Walmart Sales Fell 2% in the Fourth Quarter

Wal-Mart Stores Inc. (WMT ), the world's largest retailer, reported that sales fell 2% in the fourth quarter compared to the same period last year. More bad news is on the way. Walmart also forecast a "challenging" first quarter.

All of the big guns at Walmart offered their reasons for the decline. Deflation in the price of groceries, which account for 40% of sales, was one factor. Price discounts in electronics and flat screen TVs were also cited.

Tom Schoewe, chief financial officer, said customer traffic had fallen and, among other things, cited the remodeling of Walmart stores under Project Impact.

The retailer reported adjusted earnings of $4.5 billion or $1.17 per diluted share. Full-year sales increased 4.6% to $112 billion. International sales surpassed $100 billion.

Mike Duke, chief executive, said sales had exceed expectations for the fourth quarter. It ended the year with inventory down 7.8%. He expects the first quarter to be "challenging."

For the current fiscal year, the company expects diluted earnings per share to come in at $3.90 to $4.00. First quarter earnings per share are expected to be between $0.81 to $0.85.

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GE and Hitachi want to use nuclear waste as a fuel

One of the world's biggest providers of nuclear reactors, GE Hitachi Nuclear Energy (a joint venture of General Electric and Hitachi), wants to reprocess nuclear waste for use as a fuel in advanced nuclear power plants, instead of burying it in waste repositories such as that proposed at Nevada's Yucca Mountain.

Conventional nuclear power plants in the US only harness around five percent of the energy of nuclear fuels. The reprocessing technique would separate nuclear waste into different types of fuels, some of which can be used in conventional nuclear power plants, and some of which can only be used in advanced fast neutron reactors. Reprocessing of nuclear waste to extract more useable fuel has been criticized in the US because it produces pure plutonium, which could be stolen and used to make nuclear weapons. To get around this difficulty, GE Hitachi’s proposed method produces a fuel that is much harder to steal.

The GE Hitachi process separates wastes from conventional nuclear power plants into three streams, by applying voltage to a molten salt. The first waste material consists of the products of fission, which cannot be further used as fuel and will need to be stored, but the storage time required is reduced from tens of thousands of years to a few hundred years (although a small fraction of the material will still need to be stored for over 10,000 years). The second material is uranium that does not have enough fissile material to be used in the light water uranium reactors in the US, which need enriched uranium, but it can be used by deuterium (heavy water) uranium reactors, which are used in Canada.

The final group of waste products is a mixture of transuranic elements including plutonium and neptunium. The plutonium is not separated from the other elements, and the mixture releases 1,000 times more heat and 10,000 times more neutrons than pure plutonium. This makes it much harder to steal, and therefore less of a security risk, and it is also much easier to detect. The mixture of transuranic elements can be used in nuclear reactors that use molten sodium as the coolant rather than water, and this type is used in Japan and a few other countries. GE Hitachi has designed a reactor known as the PRISM reactor that would be able to use the mixed fuel, but sodium cooled reactors have not been approved for use in the US.

A GE Hitachi spokesman said previous US administrations had little interest in re-using spent nuclear fuel, but the Obama administration is increasing support for nuclear power and looking at possibilities such as reprocessing. If adopted, the proposal would significantly decrease the amount of dangerous nuclear waste that needs to be stored.

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GE Energy, Partner Seek Smarter Way To Charge Electric Cars

GE Energy has entered into a partnership with electric vehicle plug developer Juice Technologies LLC to integrate smart-metering technology into charging devices. GE Energy, a unit of General Electric Co. (GE), has been developing products and services to help the integration of advanced energy technologies into the transmission system in a way that allows better use of power resources. The partnership with Juice is its first move into electric car charging technology.

With advanced metering technology incorporated into charging devices developed by Juice, GE hopes vehicle owners will be able to manage the charging, the same way smart meters are being deployed to help people monitor electricity use. Clemente also said utilities may eventually develop a rate system whereby electric vehicle owners would have an incentive to charge up their cars during off-peak hours, and the smart charging stations would help them control that.

GE said it will start offering the chargers with Juice's technology in the second half of this year.

GE is in talks with original equipment manufacturers in the auto industry to discuss the adoption of its meters, which it believes will be used both at homes as well as in public charging infrastructure.

Some electric vehicle developers are offering charging kits to be installed in their customers' homes. For instance, ClipperCreek Inc. delivered chargers for Tesla Motors Inc.'s Roadster and BMW AG's (BMW.XE) Mini E, and Nissan USA has a deal with AeroVironment Inc. (AVAV) to use its chargers for the fully electric Nissan Leaf.

Juice Technologies, which worked with utilities and the Ohio State University's Center for Automotive Research to develop its technology, has also developed a kit for homeowners to manage their energy consumption that is marketed under the brand PlugSmart.

Juice is backed by private individual investors as well as "a significant equity investment" by a large consumer electronics company, with which Juice is working to market its home energy management technology, said Aaron Martlage

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ConocoPhillips President Dies in Avalanche

State troopers are watching the weather for a chance to return to the scene of an avalanche that killed Conoco Phillips Alaska President Jim Bowles and left another Conoco worker missing Saturday on the Kenai Peninsula.

Low clouds, high winds and heavy rain prevented searchers from looking for the body of 40-year-old Alan Gage Sunday, according to troopers. Friends say the father of two disappeared in a cloud of snow when a slide walloped their snowmachine group in the Grandview area wilderness.

He is presumed dead.

Other snowmachiners on the trip said it took as little as 15 minutes to generally locate Bowles -- head of the largest oil and gas producer in Alaska -- but 90 minutes to shovel him out of the snow. Members of the group said they then tried for up to an hour and a half to revive him.

"We dug and probed and CPR'd until it was dark," said Ed Gohr, a former Conoco employee who is part-owner of an equipment rental company and rode with Bowles and Gage Saturday.

Gohr and another snowmachiner, CH2M Hill Vice President Bob Lacher, described the avalanche moment-by-moment Sunday. Here's what happened, they said:

Bowles and another rider were at the front of a pack of about 10 snowmachiners riding in groups along a relatively flat bench. They traveled beside a tall mountain -- it looked to be 3,000 to 4,000 feet -- loaded with snow.

Gage was following close behind the two leaders. At some point, Bowles' snowmachine became stuck, Lacher said, and another rider ran over to help.

"About that time, I just happened to be looking up as I was traveling up the bench and saw the first of about four or five pieces of the mountain break loose," Lacher said.

The avalanche began about 500 to 700 yards above the snowmachiners, he said. The first wave of snow hammered the rider who had been trying to help Bowles, slamming him into the throttle. His machine accelerated to safety.

But Bowles was caught -- pinned beneath 10 feet of snow, his friends said.

GAGE DISAPPEARS

Lacher managed to turn his machine around and speed back the way he'd come.

"Just as I did, I saw Al (Gage) up and to the left get hit with the main force of the avalanche and disappear in a cloud," he said.

Lacher waved and pointed, warning the nearest snowmachiners to spin around and accelerate out from under the avalanche, he said

After the avalanche, other snowmachiners in the area joined in the search. They could see one of the skis from Gage's snowmachine poking through the snow, but no sign of the rider, the men said.

"Because Jim had a beacon we were able to find him, I'd say in 15 or 20 minutes, we knew what part of the mountain he was buried under," Lacher said.

The slide came maybe 100 yards from an area where the group had been riding for 25 minutes, Gohr said.

ROLE OF BEACONS

The avalanche was reported to troopers at about 12:30 p.m. along the west ridge of Grandview, about a half mile from Mile 43 of the Alaska Railroad tracks between Girdwood and Seward.

Initial trooper reports said Bowles was buried for about 45 minutes before friends located him, and announced dead after rescuers tried to revive him for at least 30 minutes.

"One of the party members rode down about a mile to the railroad tracks and contacted a railroad worker who then contacted us," said Trooper Howie Peterson.

The section of the avalanche that caught the snowmachiners was about 150 yards high by 150 yards wide, Peterson said. "It was a heavy, slow moving slide."

Troopers said late Saturday night that Bowles and Gage weren't wearing beacons. But Bowles was apparently found with the device, troopers spokeswoman Megan Peters said Sunday.

Troopers still believe Gage was not carrying a beacon. Lacher and Gohr, his fellow snowmachiners, agree.

Gage's wife, Dalon Gage, says that's hard to imagine. Her husband her "always played it safe," she said.

"This was not a go goof-off, play around, screw-off group of guys," Dalon Gage said. "They were very safe, well-versed, trained."

BAD WEATHER

Alan Gage grew up in Alaska and is an avid outdoorsman who often hunted and fished with other members of Saturday's group, she said.

He worked for the oil field services company Veco for eight or nine years before joining Conoco about five years ago, where he worked as a project control lead for the company's capital projects division, Dalon Gage said. Conoco runs the big Kuparuk River and Alpine oil fields on the North Slope.

Along with Bowles, most of the snowmachine group were friends who work in the energy business or supporting industries and get together for outdoor trips, the snowmachiners said.

Lacher and Gohr worked with Gage at Veco at one time, they said. Another of the snowmachiners along on the trip, Eric Spitzer, is a state trooper who led the efforts to revive Bowles, Lacher said.

The search for Gage was called off as darkness fell Saturday night, while poor weather prevented Troopers from looking again on Sunday.

There was a low cloud ceiling, high winds and heavy rain in the region, Peterson said. "Everything is ready to go as far as the search. It's just weather permitting."

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Norfolk Southern Facilitates $3.1 Billion in Industrial Investment Along Rail Lines in 2009

Norfolk Southern Corporation in the location of 70 new industries and the expansion of 23 existing industries along its rail lines in 2009.

New plants and expansions represented an investment of more than $3.1 billion by Norfolk Southern customers and are expected to create 3,000 jobs in the railroad's territory, eventually generating more than 138,500 carloads of new rail traffic annually.

Norfolk Southern assisted state and local government and economic development officials throughout 19 states in helping customers identify ideal locations for new and expanded facilities.

"The energy sector anchored our results during 2009," said Newell Baker, assistant vice president industrial development. "Our group assisted in the location or expansion of 24 energy related facilities in 12 states across our service area. Ethanol production and distribution accounted for the lion's share of energy projects, with 11 new and expanded facilities that began to receive NS rail service in 2009."

The balance of other projects secured during 2009 was distributed among several of the broad product areas Norfolk Southern serves.

Norfolk Southern works with state and local economic development authorities on projects involving site location and development of infrastructure to connect customers to its rail system and provides free and confidential plant location services, including industrial park planning, site layout, track design, and logistics assistance. During the past 10 years, Norfolk Southern's Industrial Development Department has participated in the location or expansion of 1,084 facilities, representing an investment of $23.9 billion and creating nearly 50,000 customer jobs in the territory served by the railroad.

Norfolk Southern Corporation ( NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 21,000 route miles in 22 states and the District of Columbia, serving every major container port in the eastern United States and providing efficient connections to western rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is North America's largest rail carrier of metals and automotive products.

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GlaxoSmithKline to cut 380 jobs at UK research facility

UK-based pharmaceutical group GlaxoSmithKline is planning to reduce its workforce at the company's R&D facility in Harlow, Essex. According to reports, approximately 380 employees are likely to lose their jobs at the facility.

The company has decided to implement the job reductions following the completion of projects for pain relief, anxiety and depression drugs.

Andrew Witty, CEO of GlaxoSmithKline, was quoted by Canadian Business Online as saying: "Glaxo would discontinue research in some areas including depression and pain, and would focus more on degenerative and inflammatory diseases such as Alzheimer's disease and Parkinson's disease."

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Conn. blast fuels plant plan’s critics

Carlsbad Fire Chief Kevin Crawford said that this week’s fatal explosion at a Connecticut power plant has validated his city’s stand that such projects are dangerous and shouldn’t be underestimated.

The blast occurred Sunday, three days after public hearings wrapped up on a proposal by NRG Energy to build a 540-megawatt plant next to Interstate 5 in Carlsbad.

Construction of the 620-megawatt plant in Middletown, Conn., was nearing completion when crews were testing a natural-gas line. The blast ripped a giant hole in the works, killing five workers and injuring 27. The explosion was heard 20 miles away.

“It gives me a sense that maybe in the eyes of other people, my opinion is getting validated a little,” Crawford said. “Here’s exactly what we were trying to say.”

However, Steve Hoffmann, president of NRG Energy’s Western division, which has proposed the Carlsbad plant, said it’s wrong to link the two.

“I don’t believe you can draw a parallel,” Hoffmann said. “The Kleen Energy (in Connecticut) plant and the Carlsbad plant are very different.

“The Kleen Energy plant was in a building. Natural gas was released in a building … and went off, and that’s what caused the explosion.”

He said the Carlsbad plant will be in the open, so gas can’t concentrate in an enclosure and cause the same kind of blast.

Matthew Layton, manager of the California Energy Commission’s engineering office, said the Connecticut blast hasn’t changed the way the commission is evaluating the Carlsbad proposal, or others, because the agency already places a high importance on safety.

The commission has the authority to license power plants in the state. Two of the commission’s five members held a hearing in Carlsbad from Feb. 1-4, gathering information on all aspects of the plant.

NRG has proposed the plant on its 95 acres west of Interstate 5 and north of Cannon Road, and east of the coastal railroad tracks. It owns and operates the Encina Power Station on the same property, closer to the ocean.

City officials oppose the project. They say the location is no longer suitable for heavy industry. Carlsbad fire officials told the commission last week that the proposed access road encircling the plant would be too narrow, limiting firefighters’ access in an emergency.

However, NRG’s safety experts testified that the plant’s concrete-and-steel construction would render the structure practically noncombustible. Valves installed along the plant’s natural-gas lines would enable workers to cut the supply should a fire erupt, and thus prevent its spread, they said.

Frank Collins, an NRG safety expert, told commissioners that the control measures would be so sophisticated that “the Fire Department is a backup to fire-suppression systems on large fires.”

“Their testimony would indicate to me that maybe they don’t have the same degree of concern or appreciation for the impact of any incident,” Crawford said.

“We’re in the worst-day-of-your-life business and need to get the upper hand. It really says to me, OK, we’re really on the right track on this,” Crawford said, in reference to the explosion.

NRG’s Hoffmann said the company is well aware that disasters happen, and that’s why the plant would have built-in detection, suppression and monitoring systems. He called the Fire Department’s statements about potential danger “wild speculation” and said Encina’s safety record is exemplary.

When questioned last week, Carlsbad fire operations Chief Chris Heiser testified that there have been few recent incidents at Encina. The worst accident was in 1976, when six people died in a crane accident, he said.

Recent reports from Middletown indicate that gas may have vented outside the building into an enclosed area, where welding equipment ignited it.

The Connecticut disaster is prompting calls by residents elsewhere in the country to challenge power plants. Opponents of a proposed gas-fired plant in Brockton, Mass., jammed a state legislative hearing Tuesday, urging lawmakers to block its construction.

California Energy Commission officials hesitated this week to draw conclusions about Sunday’s explosion, saying they want to see the results of an investigation first. However, they said initial reports from Connecticut raised some concerns, such as the procedures used in venting the gas.

“The commission doesn’t allow venting gas into a confined space,” said Layton, the commission’s engineering office manager. “You would vent on a day that would make sure there isn’t a confined area (that would) lead to such an event.”

He also said it wasn’t clear how closely Connecticut officials monitored the venting. He said California requires a chief building officer and a safety monitor to be present for gas venting, and that it didn’t appear a monitor was there.

Layton said commissioners are familiar with the safety debate at the Carlsbad plant. The commission is expected to make a final decision on the proposed plant by the end of the year.

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Eaton Corp. shares rendering of planned Beachwood headquarters with workers

Eaton Corp. shared a rendering of its planned Beachwood headquarters with its employees today, giving a first glimpse of the 470,000-square-foot structure that the company says it will begin building in early 2011.

Appearing to be mostly glass from the outside, the $170 million, semi-circular headquarters will cradle a lake and will be surrounded by walking paths on its 53-acre site, which is the highest point in Cuyahoga County. The development includes a 220,000-square-foot parking garage for Eaton employees. Executives in the highest of the building's 10 floors are to have views of downtown Cleveland and Lake Erie.

In an e-mail to Crain's, Eaton spokeswoman Kelly Jasko said the company plans to move about 700 of its local employees, including those now housed at Eaton Center in downtown Cleveland, to the new building in late 2012.

Site preparation and infrastructure work should begin this summer, the company reported.

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Eaton’s Cutler Says U.S. Doesn’t Need Another Stimulus Package

Eaton Corp., the maker of hydraulics and automotive valves, said the U.S. government doesn’t need another economic-stimulus plan even as his company expects about $1 billion in related funding.

“From a pure economic view, do you need another stimulus plan? Probably not,” Chief Executive Officer Sandy Cutler said in an interview from company headquarters in Cleveland. “Every economy goes through three phases -- there’s an early phase, a mid phase and a late phase -- and that won’t be changed by a stimulus program. Part of what we are seeing now is the early- cycle businesses are recovering.”

Eaton, which also makes power meters and lighting controls, has forecast it will capture $500 million in stimulus funds this year and another $500 million in 2011. The company “immediately” began seeking opportunities to benefit from spending in the $787 billion package that passed last year while Congress was debating the legislation, Cutler said.

The company pursued projects such as rebuilding housing on U.S. military bases and improving efficiency in federal buildings.

“Buried within the stimulus packages are very specific programs that have a pretty good mapping to Eaton’s electrical businesses,” said Eli Lustgarten, an analyst with Longbow Securities in Independence, Ohio. Lustgarten recommends buying Eaton’s shares.

The U.S. should ease away from monetary and fiscal measures that have kept interest rates low and bring them back to about 3 percent, Cutler said in the Feb. 10 interview. Providing research and development credits and making more loans available to small businesses would remedy an underemployment rate of about 17 percent, he said.

Small Businesses

“When the economy starts to move up, that’s normally when your small business goes bankrupt,” said Cutler, 58. “They’ve lived off of their working capital for a year and now when they start to get their first orders in, they place the order, they go to their bank, they can’t get the loan.”

Cutler joined Eaton in 1979 and has served as CEO since 2000. He reduced the company’s reliance on truck and automotive markets to about a quarter of revenue from almost 40 percent of sales in 2004. The company has a larger presence in housing, non-residential construction and aerospace and expanded its international business to more than half of revenue from about 35 percent in 2004.

Net income last year dropped 64 percent to $383 million and sales declined 23 percent as the global recession reduced demand. The company trimmed the workforce by about 17 percent since 2008 to about 70,000 and last year imposed one week of unpaid furlough per worker each quarter. Eaton forecasts 2010 sales increasing about 11 percent, driven by higher demand, a gain in market share and favorable foreign exchange rates.

Auto Demand

The company is seeing demand increase in its auto and trucks unit as is typical early in an economic cycle, Cutler said. The global recovery will be a more muted rebound with higher-than- normal growth from underdeveloped countries, he said.

“I think 2010 in many ways is a transitional year,” Cutler said. “And I think that’s the way one has to think about it in terms of an economic recovery, because many end-markets won’t return to their 2007-2008 time period until we get out into the 2011 and 2012 time period.”

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Gannett’s USA Today to Impose Leave, Extend Pay Halt

Gannett Co.’s USA Today will enforce a weeklong unpaid leave for about 1,500 employees between the end of this month and July to help counter declining advertising and circulation sales, according to a memo to staff.

A yearlong freeze on pay increases begun in February 2009 also will be extended by at least 90 days, the newspaper’s publisher, David Hunke, said today in the memo.

“National advertising revenues in general were still down from the previous year as were paid advertising pages at USA Today,” Hunke said in the memo. “Circulation sales continued to be lower” in the fourth quarter.

Gannett said in December it would require most local newspaper employees to take five days of unpaid leave this quarter, though USA Today employees originally weren’t affected. The McLean, Virginia-based publisher enforced two weeks of unpaid leave for many workers in 2009.

Ed Cassidy, a spokesman for USA Today, confirmed the memo in an e-mail.

Circulation for USA Today, the second-largest by distribution, fell 17 percent from a year earlier to 1.9 million on an average weekday in the six months through September, according to the latest data from the Audit Bureau of Circulations. That compares with an 11 percent plunge industrywide.

The company last year posted a 28 percent decline in publishing advertising revenue to $2.97 billion, according to a Feb. 1 statement. It didn’t break out USA Today’s ad sales.

Ad Hire

Hunke said in a separate statement today that USA Today has hired Gordon Lee Jones as new senior vice president of advertising, replacing Brett Wilson, who stepped down last year. Jones previously was senior vice president of sales and marketing for Cablevision Systems Corp.’s Newsday.

In December, Gannett said it couldn’t rule out additional unpaid leave time this year. Robin Pence, a Gannet spokeswoman, said in an e-mail message that USA Today’s action today was not part of a larger strategy.

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Wabco TVS inks supply pact with Mahindra Navistar

Wabco TVS (India) Limited, part of global technology leader Wabco Holdings Inc of Belgium, a tier-I global supplier for the commercial vehicles industry, has entered into an agreement with Mahindra Navistar Automotives Limited (MNAL), a manufacturer of trucks and part of M&M Group. The pact is for development and long-term supply of air compressor technology products for braking systems and clutch servo technology products.

MNAL, a joint venture between M&M and Navistar, Inc of the US, manufactures a range of trucks and tractor-trailers that set new levels of reliability, efficiency and customer value for the commercial vehicle industry in India.

“Our commitment is to develop and deliver an entire spectrum of commercial vehicles that will benefit our customers in ways that until now are unseen and unheard of in the industry. By partnering with Wabco TVS in India for rigid trucks, we can create and sustain new value in the marketplace through technology innovation that enhances our products for local and export markets,” said Rakesh Kalra, managing director, Mahindra Navistar.

“We are proud to partner with Mahindra Navistar as they move forward to grow their position in high quality commercial vehicles in India and abroad,” said P Kanniappan, managing director, Wabco-TVS (India) Limited. “This significant new business with MNAL further leverages the well-anchored leading position of Wabco TVS in the local market and our ability to maximise value for our customers through improved vehicle safety, increased fuel efficiency and driver effectiveness,” he added. According to Leon Liu, Wabco president (Asia-Pacific), “We are passionate about partnering with MNAL as we continue to contribute to Wabco's pioneering engineering and highly reliable products while further growing our position in emerging markets through deep connectivity with customers.”

This agreement confirms Wabco’s number one position in air compressor technology globally, particularly in India. It also enlarges Wabco's already broad and successful customer base in Asia, he added.

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Moody's Corp. Releases Results for 4th Quarter and Full-Year 2009

Moody's Corp. announced results for the fourth quarter and full-year 2009.

In a release on Feb. 4, Moody's reported revenue of $485.8 million for the three months ended December 31, an increase of 20 percent from $403.7 million for the fourth quarter of 2008. Operating income for the quarter was $178.9 million, a 43 percent increase from $125.4 million for the same period last year. Diluted earnings per share of $0.43 for the fourth quarter of 2009 included a benefit of $0.01 related to previously announced restructuring activities. Excluding restructuring adjustments in both periods, diluted earnings per share of $0.42 for the quarter increased 14 percent from $0.37 in the prior-year period.

Summary of Results for Full-Year 2009

Moody's Corp. said its revenue for the full-year 2009 totaled $1,797.2 million, an increase of 2 percent from $1,755.4 million for 2008. U.S. revenue of $920.8 million increased 1 percent, while non-U.S. revenue of $876.4 million increased 4 percent from the prior year. Operating income of $687.5 million declined 8 percent from $748.2 million for the full-year 2008, and the operating margin was 38.3 percent for the full-year 2009. Excluding the unfavorable impact from foreign currency translation, revenue increased 4 percent from the prior-year period. The impact of foreign currency translation on operating income was negligible. Diluted earnings per share of $1.69 for the full-year 2009 included a net charge of $0.01, reflecting costs related to previously announced restructuring plans partially offset by a benefit from certain legacy tax matters. Excluding these items in both years, diluted earnings per share of $1.70 for the full-year 2009 decreased 7 percent from $1.82 for the full-year 2008.

"Moody's full-year results reflected gradual improvement of credit markets throughout 2009. Strength in corporate debt issuance and growth from Moody's Analytics provided a slight increase in revenue from the prior year, but activity was limited in other areas of the markets," said Raymond McDaniel, Chairman and Chief Executive Officer of Moody's. "We anticipate continuing recovery for 2010, but also expect market conditions to remain challenging until economic improvement across key markets is sustained. With this outlook, we are projecting a stronger revenue increase and a return to earnings growth for 2010, with ongoing expense management to support business initiatives and regulatory and compliance efforts."

Fourth Quarter Revenue

For Moody's Corp. overall, global revenue of $485.8 million increased 20 percent from the fourth quarter of 2008. Excluding the favorable impact of foreign currency translation, revenue increased 17 percent. U.S. revenue of $245.1 million for the fourth quarter of 2009 increased 25 percent from the fourth quarter of 2008, while revenue generated outside the U.S. of $240.7 million increased 16 percent from the prior-year period. Revenue generated outside the U.S. represented 50 percent of Moody's total revenue for the quarter, down from 52 percent in the year-ago period.

Global revenue for Moody's Investors Service ("MIS") for the fourth quarter of 2009 was $331.9 million, an increase of 31 percent from the prior-year period. Excluding the favorable impact of foreign currency translation, revenue grew 26 percent. U.S. revenue of $179.1 million for the fourth quarter of 2009 increased 42 percent from the fourth quarter of 2008. Outside the U.S., revenue of $152.8 million increased 19 percent from the year-ago period, according to Moody's.

Within MIS, global corporate finance revenue of $115.2 million in the fourth quarter of 2009 increased 99 percent from the same quarter of 2008. U.S. corporate finance revenue increased 106 percent from the fourth quarter of 2008, while outside the U.S., revenue increased 90 percent from the prior-year period. Growth was primarily driven by activity in the high-yield bond market.

The company said global structured finance revenue totaled $78.7 million for the fourth quarter of 2009, a decrease of 14 percent from a year earlier. U.S. structured finance revenue increased 5 percent from the year-ago period, reflecting increased issuance activity from asset-backed securities and commercial real-estate finance. Non-U.S. structured finance revenue decreased 25 percent, driven by revenue declines across all asset classes as improved credit market conditions slowed use of securitization for central bank supported programs.

Global financial institutions revenue of $72.0 million in the fourth quarter of 2009 increased 27 percent compared to the same quarter of 2008, due to gains from the banking sector. U.S. financial institutions revenue increased 18 percent, while non-U.S. revenue increased 35 percent.

Global public, project and infrastructure finance revenue was $66.0 million for the fourth quarter of 2009, an increase of 36 percent from the fourth quarter of 2008. U.S. revenue increased 36 percent from the prior-year period, primarily driven by stimulus plan-related public finance issuance. Non-U.S. revenue increased 35 percent with strong issuance in European infrastructure finance.

Global revenue for Moody's Analytics ("MA") for the fourth quarter of 2009 reached $153.9 million, up 3 percent from the same quarter of 2008. Foreign currency translation did not materially impact revenue. Reflecting a realignment of revenue by product grouping in both periods, revenue from subscription-based research, data and analytics of $106.0 million declined by 1 percent from the prior-year period; risk management software revenue of $42.3 million grew 21 percent; and professional services revenue of $5.6 million decreased 26 percent from the prior-year period. A reconciliation table for MA revenue is available at the end of this press release.

In the U.S., MA revenue of $66.0 million for the fourth quarter of 2009 declined 5 percent from the prior-year period, reflecting the effects of customer attrition due to financial market disruption in late 2008 and early 2009. Outside the U.S., revenue increased 10 percent over the prior-year period to $87.9 million, primarily due to growth in the risk management software business.

Fourth Quarter and Full-Year Expenses

According to the company, fourth quarter 2009 expense for Moody's Corp. of $306.9 million was 10 percent higher than in the prior-year period and included higher accruals for performance-based compensation. Moody's reported operating margin for the fourth quarter of 2009 was 36.8 percent. Excluding the restructuring adjustments in the current period, expenses were 11 percent higher than the prior-year period and operating margin was 36.6 percent, compared to 31.1 percent in the prior-year period. Without the unfavorable impact of foreign currency translation, reported expenses increased 8 percent.

Full-year 2009 expenses for Moody's Corp. of $1,109.7 million were 10 percent higher than the prior year. Excluding restructuring adjustments in both periods, Moody's expenses were 8 percent higher in 2009, primarily due to incremental expenses from businesses acquired in the fourth quarter of 2008 and higher incentive compensation.

Moody's said its effective tax rate was 38.3 percent for the fourth quarter of 2009, compared with 28.6 percent for the prior-year period. The increase was primarily due to a favorable true-up of the full-year 2008 tax accrual in the fourth quarter of 2008. In addition, the 2008 effective tax rate included realization of U.S. manufacturing and research credits and deductions. The annual effective tax rate for 2009 was 37.0 percent compared to 36.7 percent for 2008.

Full-Year 2009 Revenue Results

The release said that revenue at Moody's Investors Service totaled $1,217.7 million for the full-year 2009, an increase of 1 percent from the prior-year period. Excluding the unfavorable impact of foreign currency translation, revenue increased 3 percent. U.S. revenue of $663.1 million increased 3 percent, while non-U.S. revenue of $554.6 million decreased 1 percent from the prior year.

Moody's Analytics revenue rose to $579.5 million for the full-year of 2009, up 5 percent from the full-year of 2008. Excluding the unfavorable impact of foreign currency translation, revenue increased by 7 percent. Revenue from research, data and analytics declined by 1 percent to $413.6 million, and professional services revenue was down 10 percent to $20.8 million. For the risk management software business, revenue increased 33 percent to $145.1 million, due to the acquisition of Fermat International in late 2008 and good growth from legacy products and services. U.S. revenue of $257.7 million decreased 3 percent from the full-year 2008 results. Non-U.S. revenue of $321.8 million increased 13 percent from 2008 and represented 56 percent of total revenue, up from 52 percent in 2008.

Capital Allocation and Liquidity

On December 15, Moody's said it increased its quarterly dividend by 5 percent to 10.5 cents per share of Moody's common stock. During the fourth quarter of 2009, Moody's did not repurchase shares and issued 0.4 million shares under employee stock-based compensation plans. Outstanding shares as of December 31, totaled 236.9 million, representing a 1 percent increase from a year earlier. Additionally, as of December 31, Moody's had $1.4 billion of share repurchase authority remaining under its current program. At year-end, Moody's had $1.2 billion of outstanding debt and approximately $550 million of additional debt capacity available under its revolving credit facility. Moody's reduced total outstanding debt by $87 million during the fourth quarter and $274 million for the full-year of 2009. At year-end, total cash and cash equivalents were $473.9 million, an increase of $228 million from a year earlier.

Assumptions and Outlook for Full-Year 2010

Moody's said its outlook for 2010 is based on assumptions about many macroeconomic and capital market factors, including interest rates, corporate profitability and business investment spending, merger and acquisition activity, consumer borrowing and securitization, and the eventual withdrawal of government-sponsored economic stabilization initiatives. There is an important degree of uncertainty surrounding these assumptions and, if actual conditions differ from these assumptions, Moody's results for the year may differ materially from the current outlook.

For Moody's overall, the Company expects full-year 2010 revenue to increase in the high-single-digit percent range. Full-year 2010 expenses are also expected to increase in the high-single-digit percent range. Full-year 2010 operating margin is projected in the high-thirties percent range and the effective tax rate is expected in the range of 37 to 38 percent. Share repurchase is expected to resume at modest levels in 2010 subject to available cash flow and other capital allocation decisions. The Company expects diluted earnings per share for full-year 2010 in the range of $1.75 to $1.85. This outlook assumes foreign currency translation at end-of-year 2009 rates.

For the global MIS business, revenue for the full-year 2010 is expected to increase in the high-single- to low-double-digit percent range. Within the U.S., MIS revenue is expected to increase in the mid-teens percent range, while non-U.S. revenue is expected to increase in the mid-single-digit percent range. Corporate finance revenue is expected to increase in the high-teens percent range with anticipated growth in speculative-grade issuance activity offset by moderation of investment-grade issuance from the high volume of 2009. Structured finance revenue is expected to increase in the mid-single-digit percent range reflecting modest growth in most asset classes. Revenue from financial institution ratings is expected to increase in the low-single-digit percent range, while revenue from public, project and infrastructure finance is expected to increase in the low-double-digit percent range.

For Moody's Analytics, full-year 2010 revenue is expected to increase in the mid-single-digit percent range. Revenue growth is expected in the low-single-digit percent range for research, data and analytics, in the mid-teens percent range for risk management software, and in the high-single- to low-double-digit percent range for professional services. MA revenue is expected to increase in the low-single-digit percent range in the U.S. and in the mid-single-digit percent range outside the U.S.

According to the release, Moody's provides credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. Moody's Corp. is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which encompasses Moody's non-ratings businesses including risk management software for financial institutions, quantitative credit analysis tools, economic research and data services, data and analytical tools for the structured finance market, and training and other professional services. The Corp., which reported revenue of $1.8 billion in 2009, employs approximately 4,000 people and maintains a presence in 27 countries.

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update: Becton, Dickinson & Co

Becton, Dickinson & Co. said Wednesday that a recently recalled part that hospitals use to deliver fluids intravenously wasn't responsible for a death it was investigating for possible links to the device.

The company's investigation also revealed that a serious injury linked to the Q-Syte Luer Access components was unfounded and the patient didn't experience any harm, said Becton spokeswoman Colleen White.

The Q-Syte components are part of a needle-less IV system that Becton has sold since late 2003. The systems are used to pump medicine, fluids or blood products into patients, or to withdraw blood.

Becton, of Franklin Lakes, N.J., has recalled 7.8 million of the parts because of a manufacturing defect that the company says affected production of certain lots from November 2008 to November 2009.

The company recalled some of the parts in October and more this week. It said it has fixed the defect and taken steps to prevent its recurrence.

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GlaxoSmithKline Creates New Unit for Rare Diseases R&D

GlaxoSmithKline (GSK) launched a stand-alone unit that will specialize in the research and development (R&D) and commercialization of medicines for rare diseases. The operation, which will be led by Marc Dunoyer, president of GSK's Asia Pacific operations and chairman of its Japan group, will seek to "leverage existing capabilities and partnerships, and further establish in-licensing opportunities," according to a company press release.

"In addition to our existing discovery effort, alternative opportunities need to be explored to make treatments available for rare diseases," Dunoyer said in the press release. "This complementary approach will combine our existing global expertise with specialist partners. Over time, this new unit has the potential to deliver multiple therapies responding to high medical needs of underserved populations of patients."

In 2009, GSK entered into collaborations with Prosensa (Leiden, The Netherlands) and JCR Pharmaceuticals (Hyogo, Japan), that focus on therapeutics that could be used to treat orphan diseases.

"The entry into this new therapeutic area forms part of our strategy to deliver more products of value and improve returns in R&D through a focus on areas with a higher probability of success," Patrick Vallance, GSK's senior vice-president of drug discovery, said in the press release. "The risk associated with product discovery and development in rare diseases is generally lower than other disease areas, as disease definitions are very clear and clinical trials tend to be small with robust endpoints. In most cases, the molecular target is known, making it easier for specialized physicians to diagnose patients.”

According to GSK, more than 5500 rare diseases have been identified, but less than 10% are being treated.

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Comdisco Announces Fiscal 2010 First Quarter Financial Results

Comdisco Holding Company, Inc. /quotes/comstock/11k!cdco ("Comdisco") today reported financial results for its fiscal first quarter ended December 31, 2009. Comdisco emerged from Chapter 11 bankruptcy proceedings on August 12, 2002 and, under its Plan of Reorganization (the "Plan"), its business purpose is limited to the orderly sale or run-off of all its remaining assets.

Operating Results: For the quarter ended December 31, 2009, Comdisco reported a net loss of approximately $(1,237,000), or $(0.31) per common share (basic and diluted). The per share results for Comdisco are based on 4,029,055 shares of common stock outstanding on average during the quarter ended December 31, 2009.

For the quarter ended December 31, 2009, total revenue decreased by 53 percent to approximately $180,000. The decrease is primarily the result of lower gains on the sale of equity securities and lower interest income in the current quarter. Gains were approximately $8,000 for the current quarter compared to gains of approximately $92,000 for the quarter ended December 31, 2008, and interest income was down $254,000 from the prior quarter. Net cash used in operating activities was approximately $995,000 for the three months ended December 31, 2009 compared to net cash provided by operating activities of approximately $4,771,000 for the three months ended December 31, 2008.

Total assets are approximately $76,311,000 as of December 31, 2009, which included approximately $65,426,000 of unrestricted cash, compared to total assets of approximately $76,890,000 as of September 30, 2009, which included approximately $66,065,000 of unrestricted cash.

As a result of bankruptcy restructuring transactions, adoption of fresh-start reporting and multiple asset sales, Comdisco's financial results are not comparable to those of its predecessor company, Comdisco, Inc. Please refer to Comdisco's quarterly report on Form 10-Q filed on February 10, 2010 for complete financial statements and other important disclosures.

About Comdisco

Comdisco emerged from chapter 11 bankruptcy proceedings on August 12, 2002. The purpose of reorganized Comdisco is to sell, collect or otherwise reduce to money in an orderly manner the remaining assets of the corporation. Pursuant to the Plan and restrictions contained in its certificate of incorporation, Comdisco is specifically prohibited from engaging in any business activities inconsistent with its limited business purpose. Accordingly, within the next few years, it is anticipated that Comdisco will have reduced all of its assets to cash and made distributions of all available cash to holders of its common stock and contingent distribution rights in the manner and priorities set forth in the Plan. At that point, the company will cease operations. The company filed on August 12, 2004 a Certificate of Dissolution with the Secretary of State of the State of Delaware to formally extinguish Comdisco Holding Company, Inc.'s corporate existence with the State of Delaware except for the purpose of completing the wind-down contemplated by the Plan.

Safe Harbor

The foregoing contains forward-looking statements regarding Comdisco. They reflect the company's current views with respect to current events and financial performance, are subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the actual results of the company to be materially different from any future results, express or implied by such forward-looking statements. The company intends that such forward-looking statements be subject to the Safe Harbor created by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words and phrases ''expect,'' ''estimate,'' and ''anticipate'' and similar expressions identify forward-looking statements. Certain factors that could cause actual results to differ materially from these forward-looking statements are listed from time to time in the company's SEC reports, including, but not limited to, the report on Form 10-K for the fiscal year ended September 30, 2009 and Form 10-Q for the fiscal quarter ended December 31, 2009. Comdisco disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

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Moody's downgrades Minnesota debt outlook

Moody’s Corp. Tuesday downgraded its outlook on the state of Minnesota’s general obligation bonds and state-supported debt to negative from stable.

The ratings agency at Moody’s Investors Service, New York, said the downgrade reflects Minnesota’s ongoing financial and economic weakness caused by revenue shortfalls and sizeable budget deficits.

Despite the downgraded outlook, Moody’s affirmed the state’s Aa1 general obligation rating and the Aa2 rating assigned to the state-supported debt.

The debt concerns Moody’s highlighted in its opinion stem from the state’s $1.2 billion shortfall in its 2010-2011 biennium, which is largely due to revenue shortfalls.

Moody’s also said the state is vulnerable to further downward revenue revisions, given the uncertain timing of an economic recovery and the expected drop-off in federal stimulus funds.

“Given the one-time actions already incorporated in the adopted budget ... the state has reduced flexibility to address continued budget challenges,” Moody’s said in its report.

On the bright side, the state has a fundamentally strong economy. Also, it isn’t dependent on any one sector, which can lead to economic weakness beyond national trends. Moody’s said per-capita personal income (PCPI) is consistently above the U.S. average; for the past five years the state’s PCPI has been between 105 and 109 percent of the national average.

But Minnesota’s economy has been sluggish lately, according to the report.

Although the state has historically lagged the nation in unemployment, the rate rapidly grew to mirror the nation in the first quarter of 2009. Since then, the state unemployment rate has again fallen below the national rate. The Minnesota unemployment rate for December 2009 was 7.4 percent, below the national rate of 9.7 percent during the same period.

In summary, Moody’s says, “Minnesota continues to deal with fiscal and economic stress, which has resulted in budgetary pressure and significant liquidity strain. The measures taken by the state thus far are not of a recurring nature, and available reserves have been substantially depleted. This leaves the state facing the challenge of addressing ongoing structural imbalance with limited resources in an uncertain economic environment.”

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Conoco Phillips to pay $175K fine

ConocoPhillips Co. has agreed to pay a hefty fine and install pollution-control equipment to settle alleged Clean Air Act violations on the Southern Ute Indian Reservation.The company will pay $175,000 in civil penalties in an agreement with the U.S. Environmental Protection Agency regarding the Argenta and Sunnyside compressor stations.

ConocoPhillips also agreed to install new equipment and implement practices to reduce emissions and conserve natural gas.

“The settlement will formalize ConocoPhillips Co.'s commitment to reduce emissions of carbon monoxide, volatile organic compounds, toxic and greenhouse gases, while conservation measures help return valuable natural gas to the marketplace," Carol Rushin, EPA Region 8 acting regional administrator, said in a news release Thursday.

ConocoPhillips in 2009 produced 16 billion cubic feet of natural gas in La Plata County, sixth-most among gas producers, according to state records. BP America produced the most by far, pumping 194.7 billion cubic feet from local wells.

“That will reduce the emissions across the board eventually, so it'll help anyone that lives close by that has any asthma-related health issues," Baizel said. “It'll also help keep La Plata County out of trouble with the EPA in terms of ozone levels."

The federal agency's complaint says a permit for ConocoPhillips' Sunnyside compressor station that took effect in December 2005 required the company to install an oxidation catalyst control system, but the company did not do so until March 2007.

The agency also alleged that ConocoPhillips was not keeping required emissions records, among other violations. ConocoPhillips cooperated with the agency to resolve the violations, the EPA said.

ConocoPhillips, based in Houston, reported $4.9 billion in earnings in 2009. The company has 30 days to pay the $175,000 fine, according to the settlement.

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Union Pacific Corporation Declares Quarterly Dividend of 27 Cents Per Share

The Board of Directors of Union Pacific Corporation (NYSE: UNP) has declared a quarterly dividend of 27 cents per share on its common stock, payable April 1, 2010, to stockholders of record February 26, 2010.

Union Pacific has paid dividends on its common stock for 111 consecutive years.

Union Pacific Corporation owns one of America’s leading transportation companies :

Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country. Union Pacific serves many of the fastest-growing U.S. population centers and provides Americans with a fuel-efficient, environmentally responsible : and safe mode of freight transportation. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad emphasizes excellent customer service and offers competitive routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico, making it North America’s premier rail franchise.

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Union Pacific Railroad Investing Nearly $42 Million to Improve Rail Lines in Arizona

Union Pacific Railroad is investing nearly $42 million to improve its existing rail lines in Arizona. Projects under way in the first quarter 2010 include track renewal work in the Phoenix and Mesa areas, railroad tie replacement in Union Pacific's Phoenix and Tucson rail yards and railroad tie replacement on Union Pacific's main line between Casa Grande and Yuma.

When work is complete, crews will have installed 156,000 wood and 58,000 concrete railroad ties and 24 miles of welded rail and spread 140,000 tons of rock ballast to ensure a stable roadbed. The projects began in January and are scheduled to be completed by the end of May. The concrete ties for this project are being produced by Arizona-based companies.

Crews will complete these track improvement projects using Union Pacific's modern track renewal train, the TRT 909. The TRT 909 installs rail and concrete ties in one pass, and can install up to 5,000 ties in a twelve-hour day. Approximately 30 rail cars - each carrying 210 concrete ties - are part of the TRT. Three sets of gantry cranes move the concrete ties forward for the TRT to drop into place and the machine then threads the new rail onto the ties. The old wooden ties are picked up and the discarded rail threaded out as the machine works its way down the track. A conveyor moves the removed ties into position for the gantry cranes to load them onto the cars for movement to a facility for sorting. The TRT 909 can install concrete, composite and wooden ties.

At the Phoenix and Tucson rail yards, crews are stabilizing the track foundation by adding ballast and replacing 46,000 ties. The work will improve operating efficiencies and help Union Pacific continue to enhance the safety of its operations.

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Alaska Governor “outraged” by Corps of Engineers’ decision on drill pad More at : Alaska Governor “outraged” by Corps of Engineers’ decision on drill

Alaska Governor Sean Parnell said Saturday he is outraged by the U.S. Army Corps of Engineers’ decision to deny Conoco Phillips and Anadarko a permit to construct a drill pad in the National Petroleum Reserve-Alaska.“Just in the last six months, we’ve fought the federal government for tying up Outer Continental Shelf leasing, and for adding bureaucratic nightmares and costs with Endangered Species Act listings and critical habitat area designations,” Governor Parnell said.

“We’ve seen the U.S. Fish and Wildlife Service and the Environmental Protection Agency show reluctance to approve anything related to jobs in Alaska.”

“And then — first, by delay, and now, through their decision — the Corps of Engineers continues to set back our nation’s chances for economic recovery, domestic energy production, and Alaskans’ prospects for jobs,” Governor Parnell added.

Corps’ decision is “a half a billion dollars of development lost”, Republican state Rep. Craig Johnson said on Friday. The Corps of Engineers on Friday said that the company’s proposal did not comply with Clean Water Act rules.

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WABCO Reports Q4, Maintains Profitability Amid Severe Industry Decline; Provides Guidance for 2010

WABCO Holdings Inc. (NYSE: WBC), a global technology leader and tier-one supplier to the commercial vehicle industry, today reported Q4 2009 sales of $460 million, up 1 percent from prior year and down 9 percent in local currencies, bringing full year 2009 sales to $1.49 billion, down 42 percent from prior year and down 39 percent in local currencies, reflecting the unprecedented severe slump in global demand for new commercial vehicles.

"2009 was an unprecedented year for the global commercial vehicle industry, which abruptly and deeply dropped in size while going through a shakeup of market demand among regions of the world and significantly increasing the importance of Asia. Indeed, in the last 12 months, commercial vehicle production decreased by more than 60 percent in Europe and almost 40 percent in North America while production grew by 18 percent in China. In 2009, more than 60 percent of the world's truck and bus production took place in China and India," said Jacques Esculier, WABCO Chairman and Chief Executive Officer. "During the past five years, in anticipation of the growing importance of emerging markets, WABCO has been driving major initiatives to globalize the company's culture, capabilities and customer reach. In 2009, the future came faster than we thought but we were well prepared to morph with the market."

"Strongly rooted in China and India, WABCO has achieved a leading position in the marketplace through increasingly close connectivity to customers. We are further strengthened in Asia by an outstanding network of suppliers, manufacturing sites and engineering hubs. We produce some of our most advanced technologies right in Asia to serve local markets," said Esculier. "In Q4 2009, Asia accounted for 22 percent of sales, compared with 10 percent the prior year."

"In 2009, we also benefited from our efforts initiated a few years ago to grow our aftermarket globally. Q4 2009 revenues from aftermarket, in fact, increased by 13 percent year on year," said Esculier. "For full year 2009, we limited our decline in aftermarket sales to 6 percent."

WABCO reported Q4 2009 EBIT of $24.6 million, up from $15.2 million a year ago while performance EBIT was $26.5 million versus $43.3 million a year ago.

WABCO reported full year 2009 EBIT of $7.6 million, compared with EBIT of $247.8 million a year ago while performance EBIT was $38.9 million versus $301.1 million a year ago.

WABCO reported Q4 2009 net income of $38.7 million or $0.59 per diluted share versus net income of $21.2 million or $0.33 per diluted share a year ago. Performance net income for Q4 2009 was $23.2 million or $0.36 per diluted share versus performance net income of $39.5 million or $0.62 per diluted share a year ago. Performance net income excludes $13.9 million of benefits from certain one-time tax items in Q4 2009, in addition to other smaller items relating to streamlining and separation.

WABCO reported full year 2009 net income of $18.8 million or $0.29 per diluted share versus net income of $213.3 million or $3.24 per diluted share in 2008. Performance net income for full year 2009 was $25.7 million or $0.40 per diluted share versus performance net income of $246.8 million or $3.75 per diluted share a year ago.

Full year performance net income excludes certain non-performance items including streamlining expenses of $46.4 million (net of tax), favorable settlements resulting in the release of certain separation related indemnification obligations of $37.8 million, the previously disclosed charge from the Indian joint venture transactions of $9.8 million, and other tax related benefits of $11.5 million. In total, these non-performance items negatively impacted reported net income by $6.9 million for full year 2009.

WABCO generated $18.9 million in net cash from operating activities in Q4 2009 and used $7.6 million of free cash flow. Excluding payments of $10.2 million associated with streamlining, free cash flow in Q4 2009 totaled $2.6 million, reflecting the company's funding of increased business activities in Q4 2009.

WABCO generated free cash flow of $78.8 million for full year 2009. Excluding payments of $40.0 million associated with streamlining, free cash flow for full year 2009 totaled $118.8 million.

"Rising to the market challenges in 2009, we demonstrated, once again, our powerful ability to adapt to fast changing conditions and outperform industry dynamics. As early as mid 2008, we had already anticipated adverse global market conditions, and we swiftly launched decisive actions to align our capacity and cost structure for a significantly reduced level of market demand," said Esculier. "In the meantime, we continued to make progress on our three-pillar strategy of technology leadership, global expansion and excellence in execution."

"In 2009, we announced two breakthrough technologies: new clutch compressors and ESCsmart™ simulation system while our OptiDrive™ transmission automation system was named a finalist for the Automotive News PACE™ Award, the industry's benchmark for innovation. We entered into a long term supply agreement with CNHTC, China's largest producer of heavy duty trucks, to deliver our broad range of products from traditional valves all the way to our most sophisticated transmission automation systems," said Esculier. "In India, after acquiring majority control of our award-winning joint venture WABCO-TVS, we successfully integrated this world class subsidiary into our global organization. We further expanded our global customer base for OptiDrive systems through our long term agreement with Ashok Leyland, one of India's largest manufacturers of commercial vehicles."

"Amid WABCO's many accomplishments in 2009, our organization performed superbly, with high efficiency, maximum flexibility and fully under control. Across our worldwide manufacturing network, we further improved the overall quality of our products by 60 percent, reaching another exceptional level," said Esculier. "Demonstrating our commitment to safety in the workplace, we also improved the company's rate of occupational injury or illness in our factories by 20 percent, exceeding our superlative result from the previous years and continuing WABCO's industry-leading safety performance at yet another world class level."

"During 2009, we drove continuous improvements through our WABCO Operating System, one of our industry's most advanced management environments. Despite market turmoil that continued to strongly impact our suppliers and significant restructuring activities internally, our WABCO Operating System delivered $56.6 million of materials and conversion productivity, with materials productivity representing a record 6.1 percent of total materials cost. Among other strong positive results, we also achieved cost savings of $75 million in operating expenses, resulting in a reduction of approximately 19 percent year on year," said Esculier. "This major success helped maintain WABCO's full year 2009 profitability and generate free cash flow that well achieved the expectations in the company's previously disclosed 2009 operating framework."

Recent Highlights

In January 2010, WABCO announced that WABCO-TVS, the company's Indian subsidiary, won the India Manufacturing Excellence Award (IMEA) with "Super Platinum" distinction. Presented by The Economic Times in partnership with Frost & Sullivan, it is India's largest on-site audit of manufacturing practices benchmarked against global standards. The jury honored the WABCO-TVS manufacturing facility located in Chennai, India, as "Super Platinum" in recognition of the site's highest score among all other winners in 2009.

WABCO reported in January 2010 that it again supplied its most advanced, high performance braking technology to KAMAZ-Master, the Russian national off-road truck rally team and winner of Dakar 2010, the world's most challenging endurance rally. KAMAZ-Master trucks finished in first, second and fifth place at Dakar 2010, marking an unprecedented ninth time that KAMAZ-Master is the winner of the Dakar competition. WABCO has been supplying KAMAZ-Master heavy duty trucks for more than 10 years.

WABCO announced in January 2010 that its roll stability support (RSS) for trailers is the industry's first trailer roll-over control approved for use in all 27 countries of the European Union and in 20 other countries worldwide in accordance with the United Nations Economic Commission for Europe's Regulation 13 for braking. A new EU regulation requires vehicle stability with roll-over control for semi-trailers and heavy trailers, both with air suspension and up to three axles. It is compulsory for new type approvals from July 2010 and for new registrations from July 2011.

In January 2010, WABCO disclosed that it has developed and will supply breakthrough electronic control technology and an innovative high performance air supply system for original equipment manufacturer AUDI AG. WABCO's content will be equipped on the air suspension of the Audi A8 2010 model, Audi's new flagship luxury sedan. WABCO's electronic control unit is the passenger car industry's first application of air suspension using FlexRay™ technology for in-car data networking, resulting in faster and more highly reliable integration with the vehicle's other sensors and control systems.

Also in January 2010, WABCO introduced Trailer Immobilizer, a security innovation that significantly increases protection against trailer theft, as an additional function in the company's trailer electronic braking system (EBS). It blocks the wheels of a parked trailer to help prevent theft or unauthorized use. It is also the commercial vehicle industry's first trailer immobilizer system integrated with the vehicle's electronic braking system. It continues WABCO's 11-year track record of technology leadership in EBS for trailers.

In Q4 2009, WABCO announced that a global original equipment manufacturer headquartered in Europe has awarded WABCO a multi-year contract to supply an integrated pedal module to equip heavy and medium duty trucks for series production starting in 2013. Available for both automated and manual gearboxes, WABCO's integrated pedal module provides a standard interface in the vehicle's cab environment, resulting in lower installation costs and optimized logistics in original equipment manufacturing processes.

WABCO recently announced that its OptiDrive system, a breakthrough in transmission automation technology, has been named a finalist for the 2010 Automotive News PACE™ Awards, the automotive industry's benchmark for innovation. OptiDrive is a modular automated manual transmission system for medium and heavy duty commercial vehicles. It continues the company's 20-year track record of technology leadership in transmission automation.

WABCO was honored in Q4 2009 with two Technology Innovation Awards from one of China's largest manufacturers of commercial vehicles. Foton Group recognized WABCO's outstanding technological contribution to their trucks and Foton Bus Company praised WABCO's top innovation for their buses. Foton is ranked among China's 50 most valuable brands.

WABCO disclosed in Q4 2009 that the company and Yuchai Machinery Company have completed an agreement for product development and the long-term supply of twin-cylinder compressors for diesel engines to be mounted on heavy duty trucks. Yuchai is China's largest manufacturer of diesel engines for commercial vehicles for the past eight consecutive years and one of China's leading exporters serving more than 50 countries.

The company reported in Q4 2009 that WABCO and Chery Automobile Company have completed an agreement for product development and the long-term supply of vacuum pumps for automotive braking applications for diesel and gasoline direct injection engines. Chery is one of China's leading manufacturers of passenger cars and China's top ranked exporter of cars serving more than 70 countries. WABCO vacuum pumps for automotive braking systems utilize an ultra-low power consumption design that helps improve engine efficiency.

WABCO recently achieved a business breakthrough at one of its customers, Anhui Hualing Automobile Company (CAMC), one of China's major manufacturers of heavy duty trucks. Supplying the customer's trucks for both domestic and international markets, WABCO is providing anti-lock braking systems (ABS) and components for cabin air suspension systems on a sole supplier basis while also significantly furnishing other braking systems.

In Q4 2009, Meritor WABCO, the company's joint venture in North America, announced that System Saver 1200 Plus air dryers will be standard on all truck models of Daimler Trucks North America, as of January 2010. Developed specifically for North American air braking systems, the Meritor WABCO System Saver 1200 Plus is a high capacity air dryer that can be used in a wide range of vocational environments.

In Q4 2009, Meritor WABCO was awarded a significant contract by a major original equipment manufacturer of commercial vehicles to supply emission control valves, starting in January 2010, to help meet new engine requirements that came into effect in 2010 in the United States.

Also in Q4 2009, Meritor WABCO and a leading truck producer made an agreement for the supply of hydraulic clutch control systems, which include a master cylinder, slave cylinders and connecting technology for optional servo cylinders. The customer's volume production is scheduled to begin in April 2010.

As of 2009, Meritor WABCO marked another achievement in the company's technology leadership for commercial vehicle clutch technology. It now supplies clutch controls to three of the largest manufacturers of Class 8 trucks in North America. Class 8 trucks are the North American industry's heaviest duty with a gross vehicle weight rating above 33,000 pounds (14,969 kilos).

Full Year 2010 Guidance

Based on a set of market assumptions, the company's guidance for 2010 includes an estimated increase in 2010 sales of 15 to 20 percent in local currencies, full year reported operating margin from 4.5 to 6.5 percent, and performance operating margin from 5 to 7 percent, resulting in diluted earnings per share between $0.87 and $1.27 on a U.S. GAAP basis and between $1.00 and $1.40 on a performance basis. WABCO expects to convert between 80 and 90 percent of its net income into free cash flow, excluding streamlining and separation related payments.

"With our organization realignment and track record of excellent adaptability, we have enabled sufficient flexibility to take advantage of anticipated market opportunities. We will continue to connect more closely with customers and morph with the markets, especially in Asian and emerging countries," said Esculier. "We will fully capitalize on the exceptional efforts we made in 2009, resulting in our successful streamlining, major productivity gains, significantly reduced cost structure and an even more highly cost-effective WABCO Operating System. WABCO is well poised to generate superb incremental margins on future growth in the coming years."

About WABCO

WABCO Vehicle Control Systems (NYSE: WBC) is a leading supplier of safety and control systems for commercial vehicles. For over 140 years, WABCO has pioneered breakthrough electronic, mechanical and mechatronic technologies for braking, stability, and transmission automation systems supplied to the world's leading commercial truck, trailer, and bus manufacturers. With sales of $1.5 billion in 2009, WABCO is headquartered in Brussels, Belgium. For more information, visit www.wabco-auto.com

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