Highlights

-- Cash flow from operations was $99 million compared to $114 million in

the same period last year.

-- Free cash flow was $73 million compared to $59 million in the same

period last year.

-- Fully complied with all covenants in its revolving credit facility in

June; the debt to EBITDA covenant was met with a comfortable cushion.

-- Signed agreements to divest the majority of its Chassis businesses, and

closed selective sales during the quarter.

-- Signed an agreement on Aug. 4, 2009, to sell the Wheels business unit.

-- Awarded new axle business with Navistar and a premier bus manufacturer

in China; executed multi-year agreement with Daimler Trucks North

America.

"Although sales are down significantly, our performance this quarter demonstrates a continued diligence to improve ArvinMeritor's liquidity position through proactive management of working capital, improved operational performance and ongoing cost reduction actions," said Chairman, CEO and President Chip McClure. "With the completion of several divestitures, we moved closer to our objective of becoming a commercial vehicle company, enabling us to focus on expanding our leadership position in both on- and off-highway markets, as demonstrated by the new contracts we announced this quarter."

Results for the Third-Quarter Fiscal Year 2009

In the third quarter of fiscal year 2009, ArvinMeritor posted sales of $993 million, down from $1.9 billion, or 47 percent, from the same period last year (42 percent excluding effects of foreign currency). This decrease in sales is due to significantly lower production volumes in most original equipment markets globally.

Net loss was $162 million, or $2.23 per diluted share, compared to net income of $44 million or $0.60 per diluted share, in the third quarter of fiscal year 2008. Net loss includes losses from discontinued operations of $134 million or $1.84 per diluted share, primarily related to non-cash, after-tax charges of approximately $90 million associated with the divestiture of several of the company's chassis businesses.

EBITDA from continuing operations, before special items, was $33 million, down $79 million or 71 percent, from the same period last year. Despite sales being down nearly 50 percent in our core Commercial Vehicle Systems business, EBITDA margins in that business only declined by approximately 30 percent, due to operational improvements, the impact of restructuring and other cost reduction initiatives, and positive material performance.

Loss from continuing operations, on a GAAP basis, was $28 million or $0.39 per diluted share, compared to income from continuing operations of $48 million or $0.66 per diluted share in the prior year.

Loss from continuing operations, before special items, was $18 million or $0.25 per diluted share, compared to income from continuing operations, before special items, of $54 million or $0.74 per diluted share a year ago. Special items for the quarter primarily relate to restructuring charges and non-cash charges for a valuation reserve against certain deferred tax assets.

Free cash flow was $73 million in the third quarter, an increase of $211 million from the second fiscal quarter of this year. This increase is due to continued reductions in working capital levels, primarily in accounts receivable and inventory.

Divestiture of Wheels Business

On Aug. 4, 2009, ArvinMeritor entered into a purchase and sale agreement to divest the entirety of its Wheels business - previously a division of the company's LVS segment - to Iochpe-Maxion, S. A. (Buyer), a Brazilian producer of wheels and frames for commercial vehicles, railway freight cars and castings. The base purchase price is $180 million; actual closing proceeds may vary depending on taxes and the net cash or debt position of the business at closing.

The closing and funding of the entire adjusted purchase price is expected to be on or before Sept. 23, 2009, prior to the end of ArvinMeritor's fourth fiscal quarter. The agreement also requires certain true-up payments for working capital and other miscellaneous adjustments, on a post-closing basis.

The completion of the transaction is subject to several conditions, including the clearance or waiver of applicable competition law waiting periods in the United States and Mexico, and the fulfillment of Buyer's committed financing. The Buyer will be pursuing corporate approvals, which are required under Brazilian law.

Divestiture of Chassis Businesses

As previously announced, in the third quarter of fiscal year 2009, ArvinMeritor completed the sale of its 51-percent stake in Gabriel de Venezuela, substantially completed the sale of its Gabriel Ride Control Products North America business and entered into a binding letter of intent to sell its stake in Meritor Suspension Systems Company. All of these businesses are included in the company's discontinued operations for the third quarter.

These transactions largely complete the divestiture of Chassis Systems, representing 72 percent of total Chassis revenue based on 2008 sales, including $117 million of pass-through sales, and 87 percent of value-added sales.

The remaining Chassis businesses operate near breakeven and primarily support the company's suspension module assembly business which is expected to run-off over the next two years as various vehicle programs come to a conclusion.

New Business Wins

During the third quarter, ArvinMeritor announced a long-term supply agreement with Navistar. Effective July 13, Meritor axles are now in standard position on International(R) medium-duty trucks and IC Bus(TM) brand school and commercial buses. In addition, ArvinMeritor gains additional standard axle positions on International's heavy-duty trucks.

The company also completed a multi-year agreement with Daimler Trucks North America this quarter for the supply of axles, brakes and drivelines.

In Asia Pacific, ArvinMeritor signed a supply agreement with Yutong Group Co., Ltd., the largest producer of high-end buses and coaches in the China market, to supply drivetrain components for buses and coaches in China. Production under this agreement is expected to begin at the end of calendar year 2009.

Credit Line Covenant Compliance

ArvinMeritor was in compliance with the covenants in its revolving credit facility as of June 28, 2009. Stronger cash flow and improved regional cash efficiencies in the third quarter allowed the company to reduce usage of the revolver in the quarter by $145 million.

In addition, the company has identified actions that should allow it to meet its covenants at the September measurement date and is working diligently to implement those actions. These include executing the sale of Wheels and replacing the U.S. accounts receivable securitization program, as well as continued improvements in working capital. ArvinMeritor is in negotiations with potential lenders for a replacement to its US securitization program. Based on discussions with those lenders and progress to date, the company expects to complete a transaction in August 2009.

If the company is unable to complete these actions by the September measurement date, it is likely that ArvinMeritor will seek and obtain an amendment or waiver to its revolving credit line agreement.

Outlook

While market conditions remain depressed in North America and Europe, South America and Asia Pacific continue to show signs of improvement.

For the fourth quarter of fiscal year 2009 (compared to the third fiscal quarter of 2009), the company anticipates:

-- Revenue to be slightly lower, due largely to seasonal patterns

-- Loss per share, before special items, to be greater

-- Free cash flow, before factoring and restructuring, to be slightly

negative

-- Total free cash flow to be negative

"While we anticipate market conditions will remain tough through our fourth fiscal quarter, we are taking appropriate actions that should help offset the impact and allow us to remain in compliance with our year-end credit line financial covenant," said McClure. "We will continue to proactively manage working capital levels, execute key initiatives and reduce costs, while at the same time positioning the company for a recovery in our key markets."

About ArvinMeritor

ArvinMeritor, Inc. is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company marks its centennial anniversary in 2009, celebrating a long history of 'forward thinking.' ArvinMeritor serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers.