1. Announcement of Light
Vehicle Systems Spinoff
Chip McClure
Chairman, CEO and President
Phil Martens
President, Light Vehicle Systems
Carsten Reinhardt
President, Commercial Vehicle Systems
Jim Donlon
Executive Vice President and CFO
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2. Forward-Looking Statements
This presentation contains statements relating to future results of the company (including certain projections
and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,”
“anticipate,” “estimate,” “should,” “are likely to be,” “will” and similar expressions. In addition, there are risks
and uncertainties relating to the planned spinoff of ArvinMeritor’s Light Vehicle Systems business, including the
timing and certainty of completion of the transition. Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not limited to global economic and market cycles and
conditions; the demand for commercial, specialty and light vehicles for which the company supplies products;
risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of
production and supply due to terrorist attacks or acts of aggression); availability and sharply rising cost of raw
materials, including steel and oil; OEM program delays; demand for and market acceptance of new and existing
products; successful development of new products; reliance on major OEM customers; labor relations of the
company, its suppliers and customers, including potential disruptions in supply of parts to our facilities or
demand for our products due to work stoppages; the financial condition of the company’s suppliers and
customers, including potential bankruptcies; possible adverse effects of any future suspension of normal trade
credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing
contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged
businesses; the ability to achieve the expected annual savings and synergies from past and future business
combinations and the ability to achieve the expected benefits of restructuring actions; success and timing of
potential divestitures; potential impairment of long-lived assets, including goodwill; potential adjustment of the
value of deferred tax assets; competitive product and pricing pressures; the amount of the company’s debt; the
ability of the company to continue to comply with covenants in its financing agreements; the ability of the
company to access capital markets; credit ratings of the company’s debt; the outcome of existing and any future
legal proceedings, including any litigation with respect to environmental or asbestos-related matters; product
liability and warranty and recall claims; rising costs of pension and other post-retirement benefits and possible
changes in pension and other accounting rules; as well as other risks and uncertainties, including but not limited
to those detailed from time to time in filings of the company with the SEC. These forward-looking statements
are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-
looking statements, whether as a result of new information, future events or otherwise, except as otherwise
required by law.
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3. Announcing the Separation of
ArvinMeritor’s Two Business Units
• ArvinMeritor to spin off our Light Vehicle Systems segment
to shareholders
• ArvinMeritor to continue as a commercial vehicle systems
supplier
• Spinoff represents a major step in corporate transformation
• Improves corporate clarity and management focus
• Allows each company to reach its full shareholder value
potential
• Allows holders to invest selectively
• De-couples risk profiles
• Improves customer dynamics
Unlocks shareholder value and increases focus
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4. Terms of the Spinoff
• Spinoff expected to be implemented through a pro rata tax-free stock
dividend to ArvinMeritor shareholders
– Upon completion, ARM shareholders will own 100% of both
companies
• Spinoff expected to be completed within the next 12 months
– Subject to market conditions and regulatory and other customary
approvals
• New company has applied to be listed as ARVI on the NASDAQ stock
exchange
• Transaction time line:
Announce
Update the Market Spinoff Effective
File Form 10
FY 2008 Q3 Q4 FY 2009
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5. Investment Thesis
• Global supplier with $2 billion of value-added sales
– Specialized in Body and Chassis Systems
– Over 60% of revenue derived outside the U.S.
• Diverse and robust business portfolio
• Global manufacturing with an expanding LCCC footprint
• Great brands and business building blocks
• Strong book of business benefiting from emerging
market growth
• Experienced and respected management team
• Margin expansion from an improving cost structure
Positioned to win in the global automotive industry
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6. The New Company: Arvin Innovation
We are a high-performance team. Together In all we do, we aim for profitable
and with our customers we create value growth. We grow value for our
everyday. As great team members, we shareholders, associates,
become invaluable partners. customers and the communities
where we work and live.
Individually and collectively,
our goal is to never stop growing.
Collaborate. Innovate. GROW.
We are out to change the game through original thinking,
new advances and optimized performance. We look to
innovate in every aspect of our business.
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7. Diverse and Robust Business Portfolio
LVS 2007 Value-Added Sales(1)
Geographic Mix Customer Mix
Toyota
South Asia Pacific
2% Honda
America 6% Fiat
2% Other
2%
10%
5%
North Nissan VW
BMW
2%
America 25%
3%
38%
Hyundai
5%
Europe Renault
8%
46%
Chrysler
Aftermkt 13%
9%
Segment Mix
PSA Ford
7% GM 10%
7%
Chassis
Systems
40% Ford GM Chrysler Total
North America 4.1% 2.9% 12.6% 19.5%
South America 0.0 2.9 0.2 3.0
Body
Systems
Europe 2.7 1.5 0.0 4.2
60%
Asia Pacific 2.7 0.0 0.0 2.7
Only 20% of sales are to the
(1) Value-added sales are defined to be total sales less pass-
Detroit 3 in North America
through sales. In 2007, LVS had value-added sales of
$2.0 billion and pass-through sales of $200 million.
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9. Global Sourcing/Manufacturing Model
Arvin Innovation Facilities
• 42 facilities and approximately
9,000 employees in 16 countries
• Favorable labor arrangements
Headquarters in Detroit, but center of gravity in Europe
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10. Great Brands and Other Building Blocks
Gabriel brand shocks & struts
• Instant name recognition
• Outstanding product heritage
High value-add products in the
Outstanding joint venture
pipeline
partners
• Smart motors and latches
• Local experts
• Active chassis products
• Rapidly growing customers
• Highly-engineered wheels
Existing plants in low-cost
The world’s best steel wheels
regions
business
• 8 plants in Asia
• Fumagalli brand – respected
• 6 plants in Mexico and South
around the world
America
• Brazil home base and home
• 6 plants in Central/Eastern
market
Europe
• Great products and processes
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11. Strong Growth Trajectory
Asia
Europe • Able to offer the full product portfolio in China
• Building three new plants
• Our largest region
• Expanding engineering capability
• Growing with Central/
Eastern European
South America
customers and demand
• Sales up more than 30% FYTD
• Potential to double business within region
Industry Sales
(millions of units)
• Leverage existing footprint
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smart systems ™
6
Central
• Improving vehicle performance & integration
Europe
• Emphasis on materials engineering
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Eastern
• Development contracts for advanced chassis
Europe
2
• Launching many new programs this year
Customers
0
2006 2007 2008 2014
• Strategic body systems supplier to Hyundai
• Growing with Chery and other emerging OEMs
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12. Experienced and Respected Management Team
James Marley Phil Martens Jim Donlon Rakesh Sachdev
Non-Executive Chief Executive Executive Vice Executive Vice
Chairman Officer President & Chief President, Chief
Financial Officer Administrative
Retired Chairman, Current President,
Officer & Managing
AMP Inc. and Light Vehicle Current Executive
Director of Emerging
current member of Systems Vice President and
Markets
ArvinMeritor Board Chief Financial
of Directors Officer Current President,
Asia Pacific
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13. Cost Structure Is Improving
• Performance Plus has accelerated cost reduction efforts and
focus, especially in labor and burden productivity
• Aggressive restructuring efforts have shifted footprint
toward low-cost countries and will continue to improve cost
structure
N. America S. America Europe Asia Pacific
• Toronto • Brussels
• Restructure • Frankfurt
Out some labor
agreements
Production
• Expand Puebla • Expand Brazil Body • Expand • Changchun
Systems Lozorno
• Expand San • Pune
In Luis Potosi • Extend offering • Romania • Waigaoqaio
from Venezuela JV • Wuhu
• S. America Tech • Consolidate • Offshore
Engineering Center Body Engineering
Engineering Center
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14. Margin Expansion Trend Underway
LVS Segment Results(1)
2006 2007 2008 2010
Actual Actual Estimate Target(2)
Sales (billions) $ 2.2 $2.2 $ 2.4 $2.7 - $2.9
Annual Sales Growth 0% 7% 7 - 10%
EBITDA Before Special Items
$ 69 $ 90
(millions)(3)
EBITDA Margin 3.1% 4.0%
3-5 year EBITDA margin target of 7-8%(2)
(1) Actual and estimated results and targets are on the basis of the LVS segment of ArvinMeritor, Inc. and are not on the
basis of LVS as a separate, stand-alone entity. Financial results, estimates and targets for the LVS segment of
ArvinMeritor will differ from, and may not be indicative of, the results of operations and financial position LVS would have
had or may have if it operated as a separate, stand-alone entity during those periods.
(2) Based on management assumptions regarding pricing, currency exchange rates, volume and timing of vehicle production,
option mix, and other factors not in the control of management.
14 (3) See Appendix – “Non-GAAP Financial Information”
15. 2008 Progress on Underlying Profitability
LVS Segment Results (millions)(1)
2008
2008 2007
Better/Worse
FYTD FYTD
Than 2007
EBITDA Before Special Items as Reported (2) $ 36 $ 46 $ (10)
Changes to Certain Benefit Programs (2) - (2)
Legal/Commercial Dispute with Customer 9 - 9
Commercial Settlement with Supplier 2 - 2
ET Corporate Allocations 5 - 5
Adjustments to Pricing Reserves - (5) 5
Adjusted EBITDA on Comparable Basis $ 50 $ 41 $ 9
(1) Actual results are on the basis of the LVS segment of ArvinMeritor, Inc. and are not on the basis of LVS as a separate, stand-alone
entity. Financial results for the LVS segment of ArvinMeritor will differ from, and may not be indicative of, the results of
operations and financial position LVS would have had if it had operated as a separate, stand-alone entity during those periods.
15 (2) See Appendix – “Non-GAAP Financial Information”
16. ArvinMeritor After the Spinoff
• Will continue to be a leader in providing undercarriage
components and systems to global truck, trailer,
specialty and aftermarket customers
• Experienced management team will remain in place, with
Chip McClure as CEO, Carsten Reinhardt as COO and Jay
Craig as CFO
• Well positioned to benefit from significant operating
improvements and expected rebound in North American
truck and trailer markets
• Will continue to trade as ARM on the New York Stock
Exchange
• Management will recommend that the board maintain
the current dividend policy until the spinoff is completed
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17. Creating Value Through Transformation
• Roll Coater divestiture
• LVA divestitures
• Balance sheet restructuring
– Pay-down and re-timing
• Emissions Technologies divestiture
• Performance Plus profit improvement program
• Spinoff of Light Vehicle Systems
Optimizing structure for greatest shareholder value
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19. Use of Non-GAAP Financial Information
Included in this presentation, the Company has provided information regarding segment EBITDA and segment EBITDA
margins. ArvinMeritor uses Segment EBITDA as the primary basis for the chief operating decision maker to evaluate the
performance of each of the company’s reportable segments. Segment EBITDA is defined as earnings before interest, tax,
depreciation and amortization and losses on sales of receivables. Segment EBITDA margins are defined as Segment
EBITDA as a percentage of sales. This presentation also includes Segment EBITDA before special items (BSI) and Segment
EBITDA BSI margins. Segment EBITDA before special items is defined as Segment EBITDA plus or minus special items.
Management believes that the non-GAAP financial measures used in this presentation are useful to both management and
investors in their analysis of the Company’s financial position and results of operations. Segment EBITDA is a meaningful
measure of performance commonly used by management, the investment community and banking institutions to analyze
operating performance and entity valuation. Further, management uses these non-GAAP measures for planning and
forecasting in future periods.
These non-GAAP measures should not be considered a substitute for the reported results prepared in accordance with
GAAP. Segment EBITDA should not be considered an alternative to operating income as an indicator of operating
performance or to cash flows as a measure of liquidity. These non-GAAP financial measures, as determined and presented
by the Company, may not be comparable to related or similarly titled measures reported by other companies.
Set forth on the following slide are reconciliations of the Segment EBITDA as reported in the company’s Form 10-K and Form
10-Q to Segment EBITDA before special items.
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20. Non-GAAP Financial Information (1)
Segment EBITDA Before Special Items Reconciliation
Twelve Months Ended
(in millions) September 30,
2007 2006
$ 2,244 $ 2,236
Segment Sales
Segment EBITDA - Reported $ 36 $ 58
54 12
Restructuring Costs
Ride Control Fair Value Adjustments (12) 3
12 -
Product Disruptions/Supplier Reorganizations
- (5)
Gain On Divestitures
Other - 1
$ 90 $ 69
Segment EBITDA - Before Special Items
Segment EBITDA Margins - Before Special Items 4.0% 3.1%
Six Months Ended
March 31,
2008 2007
Segment EBITDA - Reported $ 21 $ 22
Restructuring Costs 15 29
- (10)
Ride Control Fair Value Adjustments
Product Disruptions - 5
$ 36 $ 46
Segment EBITDA - Before Special Items
(1) See Slide 19 – “Non-GAAP Financial Information”
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