10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 1-33332

WABCO Holdings Inc.

(Exact name of Registrant as specified in its charter)

Delaware	20-8481962
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Chaussée de la Hulpe 166 1170 Brussels, Belgium
2770 Research Drive Rochester Hills, MI	48309-3511
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code +32 2 663 98 00

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    o  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.  

Large Accelerated Filer	x		Accelerated Filer	o
Non-Accelerated Filer	o	(Do not check if a smaller reporting company)	Smaller Reporting Company	o
			Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    o  Yes    x  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $.01 par value, outstanding at
July 12, 2017	53,631,155

WABCO HOLDINGS INC. AND SUBSIDIARIES

FORM 10-Q

For the Quarter ended June 30, 2017

Contents
FORM 10-Q		2
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS		3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		4
CONDENSED CONSOLIDATED BALANCE SHEETS		5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS		6
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
PART II. OTHER INFORMATION		32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	32
SIGNATURE		33

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WABCO HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in millions, except share and per share data)	2017			2016			2017			2016
Sales	$	795.0		$	732.2		$	1,542.3		$	1,420.8
Cost of sales	547.5			501.0			1,054.6			974.9
Gross profit	247.5			231.2			487.7			445.9
Operating expenses:
Selling and administrative expenses	99.2			93.1			191.1			179.1
Research, development and engineering expenses	39.1			32.9			77.9			67.6
Other operating expense, net	0.8			1.3			1.8			2.7
Operating income	108.4			103.9			216.9			196.5
Equity income of unconsolidated joint ventures, net	9.4			5.3			15.1			12.5
Other non-operating expense, net	(8.2		)	(6.9		)	(19.0		)	(12.4		)
Interest expense, net	(4.1		)	(3.0		)	(7.9		)	(6.0		)
Income before income taxes	105.5			99.3			205.1			190.6
Income tax expense	14.0			20.4			29.3			121.5
Net income including noncontrolling interests	91.5			78.9			175.8			69.1
Less: net income attributable to noncontrolling interests	4.3			3.8			7.9			7.4
Net income attributable to Company	$	87.2		$	75.1		$	167.9		$	61.7
Net income attributable to Company per common share
Basic	$	1.62		$	1.34		$	3.10		$	1.10
Diluted	$	1.61		$	1.33		$	3.09		$	1.09
Cash dividends per share of common stock	$	—		$	—		$	—		$	—
Weighted average common shares outstanding
Basic	53,966,710			56,074,209			54,131,785			56,279,630
Diluted	54,158,923			56,298,672			54,336,414			56,511,879

See Notes to Condensed Consolidated Financial Statements.

3

WABCO HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Amounts in millions)	2017			2016			2017			2016
Net income including noncontrolling interests	$	91.5		$	78.9		$	175.8		$	69.1
Currency translation adjustments	61.6			(28.5		)	98.1			8.4
Pension and post-retirement benefit plan adjustments, net	(11.9		)	8.1			(10.0		)	4.8
Unrealized gains on hedges, net	—			—			0.1			0.1
Comprehensive income	141.2			58.5			264.0			82.4
Less: comprehensive income attributable to noncontrolling interests	4.5			2.9			10.8			6.7
Comprehensive income attributable to Company	$	136.7		$	55.6		$	253.2		$	75.7

See Notes to Condensed Consolidated Financial Statements.

4

WABCO HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in millions, except share data)	June 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	820.7		$	862.5
Short-term investments	80.1			—
Accounts receivable, less allowance for doubtful accounts of $8.0 in 2017 and $6.5 in 2016	611.4			493.7
Inventories:
Finished products	114.6			102.9
Products in process	13.6			14.2
Raw materials	115.3			106.5
VAT receivable	49.2			65.1
Guaranteed notes receivable	43.0			53.6
Investments in repurchase agreements	139.4			128.7
Other current assets	56.3			46.8
Total current assets	2,043.6			1,874.0
Property, plant and equipment, less accumulated depreciation	432.8			408.6
Goodwill	430.9			399.2
Deferred tax assets	196.7			208.8
Investments in unconsolidated joint ventures	21.0			20.8
Intangible assets, net	77.1			78.9
Other assets	81.9			65.7
TOTAL ASSETS	$	3,284.0		$	3,056.0
LIABILITIES AND EQUITY
Current liabilities:
Loans payable to banks	$	0.2		$	0.2
Accounts payable	192.7			171.9
Accrued payroll	114.9			101.8
Current portion of warranties	29.1			32.2
VAT payable	27.7			40.1
Accrued expenses	73.8			69.4
Promotion and customer incentives	24.8			31.9
Other accrued liabilities	107.1			83.4
Total current liabilities	570.3			530.9
Long-term debt	1,000.9			958.9
Pension and post-retirement benefits	647.1			590.6
Deferred tax liabilities	89.4			138.8
Other liabilities	59.1			69.5
TOTAL LIABILITIES	2,366.8			2,288.7
Shareholders’ equity:
Preferred stock, 4,000,000 shares authorized; none issued and outstanding				—
Common stock, $.01 par value, 400,000,000 shares authorized; shares issued: 78,837,446 in 2017; 78,701,273 in 2016; and shares outstanding: 53,623,224 in 2017; 54,491,918 in 2016	0.8			0.8
Capital surplus	868.2			861.2
Treasury stock, at cost: 25,214,222 shares in 2017; 24,209,355 shares in 2016	(1,862.2		)	(1,744.4		)
Retained earnings	2,329.0			2,161.1
Accumulated other comprehensive loss	(491.9		)	(577.3		)
Total shareholders’ equity	843.9			701.4
Noncontrolling interests	73.3			65.9
Total equity	917.2			767.3
TOTAL LIABILITIES AND EQUITY	$	3,284.0		$	3,056.0

See Notes to Condensed Consolidated Financial Statements.

5

WABCO HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
(Amounts in millions)	2017			2016
Operating activities:
Net income including noncontrolling interests	$	175.8		$	69.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	39.7			35.3
Amortization of intangibles	10.1			11.0
Equity in earnings of unconsolidated joint ventures, net of dividends received	(0.1		)	3.7
Non-cash stock compensation	9.7			7.7
Non-cash interest expense and debt issuance cost amortization	10.8			7.8
Deferred income tax (benefit)/expense	(9.5		)	75.5
Pension and post-retirement benefit expense	29.3			20.8
Gain on sale or disposal of property, plant and equipment	—			(0.3		)
Changes in assets and liabilities:
Accounts receivable, net	(84.2		)	(49.7		)
Inventories	(5.7		)	(12.7		)
Accounts payable	9.9			25.4
Other accrued liabilities and taxes	(15.9		)	31.0
Other current and long-term assets	(0.6		)	13.3
Other long-term liabilities	(15.7		)	(19.0		)
Pension and post-retirement benefit payments	(11.1		)	(10.9		)
Net cash provided by operating activities	142.5			208.0
Investing activities:
Purchases of property, plant and equipment	(35.6		)	(46.9		)
Investments in capitalized software	(3.0		)	(5.0		)
Purchases of short-term investments	(282.0		)	(209.8		)
Sales and maturities of short-term investments	204.8			163.9
Acquisitions of businesses, net	—			(92.9		)
Net cash used in investing activities	(115.8		)	(190.7		)
Financing activities:
Borrowings of long-term debt and revolving credit facilities	0.3			183.0
Net borrowings of short-term debt	—			(2.9		)
Purchases of treasury stock	(120.0		)	(115.6		)
Taxes withheld and paid on employee stock award vestings	(4.2		)	(5.9		)
Dividends to noncontrolling interest holders	(3.5		)	(2.1		)
Proceeds from exercise of stock options	3.8			2.7
Net cash (used)/provided in financing activities	(123.6		)	59.2
Effect of exchange rate changes on cash and cash equivalents	55.1			7.5
Net (decrease)/increase in cash and cash equivalents	(41.8		)	84.0
Cash and cash equivalents at beginning of period	862.5			515.2
Cash and cash equivalents at end of period	$	820.7		$	599.2
Cash paid during the period for:
Interest	$	7.6		$	7.8
Income taxes	$	31.9		$	18.9

See Notes to Condensed Consolidated Financial Statements.

6

WABCO HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2017

(Unaudited)

NOTE 1. Basis of Financial Statement Presentation

WABCO Holdings Inc. and its subsidiaries (collectively WABCO or the Company) engineers, develops, manufactures and sells integrated systems controlling advanced braking, stability, suspension and transmission automation as well as air compression and processing primarily for commercial vehicles. WABCO’s largest selling products are pneumatic anti-lock braking systems (ABS), electronic braking systems (EBS), electronic stability control (ESC), automated manual transmission systems, air disc brakes and a large variety of conventional mechanical products such as actuators, air compressors and air control valves for medium- and heavy-duty trucks, buses and trailers. In addition, we supply commercial vehicle aftermarket distributors and service partners as well as fleet operators with replacement parts, fleet management solutions, diagnostic tools, training and other expert services. WABCO sells its products primarily to four groups of customers around the world: truck and bus original equipment manufacturers (OEMs), trailer OEMs, commercial vehicle aftermarket distributors of replacement parts and services, and automotive OEMs. We also provide remanufacturing services globally.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, including normal recurring items, considered necessary for a fair presentation of financial data have been included. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the entire year. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K.

Based on the organizational structure, as well as the nature of financial information available and reviewed by the Company’s chief operating decision maker to assess performance and make decisions about resource allocations, the Company has concluded that its total WABCO operations represent one reportable segment and that WABCO’s performance and future net cash flow perspectives are best understood and assessed as such. All majority-owned subsidiaries of WABCO are included in the consolidated financial statements and intercompany transactions are eliminated upon consolidation. WABCO’s investments in unconsolidated joint ventures are included at cost plus its equity in undistributed earnings less dividends and changes in foreign currency in accordance with the equity method of accounting and reflected as investments in unconsolidated joint ventures in the consolidated balance sheet. Certain amounts in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year presentation as a result of the Company's adoption during the current year of a new accounting standard. In addition, certain amounts within the cash flows from investing section of the prior year's condensed consolidated statements of cash flows have been expanded to conform to the current year presentation.

Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes 2 and 15 to the Consolidated Financial Statements for the year ended December 31, 2016, in the Company’s Annual Report on Form 10-K, describe the most significant accounting estimates and policies used in the preparation of the Consolidated Financial Statements. Actual results in these areas could differ materially from management’s estimates. There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the first six months of 2017.

NOTE 2. Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In March 2017, the FASB issued Accounting Standards Update 2017-07 (ASU 2017-07) Compensation-Retirement Benefits, in order to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost in the statements of operations. Under ASU 2017-07, the service cost component of the net periodic benefit cost is disclosed in the same income

7

statement line item as other employee compensation costs arising from services rendered during the period, and the other components are reported separately from the line item that includes the service cost and outside of any subtotal of operating income. ASU 2017-07 is effective for annual periods beginning after December 15, 2017 and early adoption is permitted. The Company adopted the provisions of ASU 2017-07 as of January 1, 2017, and applied the change retrospectively in its condensed consolidated statements of operations, by reclassifying respectively $1.2 million from cost of sales and $5.7 million from selling and administrative expenses to other non-operating expenses for the three-month period ended June 30, 2016 , and $2.4 million from cost of sales and $10.2 million from selling and administrative expenses to other non-operating expenses for the six-month period ended June 30, 2016.

In March 2016, the FASB issued ASU 2016-09 Compensation - Stock Compensation, in order to simplify certain aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liability, classification of excess tax benefits, and taxes withheld and paid on employee stock award vestings on the statement of cash flows. ASU 2016-09 requires that companies elect to account for forfeitures based on an estimate of the number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. ASU 2016-09 is effective for the interim and annual periods ending after December 15, 2016. Early adoption is permitted, and the Company adopted the provisions of ASU 2016-09 as of January 1, 2016. The impact from adoption of the provisions related to forfeiture rates was reflected in the Company's condensed consolidated financial statements on a modified retrospective basis, resulting in an adjustment of $0.4 million to retained earnings as of January 1, 2016. Provisions related to income taxes were adopted prospectively resulting in a tax benefit of $1.3 million for 2016. Provisions related to the statement of cash flows were also adopted retrospectively.

Pending Adoption of Recently Issued Accounting Standards

In May 2017, the FASB issued ASU 2017-09 Compensation-Stock Compensation, which provides guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. ASU 2017-09 is effective for the interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16 Intra-entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, which provides guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows in order to reduce diversity in existing practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 Leases, which requires lessees to recognize most leases on the balance sheet. ASU 2016-02 is effective for the interim and annual periods in fiscal years beginning after December 15, 2018. The Company is currently assessing the potential impact of the adoption of this guidance on its condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers, which is a new comprehensive revenue recognition standard on the financial reporting requirements for revenue from contracts entered into with customers. ASU 2014-09 requires revenue to be recognized when a customer obtains control of promised goods or services at an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

ASU 2014-09 was initially effective for interim and annual periods beginning after December 15, 2016. The FASB subsequently deferred the effective date of this standard to December 15, 2017 with early adoption permitted as of December 15, 2016. The Company currently anticipates adopting ASU 2014-09 in the annual period beginning January 1, 2018.

ASU 2014-09 permits two methods of adoption, either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We are still evaluating the transition methods along with a number of practical expedients available under the standard. Successful adoption of ASU 2014-09 is contingent on the completion of an

8

analysis of the cumulative impact on prior periods’ financial information as well as the completion of changes to the accounting information system.

The Company’s implementation of this standard include a project management framework that includes a dedicated lead project manager for assessing the impact that the new standard will have on the Company’s accounting, financial statements and footnote disclosures. The assessment phase of the project has included the identification of the key revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The assessment has resulted in the identification of potential accounting differences that may arise from the application of the new standard. While we are still evaluating all potential impacts of ASU 2014-09, we currently believe the most significant impact relates to our accounting for revenue in relation to our product engineering activities and our sales of products with no alternative use. Specifically, under ASU 2014-09 we expect to recognize all reimbursements received from customers related to product engineering as revenue. We also expect that most revenues from sales to OEM customers of products with no alternative use should be recognized over time instead of at a point in time. Due to the complexity of certain of our agreements with OEM customers, the actual revenue recognition treatment required under ASU 2014-09 will be dependent on contract-specific terms, and may vary in some instances. During the second quarter, the team has continued to make progress on the contract review phase, which includes identifying the population of contracts for a deeper analysis of the potential accounting impacts due to the new standard for individual contracts. A detailed implementation plan for the second half of 2017 has been developed and includes tasks around data gathering, training, implementing the required system and process changes required to support the new model and to quantify the impact on historical results.

We do not expect the pending adoption of other recently issued accounting standards to have an impact on the condensed consolidated financial statements.

NOTE 3. Accumulated Other Comprehensive Loss

The table below presents the changes in accumulated other comprehensive loss for the three and six month periods ended June 30, 2017 and 2016.

9

	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Foreign currency translation adjustments (1):
Balance at beginning of period	$	(294.9	)	$	(235.7	)	$	(328.7	)	$	(271.2	)
Adjustment for the period	61.7			(30.2		)	95.5			5.3
Balance at end of period	(233.2		)	(265.9		)	(233.2		)	(265.9		)
Losses on intra-entity transactions (2):
Balance at beginning of period	(11.4		)	(14.0		)	(11.4		)	(15.2		)
Adjustment for the period	(0.3		)	2.6			(0.3		)	3.8
Balance at end of period	(11.7		)	(11.4		)	(11.7		)	(11.4		)
Unrealized gains on investments:
Balance at beginning of period	0.2			0.2			0.2			0.2
Adjustment for the period	—			—			—			—
Amounts reclassified to earnings, net	—			—			—			—
Balance at end of period	0.2			0.2			0.2			0.2
Unrealized losses on hedges:
Balance at beginning of period	(1.0		)	(1.1		)	(1.0		)	(1.2		)
Adjustment for the period	0.1			—			0.1			—
Amounts reclassified to earnings, net	—			—			—			0.1
Balance at end of period	(0.9		)	(1.1		)	(0.9		)	(1.1		)
Pension and post-retirement plans:
Balance at beginning of period	(234.5		)	(223.8		)	(236.4		)	(220.5		)
Other comprehensive income before reclassifications	(16.3		)	5.3			(18.3		)	0.9
Amounts reclassified to earnings, net (3)	4.5			2.8			8.4			3.9
Balance at end of period	$	(246.3	)	$	(215.7	)	$	(246.3	)	$	(215.7	)
Accumulated other comprehensive loss at end of period	$	(491.9	)	$	(493.9	)	$	(491.9	)	$	(493.9	)

(1) This accumulated other comprehensive loss component includes the realized gain on settled forward contracts accounted for as net investment hedges of $9.3 million, net of taxes of $5.8 million. Additionally, this component includes the unrealized loss on the Senior EUR notes, which have been designated as a net investment hedge, of $19.4 million, net of taxes of $12.2 million. See Note 13 for further discussion.

(2) Relates to intra-entity foreign currency transactions that are of a long term investment nature, when the entities to the transaction are consolidated, combined or accounted for by the equity method in the Company's financial statements.

(3) This accumulated other comprehensive loss component, net of taxes of $1.9 million and $1.1 million for the three months ended June 30, 2017 and 2016 respectively, and $3.6 million and $2.3 million for the six-month period ended June 30, 2017 and 2016 respectively, is included in the computation of net periodic pension cost. See Note 12 for additional details.

NOTE 4. Guaranteed Notes Receivable

The Company holds guaranteed notes receivable from reputable state owned and public enterprises in China that are settled through bankers acceptance drafts, which are registered and endorsed to the Company. These notes receivable are fully guaranteed by banks and generally have contractual maturities of six months or less, but the ultimate recourse remains against the trade debtor.

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These guaranteed drafts are available for discounting with banking institutions in China or transferring to suppliers to settle liabilities. The total amount of notes receivable discounted or transferred for the first six months of 2017 and 2016 were $72.6 million and $50.0 million, respectively. Expenses related to discounting these notes for the six months ended June 30, 2017 amounted to $1.2 million and are included in other non-operating expense, net. Expenses related to discounting for the six months ended June 30, 2016 were immaterial. The fair value of these guaranteed notes receivable is determined based on Level 2 inputs including credit ratings and other criteria observable in the market and equal their carrying amounts of $43.0 million and $53.6 million as of June 30, 2017 and December 31, 2016, respectively.

The Company monitors the credit quality of both the drawers of the drafts and guarantors on a monthly basis by reviewing various factors such as payment history, level of state involvement in the institution, size, national importance as well as current economic conditions in China. Since the Company has not experienced any historical losses nor is expecting future credit losses based on a review of the various credit quality indicators described above, we have not established a loss provision against these receivables as of June 30, 2017 or December 31, 2016.

NOTE 5. Net Income Attributable to Company per Share

Basic net income attributable to Company per share has been computed using the weighted average number of WABCO common shares outstanding. The average number of outstanding shares of common stock used in computing diluted net income attributable to Company per share includes weighted average incremental shares when the impact is not anti-dilutive. The weighted average incremental shares represent the net amount of shares the Company would issue upon the assumed exercise of in-the-money stock options and vesting of restricted stock units (RSUs) and deferred stock units (DSUs) after assuming that the Company would use the proceeds from the exercise of options to repurchase stock. The weighted average incremental shares also includes the net amount of shares issuable for performance stock units (PSUs) at the end of the reporting period, if any, based on the number of shares issuable if the end of the period were the end of the vesting period.

Anti-dilutive shares, if applicable, are excluded and represent those options, RSUs, DSUs and PSUs whose assumed proceeds were greater than the average price of the Company’s common stock.

	Three Months Ended June 30,		Six Months Ended June 30,
	2017	2016	2017	2016
Weighted average incremental shares included	192,213	224,463	204,629	232,249
Shares excluded due to anti-dilutive effect	—	525	—	35,542

NOTE 6. Capital Stock

The following is a summary of net shares outstanding and shares issued or reacquired during the six month period ended June 30, 2017.

	Number of Shares of Common Stock
	Total Shares	Treasury Shares		Net Shares Outstanding
Balance, December 31, 2016	78,701,273	(24,209,355	)	54,491,918
Shares issued upon exercise of stock options	67,995	18,262		86,257
Shares issued upon vesting of RSUs	42,563	2,696		45,259
Shares issued for DSUs	1,090	—		1,090
Shares issued upon vesting of PSUs	24,525	7,175		31,700
Shares purchased for treasury	—	(1,033,000	)	(1,033,000	)
Balance, June 30, 2017	78,837,446	(25,214,222	)	53,623,224

The Company accounts for purchases of treasury stock under the cost method with the costs of such share purchases reflected in treasury stock in the accompanying condensed consolidated balance sheets. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired since the inception of the share repurchase programs, net of shares previously reissued and the Company reflects the difference between the average cost paid and the amount received for the reissued shares

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in capital surplus. As of June 30, 2017 the Company has reissued a total of 71,496 treasury shares related to certain employee vestings under its equity incentive program.

The share repurchase programs approved by the Board of Directors are as follow:

(Amounts in millions)
Date of authorization	Authorized amount		Date of commencement	Date of expiration
May 26, 2011	400.0		June 1, 2011	May 31, 2013
October 26, 2012	400.0		October 26, 2012	December 31, 2014
October 29, 2013	200.0		October 29, 2013	December 31, 2014
December 5, 2014	500.0		December 5, 2014	December 31, 2016
December 2, 2016	600.0		January 1, 2017	December 31, 2018
	$	2,100.0

As of June 30, 2017, the Company has repurchased a total of $1,591.0 million of shares under the five repurchase programs effective through this date, leaving an unexpended balance of $480.0 million available for share repurchases. The Company plans to continue to repurchase shares at prevailing market prices. The timing and amount of share repurchases, if any, will depend on a variety of factors including, among other things, share price, market conditions and applicable regulatory requirements.

NOTE 7. Stock-Based Compensation

The Company records stock-based compensation based on the estimated fair value of the award at the grant date and recognizes that as an expense in the condensed consolidated statements of operations over the requisite service period. The estimated fair value of the award is based on the closing market price of the Company’s common stock on the date of grant.

As part of its equity incentive program, the Company grants PSUs, the vesting of which would occur, if at all, and at levels depending upon, the achievement of three-year cumulative goals tied to earnings per share. The Company assesses the expected achievement levels at the end of each reporting period. The grant date fair value of the number of awards expected to vest based on the Company’s best estimate of ultimate performance against the respective targets is recognized as compensation expense on a straight-line basis over the requisite vesting period of the awards. As of June 30, 2017, the Company believes it is probable that the performance conditions will be met and has recognized compensation expense accordingly.

The Company also grants DSUs to its non-management directors as part of the equity portion of their annual retainer. The DSUs are fully vested at grant. Each DSU provides the right to the issuance of a share of our common stock, within ten days after the earlier of the director’s death or disability, the 13-month anniversary of the grant date or the director’s separation from service. Each director may also elect within a month after the grant date to defer the receipt of shares for five or more years. No election can be made to accelerate the issuance of stock from a DSU.

Total stock-based compensation cost recognized during the three and six month periods ended June 30, 2017 and 2016 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amount in millions)	2017		2016		2017		2016
Stock-based compensation	$	6.2	$	4.3	$	9.7	$	7.7

The total number and type of awards granted during the periods presented and the related weighted-average grant-date fair values were as follows:

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	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
	Underlying Shares	Weighted Average Grant Date Fair Value		Underlying Shares	Weighted Average Grant Date Fair Value
RSUs Granted	72,022	$	114.88	89,868	$	92.27
PSUs Granted	69,034	$	116.41	82,558	$	91.35
DSUs Granted	7,752	$	118.75	9,194	$	105.52
Stock Awards Granted	—	$	—	1,100	$	107.47
Total Awards	148,808			182,720

The RSUs granted during the periods presented above have vesting terms as follow:

	Six Months Ended June 30,
	2017	2016
Vest in equal annual installments over three years	69,253	84,966
Vest after three years	2,769	4,902
Total RSUs granted	72,022	89,868

NOTE 8. Debt

Senior EUR Notes

On November 15, 2016, the Company issued an aggregate amount of €440 million of senior unsecured notes (collectively, the Senior EUR Notes) as follows:

(Amounts in millions)	Face value		Coupon		Maturity Date
Series D Notes	€	190.0	0.84	%	November 15, 2023
Series E Notes	80.0		1.20	%	November 15, 2026
Series F Notes	170.0		1.36	%	November 15, 2028
	€	440.0

The Company paid approximately $1.4 million of debt issuance costs in connection with the Senior EUR Notes, which has been presented in the condensed consolidated balance sheets as a direct reduction of the related debt liability. Interest on the Senior EUR Notes will be payable semi-annually on January 1 and July 1 of each year, commencing July 1, 2017. As of June 30, 2017, the outstanding debt balance net of unamortized debt issuance costs was $502.1 million. This debt balance included a revaluation loss of $19.4 million, net of taxes of $12.2 million, related to these notes that has been recognized in cumulative translation adjustment within accumulated other comprehensive income. See Note 13 for further discussion.

The proceeds from the Senior Notes were partially utilized to repay the outstanding balance on our revolving credit facilities. The remaining proceeds are intended to fund our share repurchase program, finance acquisitions, refinance existing indebtedness and meet general financing requirements.

Subject to certain conditions, the Company may, at its option, prepay all or part of the Senior EUR Notes plus any accrued and unpaid interest to the date of prepayment and certain penalties as defined in the note purchase agreement (the EUR Note Purchase Agreement). The Company may also be required, subject to certain events and conditions, to make an offer to prepay all of the Senior EUR Notes including any accrued and unpaid interest to the date of prepayment. Each holder has the option to accept or reject such offer to prepay.

The EUR Note Purchase Agreement contains customary affirmative and negative covenants, and financial covenants consisting of a consolidated net indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for certain items) ratio of not more than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months, as well as a consolidated EBITDA to consolidated net interest expense ratio of not less than three

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times at the end of each fiscal quarter based upon the preceding twelve consecutive months. The EUR Note Purchase Agreement also provides for customary events of default, the occurrence of which could result in an acceleration of the Company's obligations under the EUR Note Purchase Agreement. We were in compliance with all of the covenants as of June 30, 2017.

The Company also agreed to indemnify the note purchasers holding Senior EUR Notes that are subject to a swap agreement for certain potential losses associated with swap breakage resulting from a prepayment of the Senior EUR Notes or from an acceleration of the Senior EUR Notes as a result of an event of default.

Senior USD Notes

On June 25, 2015, the Company issued an aggregate amount of $500.0 million of senior unsecured notes (collectively, the Senior Notes) as follows:

(Amounts in millions)	Face value		Coupon		Maturity Date
Series A Notes	$	150.0	2.83	%	June 25, 2022
Series B Notes	200.0		3.08	%	June 25, 2025
Series C Notes	150.0		3.18	%	June 25, 2027
	$	500.0

The Company paid approximately $2.1 million of debt issuance costs in connection with the Senior Notes, which has been presented in the condensed consolidated balance sheets as a direct reduction of the related debt liability. Interest on the Senior Notes is payable semi-annually on January 1 and July 1 of each year, commencing January 1, 2016. As of June 30, 2017, the outstanding debt balance net of unamortized debt issuance costs was $498.3 million.

The proceeds from the Senior Notes were partially utilized to repay the outstanding balance on our revolving credit facilities. The remaining proceeds are intended to fund our share repurchase program, finance acquisitions, refinance existing indebtedness and meet general financing requirements.

Subject to certain conditions, the Company may, at its option, prepay all or part of the Senior Notes plus any accrued and unpaid interest to the date of prepayment and certain penalties as defined in the note purchase agreement (Note Purchase Agreement). The Company may also be required, subject to certain events and conditions, to make an offer to prepay all of the Senior Notes including any accrued and unpaid interest to the date of prepayment. Each holder has the option to accept or reject such offer to prepay.

The Note Purchase Agreement contains customary affirmative and negative covenants, and financial covenants consisting of a consolidated net indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for certain items) ratio of not more than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months, as well as a consolidated EBITDA to consolidated net interest expense ratio of not less than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months. The Note Purchase Agreement also provides for customary events of default, the occurrence of which could result in an acceleration of the Company's obligations under the Note Purchase Agreement. We were in compliance with all of the covenants as of June 30, 2017.

Revolving Credit Facilities

On July 8, 2011, the Company entered into a $400 million multi-currency five-year senior unsecured revolving credit facility which was amended and restated on September 30, 2015 (the 2015 Facility, previously referred to as the 2011 Facility) to, among other things, extend the original expiry date (subject to two 1-year extension options) and amend the applicable margins on the original revolving credit facility. The term of the 2015 Facility was subsequently extended by an additional one year to expire on September 30, 2021. As of June 30, 2017, this is our principal bank credit facility.

On December 17, 2014, the Company entered into a new $100 million multi-currency five-year senior unsecured revolving credit facility (the 2014 Facility) which will expire on December 17, 2019.

Under the revolving credit facilities, the Company may borrow, on a revolving basis, loans in an aggregate principal amount at any one time outstanding not in excess of $500 million. Up to $30 million under the 2015 Facility may be used for issuing letters of credit, of which $30 million was unused as of June 30, 2017, and up to $50 million is available in the form of swing line loans, all $50 million of which was available for use as of June 30, 2017.

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As of June 30, 2017 and December 31, 2016, there were no balances outstanding on these facilities and an incremental ability to borrow $500 million.

Interest on loans under the revolving credit facilities will be calculated at a rate per annum equal to an applicable margin, which can vary from 0.45% to 1.00% for both the 2014 Facility and the 2015 Facility based on the Company's leverage ratio, plus LIBOR for loans denominated in U.S. Dollars, EURIBOR for loans denominated in Euros, HIBOR for loans denominated in Hong Kong Dollars and SIBOR for loans denominated in Singapore Dollars, plus mandatory costs, if any.

The revolving credit facilities contain terms and provisions (including representations, covenants and conditions) customary for credit agreements of this type. Our primary financial covenant is a leverage test which requires net indebtedness not to exceed three times adjusted four quarter trailing EBITDA. Additional financial covenants include an interest coverage test and a maximum subsidiary indebtedness test. The interest coverage test requires three times interest expense not to exceed adjusted four quarter trailing EBITDA. The maximum subsidiary indebtedness test limits the total aggregate amount of indebtedness of WABCO's subsidiaries, excluding indebtedness under the facilities, to $500 million under both the 2014 Facility and the 2015 Facility, of which not more than $150 million may be secured. All cash, cash equivalents and short-term investments on the balance sheet can be deducted for net indebtedness purposes. In addition, expenses and payments related to any streamlining of WABCO’s operations are excluded when calculating the four quarter trailing adjusted EBITDA. Other covenants include delivery of financial reports and other information, compliance with laws including environmental laws and permits, ERISA and U.S. regulations, limitations on liens, mergers and sales of assets and change of business. We were in compliance with all of the covenants as of June 30, 2017.

Other Debt

As of June 30, 2017, the Company's various subsidiaries had borrowings from banks totaling $0.7 million, of which $0.5 million was classified as long-term debt. The remaining $0.2 million supports local working capital requirements. This is in comparison to $0.8 million as of December 31, 2016 of which $0.6 million was classified as long-term debt.

NOTE 9. Warranties, Guarantees, Commitments and Contingencies

Warranties

Products sold by WABCO are covered by a basic limited warranty with terms and conditions that vary depending upon the product and country in which it was sold. The limited warranty covers the equipment, parts and labor (in certain cases) necessary to satisfy the warranty obligation generally for a period of two years. Estimated product warranty expenses are accrued in cost of goods sold at the time the related sale is recognized. Estimates of warranty expenses are based primarily on warranty claims experience and specific customer contracts. Warranty expenses include accruals for basic warranties for product sold, as well as accruals for product recalls, service campaigns and other related events when they are known and estimable. Recoveries from suppliers are recognized when an arrangement with the supplier exists and collectibility is assured. Amounts recognized as recoveries do not exceed related warranty costs accrued. To the extent WABCO experiences changes in warranty claim activity or costs associated with servicing those claims, its warranty accrual is adjusted accordingly. Warranty accrual estimates and the allocation of warranty between short and long term are updated based upon the most current warranty claims information available.

The following is a summary of changes in the Company’s product warranty liability for the three and six month periods ended June 30, 2017 and 2016.

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	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Balance of warranty costs accrued, beginning of period	$	48.9		$	43.4		$	49.3		$	40.9
Warranty costs accrued	7.5			6.9			11.9			12.7
Warranty claims settled	(10.8		)	(6.8		)	(16.3		)	(11.5		)
Foreign exchange translation effects	2.4			(0.8		)	3.1			0.6
Balance of warranty costs accrued, end of period	$	48.0		$	42.7		$	48.0		$	42.7
Current liability, included in current portion of warranties	$	29.1		$	24.7		$	29.1		$	24.7
Long-term liability, included in other liabilities	$	18.9		$	18.0		$	18.9		$	18.0
Warranty costs accrued	$	7.5		$	6.9		$	11.9		$	12.7
Less: received and anticipated recoveries from suppliers	(1.3		)	—			(1.6		)	(0.6		)
Warranty costs net of received and anticipated recoveries	$	6.2		$	6.9		$	10.3		$	12.1

In 2016, the Company initiated a recall and service campaign related to certain defects in components from one of our suppliers. The defective parts impacted certain shipments to our customers over a two month period. The Company currently estimates the costs of the warranty campaign to be $28.8 million, the majority of which concluded in the second quarter of 2017. The Company also expects substantially all of the costs to be recovered from its supplier and has reflected this within other current assets on the condensed consolidated balance sheets.

Guarantees and Commitments

The Company has uncollateralized bank guarantees for $37.4 million, of which $30.2 million is related to statutorily-required guarantees for tax and other litigation, $0.2 million is related to letters of credit, and $7.0 million is related to other individually immaterial items.

Right of Recourse

As discussed in Note 4, the Company may receive bankers acceptance drafts from customers in China in payment of outstanding accounts receivable in the ordinary course of business. These banker's acceptance drafts are non-interest bearing obligations of the issuing bank andgenerally have contractual maturities of six months or less. The Company may use these bankers acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Bankers acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity date. As of June 30, 2017 and as of December 31, 2016, the Company had approximately $31.4 million and $24.3 million, respectively, of bankers acceptance drafts subject to customary right of recourse provisions, which were transferred to vendors and had not reached their scheduled maturity date. Historically, the bankers acceptance drafts have settled upon maturity without any claim of recourse against the Company.

Contingencies

We are subject to proceedings, lawsuits and other claims related to products and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable and reasonably possible losses. A determination of the amount of liability to be recorded, if any, for these contingencies is made after careful analysis of each individual issue.

Under an indemnification agreement, WABCO Brazil is responsible for certain claims related to its business for periods prior to the spin-off of WABCO from Trane. In particular, there are tax claims pending in various stages of the Brazilian legal process related to income, social contribution and/or value added taxes for which a contingency exists and which may or may not ultimately be incurred by the Company. The estimated total amount of the contingency as of June 30, 2017 was $43.1 million including interest. However, based on management’s assessment and advice of our external legal counsel, the Company believes that it has valid arguments in all of these cases and thus no accrual is required at this time.  

This estimated total amount includes a contingency for one particular case that the Company is currently appealing to be heard at the Brazilian Superior Court of Justice and for which we continue to believe we have a valid legal position.

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A corresponding deposit of $11.3 million was made in the first quarter of 2017 into an escrow account with the Brazilian government and represents substantially all of the potential liability for that case.

NOTE 10. Income Taxes

Income tax expense is the net result of taxes on the mix of earnings in multiple tax jurisdictions, foreign tax credits and rulings, the assessment and accrual of uncertain tax positions resulting from tax authority audits or changes in the interpretation of the law. For interim income tax reporting we estimate our annual effective tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

The income tax expense was $29.3 million on pretax income of $205.1 million before adjusting for noncontrolling interest for the six months ended June 30, 2017, and $121.5 million on pretax income of $190.6 million for the six months ended June 30, 2016. The decrease in income tax expense is primarily related to a non-cash tax expense of $86.4 million related to the Belgian Excess Profit Ruling (EPR) program recorded in the first quarter of 2016.

Unrecognized tax benefits at June 30, 2017 amounts to $75.1 million, of which $1.7 million was classified as a long-term liability. The remaining unrecognized tax benefits of $73.4 million, including the $71.1 million related to the clawback under the EPR program, were classified as a reduction to deferred tax assets, since they are non-cash unrecognized tax benefits. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. With no material exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2008.

NOTE 11. Streamlining Expenses

The Company accounts for employee-related streamlining charges as either a one-time benefit arrangement or an ongoing benefit arrangement as appropriate. From time to time the Company also has streamlining charges that are not related to employees, such as facility exit costs.

In the third quarter of 2015, the Company announced proposals to cease manufacturing at two production facilities to preserve the Company's global competitiveness for certain mechanical products. These proposals would result in a workforce reduction of approximately 320 positions and includes a smaller program initiated in the fourth quarter of 2014 (the 2014/2015 Program). Production at both facilities is expected to be transferred to other facilities within the Company's globally integrated supply chain by the end of 2017.

Based on the Company’s efforts to maintain our global footprint, the Company has periodically entered into other streamlining programs as deemed necessary which may include workforce reductions, site closures and rotation of manufacturing footprint to low cost regions (Other Programs).

The following is a summary of changes in the Company’s streamlining program liabilities for the six month period ended June 30, 2017.

17

(Amounts in millions)
2014 / 2015 Program
Balance as of December 31, 2016	$	27.8
Reversals for the first six months of 2017	0.2
Payments during the first six months of 2017	(6.3		)
FX effects	2.1
Balance as of June 30, 2017	$	23.8
Other Programs
Balance as of December 31, 2016	$	23.4
Charges during the first six months of 2017	1.2
Payments during the first six months of 2017	(4.9		)
FX effects	2.0
Balance as of June 30, 2017	$	21.7
Total streamlining liability as of June 30, 2017	$	45.5

A balance of $22.0 million has been included in other liabilities (non-current) and $23.5 million has been included in other accrued liabilities (current) as of June 30, 2017.

The following is a summary of current and cumulative streamlining costs related to the above programs:

	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program		Other Programs
Employee-related charges – cost of sales	$	1.5		$	0.4	$	(0.3	)	$	0.1	$	(1.9	)	$	0.6	$	3.4	$	0.3
Employee-related charges – selling and administrative	(1.0		)	0.2		0.1			1.0		1.9			0.2		1.8		1.0
Other streamlining charges	0.1			0.3		0.4			0.1		0.2			0.4		0.6		0.1
Total program costs	$	0.6		$	0.9	$	0.2		$	1.2	$	0.2		$	1.2	$	5.8	$	1.4

For the three and six month periods ended June 30, 2017 and 2016, streamlining costs incurred for other programs include charges for headcount reductions and footprint relocations primarily driven by the Company's continued cost optimization efforts. These costs are summarized as follow:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in millions)	2017		2016		2017		2016
Headcount reductions	$	0.2	$	1.2	$	0.5	$	1.4
Footprint relocation	0.7		—		0.7		—
Total other programs	$	0.9	$	1.2	$	1.2	$	1.4

NOTE 12. Pension and Post-retirement Benefits

Post-retirement pension, health and life insurance costs had the following components for the three and six month periods ended June 30, 2017 and 2016:

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	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits
Service cost-benefits earned during period	$	5.0		$	0.1	$	4.2		$	—	$	9.9		$	0.3	$	8.2		$	—
Interest cost on the projected benefit obligation	3.7			0.1		4.4			0.2		7.0			0.2		8.8			0.3
Less: expected return on plan assets	(1.3		)	—		(1.7		)	—		(2.5		)	—		(3.4		)	—
Amortization of net loss	5.6			0.2		3.9			0.2		14.1			0.3		6.5			0.4
Pension and post-retirement benefit plan cost	$	13.0		$	0.4	$	10.8		$	0.4	$	28.5		$	0.8	$	20.1		$	0.7

The weighted-average expected rates of return on plan assets used to determine the pension and post-retirement benefit plan cost for the three and six month periods ended June 30, 2017 and 2016 were based on the rates determined as of the beginning of each of the fiscal years of 4.54% and 4.89%, respectively.

The Company makes contributions to funded pension plans that, at a minimum, meet all statutory funding requirements. Contributions in 2017, as well as payments of benefits incurred by unfunded plans, were in line with the expectations for 2017 and also in line with the contributions made during 2016.

Pension and post-retirement benefit plan cost is included in cost of sales, selling and administrative expenses and non-operating expenses on the condensed consolidated statements of operations.

NOTE 13. Derivative Instruments and Hedging Activities

ASC 815, Derivatives and Hedging, requires a company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies and has been designated as a relationship hedge. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

The Company recognizes all derivative financial instruments in the condensed consolidated balance sheet at fair value using Level 2 inputs and these are classified as “other current assets,” “other assets,” “other accrued liabilities” or “other liabilities” on the condensed consolidated balance sheets. Level 2 inputs used by the Company in valuing its derivative instruments include model-based valuation techniques for which all significant assumptions are observable in the market.

The earnings impact resulting from changes in the fair value of derivative instruments is recorded in the same line item in the condensed consolidated statement of operations as the underlying exposure being hedged or in accumulated other comprehensive income for derivatives that qualify and have been designated as cash flow hedges or hedges of a net investment in a foreign operation. Any ineffective portion of a financial instrument's change in fair value is recognized in earnings together with changes in the fair value of any derivatives not designated as relationship hedges.

Net Investment Hedges

During 2016, the Company entered into various forward contracts with an aggregate notional amount of €440.0 million that were designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. All of these contracts had matured as of December 31, 2016. As of December 31, 2016 and June 30, 2017, a gain of $9.3 million, net of taxes of $5.8 million, related to these contracts has been recognized in cumulative translation adjustment within accumulated other comprehensive income (AOCI).

On November 15, 2016, the Company issued EUR Senior Notes of an aggregate amount of €440.0 million as previously discussed in Note 8, that were also designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. As of June 30, 2017, there was no hedge ineffectiveness and a loss of $19.4 million, net of taxes of $12.2 million, related to these notes has been recognized in cumulative translation adjustment within AOCI.

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Derivatives Not Designated as Hedges

Foreign exchange contracts are also used by the Company to offset the earnings impact relating to the variability in exchange rates on certain assets and liabilities denominated in non-functional currencies and have not been designated as relationship hedges. As of June 30, 2017 and December 31, 2016, the Company had the following outstanding notional amounts related to foreign currency forward contracts:

(Amounts in millions)		As of June 30, 2017		As of December 31, 2016
Foreign Currency	Unit of Measure	Quantity Hedged	Notional Amount (USD Equivalent)	Quantity Hedged	Notional Amount (USD Equivalent)
Chinese Yuan	CNY	509.0	76.0	495.0	64.2
Hong Kong Dollar	HKD	294.6	37.8	294.5	34.6
British Pound	GBP	11.0	14.3	12.7	14.2
Brazilian Real	BRL	*	*	43.1	11.7

* No significant outstanding foreign currency forward contracts

The Company had additional foreign currency forward contracts with notional amounts that individually amounted to less than $10 million. As of June 30, 2017, forward contracts for an aggregate notional amount of €132.1 million ($151.1 million at June 30, 2017 exchange rates) were outstanding with an average duration of one month. These foreign exchange contracts have offset the revaluation of assets and liabilities. The combined net non-operating gain for the six months ended June 30, 2017 and 2016 amounted to $1.9 million and $0.4 million, respectively. The majority of these exchange contracts were entered into on June 29, 2017. The fair value of these derivatives was $0.9 million at June 30, 2017.

NOTE 14. Business Combinations

Acquisition of MICO, Inc.

On February 1, 2016, the Company acquired MICO, Inc. (MICO) for cash consideration of $66.4 million, excluding cash acquired of $6.4 million, resulting in net cash paid of $60.8 million. MICO manufactures and markets hydraulic components, controls and brake systems for heavy-duty, off-highway vehicles in agriculture, construction, mining and similar industries.

The allocation of the purchase consideration to the assets acquired and liabilities assumed as of the acquisition date was finalized in the fourth quarter of 2016. The following table summarizes the allocation of the net purchase consideration:

(Amounts in millions)
Cash and cash equivalents	$	6.4
Trade receivables	5.8
Inventory	11.8
Property, plant and equipment	17.5
Intangible assets	14.3
Other assets acquired	3.0
Other liabilities assumed	(7.4		)
Identifiable net assets acquired	$	51.4
Goodwill	15.0
Net purchase consideration	$	66.4

The intangible assets include amounts recognized for the fair value of trade name, customer-based and technology-related assets. The fair values of the intangible assets were determined based on an income and cost approach. The intangible assets are being amortized over a weighted-average useful life of approximately 11 years and are deductible for tax purposes. The goodwill generated is primarily attributable to expected synergies and is deductible for tax purposes. The transaction-related costs were expensed as incurred and were recorded within other non-operating expense. The pro forma effects of this acquisition would not

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materially impact the Company's reported results for any period presented and as a result, no pro forma financial statements have been presented.

Acquisition of Laydon Composites Ltd.

On April 15, 2016, the Company acquired Laydon Composites Ltd. (LCL), a manufacturer of aerodynamic devices for heavy-duty trucks and trailers, for total consideration of $34.2 million. The Company paid $31.1 million, excluding cash acquired of $0.8 million, with additional contingent consideration of up to $4.3 million contingent upon the achievement of certain goals tied to annual and cumulative sales and earnings over a three year period. The range of undiscounted amounts the Company could be required to pay under this arrangement is between $0 and $4.3 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $3.1 million.

The allocation of the purchase consideration to the assets acquired and liabilities assumed as of the acquisition date was finalized in the first quarter of 2017. The following table summarizes the allocation of the net purchase consideration:

(Amounts in millions)
Purchase price, cash consideration	$	31.1
Purchase price, fair value of contingent consideration	3.1
Net purchase consideration	$	34.2
Cash and cash equivalents	$	0.8
Intangible assets	16.3
Other assets acquired	3.2
Deferred tax liabilities	(4.3		)
Other liabilities assumed	(1.0		)
Identifiable net assets acquired	$	15.0
Goodwill	19.2
Net purchase consideration	$	34.2

The intangible assets include amounts recognized for the fair value of trade name, customer-based and technology-related assets. The fair values of the intangible assets were determined based on an income and cost approach. The intangible assets are being amortized over a weighted-average useful life of approximately 18 years and are not deductible for tax purposes. The goodwill generated is primarily attributable to expected synergies and is not deductible for tax purposes. The transaction-related costs were expensed as incurred and were recorded within other non-operating expense. The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented and as a result, no pro forma financial statements have been presented.

Other Acquisitions

On February 1, 2016, the Company acquired assets from Trans-Safety LOCKS GmbH for $1.9 million.

NOTE 15. Subsequent Events

On July 19, 2017, the Company entered into an agreement for the acquisition of Asset Trackr Private Limited (ATPL). Closing of the transaction is subject to customary conditions precedent and is expected to take place in the fourth quarter of 2017. ATPL is an India-based start-up company that helps commercial vehicle fleets track, analyze and optimize their transportation resources and assets in real time.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

In the second quarter of 2017, we once again outperformed the market in most regions with a sales growth compared to one year ago of 8.6% on a reported basis and 10.4% excluding foreign currency translation effects. This sales performance was driven by China, North America and Europe. Our global aftermarket sales also increased 5.6% (6.6% excluding foreign currency translation effects) in the second quarter of 2017 compared to last year from continuous growth in key regions, partially offset by a severe market downturn in the Middle East.

The WABCO Operating System (WOS), during the second quarter of 2017, continued to enable fast and flexible responses to major market changes, delivering $20.4 million of materials and conversion productivity, a continued solid performance for us. Gross materials productivity represented 5.2% of total materials cost, while inflation in raw material prices resulted in net materials productivity of 4.3%. Conversion productivity represented 8.0% for the second quarter of 2017.

In the second quarter of 2017, operating margin was negatively impacted due to extraordinary professional fees incurred in connection with an acquisition proposal received by the Company. Both parties engaged in advanced discussions, with WABCO being advised by the potential buyer that due diligence had been satisfactorily concluded. However, these discussions were subsequently terminated when final approval was not granted by the buyer’s board.

As previously disclosed, we and the Belgian Government have (separately) appealed the 2016 decision of the European Commission which invalidated the Belgian Excess Profit Ruling (EPR) program that we and many other companies had participated in since 2004 and required a clawback of all past tax benefits received under the program. We have sought and obtained an alternative tax relief for 2015 and future years under Belgium’s Patent Income Deduction (PID), which we continue to seek for the 2013 and 2014 tax years as well. If relief is granted for 2013 and 2014 the potential tax benefit impact in a subsequent quarter could be in aggregate up to $32 million.

Results of Operations

Approximately 83% of our sales are outside the United States, and therefore changes in exchange rates can have a significant impact on the reported results of our operations, which are presented in U.S. dollars. Quarter-over-quarter changes in sales, cost of sales, gross profit and expenses for 2017 compared with 2016 are presented both with and without the effects of foreign currency translation. Changes in sales, cost of sales, gross profit and expenses excluding foreign exchange effects are calculated using current year sales, cost of sales, gross profit and expenses translated at prior year exchange rates. Presenting changes in sales, cost of sales, gross profit and expenses excluding the effects of foreign currency translation is not in conformity with U.S. GAAP, but management analyzes the data in this manner because it is useful to us in understanding the operating performance of our business. We believe this data is also useful to shareholders for the same reason. The changes in sales, cost of sales, gross profit and expenses excluding the effects of foreign exchange translation are not meant to be a substitute for measurements prepared in conformity with U.S. GAAP, nor to be considered in isolation.

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Second Quarter Results of Operations for 2017 Compared with 2016

	Three Months Ended June 30,						Excluding foreign exchange translation *
(Amounts in millions)	2017		2016		% change reported		2017 adjusted amount		% change adjusted
Sales	$	795.0	$	732.2	8.6	%	$	808.3	10.4	%
Cost of sales	547.5		501.0		9.3	%	555.9		11.0	%
Gross profit	247.5		231.2		7.1	%	252.4		9.2	%
Operating expenses	139.1		127.3		9.3	%	141.5		11.2	%
Equity income of unconsolidated joint ventures	9.4		5.3		77.4	%	9.4		77.4	%
Income tax expense	14.0		20.4		(31.4	)%	14.1		(30.9	)%

* Amounts translated using average exchange rates for the three month period ending June 30, 2016

Sales

Our sales for the second quarter of 2017 were $795.0 million, an increase of 8.6% (10.4% excluding foreign currency translation effects) from $732.2 million in 2016.

Total sales in Europe, our largest market, increased 0.6% (2.9% excluding foreign currency translation effects) for the second quarter of 2017. Despite a slight contraction in the production of new trucks and buses, our sales grew driven by market share gains in AMT and EBS at a major OEM customer as well as further growth in aftermarket, partially offset by the phase out of a prior generation AMT at a major gearbox supplier.

Sales in North America increased 22.9% (24.5% excluding foreign currency translation effects) driven by increased penetration of AMT, OnGuard and ESC in the market as well as further growth in the the aftermarket. Sales in South America increased 23.5% (14.1% excluding foreign currency translation effects), driven primarily by growth in truck and bus sales in line with truck and bus production growth of 21% from a very low quarter last year, partially offset by a weak trailer market.

Total sales in Asia increased 16.1% (17.6% excluding foreign currency translation effects) compared to an estimated 20% increase in new vehicle production in the region. Sales in China grew 42.1% (49.2% excluding foreign currency translation effects) which was primarily supported by a 40% growth in truck and bus production as well as continued benefits from ABS mandate on light- and medium-duty trucks. Sales in India decreased 14.9% (18.0% excluding foreign currency translation effects) due to the 31% decline in the production of new trucks and buses following the introduction of the BS IV mandate for trucks and buses. Japan increased 5.6% (8.5% excluding foreign currency translation effects) and sales in Korea increased 16.1% (15.5% excluding foreign currency translation effects), driven by growth in truck and bus production of 32%.

WABCO's aftermarket sales, included in the geographic numbers provided above, increased by 5.6% (6.6% excluding foreign currency translation effects) in the second quarter of 2017 from continuous growth in key regions, additionally supported by a one-time replacement of competitor products in the field, partially offset by a continued severe drop in the Middle East due to political and economic uncertainty.

Cost of Sales and Gross Profit

Within cost of sales, our largest expense is material costs, which mainly represents the purchase of components and parts. Our continued focus on productivity generated 8.0% of production and conversion cost savings, as well as 5.2% of material savings before the impact of commodity inflation, which had a negative impact of 0.9%, bringing net materials productivity to 4.3% for the second quarter of 2017.

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(Amounts in millions)	Cost of Sales			Gross Profit
Cost of sales / gross profit for the three months ended June 30, 2016	$	501.0		$	231.2
Increase/(decrease) due to:
Sales price reductions	—			(14.0		)
Sales price reductions as % of sales				1.7		%
Volume, mix and absorption	63.6			26.6
Material productivity	(11.6		)	11.6
Conversion productivity	(8.8		)	8.8
Labor inflation	3.9			(3.9		)
Streamlining costs	2.2			(2.2		)
Foreign exchange effects *	(4.6		)	(8.8		)
Other	1.8			(1.8		)
Net increase	46.5			16.3
Cost of sales / gross profit for the three months ended June 30, 2017	$	547.5		$	247.5

^*Foreign exchange effects include both translational and transactional effects.

Operating Expenses

Operating expenses include selling and administrative expenses, product engineering expenses and other operating expenses.

(Amounts in millions)
Operating expenses for the three months ended June 30, 2016	$	127.3
Increase/(decrease) due to:
Labor inflation	3.1
Extraordinary sell-side M&A activity	4.5
Streamlining expenses	(2.2		)
Research & development investments, net	6.0
Employee-related costs	2.3
Foreign exchange translation	(2.3		)
Investments net of savings	0.4
Net increase	11.8
Operating expenses for the three months ended June 30, 2017	$	139.1

Equity Income of Unconsolidated Joint Ventures

Equity in net income of unconsolidated joint ventures increased by $4.1 million to $9.4 million for the second quarter of 2017 as compared to $5.3 million for the second quarter of 2016, primarily driven by higher income from our North American joint venture due to increased content per vehicle of WABCO products as well as strong aftermarket growth from a low basis in prior year.

Income Taxes

The income tax expense for the second quarter of 2017 was $14.0 million on pre-tax income of $105.5 million before adjusting for noncontrolling interest, compared with $20.4 million on pre-tax income of $99.3 million before adjusting for noncontrolling interest in the second quarter of 2016. The decrease in income tax expense is primarily related to mix of earnings in multiple jurisdictions.

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Year to Date Results of Operations for 2017 Compared with 2016

	Six Months Ended June 30,								Excluding foreign exchange translation *
(Amounts in millions)	2017			2016			% change reported		2017 adjusted amount			% change adjusted
Sales	$	1,542.3		$	1,420.8		8.6	%	$	1,572.6		10.7	%
Cost of sales	1,054.6			974.9			8.2	%	1,073.1			10.1	%
Gross profit	487.7			445.9			9.4	%	499.5			12.0	%
Operating expenses	270.8			249.4			8.6	%	276.3			10.8	%
Equity income of unconsolidated joint ventures	15.1			12.5			20.8	%	15.1			20.8	%
Other non-operating expense, net	(19.0		)	(12.4		)	53.2	%	(21.2		)	71.0	%
Income tax expense	29.3			121.5			(75.9	)%	29.9			(75.4	)%

* Amounts translated using average exchange rates for the six month period ending June 30, 2016

Sales

Our sales for the first six months of 2017 were $1,542.3 million, an increase of 8.6% (10.7% excluding foreign currency translation effects) from $1,420.8 million in 2016.

Total sales in Europe, our largest market, increased approximately 2.5% (5.6% excluding foreign currency translation effects) for the first six months of 2017, which was supported by strong truck and bus production in the first quarter of 2017 as well as by market share gains at a major OEM customer, partially offset by a phase out of AMT at a major gearbox supplier.

Sales in North America increased 13.1% (14.9% excluding foreign currency translation effects). The sales growth was driven primarily by increased content per vehicle due to higher penetration of AMT, OnGuard and ESC, more than offsetting the decline in truck and bus production of 5%. Sales in South America increased 21.0% (5.6% excluding foreign currency translation effects) driven primarily by growth in truck and bus production.

Total sales in Asia increased 21.5% (23.0% excluding foreign currency translation effects) compared to an estimated 23% increase in new vehicle production in the region. Continued sharp increase in production of new truck and buses in China strongly contributed to the sales growth of 52.4% (60.3% excluding foreign currency translation effects), which was additionally supported by increased WABCO content per vehicle as well as continued benefits from ABS mandate on light- and medium-duty trucks. Sales in India decreased by 6.4% (8.3% excluding foreign currency translation effects) as a result of the decline in production of new trucks and buses driven by the upcoming BS IV mandate. Japan increased 4.1% (4.8% excluding foreign currency translation effects) with the increased value per vehicle in the first half of 2017. Sales in Korea increased 20.4% (19.4% excluding foreign currency translation effects) driven by higher vehicle production compared to the first half of 2016 which was negatively impacted by a slow-down of exports.

WABCO's aftermarket sales, included in the geographic numbers provided above, increased by 3.2% (4.3% excluding foreign currency translation effects) and reflects a lower growth rate of our aftermarket segment in the first six months of 2017 as a result of political and economic instability in the Middle East, as well as the weak market in India in the beginning of 2017 after the demonetization.

Cost of Sales and Gross Profit

Within cost of sales, our largest expense is material costs, which mainly represents the purchase of components and parts. Our continued focus on productivity generated 8.0% of production and conversion cost savings, as well as 5.1% of material savings before the impact of commodity inflation, which had a negative impact of 0.6%, bringing net materials productivity to 4.5% for the year.

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(Amounts in millions)	Cost of Sales			Gross Profit
Cost of sales / gross profit for the six months ended June 30, 2016	$	974.9		$	445.9
Increase/(decrease) due to:
Sales price reductions	—			(26.0		)
Sales price reductions as % of sales				1.6		%
Volume, mix and absorption	129.0			48.8
Material productivity	(24.1		)	24.1
Conversion productivity	(17.7		)	17.7
Labor inflation	7.4			(7.4		)
Streamlining costs	(4.7		)	4.7
Foreign exchange effects *	(15.5		)	(14.8		)
Other	5.3			(5.3		)
Net increase	79.7			41.8
Cost of sales / gross profit for the six months ended June 30, 2017	$	1,054.6		$	487.7

^*Foreign exchange effects include both translational and transactional effects.

Operating Expenses

Operating expenses include selling and administrative expenses, product engineering expenses and other operating expenses.

(Amounts in millions)
Operating expenses for the six months ended June 30, 2016	$	249.4
Increase/(decrease) due to:
Labor inflation	6.1
Incremental costs from acquisitions	1.6
Extraordinary sell-side M&A activity	4.5
Streamlining expenses	(0.9		)
Research & development investments, net	10.4
Employee-related costs	3.9
Foreign exchange translation	(5.5		)
Investments net of savings	1.3
Net increase	21.4
Operating expenses for the six months ended June 30, 2017	$	270.8

Equity Income of Unconsolidated Joint Ventures

Equity in net income of unconsolidated joint ventures increased by $2.6 million to $15.1 million for the six-month period ended June 30, 2017 as compared to $12.5 million for the six-month period ended June 30, 2016, primarily driven by a higher income from our North American joint venture due to increased content per vehicle of WABCO products partially offset by a market decline in the production of trucks and buses.

Other Non-Operating Expense, net

Non-operating expense was $19.0 million for the six-month period ended June 30, 2017 compared to $12.4 million for the six-month period ended June 30, 2016 with the increase mainly due to higher pension and post-retirement benefit costs as a result of the lower interest rate environment applicable to our foreign pension and post-retirement benefit plans.

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Income Taxes

The income tax expense for the six-month period ended June 30, 2017 was $29.3 million on pre-tax income of $205.1 million before adjusting for noncontrolling interest, compared with $121.5 million on pre-tax income of $190.6 million before adjusting for noncontrolling interest for the six-month period ended June 30, 2016. The decrease in income tax expense is primarily related to a non-cash tax expense of $86.4 million related to the EPR program recorded in the first quarter of 2016.

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Liquidity and Capital Resources

We employ several means to manage our liquidity, and we are not dependent upon any one source of funding. Our sources of financing include cash flows from operations, cash and cash equivalents, our senior unsecured notes, revolving credit facilities and the use of operating leases.

Cash Flows for the Six Months Ended June 30, 2017

Operating activities - Net cash provided by operating activities was $142.5 million and $208.0 million for the first six months of 2017 and 2016, respectively. The Company recorded net income including noncontrolling interests of $175.8 million for the first six months of 2017 compared with net income of $69.1 million for the first six months of 2016. The increase in income is primarily driven by a non-cash tax expense of $86.4 million related to the Belgian EPR program recorded in the first quarter of 2016. Net income attributable to the Company in 2017 included noncash elements such as depreciation and amortization of $49.8 million and pension and post-retirement benefit expense of $29.3 million. Our use of working capital amounted to $80.0 million for the six months ended June 30, 2017 compared to $37.0 million for the six months ended June 30, 2016. This use of working capital results from our increased business compounded by the sales growth being primarily in China which has higher working capital requirements.

Other accrued liabilities and taxes decreased $15.9 million for the first six months of 2017 compared to an increase of $31.0 million for the first six months of 2016. The major driver of this decrease is due to payments made for our annual incentive compensation and tax-related items, partially offset by accruals for payroll. Other current and long-term assets for the first six months of 2017 increased $0.6 million compared to a decrease of $13.3 million for the first six months of 2016. This increase was mainly driven by an $11.7 million payment made into an escrow account in January 2017 with the Brazilian government due to legislative changes requiring a cash deposit in lieu of a bank guarantee for outstanding litigation related to WABCO Brazil's business for periods prior to the spin-off of WABCO from Trane, partially offset by a decrease in our guaranteed notes receivable as well as lower taxes receivable. Other long-term liabilities for the first six months of 2017 decreased $15.7 million compared to $19.0 million for the first six months of 2016, primarily driven by the continued shift from non-current to current liabilities on our streamlining accruals primarily related to our 2014/2015 Program as discussed in Note 11 of Notes to Condensed Consolidated Financial Statements.

Investing activities - Net cash used in investing activities amounted to $115.8 million and $190.7 million in the first six months of 2017 and 2016, respectively. The net cash usage for 2017 includes capital expenditures of $16.2 million of investments in tooling, $19.4 million in plant and equipment and $3.0 million in software to support the Company's long-term growth strategies. This is compared to $14.1 million of investments in tooling, $32.8 million in plant and equipment and $5.0 million in software during the first six months of 2016.

During the first six months of 2017, we entered into $206.4 million of repurchase agreements and also received $204.8 million from the maturities of repurchase agreements, all of which were classified within other current assets on the condensed consolidated balance sheets. We also purchased $75.6 million of short-term investments. In comparison, during the first six months of 2016, we entered into $184.8 million of repurchase agreements, received $163.9 million from the maturity of a repurchase agreement and purchased $25.0 million of short-term investments. In 2016, we also paid $92.9 million for the acquisitions of MICO, LCL and Trans-Safety LOCKS as discussed in Note 14 of Notes to Condensed Consolidated Financial Statements.

Financing activities - Net cash used by financing activities amounted to $123.6 million for the first six months of 2017 compared to net cash provided of $59.2 million for the first six months of 2016. Our total third-party debt increased $0.3 million for the first six months of 2017 compared to $180.1 million for the first six months of 2016 when we made additional borrowings on our revolving credit facilities mainly to finance our acquisitions of MICO and LCL and also to fund our share repurchase program.

During the first six months of 2017 and 2016, we repurchased shares for a total amount of $120.0 million and $126.8 million, respectively. The full amounts of repurchases in 2017 were settled as of June 30, 2017 while $11.2 million of the shares repurchased in 2016 were settled subsequent to June 30, 2016. We received $3.8 million of stock option proceeds in 2017 compared with $2.7 million in 2016. We also withheld $4.2 million of shares during the first six months of 2017 related to employee tax payments made during the period for equity award vestings, as compared to $5.9 million during the first six months of 2016.

Senior Notes

On November 15, 2016, the Company issued €440.0 million in aggregate principal amount of senior unsecured notes, comprised of €190 million of 0.84% senior unsecured notes due 2023, €80 million of 1.20% senior unsecured notes due 2026 and

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€170 million of 1.36% senior unsecured notes due 2028. The Company paid $1.4 million of debt issuance costs in connection with these senior unsecured notes. Interest on these notes is payable semi-annually on January 1 and July 1 of each year commencing July 1, 2017.

On June 25, 2015, the Company issued $500 million in aggregate principal amount of senior unsecured notes, comprised of $150 million of 2.83% senior unsecured notes due 2022, $200 million of 3.08% senior unsecured notes due 2025 and $150 million of 3.18% senior unsecured notes due 2027. The Company paid $2.1 million of debt issuance costs in connection with these senior unsecured notes. Interest on these notes is payable semi-annually on January 1 and July 1 of each year commencing January 1, 2016.

The proceeds from the above issuances of senior notes were partially utilized to repay the outstanding balance on our revolving credit facilities. The remaining proceeds are intended to fund our share repurchase program, finance acquisitions, refinance existing indebtedness and meet general financing requirements.

Credit Facilities

On July 8, 2011, the Company entered into a $400 million multi-currency five-year senior unsecured revolving credit facility which was amended and restated on September 30, 2015 (the 2015 Facility) to, among other things, extend the original expiry date subject to two 1-year extension options and amend the applicable margins on the original revolving credit facility. This facility will expire on September 30, 2021.

On December 17, 2014, the Company entered into a new $100 million multi-currency five-year senior unsecured revolving credit facility (the 2014 Facility) which will expire on December 17, 2019.

Under the revolving credit facilities, the Company may borrow, on a revolving basis, loans in an aggregate principal amount at any one time outstanding not in excess of $500 million, which was fully unused as of June 30, 2017. The proceeds from the revolving credit facilities are available to finance acquisitions, refinance existing indebtedness and meet general financing requirements.

As of June 30, 2017, various subsidiaries also had borrowings from banks totaling $0.7 million, of which $0.5 million was classified as long-term debt. The remaining $0.2 million supports local working capital requirements.

Derivative Instruments and Hedging Activities

Foreign exchange contracts are used by the Company to offset the earnings impact relating to the variability in exchange rates on certain assets and liabilities denominated in non-functional currencies and have not been designated as relationship hedges. As of June 30, 2017, forward contracts for an aggregate notional amount of €132.1 million ($151.1 million at June 30, 2017 exchange rates) were outstanding with an average duration of one month. These foreign exchange contracts have offset the revaluation of assets and liabilities and resulted in net non-operating gains for the six months ended June 30, 2017 and 2016 of $1.9 million and $0.4 million, respectively. The majority of these exchange contracts were entered into on June 29, 2017. The fair value of these derivatives was $0.9 million as of June 30, 2017.

During 2016, the Company entered into various forward contracts with an aggregate notional amount of €440.0 million that were designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. All of these contracts had matured as of December 31, 2016. As of December 31, 2016 and June 30, 2017, a gain of $9.3 million, net of taxes of $5.8 million, related to these contracts has been recognized in cumulative translation adjustment within accumulated other comprehensive income (AOCI).

On November 15, 2016, the Company issued EUR Senior Notes of an aggregate amount of €440.0 million as previously discussed in Note 8 of Notes to Condensed Consolidated Financial Statements, that were also designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. As of June 30, 2017, there was no hedge ineffectiveness and a loss of $19.4 million, net of taxes of $12.2 million, related to these notes has been recognized in cumulative translation adjustment within AOCI.

Aggregate Contractual Obligations

The Company has contractual obligations for debt, operating leases, tax indemnifications, purchase obligations, unfunded pension and post-retirement benefit plans and tax liabilities that were summarized in a table of aggregate contractual obligations

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for the year ended December 31, 2016 disclosed in the Annual Report on Form 10-K. There have been no material changes to those obligations since December 31, 2016.

Information Concerning Forward Looking Statements

Certain of the statements contained in this report (other than the historical financial data and other statements of historical fact), including, without limitation, statements as to management’s expectations and beliefs, are forward-looking statements. These forward-looking statements were based on various facts and were derived utilizing numerous important assumptions and other important factors, and changes in such facts, assumptions or factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements include the information concerning our future financial performance, financial condition, liquidity, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “strategies”, “prospects”, “intends”, “projects”, “estimates”, “continues”, “evaluates”, “forecasts”, “seeks”, “plans”, “goals”, “potential”, “may increase”, “may fluctuate” and similar expression or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward looking in nature and not historical facts. This report includes important information as to risk factors in “Item 1A. Risk Factors”, and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many important factors could cause actual results to differ materially from management’s expectations, including:

• the actual level of commercial vehicle production in our end-markets;

• adverse developments in the business of our key customers;

• periodic changes to contingent liabilities;

• adverse developments in general business, economic and political conditions or any outbreak or escalation of hostilities on a national, regional or international basis;

• changes in international or U.S. economic conditions, such as inflation, interest rate fluctuations, foreign exchange rate fluctuations or recessions in our markets;

• unpredictable difficulties or delays in the development of new product technology;

• pricing changes to our products or those of our competitors, and other competitive pressures on pricing and sales;

• our ability to receive components and parts from our suppliers of a reasonable quality level or to obtain them at reasonable price levels due to fluctuations in the costs of the underlying raw materials;

• our ability to access credit markets or capital markets on a favorable basis or at all;

• our ability to service our debt obligations;

• changes in the environmental regulations that affect our current and future products;

• competition in our existing and future lines of business and the financial resources of competitors;

• our failure to comply with regulations and any changes in regulations;

• our failure to complete potential future acquisitions, collaborations and cooperations or to realize benefits from completed acquisitions, collaborations and cooperations;

• our inability to implement our growth plan;

• our ability to service our pension obligations;

• the loss of any of our senior management;

• difficulties in obtaining or retaining the management and other human resource competencies that we need to achieve our business objectives;

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• the success of, and costs and savings associated with, our current streamlining initiatives;

• labor relations;

• our ability to mitigate any tax risks, including, but not limited to those risks associated with changes in legislation, tax audits and the loss of the benefits associated with our tax rulings and incentives in certain jurisdictions;

• risks inherent in operating in foreign countries, including exposure to local economic conditions, government regulation, currency restrictions and other restraints, changes in tax laws and rulings, expropriation, political instability and diminished ability to legally enforce our contractual rights;

We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

Critical Accounting Policies and Estimates

Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis and Notes 2 and 15 to the Consolidated Financial Statements for the year ended December 31, 2016 in the Company’s Annual Report on Form 10-K, describe the most significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ materially from management’s estimates. There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the first six months of 2017.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes to the disclosure on this matter for the year ended December 31, 2016 made in the Company’s Annual Report on Form 10-K.

Item 4. Controls and Procedures

The Company has established a Disclosure Controls Committee that assists the Chief Executive Officer and Chief Financial Officer in their evaluation of the Company’s disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures, as defined in the Securities Exchange Act of 1934, as amended (the Exchange Act), Rule 13a-15(e), are effective to ensure that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the six months ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

There have been no new material risks identified that were not disclosed in the Company’s risk factor disclosure in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds

The Company's Board of Directors has approved five programs as noted below to purchase shares of the Company's common stock. A summary of the repurchase activity for the first six months of 2017 is as follows:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (a)	Average price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
Total through December 31, 2016	18,295,912	$80.40	18,295,912	$0
January 1 - January 31	240,000	$106.74	240,000	$574,382,746
February 1 - February 28	85,000	$112.74	85,000	$564,799,537
March 1 - March 31	213,000	$115.24	213,000	$540,253,746
Total first quarter	538,000	$111.05	538,000	$540,253,746
Total through March 31, 2017	18,833,912	$81.28	18,833,912	$540,253,746
April 1 - April 30	—	-	-	$540,253,746
May 1 - May 31	183,000	$118.73	183,000	$518,525,967
June 1 - June 30	312,000	$123.35	312,000	$480,041,067
Total second quarter	495,000	$121.64	495,000	$480,041,067
Total through June 30, 2017	19,328,912	$82.31	19,328,912	$480,041,067

(a) Relates to the share repurchase programs approved in May 2011, October 2012, October 2013, December 2014 and December 2016 as discussed in Note 6 of Notes to Condensed Consolidated Financial Statements.

All share repurchases were effected in accordance with the safe harbor provisions of Rule 10b-18 of the Exchange Act.

Item 6. Exhibits

The exhibits listed on the accompanying Index to Exhibits are filed as part of this quarterly report on Form 10-Q.

32

SIGNATURE

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 thereunto duly authorized.

WABCO HOLDINGS INC.

/S/    SEAN DEASON

Sean Deason

VP Controller, Treasurer and Assistant Secretary

(Principal Accounting Officer)

July 20, 2017

33

WABCO HOLDINGS INC. AND SUBSIDIARIES

INDEX TO EXHIBITS

(The File Number of the Registrant, WABCO Holdings Inc., is 1-33332)

Exhibit No.		Description
10.1	Management Agreement, effective July 1, 2014 between WABCO Europe SPRL/BVBA and Nicolas Bardot.
10.2	Management Agreement, effective January 1, 2012 between WABCO Europe SPRL/BVBA and Jorge Solis.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from WABCO Holdings Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2017, filed with the SEC on July 20, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

34

EX-10.1

EX-10.2

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jacques Esculier, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WABCO Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 20, 2017

/s/ Jacques Esculier

Jacques Esculier

Chief Executive Officer and Chairman of the Board

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Prashanth Mahendra-Rajah, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WABCO Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 20, 2017

/s/ Prashanth Mahendra-Rajah

Prashanth Mahendra-Rajah

Chief Financial Officer

EX-32.1

Exhibit 32.1

WABCO HOLDINGS INC.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of WABCO Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jacques Esculier, the Chief Executive Officer and Chairman of the Board of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ Jacques Esculier

Jacques Esculier

Chief Executive Officer and Chairman of the Board

Dated: July 20, 2017

EX-32.2

Exhibit 32.2

WABCO HOLDINGS INC.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of WABCO Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Prashanth Mahendra-Rajah, the Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ Prashanth Mahendra-Rajah

Prashanth Mahendra-Rajah

Chief Financial Officer

Dated: July 20, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 12, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	WABCO Holdings Inc.
Entity Central Index Key	0001390844
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Trading Symbol	WBC
Entity Common Stock, Shares Outstanding		53,631,155

XML

Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Document Period End Date			Jun. 30, 2017
Sales	$ 795.0	$ 732.2	$ 1,542.3	$ 1,420.8
Cost of sales	547.5	501.0	1,054.6	974.9
Gross Profit	247.5	231.2	487.7	445.9
Costs and expenses:
Selling and administrative expenses	99.2	93.1	191.1	179.1
Product engineering expenses	39.1	32.9	77.9	67.6
Other operating expenses, net	0.8	1.3	1.8	2.7
Operating income	108.4	103.9	216.9	196.5
Equity income of unconsolidated joint ventures, net	9.4	5.3	15.1	12.5
Other non-operating expense, net	(8.2)	(6.9)	(19.0)	(12.4)
Interest expense, net	(4.1)	(3.0)	(7.9)	(6.0)
Income before income taxes	105.5	99.3	205.1	190.6
Income tax expense	14.0	20.4	29.3	121.5
Net Income	91.5	78.9	175.8	69.1
Less: net income attributable to noncontrolling interests	4.3	3.8	7.9	7.4
Net income attributable to Company	$ 87.2	$ 75.1	$ 167.9	$ 61.7
Net income attributable to Company per common share
Basic (in usd per share)	$ 1.62	$ 1.34	$ 3.10	$ 1.10
Diluted (in usd per share)	1.61	1.33	3.09	1.09
Cash dividends per share of common stock (in usd per share)	$ 0	$ 0	$ 0	$ 0
Weighted average common shares outstanding
Basic (in shares)	53,966,710	56,074,209	54,131,785	56,279,630
Diluted (in shares)	54,158,923	56,298,672	54,336,414	56,511,879

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Document Period End Date			Jun. 30, 2017
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 91.5	$ 78.9	$ 175.8	$ 69.1
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	61.6	(28.5)	98.1	8.4
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	(11.9)	8.1	(10.0)	4.8
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	0.0	0.0	0.1	0.1
Comprehensive income	141.2	58.5	264.0	82.4
Less: comprehensive income attributable to noncontrolling interests	4.5	2.9	10.8	6.7
Comprehensive income attributable to Company	$ 136.7	$ 55.6	$ 253.2	$ 75.7

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Sales and Excise Tax Payable, Current	$ 27.7	$ 40.1
Current assets:
Cash and cash equivalents	820.7	862.5
Short-term Investments	80.1	0.0
Accounts receivable, less allowance for doubtful accounts of $8.0 in 2017 and $6.5 in 2016	611.4	493.7
Inventories:
Finished products	114.6	102.9
Products in process	13.6	14.2
Raw materials	115.3	106.5
Value Added Tax Receivable	49.2	65.1
Guaranteed notes receivable	43.0	53.6
Securities for Reverse Repurchase Agreements	139.4	128.7
Other current assets	56.3	46.8
Total current assets	2,043.6	1,874.0
Property, plant, and equipment, less accumulated depreciation	432.8	408.6
Goodwill	430.9	399.2
Long-term future income tax benefits	196.7	208.8
Investments in unconsolidated joint ventures	21.0	20.8
Intangible assets, net	77.1	78.9
Other assets	81.9	65.7
TOTAL ASSETS	3,284.0	3,056.0
Current liabilities:
Loans payable to banks	0.2	0.2
Accounts payable	192.7	171.9
Accrued payroll	114.9	101.8
Current portion of warranties	29.1	32.2
Accrued Liabilities, Current	73.8	69.4
Promotion and customer incentives	24.8	31.9
Other accrued liabilities	107.1	83.4
Total current liabilities	570.3	530.9
Long-term debt	1,000.9	958.9
Post-retirement benefits	647.1	590.6
Deferred tax liabilities	89.4	138.8
Unrecognized tax benefits classified as long term liabilities	1.7
Other liabilities	59.1	69.5
Total liabilities	2,366.8	2,288.7
Shareholders' equity:
Preferred stock, 4,000,000 shares authorized; none issued and outstanding		0.0
Common stock, $.01 par value, 400,000,000 shares authorized; shares issued: 78,837,446 in 2017; 78,701,273 in 2016; and shares outstanding: 53,623,224 in 2017; 54,491,918 in 2016	0.8	0.8
Capital surplus	868.2	861.2
Treasury stock, at cost: 25,214,222 shares in 2017; 24,209,355 shares in 2016	(1,862.2)	(1,744.4)
Retained earnings	2,329.0	2,161.1
Accumulated Other Comprehensive Income (Loss), Net of Tax	(491.9)	(577.3)
Total shareholders' equity	843.9	701.4
Noncontrolling interests	73.3	65.9
Total equity	917.2	767.3
TOTAL LIABILITIES AND EQUITY	$ 3,284.0	$ 3,056.0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 8.0	$ 6.5
Preferred stock, shares authorized	4,000,000	4,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	78,837,446	78,701,273
Common stock, shares outstanding	53,623,224	54,491,918
Treasury stock, shares	(25,214,222)	(24,209,355)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating activities:
Net income	$ 175.8	$ 69.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	39.7	35.3
Amortization of intangibles	10.1	11.0
Equity in earnings of unconsolidated joint ventures, net of dividends received	(0.1)	3.7
Non-cash stock compensation	9.7	7.7
Other Noncash Income (Expense)	10.8	7.8
Deferred income tax expense	(9.5)	75.5
Post-retirement benefit expense	29.3	20.8
Loss on sale or disposal of property, plant and equipment	0.0	(0.3)
Changes in assets and liabilities:
Accounts receivable, net	(84.2)	(49.7)
Inventories	(5.7)	(12.7)
Accounts payable	9.9	25.4
Other accrued liabilities and taxes	(15.9)	31.0
Other current and long-term assets	(0.6)	13.3
Other long-term liabilities	(15.7)	(19.0)
Post-retirement benefit payments	(11.1)	(10.9)
Net cash provided by operating activities	142.5	208.0
Investing activities:
Purchases of property, plant and equipment	(35.6)	(46.9)
Investments in capitalized software	(3.0)	(5.0)
Proceeds from sale of short-term investments	(282.0)	(209.8)
Sales and maturities of short-term investments	204.8	163.9
Acquisitions, net	0.0	(92.9)
Net cash used in investing activities	(115.8)	(190.7)
Financing activities:
Proceeds from Long-term Lines of Credit	0.3	183.0
Net borrowings of short-term debt	0.0	(2.9)
Purchases of treasury stock	(120.0)	(115.6)
Payments Related to Tax Withholding for Share-based Compensation	(4.2)	(5.9)
Dividends to noncontrolling interest holders	(3.5)	(2.1)
Proceeds from exercise of stock options	3.8	2.7
Net cash used in financing activities	(123.6)	59.2
Effect of exchange rate changes on cash and cash equivalents	55.1	7.5
Net (decrease)/increase in cash and cash equivalents	(41.8)	84.0
Cash and cash equivalents at beginning of period	862.5	515.2
Cash and cash equivalents at end of period	820.7	599.2
Cash paid during the period for:
Interest	7.6	7.8
Income taxes	$ 31.9	$ 18.9

XML

Basis of Financial Statement Presentation

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation

WABCO Holdings Inc. and its subsidiaries (collectively WABCO or the Company) engineers, develops, manufactures and sells integrated systems controlling advanced braking, stability, suspension and transmission automation as well as air compression and processing primarily for commercial vehicles. WABCO’s largest selling products are pneumatic anti-lock braking systems (ABS), electronic braking systems (EBS), electronic stability control (ESC), automated manual transmission systems, air disc brakes and a large variety of conventional mechanical products such as actuators, air compressors and air control valves for medium- and heavy-duty trucks, buses and trailers. In addition, we supply commercial vehicle aftermarket distributors and service partners as well as fleet operators with replacement parts, fleet management solutions, diagnostic tools, training and other expert services. WABCO sells its products primarily to four groups of customers around the world: truck and bus original equipment manufacturers (OEMs), trailer OEMs, commercial vehicle aftermarket distributors of replacement parts and services, and automotive OEMs. We also provide remanufacturing services globally.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, including normal recurring items, considered necessary for a fair presentation of financial data have been included. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the entire year. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K.

Based on the organizational structure, as well as the nature of financial information available and reviewed by the Company’s chief operating decision maker to assess performance and make decisions about resource allocations, the Company has concluded that its total WABCO operations represent one reportable segment and that WABCO’s performance and future net cash flow perspectives are best understood and assessed as such. All majority-owned subsidiaries of WABCO are included in the consolidated financial statements and intercompany transactions are eliminated upon consolidation. WABCO’s investments in unconsolidated joint ventures are included at cost plus its equity in undistributed earnings less dividends and changes in foreign currency in accordance with the equity method of accounting and reflected as investments in unconsolidated joint ventures in the consolidated balance sheet. Certain amounts in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year presentation as a result of the Company's adoption during the current year of a new accounting standard. In addition, certain amounts within the cash flows from investing section of the prior year's condensed consolidated statements of cash flows have been expanded to conform to the current year presentation.

Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes 2 and 15 to the Consolidated Financial Statements for the year ended December 31, 2016, in the Company’s Annual Report on Form 10-K, describe the most significant accounting estimates and policies used in the preparation of the Consolidated Financial Statements. Actual results in these areas could differ materially from management’s estimates. There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the first six months of 2017.

XML

Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In March 2017, the FASB issued Accounting Standards Update 2017-07 (ASU 2017-07) Compensation-Retirement Benefits, in order to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost in the statements of operations. Under ASU 2017-07, the service cost component of the net periodic benefit cost is disclosed in the same income statement line item as other employee compensation costs arising from services rendered during the period, and the other components are reported separately from the line item that includes the service cost and outside of any subtotal of operating income. ASU 2017-07 is effective for annual periods beginning after December 15, 2017 and early adoption is permitted. The Company adopted the provisions of ASU 2017-07 as of January 1, 2017, and applied the change retrospectively in its condensed consolidated statements of operations, by reclassifying respectively $1.2 million from cost of sales and $5.7 million from selling and administrative expenses to other non-operating expenses for the three-month period ended June 30, 2016 , and $2.4 million from cost of sales and $10.2 million from selling and administrative expenses to other non-operating expenses for the six-month period ended June 30, 2016.

In March 2016, the FASB issued ASU 2016-09 Compensation - Stock Compensation, in order to simplify certain aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liability, classification of excess tax benefits, and taxes withheld and paid on employee stock award vestings on the statement of cash flows. ASU 2016-09 requires that companies elect to account for forfeitures based on an estimate of the number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. ASU 2016-09 is effective for the interim and annual periods ending after December 15, 2016. Early adoption is permitted, and the Company adopted the provisions of ASU 2016-09 as of January 1, 2016. The impact from adoption of the provisions related to forfeiture rates was reflected in the Company's condensed consolidated financial statements on a modified retrospective basis, resulting in an adjustment of $0.4 million to retained earnings as of January 1, 2016. Provisions related to income taxes were adopted prospectively resulting in a tax benefit of $1.3 million for 2016. Provisions related to the statement of cash flows were also adopted retrospectively.

Pending Adoption of Recently Issued Accounting Standards

In May 2017, the FASB issued ASU 2017-09 Compensation-Stock Compensation, which provides guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. ASU 2017-09 is effective for the interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16 Intra-entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, which provides guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows in order to reduce diversity in existing practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect any material impact from adoption of this guidance on the Company's condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 Leases, which requires lessees to recognize most leases on the balance sheet. ASU 2016-02 is effective for the interim and annual periods in fiscal years beginning after December 15, 2018. The Company is currently assessing the potential impact of the adoption of this guidance on its condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers, which is a new comprehensive revenue recognition standard on the financial reporting requirements for revenue from contracts entered into with customers. ASU 2014-09 requires revenue to be recognized when a customer obtains control of promised goods or services at an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

ASU 2014-09 was initially effective for interim and annual periods beginning after December 15, 2016. The FASB subsequently deferred the effective date of this standard to December 15, 2017 with early adoption permitted as of December 15, 2016. The Company currently anticipates adopting ASU 2014-09 in the annual period beginning January 1, 2018.

ASU 2014-09 permits two methods of adoption, either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We are still evaluating the transition methods along with a number of practical expedients available under the standard. Successful adoption of ASU 2014-09 is contingent on the completion of an analysis of the cumulative impact on prior periods’ financial information as well as the completion of changes to the accounting information system.

The Company’s implementation of this standard include a project management framework that includes a dedicated lead project manager for assessing the impact that the new standard will have on the Company’s accounting, financial statements and footnote disclosures. The assessment phase of the project has included the identification of the key revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The assessment has resulted in the identification of potential accounting differences that may arise from the application of the new standard. While we are still evaluating all potential impacts of ASU 2014-09, we currently believe the most significant impact relates to our accounting for revenue in relation to our product engineering activities and our sales of products with no alternative use. Specifically, under ASU 2014-09 we expect to recognize all reimbursements received from customers related to product engineering as revenue. We also expect that most revenues from sales to OEM customers of products with no alternative use should be recognized over time instead of at a point in time. Due to the complexity of certain of our agreements with OEM customers, the actual revenue recognition treatment required under ASU 2014-09 will be dependent on contract-specific terms, and may vary in some instances. During the second quarter, the team has continued to make progress on the contract review phase, which includes identifying the population of contracts for a deeper analysis of the potential accounting impacts due to the new standard for individual contracts. A detailed implementation plan for the second half of 2017 has been developed and includes tasks around data gathering, training, implementing the required system and process changes required to support the new model and to quantify the impact on historical results.

We do not expect the pending adoption of other recently issued accounting standards to have an impact on the condensed consolidated financial statements.

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Comprehensive Income

6 Months Ended

Jun. 30, 2017

Statement of Comprehensive Income [Abstract]

Comprehensive Income

The table below presents the changes in accumulated other comprehensive loss for the three and six month periods ended June 30, 2017 and 2016.

	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Foreign currency translation adjustments (1):
Balance at beginning of period	$	(294.9	)	$	(235.7	)	$	(328.7	)	$	(271.2	)
Adjustment for the period	61.7			(30.2		)	95.5			5.3
Balance at end of period	(233.2		)	(265.9		)	(233.2		)	(265.9		)
Losses on intra-entity transactions (2):
Balance at beginning of period	(11.4		)	(14.0		)	(11.4		)	(15.2		)
Adjustment for the period	(0.3		)	2.6			(0.3		)	3.8
Balance at end of period	(11.7		)	(11.4		)	(11.7		)	(11.4		)
Unrealized gains on investments:
Balance at beginning of period	0.2			0.2			0.2			0.2
Adjustment for the period	—			—			—			—
Amounts reclassified to earnings, net	—			—			—			—
Balance at end of period	0.2			0.2			0.2			0.2
Unrealized losses on hedges:
Balance at beginning of period	(1.0		)	(1.1		)	(1.0		)	(1.2		)
Adjustment for the period	0.1			—			0.1			—
Amounts reclassified to earnings, net	—			—			—			0.1
Balance at end of period	(0.9		)	(1.1		)	(0.9		)	(1.1		)
Pension and post-retirement plans:
Balance at beginning of period	(234.5		)	(223.8		)	(236.4		)	(220.5		)
Other comprehensive income before reclassifications	(16.3		)	5.3			(18.3		)	0.9
Amounts reclassified to earnings, net (3)	4.5			2.8			8.4			3.9
Balance at end of period	$	(246.3	)	$	(215.7	)	$	(246.3	)	$	(215.7	)
Accumulated other comprehensive loss at end of period	$	(491.9	)	$	(493.9	)	$	(491.9	)	$	(493.9	)

(1) This accumulated other comprehensive loss component includes the realized gain on settled forward contracts accounted for as net investment hedges of $9.3 million, net of taxes of $5.8 million. Additionally, this component includes the unrealized loss on the Senior EUR notes, which have been designated as a net investment hedge, of $19.4 million, net of taxes of $12.2 million. See Note 13 for further discussion.

(2) Relates to intra-entity foreign currency transactions that are of a long term investment nature, when the entities to the transaction are consolidated, combined or accounted for by the equity method in the Company's financial statements.

(3) This accumulated other comprehensive loss component, net of taxes of $1.9 million and $1.1 million for the three months ended June 30, 2017 and 2016 respectively, and $3.6 million and $2.3 million for the six-month period ended June 30, 2017 and 2016 respectively, is included in the computation of net periodic pension cost. See Note 12 for additional details.

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Financing Receivables

6 Months Ended

Jun. 30, 2017

Accounts Receivable Financing Facility [Abstract]

Financing Receivables

Receivable

The Company holds guaranteed notes receivable from reputable state owned and public enterprises in China that are settled through bankers acceptance drafts, which are registered and endorsed to the Company. These notes receivable are fully guaranteed by banks and generally have contractual maturities of six months or less, but the ultimate recourse remains against the trade debtor. These guaranteed drafts are available for discounting with banking institutions in China or transferring to suppliers to settle liabilities. The total amount of notes receivable discounted or transferred for the first six months of 2017 and 2016 were $72.6 million and $50.0 million, respectively. Expenses related to discounting these notes for the six months ended June 30, 2017 amounted to $1.2 million and are included in other non-operating expense, net. Expenses related to discounting for the six months ended June 30, 2016 were immaterial. The fair value of these guaranteed notes receivable is determined based on Level 2 inputs including credit ratings and other criteria observable in the market and equal their carrying amounts of $43.0 million and $53.6 million as of June 30, 2017 and December 31, 2016, respectively.

The Company monitors the credit quality of both the drawers of the drafts and guarantors on a monthly basis by reviewing various factors such as payment history, level of state involvement in the institution, size, national importance as well as current economic conditions in China. Since the Company has not experienced any historical losses nor is expecting future credit losses based on a review of the various credit quality indicators described above, we have not established a loss provision against these receivables as of June 30, 2017 or December 31, 2016.

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Net Income Attributable to Company per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Net Income Attributable to Company per Share

Net Income Attributable to Company per Share

Basic net income attributable to Company per share has been computed using the weighted average number of WABCO common shares outstanding. The average number of outstanding shares of common stock used in computing diluted net income attributable to Company per share includes weighted average incremental shares when the impact is not anti-dilutive. The weighted average incremental shares represent the net amount of shares the Company would issue upon the assumed exercise of in-the-money stock options and vesting of restricted stock units (RSUs) and deferred stock units (DSUs) after assuming that the Company would use the proceeds from the exercise of options to repurchase stock. The weighted average incremental shares also includes the net amount of shares issuable for performance stock units (PSUs) at the end of the reporting period, if any, based on the number of shares issuable if the end of the period were the end of the vesting period.

Anti-dilutive shares, if applicable, are excluded and represent those options, RSUs, DSUs and PSUs whose assumed proceeds were greater than the average price of the Company’s common stock.

	Three Months Ended June 30,		Six Months Ended June 30,
	2017	2016	2017	2016
Weighted average incremental shares included	192,213	224,463	204,629	232,249
Shares excluded due to anti-dilutive effect	—	525	—	35,542

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Capital Stock

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Capital Stock

Capital Stock

The following is a summary of net shares outstanding and shares issued or reacquired during the six month period ended June 30, 2017.

	Number of Shares of Common Stock
	Total Shares	Treasury Shares		Net Shares Outstanding
Balance, December 31, 2016	78,701,273	(24,209,355	)	54,491,918
Shares issued upon exercise of stock options	67,995	18,262		86,257
Shares issued upon vesting of RSUs	42,563	2,696		45,259
Shares issued for DSUs	1,090	—		1,090
Shares issued upon vesting of PSUs	24,525	7,175		31,700
Shares purchased for treasury	—	(1,033,000	)	(1,033,000	)
Balance, June 30, 2017	78,837,446	(25,214,222	)	53,623,224

The Company accounts for purchases of treasury stock under the cost method with the costs of such share purchases reflected in treasury stock in the accompanying condensed consolidated balance sheets. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired since the inception of the share repurchase programs, net of shares previously reissued and the Company reflects the difference between the average cost paid and the amount received for the reissued shares in capital surplus. As of June 30, 2017 the Company has reissued a total of 71,496 treasury shares related to certain employee vestings under its equity incentive program.

The share repurchase programs approved by the Board of Directors are as follow:

(Amounts in millions)
Date of authorization	Authorized amount		Date of commencement	Date of expiration
May 26, 2011	400.0		June 1, 2011	May 31, 2013
October 26, 2012	400.0		October 26, 2012	December 31, 2014
October 29, 2013	200.0		October 29, 2013	December 31, 2014
December 5, 2014	500.0		December 5, 2014	December 31, 2016
December 2, 2016	600.0		January 1, 2017	December 31, 2018
	$	2,100.0

As of June 30, 2017, the Company has repurchased a total of $1,591.0 million of shares under the five repurchase programs effective through this date, leaving an unexpended balance of $480.0 million available for share repurchases. The Company plans to continue to repurchase shares at prevailing market prices. The timing and amount of share repurchases, if any, will depend on a variety of factors including, among other things, share price, market conditions and applicable regulatory requirements.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company records stock-based compensation based on the estimated fair value of the award at the grant date and recognizes that as an expense in the condensed consolidated statements of operations over the requisite service period. The estimated fair value of the award is based on the closing market price of the Company’s common stock on the date of grant.

As part of its equity incentive program, the Company grants PSUs, the vesting of which would occur, if at all, and at levels depending upon, the achievement of three-year cumulative goals tied to earnings per share. The Company assesses the expected achievement levels at the end of each reporting period. The grant date fair value of the number of awards expected to vest based on the Company’s best estimate of ultimate performance against the respective targets is recognized as compensation expense on a straight-line basis over the requisite vesting period of the awards. As of June 30, 2017, the Company believes it is probable that the performance conditions will be met and has recognized compensation expense accordingly.

The Company also grants DSUs to its non-management directors as part of the equity portion of their annual retainer. The DSUs are fully vested at grant. Each DSU provides the right to the issuance of a share of our common stock, within ten days after the earlier of the director’s death or disability, the 13-month anniversary of the grant date or the director’s separation from service. Each director may also elect within a month after the grant date to defer the receipt of shares for five or more years. No election can be made to accelerate the issuance of stock from a DSU.

Total stock-based compensation cost recognized during the three and six month periods ended June 30, 2017 and 2016 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amount in millions)	2017		2016		2017		2016
Stock-based compensation	$	6.2	$	4.3	$	9.7	$	7.7

The total number and type of awards granted during the periods presented and the related weighted-average grant-date fair values were as follows:

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
	Underlying Shares	Weighted Average Grant Date Fair Value		Underlying Shares	Weighted Average Grant Date Fair Value
RSUs Granted	72,022	$	114.88	89,868	$	92.27
PSUs Granted	69,034	$	116.41	82,558	$	91.35
DSUs Granted	7,752	$	118.75	9,194	$	105.52
Stock Awards Granted	—	$	—	1,100	$	107.47
Total Awards	148,808			182,720

The RSUs granted during the periods presented above have vesting terms as follow:

	Six Months Ended June 30,
	2017	2016
Vest in equal annual installments over three years	69,253	84,966
Vest after three years	2,769	4,902
Total RSUs granted	72,022	89,868

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Debt

6 Months Ended

Jun. 30, 2017

Long-term Debt, Unclassified [Abstract]

Debt

Debt

Senior EUR Notes

On November 15, 2016, the Company issued an aggregate amount of €440 million of senior unsecured notes (collectively, the Senior EUR Notes) as follows:

(Amounts in millions)	Face value		Coupon		Maturity Date
Series D Notes	€	190.0	0.84	%	November 15, 2023
Series E Notes	80.0		1.20	%	November 15, 2026
Series F Notes	170.0		1.36	%	November 15, 2028
	€	440.0

The Company paid approximately $1.4 million of debt issuance costs in connection with the Senior EUR Notes, which has been presented in the condensed consolidated balance sheets as a direct reduction of the related debt liability. Interest on the Senior EUR Notes will be payable semi-annually on January 1 and July 1 of each year, commencing July 1, 2017. As of June 30, 2017, the outstanding debt balance net of unamortized debt issuance costs was $502.1 million. This debt balance included a revaluation loss of $19.4 million, net of taxes of $12.2 million, related to these notes that has been recognized in cumulative translation adjustment within accumulated other comprehensive income. See Note 13 for further discussion.

The proceeds from the Senior Notes were partially utilized to repay the outstanding balance on our revolving credit facilities. The remaining proceeds are intended to fund our share repurchase program, finance acquisitions, refinance existing indebtedness and meet general financing requirements.

Subject to certain conditions, the Company may, at its option, prepay all or part of the Senior EUR Notes plus any accrued and unpaid interest to the date of prepayment and certain penalties as defined in the note purchase agreement (the EUR Note Purchase Agreement). The Company may also be required, subject to certain events and conditions, to make an offer to prepay all of the Senior EUR Notes including any accrued and unpaid interest to the date of prepayment. Each holder has the option to accept or reject such offer to prepay.

The EUR Note Purchase Agreement contains customary affirmative and negative covenants, and financial covenants consisting of a consolidated net indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for certain items) ratio of not more than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months, as well as a consolidated EBITDA to consolidated net interest expense ratio of not less than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months. The EUR Note Purchase Agreement also provides for customary events of default, the occurrence of which could result in an acceleration of the Company's obligations under the EUR Note Purchase Agreement. We were in compliance with all of the covenants as of June 30, 2017.

The Company also agreed to indemnify the note purchasers holding Senior EUR Notes that are subject to a swap agreement for certain potential losses associated with swap breakage resulting from a prepayment of the Senior EUR Notes or from an acceleration of the Senior EUR Notes as a result of an event of default.

Senior USD Notes

On June 25, 2015, the Company issued an aggregate amount of $500.0 million of senior unsecured notes (collectively, the Senior Notes) as follows:

(Amounts in millions)	Face value		Coupon		Maturity Date
Series A Notes	$	150.0	2.83	%	June 25, 2022
Series B Notes	200.0		3.08	%	June 25, 2025
Series C Notes	150.0		3.18	%	June 25, 2027
	$	500.0

The Company paid approximately $2.1 million of debt issuance costs in connection with the Senior Notes, which has been presented in the condensed consolidated balance sheets as a direct reduction of the related debt liability. Interest on the Senior Notes is payable semi-annually on January 1 and July 1 of each year, commencing January 1, 2016. As of June 30, 2017, the outstanding debt balance net of unamortized debt issuance costs was $498.3 million.

The proceeds from the Senior Notes were partially utilized to repay the outstanding balance on our revolving credit facilities. The remaining proceeds are intended to fund our share repurchase program, finance acquisitions, refinance existing indebtedness and meet general financing requirements.

Subject to certain conditions, the Company may, at its option, prepay all or part of the Senior Notes plus any accrued and unpaid interest to the date of prepayment and certain penalties as defined in the note purchase agreement (Note Purchase Agreement). The Company may also be required, subject to certain events and conditions, to make an offer to prepay all of the Senior Notes including any accrued and unpaid interest to the date of prepayment. Each holder has the option to accept or reject such offer to prepay.

The Note Purchase Agreement contains customary affirmative and negative covenants, and financial covenants consisting of a consolidated net indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for certain items) ratio of not more than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months, as well as a consolidated EBITDA to consolidated net interest expense ratio of not less than three times at the end of each fiscal quarter based upon the preceding twelve consecutive months. The Note Purchase Agreement also provides for customary events of default, the occurrence of which could result in an acceleration of the Company's obligations under the Note Purchase Agreement. We were in compliance with all of the covenants as of June 30, 2017.

Revolving Credit Facilities

On July 8, 2011, the Company entered into a $400 million multi-currency five-year senior unsecured revolving credit facility which was amended and restated on September 30, 2015 (the 2015 Facility, previously referred to as the 2011 Facility) to, among other things, extend the original expiry date (subject to two 1-year extension options) and amend the applicable margins on the original revolving credit facility. The term of the 2015 Facility was subsequently extended by an additional one year to expire on September 30, 2021. As of June 30, 2017, this is our principal bank credit facility.

On December 17, 2014, the Company entered into a new $100 million multi-currency five-year senior unsecured revolving credit facility (the 2014 Facility) which will expire on December 17, 2019.

Under the revolving credit facilities, the Company may borrow, on a revolving basis, loans in an aggregate principal amount at any one time outstanding not in excess of $500 million. Up to $30 million under the 2015 Facility may be used for issuing letters of credit, of which $30 million was unused as of June 30, 2017, and up to $50 million is available in the form of swing line loans, all $50 million of which was available for use as of June 30, 2017.

As of June 30, 2017 and December 31, 2016, there were no balances outstanding on these facilities and an incremental ability to borrow $500 million.

Interest on loans under the revolving credit facilities will be calculated at a rate per annum equal to an applicable margin, which can vary from 0.45% to 1.00% for both the 2014 Facility and the 2015 Facility based on the Company's leverage ratio, plus LIBOR for loans denominated in U.S. Dollars, EURIBOR for loans denominated in Euros, HIBOR for loans denominated in Hong Kong Dollars and SIBOR for loans denominated in Singapore Dollars, plus mandatory costs, if any.

The revolving credit facilities contain terms and provisions (including representations, covenants and conditions) customary for credit agreements of this type. Our primary financial covenant is a leverage test which requires net indebtedness not to exceed three times adjusted four quarter trailing EBITDA. Additional financial covenants include an interest coverage test and a maximum subsidiary indebtedness test. The interest coverage test requires three times interest expense not to exceed adjusted four quarter trailing EBITDA. The maximum subsidiary indebtedness test limits the total aggregate amount of indebtedness of WABCO's subsidiaries, excluding indebtedness under the facilities, to $500 million under both the 2014 Facility and the 2015 Facility, of which not more than $150 million may be secured. All cash, cash equivalents and short-term investments on the balance sheet can be deducted for net indebtedness purposes. In addition, expenses and payments related to any streamlining of WABCO’s operations are excluded when calculating the four quarter trailing adjusted EBITDA. Other covenants include delivery of financial reports and other information, compliance with laws including environmental laws and permits, ERISA and U.S. regulations, limitations on liens, mergers and sales of assets and change of business. We were in compliance with all of the covenants as of June 30, 2017.

Other Debt

As of June 30, 2017, the Company's various subsidiaries had borrowings from banks totaling $0.7 million, of which $0.5 million was classified as long-term debt. The remaining $0.2 million supports local working capital requirements. This is in comparison to $0.8 million as of December 31, 2016 of which $0.6 million was classified as long-term debt.

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Warranties, Guarantees, Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Warranties, Guarantees, Commitments and Contingencies [Abstract]

Warranties, Guarantees, Commitments and Contingencies

Warranties, Guarantees, Commitments and Contingencies

Warranties

Products sold by WABCO are covered by a basic limited warranty with terms and conditions that vary depending upon the product and country in which it was sold. The limited warranty covers the equipment, parts and labor (in certain cases) necessary to satisfy the warranty obligation generally for a period of two years. Estimated product warranty expenses are accrued in cost of goods sold at the time the related sale is recognized. Estimates of warranty expenses are based primarily on warranty claims experience and specific customer contracts. Warranty expenses include accruals for basic warranties for product sold, as well as accruals for product recalls, service campaigns and other related events when they are known and estimable. Recoveries from suppliers are recognized when an arrangement with the supplier exists and collectibility is assured. Amounts recognized as recoveries do not exceed related warranty costs accrued. To the extent WABCO experiences changes in warranty claim activity or costs associated with servicing those claims, its warranty accrual is adjusted accordingly. Warranty accrual estimates and the allocation of warranty between short and long term are updated based upon the most current warranty claims information available.

The following is a summary of changes in the Company’s product warranty liability for the three and six month periods ended June 30, 2017 and 2016.

	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Balance of warranty costs accrued, beginning of period	$	48.9		$	43.4		$	49.3		$	40.9
Warranty costs accrued	7.5			6.9			11.9			12.7
Warranty claims settled	(10.8		)	(6.8		)	(16.3		)	(11.5		)
Foreign exchange translation effects	2.4			(0.8		)	3.1			0.6
Balance of warranty costs accrued, end of period	$	48.0		$	42.7		$	48.0		$	42.7
Current liability, included in current portion of warranties	$	29.1		$	24.7		$	29.1		$	24.7
Long-term liability, included in other liabilities	$	18.9		$	18.0		$	18.9		$	18.0
Warranty costs accrued	$	7.5		$	6.9		$	11.9		$	12.7
Less: received and anticipated recoveries from suppliers	(1.3		)	—			(1.6		)	(0.6		)
Warranty costs net of received and anticipated recoveries	$	6.2		$	6.9		$	10.3		$	12.1

In 2016, the Company initiated a recall and service campaign related to certain defects in components from one of our suppliers. The defective parts impacted certain shipments to our customers over a two month period. The Company currently estimates the costs of the warranty campaign to be $28.8 million, the majority of which concluded in the second quarter of 2017. The Company also expects substantially all of the costs to be recovered from its supplier and has reflected this within other current assets on the condensed consolidated balance sheets.

Guarantees and Commitments

The Company has uncollateralized bank guarantees for $37.4 million, of which $30.2 million is related to statutorily-required guarantees for tax and other litigation, $0.2 million is related to letters of credit, and $7.0 million is related to other individually immaterial items.

Right of Recourse

As discussed in Note 4, the Company may receive bankers acceptance drafts from customers in China in payment of outstanding accounts receivable in the ordinary course of business. These banker's acceptance drafts are non-interest bearing obligations of the issuing bank andgenerally have contractual maturities of six months or less. The Company may use these bankers acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Bankers acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity date. As of June 30, 2017 and as of December 31, 2016, the Company had approximately $31.4 million and $24.3 million, respectively, of bankers acceptance drafts subject to customary right of recourse provisions, which were transferred to vendors and had not reached their scheduled maturity date. Historically, the bankers acceptance drafts have settled upon maturity without any claim of recourse against the Company.

Contingencies

We are subject to proceedings, lawsuits and other claims related to products and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable and reasonably possible losses. A determination of the amount of liability to be recorded, if any, for these contingencies is made after careful analysis of each individual issue.

Under an indemnification agreement, WABCO Brazil is responsible for certain claims related to its business for periods prior to the spin-off of WABCO from Trane. In particular, there are tax claims pending in various stages of the Brazilian legal process related to income, social contribution and/or value added taxes for which a contingency exists and which may or may not ultimately be incurred by the Company. The estimated total amount of the contingency as of June 30, 2017 was $43.1 million including interest. However, based on management’s assessment and advice of our external legal counsel, the Company believes that it has valid arguments in all of these cases and thus no accrual is required at this time.  

This estimated total amount includes a contingency for one particular case that the Company is currently appealing to be heard at the Brazilian Superior Court of Justice and for which we continue to believe we have a valid legal position. A corresponding deposit of $11.3 million was made in the first quarter of 2017 into an escrow account with the Brazilian government and represents substantially all of the potential liability for that case.

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Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense is the net result of taxes on the mix of earnings in multiple tax jurisdictions, foreign tax credits and rulings, the assessment and accrual of uncertain tax positions resulting from tax authority audits or changes in the interpretation of the law. For interim income tax reporting we estimate our annual effective tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

The income tax expense was $29.3 million on pretax income of $205.1 million before adjusting for noncontrolling interest for the six months ended June 30, 2017, and $121.5 million on pretax income of $190.6 million for the six months ended June 30, 2016. The decrease in income tax expense is primarily related to a non-cash tax expense of $86.4 million related to the Belgian Excess Profit Ruling (EPR) program recorded in the first quarter of 2016.

Unrecognized tax benefits at June 30, 2017 amounts to $75.1 million, of which $1.7 million was classified as a long-term liability. The remaining unrecognized tax benefits of $73.4 million, including the $71.1 million related to the clawback under the EPR program, were classified as a reduction to deferred tax assets, since they are non-cash unrecognized tax benefits. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. With no material exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2008.

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Streamlining Expenses

6 Months Ended

Jun. 30, 2017

Restructuring Charges [Abstract]

Streamlining Expenses

Streamlining Expenses

The Company accounts for employee-related streamlining charges as either a one-time benefit arrangement or an ongoing benefit arrangement as appropriate. From time to time the Company also has streamlining charges that are not related to employees, such as facility exit costs.

In the third quarter of 2015, the Company announced proposals to cease manufacturing at two production facilities to preserve the Company's global competitiveness for certain mechanical products. These proposals would result in a workforce reduction of approximately 320 positions and includes a smaller program initiated in the fourth quarter of 2014 (the 2014/2015 Program). Production at both facilities is expected to be transferred to other facilities within the Company's globally integrated supply chain by the end of 2017.

Based on the Company’s efforts to maintain our global footprint, the Company has periodically entered into other streamlining programs as deemed necessary which may include workforce reductions, site closures and rotation of manufacturing footprint to low cost regions (Other Programs).

The following is a summary of changes in the Company’s streamlining program liabilities for the six month period ended June 30, 2017.

(Amounts in millions)
2014 / 2015 Program
Balance as of December 31, 2016	$	27.8
Reversals for the first six months of 2017	0.2
Payments during the first six months of 2017	(6.3		)
FX effects	2.1
Balance as of June 30, 2017	$	23.8
Other Programs
Balance as of December 31, 2016	$	23.4
Charges during the first six months of 2017	1.2
Payments during the first six months of 2017	(4.9		)
FX effects	2.0
Balance as of June 30, 2017	$	21.7
Total streamlining liability as of June 30, 2017	$	45.5

A balance of $22.0 million has been included in other liabilities (non-current) and $23.5 million has been included in other accrued liabilities (current) as of June 30, 2017.

The following is a summary of current and cumulative streamlining costs related to the above programs:

	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program		Other Programs
Employee-related charges – cost of sales	$	1.5		$	0.4	$	(0.3	)	$	0.1	$	(1.9	)	$	0.6	$	3.4	$	0.3
Employee-related charges – selling and administrative	(1.0		)	0.2		0.1			1.0		1.9			0.2		1.8		1.0
Other streamlining charges	0.1			0.3		0.4			0.1		0.2			0.4		0.6		0.1
Total program costs	$	0.6		$	0.9	$	0.2		$	1.2	$	0.2		$	1.2	$	5.8	$	1.4

For the three and six month periods ended June 30, 2017 and 2016, streamlining costs incurred for other programs include charges for headcount reductions and footprint relocations primarily driven by the Company's continued cost optimization efforts. These costs are summarized as follow:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in millions)	2017		2016		2017		2016
Headcount reductions	$	0.2	$	1.2	$	0.5	$	1.4
Footprint relocation	0.7		—		0.7		—
Total other programs	$	0.9	$	1.2	$	1.2	$	1.4

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Post-retirement Benefits

6 Months Ended

Jun. 30, 2017

Retirement Benefits, Description [Abstract]

Post-retirement Benefits

Post-retirement Benefits

Post-retirement pension, health and life insurance costs had the following components for the three and six month periods ended June 30, 2017 and 2016:

	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits
Service cost-benefits earned during period	$	5.0		$	0.1	$	4.2		$	—	$	9.9		$	0.3	$	8.2		$	—
Interest cost on the projected benefit obligation	3.7			0.1		4.4			0.2		7.0			0.2		8.8			0.3
Less: expected return on plan assets	(1.3		)	—		(1.7		)	—		(2.5		)	—		(3.4		)	—
Amortization of net loss	5.6			0.2		3.9			0.2		14.1			0.3		6.5			0.4
Pension and post-retirement benefit plan cost	$	13.0		$	0.4	$	10.8		$	0.4	$	28.5		$	0.8	$	20.1		$	0.7

The weighted-average expected rates of return on plan assets used to determine the pension and post-retirement benefit plan cost for the three and six month periods ended June 30, 2017 and 2016 were based on the rates determined as of the beginning of each of the fiscal years of 4.54% and 4.89%, respectively.

The Company makes contributions to funded pension plans that, at a minimum, meet all statutory funding requirements. Contributions in 2017, as well as payments of benefits incurred by unfunded plans, were in line with the expectations for 2017 and also in line with the contributions made during 2016.

Pension and post-retirement benefit plan cost is included in cost of sales, selling and administrative expenses and non-operating expenses on the condensed consolidated statements of operations.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

ASC 815, Derivatives and Hedging, requires a company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies and has been designated as a relationship hedge. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

The Company recognizes all derivative financial instruments in the condensed consolidated balance sheet at fair value using Level 2 inputs and these are classified as “other current assets,” “other assets,” “other accrued liabilities” or “other liabilities” on the condensed consolidated balance sheets. Level 2 inputs used by the Company in valuing its derivative instruments include model-based valuation techniques for which all significant assumptions are observable in the market.

The earnings impact resulting from changes in the fair value of derivative instruments is recorded in the same line item in the condensed consolidated statement of operations as the underlying exposure being hedged or in accumulated other comprehensive income for derivatives that qualify and have been designated as cash flow hedges or hedges of a net investment in a foreign operation. Any ineffective portion of a financial instrument's change in fair value is recognized in earnings together with changes in the fair value of any derivatives not designated as relationship hedges.

Net Investment Hedges

During 2016, the Company entered into various forward contracts with an aggregate notional amount of €440.0 million that were designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. All of these contracts had matured as of December 31, 2016. As of December 31, 2016 and June 30, 2017, a gain of $9.3 million, net of taxes of $5.8 million, related to these contracts has been recognized in cumulative translation adjustment within accumulated other comprehensive income (AOCI).

On November 15, 2016, the Company issued EUR Senior Notes of an aggregate amount of €440.0 million as previously discussed in Note 8, that were also designated as partial hedges of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. As of June 30, 2017, there was no hedge ineffectiveness and a loss of $19.4 million, net of taxes of $12.2 million, related to these notes has been recognized in cumulative translation adjustment within AOCI.

Derivatives Not Designated as Hedges

Foreign exchange contracts are also used by the Company to offset the earnings impact relating to the variability in exchange rates on certain assets and liabilities denominated in non-functional currencies and have not been designated as relationship hedges. As of June 30, 2017 and December 31, 2016, the Company had the following outstanding notional amounts related to foreign currency forward contracts:

(Amounts in millions)		As of June 30, 2017		As of December 31, 2016
Foreign Currency	Unit of Measure	Quantity Hedged	Notional Amount (USD Equivalent)	Quantity Hedged	Notional Amount (USD Equivalent)
Chinese Yuan	CNY	509.0	76.0	495.0	64.2
Hong Kong Dollar	HKD	294.6	37.8	294.5	34.6
British Pound	GBP	11.0	14.3	12.7	14.2
Brazilian Real	BRL	*	*	43.1	11.7

* No significant outstanding foreign currency forward contracts

The Company had additional foreign currency forward contracts with notional amounts that individually amounted to less than $10 million. As of June 30, 2017, forward contracts for an aggregate notional amount of €132.1 million ($151.1 million at June 30, 2017 exchange rates) were outstanding with an average duration of one month. These foreign exchange contracts have offset the revaluation of assets and liabilities. The combined net non-operating gain for the six months ended June 30, 2017 and 2016 amounted to $1.9 million and $0.4 million, respectively. The majority of these exchange contracts were entered into on June 29, 2017. The fair value of these derivatives was $0.9 million at June 30, 2017.

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Business combinations (Notes)

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Business Combinations

Business Combinations

Acquisition of MICO, Inc.

On February 1, 2016, the Company acquired MICO, Inc. (MICO) for cash consideration of $66.4 million, excluding cash acquired of $6.4 million, resulting in net cash paid of $60.8 million. MICO manufactures and markets hydraulic components, controls and brake systems for heavy-duty, off-highway vehicles in agriculture, construction, mining and similar industries.

The allocation of the purchase consideration to the assets acquired and liabilities assumed as of the acquisition date was finalized in the fourth quarter of 2016. The following table summarizes the allocation of the net purchase consideration:

(Amounts in millions)
Cash and cash equivalents	$	6.4
Trade receivables	5.8
Inventory	11.8
Property, plant and equipment	17.5
Intangible assets	14.3
Other assets acquired	3.0
Other liabilities assumed	(7.4		)
Identifiable net assets acquired	$	51.4
Goodwill	15.0
Net purchase consideration	$	66.4

The intangible assets include amounts recognized for the fair value of trade name, customer-based and technology-related assets. The fair values of the intangible assets were determined based on an income and cost approach. The intangible assets are being amortized over a weighted-average useful life of approximately 11 years and are deductible for tax purposes. The goodwill generated is primarily attributable to expected synergies and is deductible for tax purposes. The transaction-related costs were expensed as incurred and were recorded within other non-operating expense. The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented and as a result, no pro forma financial statements have been presented.

Acquisition of Laydon Composites Ltd.

On April 15, 2016, the Company acquired Laydon Composites Ltd. (LCL), a manufacturer of aerodynamic devices for heavy-duty trucks and trailers, for total consideration of $34.2 million. The Company paid $31.1 million, excluding cash acquired of $0.8 million, with additional contingent consideration of up to $4.3 million contingent upon the achievement of certain goals tied to annual and cumulative sales and earnings over a three year period. The range of undiscounted amounts the Company could be required to pay under this arrangement is between $0 and $4.3 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $3.1 million.

The allocation of the purchase consideration to the assets acquired and liabilities assumed as of the acquisition date was finalized in the first quarter of 2017. The following table summarizes the allocation of the net purchase consideration:

(Amounts in millions)
Purchase price, cash consideration	$	31.1
Purchase price, fair value of contingent consideration	3.1
Net purchase consideration	$	34.2
Cash and cash equivalents	$	0.8
Intangible assets	16.3
Other assets acquired	3.2
Deferred tax liabilities	(4.3		)
Other liabilities assumed	(1.0		)
Identifiable net assets acquired	$	15.0
Goodwill	19.2
Net purchase consideration	$	34.2

The intangible assets include amounts recognized for the fair value of trade name, customer-based and technology-related assets. The fair values of the intangible assets were determined based on an income and cost approach. The intangible assets are being amortized over a weighted-average useful life of approximately 18 years and are not deductible for tax purposes. The goodwill generated is primarily attributable to expected synergies and is not deductible for tax purposes. The transaction-related costs were expensed as incurred and were recorded within other non-operating expense. The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented and as a result, no pro forma financial statements have been presented.

Other Acquisitions

On February 1, 2016, the Company acquired assets from Trans-Safety LOCKS GmbH for $1.9 million.

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Subsequent Events (Notes)

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

On July 19, 2017, the Company entered into an agreement for the acquisition of Asset Trackr Private Limited (ATPL). Closing of the transaction is subject to customary conditions precedent and is expected to take place in the fourth quarter of 2017. ATPL is an India-based start-up company that helps commercial vehicle fleets track, analyze and optimize their transportation resources and assets in real time.

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2017

Statement of Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The table below presents the changes in accumulated other comprehensive loss for the three and six month periods ended June 30, 2017 and 2016.

	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Foreign currency translation adjustments (1):
Balance at beginning of period	$	(294.9	)	$	(235.7	)	$	(328.7	)	$	(271.2	)
Adjustment for the period	61.7			(30.2		)	95.5			5.3
Balance at end of period	(233.2		)	(265.9		)	(233.2		)	(265.9		)
Losses on intra-entity transactions (2):
Balance at beginning of period	(11.4		)	(14.0		)	(11.4		)	(15.2		)
Adjustment for the period	(0.3		)	2.6			(0.3		)	3.8
Balance at end of period	(11.7		)	(11.4		)	(11.7		)	(11.4		)
Unrealized gains on investments:
Balance at beginning of period	0.2			0.2			0.2			0.2
Adjustment for the period	—			—			—			—
Amounts reclassified to earnings, net	—			—			—			—
Balance at end of period	0.2			0.2			0.2			0.2
Unrealized losses on hedges:
Balance at beginning of period	(1.0		)	(1.1		)	(1.0		)	(1.2		)
Adjustment for the period	0.1			—			0.1			—
Amounts reclassified to earnings, net	—			—			—			0.1
Balance at end of period	(0.9		)	(1.1		)	(0.9		)	(1.1		)
Pension and post-retirement plans:
Balance at beginning of period	(234.5		)	(223.8		)	(236.4		)	(220.5		)
Other comprehensive income before reclassifications	(16.3		)	5.3			(18.3		)	0.9
Amounts reclassified to earnings, net (3)	4.5			2.8			8.4			3.9
Balance at end of period	$	(246.3	)	$	(215.7	)	$	(246.3	)	$	(215.7	)
Accumulated other comprehensive loss at end of period	$	(491.9	)	$	(493.9	)	$	(491.9	)	$	(493.9	)

(1) This accumulated other comprehensive loss component includes the realized gain on settled forward contracts accounted for as net investment hedges of $9.3 million, net of taxes of $5.8 million. Additionally, this component includes the unrealized loss on the Senior EUR notes, which have been designated as a net investment hedge, of $19.4 million, net of taxes of $12.2 million. See Note 13 for further discussion.

(2) Relates to intra-entity foreign currency transactions that are of a long term investment nature, when the entities to the transaction are consolidated, combined or accounted for by the equity method in the Company's financial statements.

(3) This accumulated other comprehensive loss component, net of taxes of $1.9 million and $1.1 million for the three months ended June 30, 2017 and 2016 respectively, and $3.6 million and $2.3 million for the six-month period ended June 30, 2017 and 2016 respectively, is included in the computation of net periodic pension cost. See Note 12 for additional details.

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Net Income Attributable to Company per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	Three Months Ended June 30,		Six Months Ended June 30,
	2017	2016	2017	2016
Weighted average incremental shares included	192,213	224,463	204,629	232,249
Shares excluded due to anti-dilutive effect	—	525	—	35,542

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Capital Stock (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Schedule of Net Shares Outstanding and Shares Issued or Reacquired

The following is a summary of net shares outstanding and shares issued or reacquired during the six month period ended June 30, 2017.

	Number of Shares of Common Stock
	Total Shares	Treasury Shares		Net Shares Outstanding
Balance, December 31, 2016	78,701,273	(24,209,355	)	54,491,918
Shares issued upon exercise of stock options	67,995	18,262		86,257
Shares issued upon vesting of RSUs	42,563	2,696		45,259
Shares issued for DSUs	1,090	—		1,090
Shares issued upon vesting of PSUs	24,525	7,175		31,700
Shares purchased for treasury	—	(1,033,000	)	(1,033,000	)
Balance, June 30, 2017	78,837,446	(25,214,222	)	53,623,224

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

Share-based Compensation [Abstract]

Total Stock-Based Compensation Cost Recognized During Period

Total stock-based compensation cost recognized during the three and six month periods ended June 30, 2017 and 2016 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amount in millions)	2017		2016		2017		2016
Stock-based compensation	$	6.2	$	4.3	$	9.7	$	7.7

Total Number and Type of Awards Granted and Related Weighted-Average Grant Date Fair Values

The total number and type of awards granted during the periods presented and the related weighted-average grant-date fair values were as follows:

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
	Underlying Shares	Weighted Average Grant Date Fair Value		Underlying Shares	Weighted Average Grant Date Fair Value
RSUs Granted	72,022	$	114.88	89,868	$	92.27
PSUs Granted	69,034	$	116.41	82,558	$	91.35
DSUs Granted	7,752	$	118.75	9,194	$	105.52
Stock Awards Granted	—	$	—	1,100	$	107.47
Total Awards	148,808			182,720

Schedule of Weighted Average Grant Date Fair Value Calculated Under The Black-Scholes Option-Pricing Model

The RSUs granted during the periods presented above have vesting terms as follow:

	Six Months Ended June 30,
	2017	2016
Vest in equal annual installments over three years	69,253	84,966
Vest after three years	2,769	4,902
Total RSUs granted	72,022	89,868

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Warranties, Guarantees, Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2017

Warranties, Guarantees, Commitments and Contingencies [Abstract]

Summary of Changes in the Company's Product Warranty Liability

The following is a summary of changes in the Company’s product warranty liability for the three and six month periods ended June 30, 2017 and 2016.

	Three Months Ended June 30,						Six Months Ended June 30,
(Amount in millions)	2017			2016			2017			2016
Balance of warranty costs accrued, beginning of period	$	48.9		$	43.4		$	49.3		$	40.9
Warranty costs accrued	7.5			6.9			11.9			12.7
Warranty claims settled	(10.8		)	(6.8		)	(16.3		)	(11.5		)
Foreign exchange translation effects	2.4			(0.8		)	3.1			0.6
Balance of warranty costs accrued, end of period	$	48.0		$	42.7		$	48.0		$	42.7
Current liability, included in current portion of warranties	$	29.1		$	24.7		$	29.1		$	24.7
Long-term liability, included in other liabilities	$	18.9		$	18.0		$	18.9		$	18.0
Warranty costs accrued	$	7.5		$	6.9		$	11.9		$	12.7
Less: received and anticipated recoveries from suppliers	(1.3		)	—			(1.6		)	(0.6		)
Warranty costs net of received and anticipated recoveries	$	6.2		$	6.9		$	10.3		$	12.1

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Streamlining Expenses (Tables)

6 Months Ended

Jun. 30, 2017

Restructuring Charges [Abstract]

Schedule of Streamlining Liabilities

The following is a summary of changes in the Company’s streamlining program liabilities for the six month period ended June 30, 2017.

(Amounts in millions)
2014 / 2015 Program
Balance as of December 31, 2016	$	27.8
Reversals for the first six months of 2017	0.2
Payments during the first six months of 2017	(6.3		)
FX effects	2.1
Balance as of June 30, 2017	$	23.8
Other Programs
Balance as of December 31, 2016	$	23.4
Charges during the first six months of 2017	1.2
Payments during the first six months of 2017	(4.9		)
FX effects	2.0
Balance as of June 30, 2017	$	21.7
Total streamlining liability as of June 30, 2017	$	45.5

Schedule of Streamlining Cost

For the three and six month periods ended June 30, 2017 and 2016, streamlining costs incurred for other programs include charges for headcount reductions and footprint relocations primarily driven by the Company's continued cost optimization efforts. These costs are summarized as follow:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in millions)	2017		2016		2017		2016
Headcount reductions	$	0.2	$	1.2	$	0.5	$	1.4
Footprint relocation	0.7		—		0.7		—
Total other programs	$	0.9	$	1.2	$	1.2	$	1.4

The following is a summary of current and cumulative streamlining costs related to the above programs:

	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program			Other Programs		2014/2015 Program		Other Programs
Employee-related charges – cost of sales	$	1.5		$	0.4	$	(0.3	)	$	0.1	$	(1.9	)	$	0.6	$	3.4	$	0.3
Employee-related charges – selling and administrative	(1.0		)	0.2		0.1			1.0		1.9			0.2		1.8		1.0
Other streamlining charges	0.1			0.3		0.4			0.1		0.2			0.4		0.6		0.1
Total program costs	$	0.6		$	0.9	$	0.2		$	1.2	$	0.2		$	1.2	$	5.8	$	1.4

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Post-retirement Benefits (Tables)

6 Months Ended

Jun. 30, 2017

Retirement Benefits, Description [Abstract]

Components of Post-retirement Pension, Health and Life Insurance Costs

Post-retirement pension, health and life insurance costs had the following components for the three and six month periods ended June 30, 2017 and 2016:

	Three Months Ended June 30,										Six Months Ended June 30,
	2017					2016					2017					2016
(Amounts in millions)	Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits		Pension Benefits			Health & Life Ins. Benefits
Service cost-benefits earned during period	$	5.0		$	0.1	$	4.2		$	—	$	9.9		$	0.3	$	8.2		$	—
Interest cost on the projected benefit obligation	3.7			0.1		4.4			0.2		7.0			0.2		8.8			0.3
Less: expected return on plan assets	(1.3		)	—		(1.7		)	—		(2.5		)	—		(3.4		)	—
Amortization of net loss	5.6			0.2		3.9			0.2		14.1			0.3		6.5			0.4
Pension and post-retirement benefit plan cost	$	13.0		$	0.4	$	10.8		$	0.4	$	28.5		$	0.8	$	20.1		$	0.7

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

As of June 30, 2017 and December 31, 2016, the Company had the following outstanding notional amounts related to foreign currency forward contracts:

(Amounts in millions)		As of June 30, 2017		As of December 31, 2016
Foreign Currency	Unit of Measure	Quantity Hedged	Notional Amount (USD Equivalent)	Quantity Hedged	Notional Amount (USD Equivalent)
Chinese Yuan	CNY	509.0	76.0	495.0	64.2
Hong Kong Dollar	HKD	294.6	37.8	294.5	34.6
British Pound	GBP	11.0	14.3	12.7	14.2
Brazilian Real	BRL	*	*	43.1	11.7

* No significant outstanding foreign currency forward contracts

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Business combinations (Tables)

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the allocation of the net purchase consideration:

(Amounts in millions)
Cash and cash equivalents	$	6.4
Trade receivables	5.8
Inventory	11.8
Property, plant and equipment	17.5
Intangible assets	14.3
Other assets acquired	3.0
Other liabilities assumed	(7.4		)
Identifiable net assets acquired	$	51.4
Goodwill	15.0
Net purchase consideration	$	66.4

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Recently Issued Accounting Standards (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of sales	$ 547.5	$ 501.0	$ 1,054.6	$ 974.9
Selling and administrative expenses	$ 99.2	93.1	$ 191.1	179.1
Reduction in Taxes [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification					$ 1.3
Retained Earnings [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification					$ 0.4
ASU 2017-07 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of sales		1.2		2.4
Selling and administrative expenses		$ 5.7		$ 10.2

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Comprehensive Income (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Derivative instruments, recognized gains / (losses)			$ 1.9	$ 0.4
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012			(577.3)
Ending Balance as of September 30, 2013	$ (491.9)	$ (493.9)	(491.9)	(493.9)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax			5.8
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	0.0	0.0	0.1	0.1
Foreign Currency Translation [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012	(294.9)	(235.7)	(328.7)	(271.2)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	61.7	(30.2)	95.5	5.3
Ending Balance as of September 30, 2013	(233.2)	(265.9)	(233.2)	(265.9)
Losses on Intra-entity transactions [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012	(11.4)	(14.0)	(11.4)	(15.2)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(0.3)	2.6	(0.3)	3.8
Ending Balance as of September 30, 2013	(11.7)	(11.4)	(11.7)	(11.4)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012	0.2	0.2	0.2	0.2
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	0.0	0.0	0.0	0.0
Amounts reclassified from accumulated other comprehensive income	0.0	0.0	0.0	0.0
Ending Balance as of September 30, 2013	0.2	0.2	0.2	0.2
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012	(1.0)	(1.1)	(1.0)	(1.2)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	0.1	0.0	0.1	0.0
Amounts reclassified from accumulated other comprehensive income	0.0	0.0	0.0	0.1
Ending Balance as of September 30, 2013	(0.9)	(1.1)	(0.9)	(1.1)
Unrealized Losses on Defined Benefit Plans, net of tax [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance as of Dec 31, 2012	(234.5)	(223.8)	(236.4)	(220.5)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(16.3)	5.3	(18.3)	0.9
Amounts reclassified from accumulated other comprehensive income	4.5	2.8	8.4	3.9
Ending Balance as of September 30, 2013	(246.3)	(215.7)	(246.3)	(215.7)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Tax	$ 1.9	$ 1.1	3.6	$ 2.3
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member]
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Derivative instruments, recognized gains / (losses)			9.3
Senior EUR Notes [Member] | Designated as Hedging Instrument [Member]
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax			19.4
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax			$ (12.2)

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Financing Receivables (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounts Receivable Financing Facility [Abstract]
Notes receivable discounted or transferred	$ 72.6	$ 50.0
Notes receivable	$ 43.0		$ 53.6
Notes receivable contractual maturity maximum	6 months
Expense from discount/transfer of notes receivable	$ 1.2

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Net Income Attributable to Company per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Weighted average incremental shares included	192,213	224,463	204,629	232,249
Shares excluded due to anti-dilutive effect	0	525	0	35,542

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Capital Stock (Schedule of Net Shares Outstanding and Shares Issued or Reacquired) (Details)	6 Months Ended
	Jun. 30, 2017 shares
Common Stock, Shares Outstanding [Roll Forward]
Total Shares, beginning balance	78,701,273
Treasury Shares, beginning balance	(24,209,355)
Net Shares Outstanding, beginning balance	54,491,918
Treasury shares issued	71,496
Stock Issued During Period, Shares, Deferred Stock Award	1,090
Shares purchased for treasury	(1,033,000)
Total Shares, ending balance	78,837,446
Treasury Shares, ending balance	(25,214,222)
Net Shares Outstanding, ending balance	53,623,224
Employee Stock Option [Member]
Common Stock, Shares Outstanding [Roll Forward]
Shares issued	67,995
Treasury shares issued	18,262
Net Shares Outstanding, ending balance	86,257
Restricted Stock Units (RSUs) [Member]
Common Stock, Shares Outstanding [Roll Forward]
Shares issued	42,563
Treasury shares issued	2,696
Net Shares Outstanding, ending balance	45,259
Deferred Stock Units [Domain]
Common Stock, Shares Outstanding [Roll Forward]
Shares issued	1,090
Performance Shares [Member]
Common Stock, Shares Outstanding [Roll Forward]
Shares issued	24,525
Treasury shares issued	7,175
Net Shares Outstanding, ending balance	31,700

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Capital Stock (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($) repurchase_program shares
Class of Stock [Line Items]
Treasury shares issued | shares	71,496
Stock Repurchase Program, Number of repurchase programs | repurchase_program	5
Repurchases of treasury stock | $	$ 1,591.0
Unexpended amount of share repurchase authorized | $	$ 480.0
Shares purchased for treasury | shares	1,033,000

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Capital Stock (Share Repurchase Program) (Details) - USD ($)	Jun. 30, 2017	Dec. 02, 2016	Dec. 05, 2014	Oct. 29, 2013	Oct. 26, 2012	May 26, 2011
Equity [Abstract]
Authorized amount	$ 2,100,000,000	$ 600,000,000	$ 500,000,000	$ 200,000,000	$ 400,000,000	$ 400,000,000

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Stock-Based Compensation (Total Stock-Based Compensation Cost and Total Number and Type of Awards Granted and Related-Weighted Average Grant-Date Fair Values) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation (in usd)	$ 6.2	$ 4.3	$ 9.7	$ 7.7
Total Awards, Underlying Shares			148,808	182,720
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			72,022	89,868
RSUs Granted, Weighted Average Grant Date Fair Value	$ 114.88	$ 92.27	$ 114.88	$ 92.27
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			69,034	82,558
RSUs Granted, Weighted Average Grant Date Fair Value	116.41	91.35	$ 116.41	$ 91.35
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Cumulative Earnings Achievement Period			3 years
Deferred Stock Units [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			7,752	9,194
RSUs Granted, Weighted Average Grant Date Fair Value	118.75	105.52	$ 118.75	$ 105.52
Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			0	1,100
RSUs Granted, Weighted Average Grant Date Fair Value	$ 0.00	$ 107.47	$ 0.00	$ 107.47
Vest Ratably over Three Years [Member] | Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			69,253	84,966
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Vest After Two Years [Member] | Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			2 years
Vest After Three Years [Member] | Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted, Underlying Shares			2,769	4,902
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years

XML

Debt (Narrative) (Details) - USD ($)		6 Months Ended	12 Months Ended
	Jul. 08, 2011	Jun. 30, 2017	Dec. 31, 2014	Dec. 31, 2016	Jun. 25, 2015	Dec. 17, 2014
Debt Instrument [Line Items]
Debt Instrument, Issuance Date		Jun. 25, 2015
Debt Instrument, Face Amount					$ 500,000,000
Payment of debt issuance costs		$ 2,100,000
Multi-currency revolving credit facility		$ 500,000,000
Document Period End Date		Jun. 30, 2017
Maximum secured indebtedness of subsidiaries		$ 150,000,000
Subsidiaries [Member]
Debt Instrument [Line Items]
Borrowings from banks		$ 700,000
Series A Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount					$ 150,000,000
Debt Instrument, Interest Rate, Stated Percentage					2.83%
Debt Instrument, Maturity Date		Jun. 25, 2022
Series B Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount					$ 200,000,000
Debt Instrument, Interest Rate, Stated Percentage					3.08%
Debt Instrument, Maturity Date		Jun. 25, 2025
Credit Facility Expiring in 2020 [Member]
Debt Instrument [Line Items]
Credit facility initiation date		Jul. 08, 2011
Multi-currency revolving credit facility	$ 400,000,000
Term Of Credit Facility	5 years
Credit facility expiration date		Sep. 30, 2021
Credit Facility Expiring in 2020 [Member] | Letters of Credit [Member]
Debt Instrument [Line Items]
Multi-currency revolving credit facility		$ 30,000,000
Unused letters of credit		30,000,000
Credit Facility Expiring in 2020 [Member] | Swingline Loans [Member]
Debt Instrument [Line Items]
Multi-currency revolving credit facility		$ 50,000,000
Credit Facility Expiring in 2019 [Member]
Debt Instrument [Line Items]
Credit facility initiation date		Dec. 17, 2014
Multi-currency revolving credit facility						$ 100,000,000
Term Of Credit Facility			5 years
Credit facility expiration date		Dec. 17, 2019
Long-term Debt [Member]
Debt Instrument [Line Items]
Debt held by subsidiaries				$ 600,000
Long-term Debt [Member] | Subsidiaries [Member]
Debt Instrument [Line Items]
Borrowings from banks		$ 500,000
Local Working Capital Requirements [Member] | Subsidiaries [Member]
Debt Instrument [Line Items]
Borrowings from banks		$ 200,000
Total balance [Member]
Debt Instrument [Line Items]
Debt held by subsidiaries				$ 800,000
Minimum [Member]
Debt Instrument [Line Items]
Interest rate, minimum		0.45%
Maximum [Member]
Debt Instrument [Line Items]
Interest rate, minimum		1.00%

XML

Debt (Senior EUR Notes) (Details) € in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 EUR (€)	Nov. 15, 2016 USD ($)	Nov. 15, 2016 EUR (€)	Jun. 25, 2015 USD ($)
Debt Instrument [Line Items]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	$ 0.0	$ 0.0	$ 0.1	$ 0.1
Debt Instrument, Face Amount								$ 500.0
Long-term Debt	498.3		498.3
Senior EUR Notes [Member]
Debt Instrument [Line Items]
Debt Issuance Costs, Net						$ 1.4
Long-term Debt	$ 502.1		$ 502.1
Senior Notes [Member] | Senior EUR Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | €					€ 440.0		€ 440.0
Senior Notes [Member] | Series D Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | €							€ 190.0
Debt Instrument, Interest Rate, Stated Percentage						0.84%	0.84%
Senior Notes [Member] | Series E Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | €							€ 80.0
Debt Instrument, Interest Rate, Stated Percentage						1.20%	1.20%
Senior Notes [Member] | Series F Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | €							€ 170.0
Debt Instrument, Interest Rate, Stated Percentage						1.36%	1.36%

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Debt (Senior USD Notes) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 25, 2015
Debt Instrument [Line Items]
Document Period End Date	Jun. 30, 2017
Long-term Debt	$ 498.3
Debt Instrument, Face Amount		$ 500.0
Series A Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 150.0
Debt Instrument, Interest Rate, Stated Percentage		2.83%
Debt Instrument, Maturity Date	Jun. 25, 2022
Series B Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 200.0
Debt Instrument, Interest Rate, Stated Percentage		3.08%
Debt Instrument, Maturity Date	Jun. 25, 2025
Series C Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 150.0
Debt Instrument, Interest Rate, Stated Percentage		3.18%
Debt Instrument, Maturity Date	Jun. 25, 2027

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Warranties, Guarantees, Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
Guarantor Obligations [Line Items]
Document Period End Date	Jun. 30, 2017
Warranty campaign - costs	$ 28.8
Standard warranty period	2 years
Bank guarantees	$ 37.4
Notes Receivable Transferred Not Matured	31.4		$ 24.3
Estimated total amount of the contingency	43.1
Loss contingency liability		$ 11.3
Tax Litigation Claims [Member]
Guarantor Obligations [Line Items]
Uncollateralized bank guarantees	30.2
Letters of Credit [Member]
Guarantor Obligations [Line Items]
Uncollateralized bank guarantees	0.2
Other Items [Member]
Guarantor Obligations [Line Items]
Uncollateralized bank guarantees	$ 7.0

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Warranties, Guarantees, Commitments and Contingencies (Summary of Changes in the Company's Product Warranty Liability) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance of warranty costs accrued, beginning of period	$ 48.9	$ 43.4	$ 49.3	$ 40.9
Warranty costs accrued	7.5	6.9	11.9	12.7
Product Warranty Accrual, Recoveries	(1.3)	0.0	1.6	0.6
Warranty claims settled	(10.8)	(6.8)	(16.3)	(11.5)
Foreign exchange translation effects	2.4	(0.8)	3.1	0.6
Balance of warranty costs accrued, end of period	48.0	42.7	48.0	42.7
Current liability, included in current portion of warranties	29.1	24.7	29.1	24.7	$ 32.2
Long-term liability, included in other liabilities	18.9	18.0	18.9	18.0
Product Warranty Expense	$ 6.2	$ 6.9	10.3	$ 12.1
Warranty campaign - costs			$ 28.8

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Income Tax Contingency [Line Items]
Income tax expense (benefit)	$ 14.0	$ 20.4	$ 29.3	$ 121.5
Pretax Income	105.5	$ 99.3	205.1	190.6
Unrecognized Tax Benefits, Period Increase (Decrease)			$ 71.1	$ 86.4
Document Period End Date			Jun. 30, 2017
Unrecognized tax benefits	75.1		$ 75.1
Unrecognized tax benefits classified as long term liabilities	1.7		1.7
Unrecognized tax benefits classified as reduction to deferred tax assets	$ 73.4		$ 73.4
Reduction in Taxes [Member]
Income Tax Contingency [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification					$ 1.3

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Streamlining Expenses (Schedule of Streamlining Liabilities) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017
Restructuring Reserve [Roll Forward]
Total streamlining liability as of June 30, 2017	$ 45.5
2014/2015 Program [Member]
Restructuring Reserve [Roll Forward]
Beginning balance	27.8
Charges during the first six months of 2017	0.2
Payments during the first six months of 2017	(6.3)
Foreign exchange translation effects	(2.1)
Ending balance	23.8
Other Programs [Member]
Restructuring Reserve [Roll Forward]
Beginning balance	23.4
Charges during the first six months of 2017	1.2
Payments during the first six months of 2017	(4.9)
Foreign exchange translation effects	(2.0)
Ending balance	$ 21.7

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Streamlining Expenses (Narrative) (Details) $ in Millions	Jun. 30, 2017 USD ($)
Other Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Streamlining liabilities	$ 22.0
Streamlining Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Streamlining liabilities	$ 23.5

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Streamlining Expenses (Schedule of Current and Cumulative Streamlining Costs) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
2014/2015 Program [Member]
Restructuring Cost and Reserve [Line Items]
Employee related charges - cost of sales	$ 1.5	$ (0.3)	$ (1.9)	$ 3.4
Employee related charges - selling and administrative	(1.0)	0.1	1.9	1.8
Other streamlining charges	0.1	0.4	0.2	0.6
Total program costs	0.6	0.2	0.2	5.8
Other Programs [Member]
Restructuring Cost and Reserve [Line Items]
Employee related charges - cost of sales	0.4	0.1	0.6	0.3
Employee related charges - selling and administrative	0.2	1.0	0.2	1.0
Other streamlining charges	0.3	0.1	0.4	0.1
Total program costs	$ 0.9	$ 1.2	$ 1.2	$ 1.4

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Streamlining Expenses Schedule of Streamiling Cost by nature (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Charges during the first six months of 2017	$ 0.2	$ 1.2	$ 0.5	$ 1.4
Employee Relocation [Member]
Restructuring Cost and Reserve [Line Items]
Charges during the first six months of 2017	0.7	0.0	0.7	0.0
Restructuring Plan [Domain]
Restructuring Cost and Reserve [Line Items]
Charges during the first six months of 2017	$ 0.9	$ 1.2	$ 1.2	$ 1.4

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Post-retirement Benefits (Components of Post-retirement Pension, Health and Life Insurance Costs) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Document Period End Date			Jun. 30, 2017
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Rate of Return on Plan Assets			4.54%	4.89%
Pension Plan [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Service cost-benefits earned during period	$ 5.0	$ 4.2	$ 9.9	$ 8.2
Interest cost on the projected benefit obligation	3.7	4.4	7.0	8.8
Less assumed return on plan assets	(1.3)	(1.7)	(2.5)	(3.4)
Amortization of net loss	5.6	3.9	14.1	6.5
Defined benefit plan cost	13.0	10.8	28.5	20.1
Health and Life Insurance Benefits [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Service cost-benefits earned during period	0.1	0.0	0.3	0.0
Interest cost on the projected benefit obligation	0.1	0.2	0.2	0.3
Less assumed return on plan assets	0.0	0.0	0.0	0.0
Amortization of net loss	0.2	0.2	0.3	0.4
Defined benefit plan cost	$ 0.4	$ 0.4	$ 0.8	$ 0.7

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Derivative Instruments and Hedging Activities (Narrative) (Details) € in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 EUR (€)
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Document Period End Date			Jun. 30, 2017
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	$ 0.0	$ 0.0	$ 0.1	$ 0.1
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax			$ 5.8
Average duration of derivatives, months			1 month
Derivative instruments, recognized gains / (losses)			$ 1.9	$ 0.4
Fair value of derivatives	(0.9)		(0.9)
Not Designated as Hedging Instrument [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Notional amount of derivatives	151.1		151.1		€ 132.1
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Notional amount of derivatives	440.0		440.0
Derivative instruments, recognized gains / (losses)			9.3
Senior EUR Notes [Member] | Designated as Hedging Instrument [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax			19.4
Notional amount of derivatives	$ 440.0		440.0
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax			$ 12.2

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Derivative Instruments and Hedging Activities (Derivatives Not Designated As Hedging) (Details) - Not Designated as Hedging Instrument [Member] € in Millions, ¥ in Millions, £ in Millions, HKD in Millions, BRL in Millions, $ in Millions	Jun. 30, 2017 CNY (¥)	Jun. 30, 2017 GBP (£)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 HKD	Jun. 30, 2017 EUR (€)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2016 GBP (£)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 HKD	Dec. 31, 2016 BRL
Derivative [Line Items]
Notional Amount			$ 151.1		€ 132.1
Foreign Exchange Forward [Member] | China, Yuan Renminbi
Derivative [Line Items]
Notional Amount	¥ 509.0		76.0			¥ 495.0		$ 64.2
Foreign Exchange Forward [Member] | Hong Kong, Dollars
Derivative [Line Items]
Notional Amount			37.8	HKD 294.6				34.6	HKD 294.5
Foreign Exchange Forward [Member] | United Kingdom, Pounds
Derivative [Line Items]
Notional Amount		£ 11.0	$ 14.3				£ 12.7	14.2
Foreign Exchange Forward [Member] | Brazil, Brazil Real
Derivative [Line Items]
Notional Amount								$ 11.7		BRL 43.1

XML

Business combinations (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($)
Business Acquisition [Line Items]
Document Period End Date	Jun. 30, 2017
MICO, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	$ 66.4
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	6.4
Payments to Acquire Businesses, Net of Cash Acquired	$ 60.8
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	11 years
Trans-Safety LOCKS GmbH [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	$ 1.9
Laydon Composites Ltd. [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	31.1
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	$ 0.8
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	18 years

XML

Business combinations Schedule of Recognized Identified Assets (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Document Period End Date	Jun. 30, 2017
Goodwill	$ 430.9	$ 399.2
MICO, Inc. [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	11 years
Business Combination, Consideration Transferred	$ 66.4
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	6.4
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	5.8
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	11.8
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	17.5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	14.3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other	3.0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(7.4)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	51.4
Goodwill	15.0
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest	$ 66.4
Laydon Composites Ltd. [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	18 years
Business Combination, Net Consideration	$ 34.2
Business Combination, Consideration Transferred	31.1
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	0.8
Business Combination, Contingent Consideration	3.1
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	16.3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other	3.2
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent	(4.3)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(1.0)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	15.0
Goodwill	19.2
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest	34.2
Trans-Safety LOCKS GmbH [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	1.9
Maximum [Member] | Laydon Composites Ltd. [Member]
Business Acquisition [Line Items]
Business Combination, Contingent Consideration	4.3
Minimum [Member] | Laydon Composites Ltd. [Member]
Business Acquisition [Line Items]
Business Combination, Contingent Consideration	$ 0.0