Excluding the effect of currency, sales would have been up approximately 32 percent. Operating income was $53 million, $15 million higher than the same period last year, resulting in operating margins of 6.1 percent, up from 5.9 percent in the prior year. Operating margins increased, despite higher steel costs of approximately $10 million, investments in commercial vehicle exhaust technology and the consolidation of the transmission business after the dissolution of the transmission joint venture with ZF Friedrichshafen.

During the third quarter, CVS completed the sale of its Kenton, Ohio, trailer-beam fabrication facility, continuing the company’s strategy to divest non-core businesses and improve return on invested capital.

  • Light Vehicle Aftermarket (LVA) sales were $224 million, nearly flat compared to last year’s third quarter. On a constant currency basis, sales would have been lower than the prior year by approximately three percent. Operating income was $4 million during the quarter, down $6 million, when compared to the same period a year ago. Weaker European markets and $5 million in higher steel costs accounted for the operating income decline.

Nine-Month Summary

              For the first nine months of fiscal year 2004, sales were $6.8 billion, up $1.0 billion, or 17 percent, compared to the same period last year. Sales would have been up approximately eight percent, or $460 million, without the effect of currency translation of $345 million and incremental revenues of $203 million associated with the fiscal year 2003 acquisition of the majority interest in Zeuna Stärker. Operating income for the first nine months of fiscal year 2004 was $232 million, compared to $233 million in the same period last year. Year-to-date operating income includes approximately $35 million in higher steel costs.

              Net income increased 10 percent to $113 million for the first nine months of fiscal year 2004, compared to a year ago, resulting in $1.65 per diluted share, up from $1.52 per diluted share in the same period last year.

Outlook

              “We have lowered our fiscal year 2004 outlook for light vehicle production to 15.9 million vehicles in North America, slightly down from our previous estimate of 16.1 million vehicles, while holding the forecast for Western Europe at 16.6 million vehicles,” Yost said. “We are increasing our Class 8 truck production outlook in North America to 234,000 units, up from our previous estimate of 227,000 units.

              “We expect to achieve record sales of $9.1 billion for our full fiscal year, based on strong North American heavy-duty truck and trailer volumes,” Yost continued. “While we believe our CVS business group will benefit from these higher volumes, in the fourth quarter we will face challenges posed by the availability and higher prices of steel. We expect fourth-quarter diluted earnings per share in the range of $0.55 to $0.60, and full-year earnings between $2.20 to $2.25.

              “We remain committed to cash generation and reducing debt. We have reduced our net debt(1) by $167 million, while contributing $207 million to our pension and retiree medical plans over the last 12 months. We believe this trend will continue, and we expect to generate between $140 million and $160 million in free cash flow(2) in fiscal year 2004.

              “We are pleased with our performance in the third quarter, as we saw our sales and earnings grow year-over-year. We remain committed to our strong focus on customers and to delivering engineering and technology solutions that move the world. I retire with confidence that ArvinMeritor is well-positioned to further strengthen our reputation as one of the nation’s premier supplier companies to the motor vehicle industry, under the strong leadership of Chip McClure.”

              ArvinMeritor, Inc. is a premier $8 billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and related aftermarkets. Headquartered in Troy, Mich., the company employs approximately 32,000 people at more than 150 manufacturing facilities in 27 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: www.arvinmeritor.com.

# # #

              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.

              This press release contains certain non-GAAP financial measures including net debt (1), free cash flow (2), and percentage changes in sales in constant currency. Such measures should not be considered substitutes for any measures derived in accordance with generally accepted accounting principles, and may also be inconsistent with similar measures presented by other companies. Reconciliation of these non-GAAP measures to the most nearly comparable GAAP measures, if applicable, is presented on our website, www.arvinmeritor.com, in the fiscal year third quarter earnings conference call presentation.

Notes

(1) The company defines net debt as balance sheet debt less the fair value adjustment of debt due to interest rate swaps plus amounts outstanding under its accounts receivable securitization and factoring programs less cash.

(2) The company defines free cash flow as cash flow from operations before the change in accounts receivable securitization and factoring programs less capital expenditures.

This press release also 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. 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 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; availability and cost of raw materials; 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 customers and suppliers; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations; 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 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; as well as other risks and uncertainties, including, but not limited to, those detailed from time to time in the filings of the company with the Securities and Exchange Commission.

ArvinMeritor, Inc. (NYSE:ARM) will host a telephone conference call to discuss the company’s fiscal year 2004 third-quarter financial results on Wednesday, July 28, 2004, at 10:00 a.m. (ET). To participate, call (706) 643-7449 10 minutes prior to the start of the call. Please reference ArvinMeritor when dialing in. Investors can also listen to the conference call in real time —or for 90 days by recording — by visiting www.arvinmeritor.com. A replay of the call will be available from 11:00 a.m. (ET) July 28, until midnight, July 30, 2004, by calling 1-800-642-1687 within the United States and Canada or (706) 645-9291 for international calls. Please refer to conference ID number 8398417.

ARVINMERITOR, INC.
STATEMENT OF CONSOLIDATED INCOME
(Unaudited, in millions, except per share amounts)

	Quarter Ended June 30,						Nine Months Ended June 30,
	2004			2003			2004			2003
Sales	$	2,388		$	2,109		$	6,822		$	5,811
Cost of Sales		(2,159	)		(1,896	)		(6,210	)		(5,238	)
Gross Margin		229			213			612			573
Selling, General and Administrative		(123	)		(111	)		(363	)		(326	)
Gain on Divestitures		—			—			20			2
Restructuring Costs		(4	)		(5	)		(13	)		(16	)
Environmental Remediation Costs		—			—			(8	)		—
Costs for Withdrawn Tender Offer		—			—			(16	)		—
Operating Income		102			97			232			233
Equity in Earnings of Affiliates		5			4			12			6
Gain on Sale of Marketable Securities		—			—			7			—
Interest Expense, Net and Other		(26	)		(26	)		(77	)		(78	)
Income Before Income Taxes		81			75			174			161
Provision for Income Taxes		(24	)		(24	)		(51	)		(52	)
Minority Interests		(4	)		(4	)		(10	)		(6	)
Net Income	$	53		$	47		$	113		$	103
Diluted Earnings Per Share	$	0.77		$	0.69		$	1.65		$	1.52
Diluted Average Shares Outstanding		68.8			67.8			68.6			67.6

ARVINMERITOR, INC.
CONSOLIDATED BUSINESS SEGMENT INFORMATION
(Unaudited, in millions)

	Quarter Ended June 30,				Nine Months Ended June 30,
	2004		2003		2004			2003
Sales:
Light Vehicle Systems	$	1,250	$	1,195	$	3,740		$	3,262
Commercial Vehicle Systems		862		645		2,316			1,806
Light Vehicle Aftermarket		224		225		621			626
Other		52		44		145			117
Total Sales	$	2,388	$	2,109	$	6,822		$	5,811
Operating Income:
Light Vehicle Systems	$	38	$	46	$	115		$	117
Commercial Vehicle Systems		53		38		123			91
Light Vehicle Aftermarket		4		10		2			22
Other		7		3		8			3
Segment Operating Income		102		97		248			233
Costs for Withdrawn Tender Offer		—		—		(16	)		—
Operating Income	$	102	$	97	$	232		$	233

ARVINMERITOR, INC.
SUMMARY CONSOLIDATED BALANCE SHEET
(In millions)

	June 30, 2004		September 30, 2003
	(Unaudited)
ASSETS
Cash	$	122	$	103
Receivables		1,751		1,327
Inventories		579		543
Other Current Assets		239		253
Property, Net		1,248		1,332
Goodwill		985		951
Other Assets		705		731
Total	$	5,629	$	5,240
LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term Debt	$	5	$	20
Accounts Payable		1,460		1,311
Accrued and Other Current Liabilities		644		534
Other Liabilities		771		871
Long-term Debt		1,585		1,541
Minority Interests		64		64
Equity		1,100		899
Total	$	5,629	$	5,240

ARVINMERITOR, INC.
SUMMARY STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited, in millions)

	Nine Months Ended June 30,
	2004			2003
OPERATING ACTIVITIES
Net Income	$	113		$	103
Adjustments to Income:
Depreciation and Amortization		164			161
Restructuring costs, Net of Expenditures		1			2
Gain on Sale of Marketable Securities		(7	)		—
Gain on Divestitures		(20	)		(2	)
Pension and Retiree Medical Expense		99			73
Pension and Retiree Medical Contributions		(185	)		(141	)
Change in Receivable Securitization and Factoring		(115	)		148
Changes in Assets and Liabilities		(65	)		(138	)
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES		(15	)		206
INVESTING ACTIVITIES
Capital Expenditures		(108	)		(119	)
Proceeds from Dispositions of Property and Businesses		85			42
Acquisitions of Businesses and Investments, Net of Cash Acquired		—			(104	)
Proceeds from Sale of Marketable Securities		18			—
Other Investing Activities		(1	)		—
CASH USED FOR INVESTING ACTIVITIES		(6	)		(181	)
FINANCING ACTIVITIES
Net Change in Revolving Debt		45			44
Net Change in Other Debt		5			(22	)
Net Change in Debt		50			22
Proceeds from Stock Option Exercises		5			—
Cash Dividends		(21	)		(20	)
CASH PROVIDED BY FINANCING ACTIVITIES		34			2
IMPACT OF CURRENCY ON CASH		6			20
CHANGE IN CASH		19			47
CASH AT BEGINNING OF PERIOD		103			56
CASH AT END OF PERIOD	$	122		$	103

EX-99.B

1

July 28, 2004

Fiscal Year 2004 3^rd Quarter
Earnings Conference Call

Larry Yost, Chairman and CEO
Carl Soderstrom, Senior Vice President and CFO

This presentation contains “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on currently
available competitive, financial and economic data and management’s views and
assumptions regarding future events.  Such forward-looking statements are inherently
uncertain, and 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 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;
availablity and cost of raw materials; OEM program delays; demand for and market
acceptance of new and existing products; reliance on major OEM customers; labor relations
of the company, its customers and suppliers; successful integration of acquired or merged
businesses; achievement of the expected annual savings and synergies from past and future
business combinations; 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 access capital markets; the 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; as well as other risks
and uncertainties, including but not limited to those detailed herein and from time to time in
ArvinMeritor’s Securities and Exchange Commission filings.

Forward-Looking Statements

2

3^rd Quarter Income Statement

(in millions, except per share amounts)

2004

2003

$

%

Sales

2,388

$      

2,109

$        

279

$         

13%

Cost of Sales

(2,159)

(1,896)

(263)

-14%

Gross Margin

229

213

16

8%

SG&A

(123)

(111)

(12)

-11%

Restructuring Costs

(4)

(5)

1

20%

Operating Income

102

97

5

5%

Equity in Earnings of Affiliates

5

4

1

25%

Interest Expense, Net and Other

(26)

(26)

-

0%

Income Before Income Taxes

81

75

6

8%

Provision for Income Taxes

(24)

(24)

-

0%

Minority Interests

(4)

(4)

-

0%

Net Income

53

$            

47

$            

6

$              

13%

Diluted EPS

0.77

$         

0.69

$         

0.08

$         

12%

Operating Margin

4.3%

4.6%

(0.3)

pts

Better/(Worse)

Quarter Ended June 30,

3

3^rd Quarter Segment Sales

(in millions)

2004

2003

$

%

Sales

Light Vehicle Systems

North America

524

$         

511

$         

13

$           

3%

Europe

604

561

43

8%

South America

45

44

1

2%

Asia-Pacific and Other

77

79

(2)

-3%

    Total

1,250

1,195

55

5%

Commercial Vehicle Systems

North America

532

394

138

35%

Europe

224

177

47

27%

South America

34

23

11

48%

Asia-Pacific and Other

72

51

21

41%

    Total

862

645

217

34%

Light Vehicle Aftermarket

North America

151

165

(14)

-8%

Europe

56

53

3

6%

South America

9

1

8

 800%

Asia-Pacific and Other

8

6

2

 33%

    Total

224

225

(1)

0%

Other - North America

52

_________

44

_________

8

_________

18%

    Total

2,388

$     

2,109

$     

279

$         

13%

Quarter Ended June 30,

 Better/(Worse)

4

3^rd Quarter Segment Operating Income

(in millions)

2004

2003

$

%

Operating Income

Light Vehicle Systems

38

$           

46

$            

(8)

$            

-17%

Commercial Vehicle Systems

53

38

15

39%

Light Vehicle Aftermarket

4

10

(6)

-60%

Other

7

3

4

133%

         Total Operating Income

102

$         

97

$            

5

$            

5%

Operating Margin

Light Vehicle Systems

3.0%

3.8%

(0.8)

pts

Commercial Vehicle Systems

6.1%

5.9%

0.2

pts

Light Vehicle Aftermarket

1.8%

4.4%

(2.6)

pts

Other

13.5%

6.8%

6.7

pts

        Total Operating Margin

4.3%

4.6%

(0.3)

pts

Quarter Ended June 30,

Better/(Worse)

5

Balance Sheet Highlights

(in millions)

June 30,

Mar. 31,

Dec. 31,

Sept. 30,

June 30,

2004

2004

2003

2003

2003

Cash

122

$         

119

$         

137

$         

103

$         

103

$        

Short-term Debt

5

$            

3

$            

12

$           

20

$           

12

$         

Long-term Debt

1,585

1,527

1,572

1,541

1,562

Total Debt

1,590

$      

1,530

$      

1,584

$      

1,561

$      

1,574

$     

Minority Interests

64

68

73

64

73

Equity

1,100

1,051

1,024

899

1,040

Total Debt to Capital

58%

58%

59%

62%

59%

Net Debt (1)

1,590

1,601

1,694

1,696

1,757

Factored Receivables

9

16

70

47

89

Securitized Receivables

142

225

223

237

263

Working Capital  (2)

616

661

673

562

622

Working Capital % of Sales (3)

6.7%

7.4%

7.1%

7.5%

6.5%

(1)

Net debt is calculated as total debt less fair value of interest rate swaps plus factored and
securitized receivables less cash.

(2)

Includes accounts receivable securitization and factored receivables and excludes cash and
short term debt.

(3)

Calculated using quarterly average working capital and current quarter annualized sales.

6

Cash Flow Highlights

(in millions)

2004

2003

Net income

113

$                  

103

$                  

Adjustments to Income:

   Depreciation and Amortization

164

161

   Gain on Sale of Marketable Securities

(7)

-

   Restructuring Costs, Net of Expenditures

1

2

   Gain on Divestitures

(20)

(2)

   Pension and Retiree Medical Expense

99

73

   Pension and Retiree Medical Contributions

(185)

(141)

   Changes in Assets and Liabilities

(65)

(138)

Cash Provided by Operations (Ex. AR Secur. and Factoring)

100

58

   Accounts Receivable Securitization and Factored Receivables

(115)

148

Cash (Used for) Provided by Operating Activities

(15)

$                  

206

$                  

Capital Expenditures

(108)

$                 

(119)

$                 

Acquistions of Businesses and Investments, Net of Cash Acquired

-

(104)

Proceeds from Dispositions of Property and Businesses

85

42

Proceeds from Sale of Marketable Securities

18

-

Other Investing Activities

(1)

-

Cash Used for Investing Activities

(6)

$                    

(181)

$                 

   Net Change in Revolving Debt

45

$                    

44

$                    

   Net Change in Other Debt

5

(22)

Net Increase in Debt

50

22

Proceeds from the Exercise of Stock Options

5

-

Cash Dividends

(21)

(20)

Cash Provided by Financing Activities

34

$                    

2

$                     

Nine Months Ended June 30,

7

FY 2004 Light Vehicle

Production Outlook

(in millions)

Calendar

Q1

Q2

Q3

Q4

Full Year

Year

North America

2004 Outlook

3.9

4.2

4.2

3.6

15.9

15.9

2003 Actual

3.9

4.2

4.2

3.7

16.0

16.0

Change

0%

0%

0%

-3%

-1%

-1%

Western Europe (1)

2004 Outlook

4.3

4.3

4.4

3.6

16.6

16.5

2003 Actual

4.2

4.4

4.4

3.7

16.7

16.8

Change

2%

-2%

0%

-3%

-1%

-2%

(1) - Includes Czech Republic

Source: CSM Worldwide, Inc.

Fiscal Year Ended September 30

8

Light Vehicle Systems Net New Business

(in millions)

Implied

Actual

Annual

2003

2004

2005

2006

Cumulative

Growth

4,355

$      

236

$      

226

$      

118

$      

580

$            

4%

Sales

Incremental

9

FY 2004 Commercial Vehicle
Production Outlook

(in thousands)

Calendar

Q1

Q2

Q3

Q4

Full Year

Year

North America - Class 8 Trucks (1)

2004 Outlook

47

54

64

69

234

251

2003 Actual

41

35

43

45

164

170

Change

15%

54%

49%

53%

43%

48%

Western Europe - Heavy & Medium Trucks

2004 Outlook

95

93

98

90

376

374

2003 Actual

98

93

92

81

364

361

Change

-3%

0%

7%

11%

3%

4%

(1) - Includes U.S., Canada and Mexico

Fiscal Year Ended September 30

10

FY 2004 Sales Outlook

(in millions)

Sales FY 2003

7,788

$   

7,788

$   

Light Vehicle Systems

523

-

528

Commercial Vehicle Systems

749

-

754

Light Vehicle Aftermarket

1

-

6

Other

29

-

29

Total Change

1,302

-

1,317

Sales FY 2004

9,090

$   

-

9,105

$   

FY 2004

Full Year Outlook

11

Full Year FY 2004 Outlook

(in millions, except EPS)

FY 2003

Full Year

Sales

7,788

$           

9,090

$   

-

9,105

$      

Operating Margin

4.0%

3.4%

-

3.5%

Net Income Before Acctg. Change

(1)

140

$               

151

$      

-

155

$         

Diluted EPS Before Acctg. Change

(1)

2.06

$              

2.20

$      

-

2.25

$        

Note (1):  FY 2003 excludes the cumulative effect of an accounting change due to

the adoption of FIN 46 of $4 million ($0.06 per diluted share).

Note (2):  Outlook does not include the impact of any future acquisitions or divestitures.

Full Year Outlook (2)

FY 2004

12

Planned Facility Closures and Workforce
Reduction Costs and Savings

(in millions)

Q1

Q2

Q3

Q4

Full Year

Pre-tax Charge

(1)

$            

(8)

$            

(4)

$            

(6)

$               

(19)

$            

Pre-tax Savings

-

1

4

6

11

Net Pre-tax Impact

(1)

$            

(7)

$            

-

$               

-

$                  

(8)

$            

Diluted Earnings Per Share

(0.01)

$         

(0.07)

$         

-

$               

-

$                  

(0.08)

$         

Fiscal Year 2004 Forecast

Actual

13

FY 2004 Free Cash Flow Outlook

(in millions)

Net Income

151

$      

-

155

$      

Adjustments to Income

Depreciation and Other Amortization

215

-

220

Pension and Retiree Medical Expense

130

-

130

Pension and Retiree Medical Contributions

(205)

-

(210)

Changes in Assets and Liabilities

34

-

60

Cash Provided by Operations

325

-

355

Capital Expenditures

(185)

-

(195)

Free Cash Flow

140

$      

-

160

$      

Net Proceeds from Acquisitions and Divestitures (1)

102

$      

-

102

$      

Cash Dividends ($0.40 per share)

(28)

$        

-

(28)

$        

(1) Includes sale of businesses, property and marketable securities.

Note: Does not include the effects of any changes in A/R securitization and factoring

or any future acquisitions or divestitures.

Full Year

FY 2004

14

4^th Quarter FY 2004 Sales Outlook

(in millions)

Sales FY 2003 Fourth Quarter

1,977

$   

1,977

$   

Light Vehicle Systems

42

-

47

Commercial Vehicle Systems

239

-

244

Light Vehicle Aftermarket

6

-

11

Other

1

-

1

Total Change

288

-

303

Sales FY 2004 Fourth Quarter

2,265

$   

-

2,280

$   

FY 2004

4th Quarter Outlook

15

4^th Quarter FY 2004 Outlook

(in millions, except EPS)

FY 2003

4th Quarter

Sales

1,977

$            

2,265

$   

2,280

$   

Operating Margin

3.8%

3.4%

-

3.6%

Net Income (1)

37

$                 

38

$         

-

41

$         

Diluted Earnings Per Share (1)

0.54

$              

0.55

$      

-

0.60

$      

(1)  FY 2003 excludes the cumulative effect of an accounting change due to the

      adoption of FIN 46 of $4 million ($0.06 per diluted share).

(2)  Outlook does not include the impact of any acquistions or divestitures.

FY 2004

4th Quarter Outlook (2)

16

Appendix

Non-GAAP Financial Information

17

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 certain non-GAAP financial
measures.  These measures include “net debt”, “sales in constant currency” and “free cash flow”.  Net debt is defined as total
debt less the fair value adjustment of debt due to interest rate swaps, plus securitized and factored receivables, less cash.  
Free cash flow represents net cash provided by operating activities before the net change in accounts receivable securitized or
factored, less capital expenditures.  The Company believes it is appropriate to exclude the net change in securitized and
factored  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 that the non-GAAP financial measures used in this presentation are useful to both management and
investors in their analysis of the Company’s financial position and results of operations.  In particular, management believes
that net debt is an important indicator of the Company’s overall leverage and free cash flow is useful in analyzing the
Company’s ability to service and repay its debt.  Further, management uses these non-GAAP measures for planning and
forecasting in future periods.

Neither, net debt nor free cash flow should be considered substitutes for debt, cash provided by operating activities or other
balance sheet or cash flow statement data prepared in accordance with GAAP or as a measure of financial position or liquidity.  
In addition, the calculation of free cash flow does not reflect cash used to service debt and thus, does not reflect funds
available for investment or other discretionary uses.  These non-GAAP financial measures, as determined and presented by
the Company, may not be comparable to related or similarily 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.

18

Non-GAAP Financial Information

Net Debt

(in millions)

June 30,

Mar. 31,

Dec. 31,

Sept. 30,

June 30,

2004

2004

2003

2003

2003

Total Debt

1,590

$   

1,530

$   

1,584

$   

1,561

$   

1,574

$   

Less:

Fair value of interest rate swaps

(29)

(51)

(46)

(46)

(66)

Plus:  

Receivable securitization

142

225

223

237

263

Plus:  

Receivable factorization

9

16

70

47

89

   Subtotal

1,712

1,720

1,831

1,799

1,860

Less:

Cash

(122)

(119)

(137)

(103)

(103)

    Net Debt

1,590

$   

1,601

$   

1,694

$   

1,696

$   

1,757

$   

19

Non-GAAP Financial Information

Sales in Constant Currency

(in millions)

Sales

Reported

Sales

Approximate

Currency

Impact

Sales in

Constant

Currency

Light Vehicle Systems

1,250

$            

(55)

$               

1,195

$            

Commercial Vehicle Systems

862

(10)

852

Light Vehicle Aftermarket

224

(5)

219

Other

52

-

52

Total

2,388

$            

(70)

$               

2,318

$            

Quarter Ended June 30, 2004

20

21