ACCELERATING 2 WABCO marked another historic milestone in 2017 by selling more than 5 million single-piston air disc brakes (ADB) globally since introduction in 1996. A key contributor to this result was WABCO’s Operating System , our globally standardized management environment. While responding superbly to surges in regional market demand during 2017, it still delivered $83 million of supply chain productivity, including a record 8.1% conversion productivity contributed from our factories alone. Furthermore, we converted 97% of performance net income into $361 million of performance free cash flow—another example of our rigor in managing business fundamentals. In 2017, WABCO repurchased shares worth $120 million, alongside the company’s investment of $417 million in acquisitions. Between June 2011 and December 31, 2017, WABCO has returned $1.6 billion in cash to shareowners through our share buyback program. With authorization to repurchase up to $480 million of additional shares by the end of 2018, this program, together with acquisitions, underpins our enduring commitment to deliver superior value. Delivering Differentiated Shareowner Value In 2017, WABCO generated record earnings per share (EPS) of $6.86 on a performance basis, up more than 18% over the previous year. We also outperformed the S&P 500 Index in 2017, beating this key benchmark by 12 percentage points in cumulative 5-year total returns. Propelled by favorable markets, WABCO again outperformed global truck and bus production, growing sales to $3.3 billion, up 16% in local currencies from a year ago. Our exceptional ability to transform top-line growth into healthy bottom- line results generated an incremental operating margin of 20% for the year. Effectively, we extracted an additional 20 cents in performance operating income from every incremental dollar in sales during 2017.