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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended March 31, 2010.



| ̈ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the Transition Period From
 to
.

Commission File No. 333-128166-10





LOGO

Affinia Group Intermediate Holdings Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 34-2022081                          
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer
Identification No.)



|                                           |  |           
|------------------------------------------ |  | ----------
|1101 Technology Drive, Ann Arbor, Michigan |  | 48108     
|(Address of Principal Executive Offices)   |  | (Zip Code)

(734)
827-5400



(Registrants Telephone Number, Including Area Code)

N/A



(Former Name,
Former Address and Former Fiscal Year, if Changed Since Last Report)





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

(Note: As a voluntary filer not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act,
the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant would have been required to file such reports) as if it were
subject to such filing requirements).

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

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



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|Non-accelerated filer   |  | x  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

There were 1,000 shares outstanding of the registrants common stock as of May 7, 2010 (all of which are privately owned and not traded on a
public market).









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##### Table of Contents

Index

Affinia Group Intermediate Holdings Inc.



|                             |  |                                                                                                      |  |   
|---------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | --
|Part I FINANCIAL INFORMATION
|                             |  |                                                                                                     
|Item 1.                      |  | Financial Statements (unaudited)                                                                     |  | 4 
|                             |  |                                                                                                     
|                             |  | Unaudited Condensed Consolidated Balance SheetsDecember 31, 2009 and March 31, 2010                 |  | 4 
|                             |  |                                                                                                     
|                             |  | Unaudited Condensed Consolidated Statements of OperationsThree Months Ended March 31, 2009 and 2010 |  | 5 
|                             |  |                                                                                                     
|                             |  | Unaudited Condensed Consolidated Statements of Cash FlowsThree Months Ended March 31, 2009 and 2010 |  | 6 
|                             |  |                                                                                                     
|                             |  | Notes to Unaudited Condensed Consolidated Financial Statements                                       |  | 7 
|                             |  |                                                                                                     
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                |  | 25
|                             |  |                                                                                                     
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                           |  | 34
|                             |  |                                                                                                     
|Item 4T.                     |  | Controls and Procedures                                                                              |  | 35
|                             | 
|Part II OTHER INFORMATION    |  |                                                                                                     
|                             |  |                                                                                                     
|Item 1.                      |  | Legal Proceedings                                                                                    |  | 35
|                             |  |                                                                                                     
|Item 1A.                     |  | Risk Factors                                                                                         |  | 35
|                             |  |                                                                                                     
|Item 6.                      |  | Exhibits                                                                                             |  | 35
|                             |  |                                                                                                     
|                             |  | Signatures                                                                                           |  | 36



2



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements may include comments concerning our plans, objectives, goals,
strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical. When used in this report, the words
estimates, expects, anticipates, projects, plans, intends, believes, forecasts, or future or conditional verbs, such as will,
should, could or may, and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, managements
examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However,
there is no assurance that these expectations, beliefs and projections will be achieved. For a discussion of other risks and uncertainties that could materially affect our business financial condition or future results see Part I, Item 7A Risk
Factors in our Annual Report on form 10-K for the year ended December 31, 2009. With respect to all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.

There are a number of risks and uncertainties that could cause our actual results to differ
materially from the forward-looking statements contained in this report. Such risks, uncertainties and other important factors include, among others: the impact of the recent turmoil in the financial markets on the availability and cost of credit;
financial viability of key customers and key suppliers; our substantial leverage; limitations on flexibility in operating our business contained in our debt agreements; pricing and import pressures; the shift in demand from premium to economy
products; our dependence on our largest customers; changing distribution channels; increasing costs for manufactured components, raw materials, crude oil and energy; our ability to achieve cost savings from our restructuring; increased costs in
imported products from low cost sources; the consolidation of distributors; risks associated with our non-U.S. operations; product liability and customer warranty and recall claims; changes to environmental and automotive safety regulations; risk of
impairment to intangibles and goodwill; non-performance by, or insolvency of, our suppliers or our customers; work stoppages or similar difficulties that could significantly disrupt our operations, and other labor disputes; challenges to our
intellectual property portfolio; changes in accounting standards that impact our financial statements; difficulties in developing, maintaining or upgrading information technology systems; the adequacy of our capital resources for future
acquisitions; our ability to successfully combine our operations with any businesses we have acquired or may acquire; effective tax rates and timing and amounts of tax payments; and our exposure to a recession. Additionally, there may be other
factors that could cause our actual results to differ materially from the forward-looking statements. Forward-looking statements are only as of the date of this report or as of the date they are made and we undertake no obligation to update publicly
any forward-looking statements, whether as a result of new information, future events, or otherwise.



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PART I

FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

Affinia Group Intermediate Holdings Inc.

Unaudited Condensed Consolidated Balance Sheets

(Dollars in Millions)



|                                                                                          |  |                  |       |   |               |   |       |  
|----------------------------------------------------------------------------------------- |  | ---------------- | ----- | - | ------------- | - | ----- | -
|                                                                                          |  | December 31,2009 |       |   | March 31,2010 |  
|Assets                                                                                    |  |                  |       |   |               |   |       |  
|Current assets:                                                                           |  |                  |       |   |               |   |       |  
|Cash and cash equivalents                                                                 |  | $                | 65    |   |               | $ | 45    |  
|Restricted cash                                                                           |  |                  | 9     |   |               |   | 11    |  
|Trade accounts receivable, less allowances of $3 million for 2009 and $2 million for 2010 |  |                  | 293   |   |               |   | 337   |  
|Inventories, net                                                                          |  |                  | 430   |   |               |   | 451   |  
|Current deferred taxes                                                                    |  |                  | 50    |   |               |   | 50    |  
|Prepaid taxes                                                                             |  |                  | 50    |   |               |   | 41    |  
|Other current assets                                                                      |  |                  | 21    |   |               |   | 20    |  
|Current assets of discontinued operations                                                 |  |                  | 55    |   |               |   |      |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total current assets                                                                      |  |                  | 973   |   |               |   | 955   |  
|Property, plant, and equipment, net                                                       |  |                  | 199   |   |               |   | 199   |  
|Goodwill                                                                                  |  |                  | 43    |   |               |   | 42    |  
|Other intangible assets, net                                                              |  |                  | 149   |   |               |   | 149   |  
|Deferred financing costs                                                                  |  |                  | 24    |   |               |   | 23    |  
|Deferred income taxes                                                                     |  |                  | 68    |   |               |   | 71    |  
|Investments and other assets                                                              |  |                  | 27    |   |               |   | 28    |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total assets                                                                              |  | $                | 1,483 |   |               | $ | 1,467 |  
|                                                                                          |  |                  |       |   |               |   |       |  
|                                                                                          |  |                 
|Liabilities and shareholders equity                                                      |  |                  |       |   |               |   |       |  
|Current liabilities:                                                                      |  |                  |       |   |               |   |       |  
|Accounts payable                                                                          |  | $                | 201   |   |               | $ | 223   |  
|Notes payable                                                                             |  |                  | 12    |   |               |   | 20    |  
|Other accrued expenses                                                                    |  |                  | 154   |   |               |   | 136   |  
|Accrued payroll and employee benefits                                                     |  |                  | 27    |   |               |   | 35    |  
|Current liabilities of discontinued operations                                            |  |                  | 43    |   |               |   |      |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total current liabilities                                                                 |  |                  | 437   |   |               |   | 414   |  
|Long-term debt                                                                            |  |                  | 589   |   |               |   | 599   |  
|Deferred employee benefits and other noncurrent liabilities                               |  |                  | 20    |   |               |   | 21    |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total liabilities                                                                         |  |                  | 1,046 |   |               |   | 1,034 |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Contingencies and commitments                                                             |  |                  |       |   |               |   |       |  
|Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding             |  |                  |      |   |               |   |      |  
|Additional paid-in capital                                                                |  |                  | 434   |   |               |   | 434   |  
|Accumulated (deficit)                                                                     |  |                  | (81   | ) |               |   | (75   | )
|Accumulated other comprehensive income                                                    |  |                  | 38    |   |               |   | 26    |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total shareholders equity of the Company                                                 |  |                  | 391   |   |               |   | 385   |  
|Noncontrolling interest in consolidated subsidiaries                                      |  |                  | 46    |   |               |   | 48    |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total shareholders equity                                                                |  |                  | 437   |   |               |   | 433   |  
|                                                                                          |  |                  |       |   |               |   |       |  
|Total liabilities and shareholders equity                                                |  | $                | 1,483 |   |               | $ | 1,467 |  
|                                                                                          |  |                  |       |   |               |   |       |  

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.



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Affinia Group Intermediate Holdings Inc.

Unaudited Condensed Consolidated Statements of Operations

(Dollars in Millions)



|                                                                                                            |  |                                |      |   |                                |   |      |  
|----------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---- | - | ------------------------------ | - | ---- | -
|                                                                                                            |  | Three MonthsEndedMarch 31,2009 |      |   | Three MonthsEndedMarch 31,2010 |  
|Net sales                                                                                                   |  | $                              | 403  |   |                                | $ | 443  |  
|Cost of sales                                                                                               |  |                                | (326 | ) |                                |   | (353 | )
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Gross profit                                                                                                |  |                                | 77   |   |                                |   | 90   |  
|Selling, general and administrative expenses                                                                |  |                                | (56  | ) |                                |   | (67  | )
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Operating profit                                                                                            |  |                                | 21   |   |                                |   | 23   |  
|Other income, net                                                                                           |  |                                |     |   |                                |   | 1    |  
|Interest expense                                                                                            |  |                                | (14  | ) |                                |   | (16  | )
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Income from continuing operations before income tax provision, equity in income and noncontrolling interest |  |                                | 7    |   |                                |   | 8    |  
|Income tax provision                                                                                        |  |                                | (3   | ) |                                |   | (2   | )
|Equity in income, net of tax                                                                                |  |                                |     |   |                                |   |     |  
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Net income from continuing operations                                                                       |  |                                | 4    |   |                                |   | 6    |  
|Income (loss) from discontinued operations, net of tax                                                      |  |                                | (1   | ) |                                |   | 2    |  
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Net income                                                                                                  |  |                                | 3    |   |                                |   | 8    |  
|Less: net income (loss) attributable to noncontrolling interest, net of tax                                 |  |                                | (1   | ) |                                |   | 2    |  
|                                                                                                            |  |                                |      |   |                                |   |      |  
|Net income attributable to the Company                                                                      |  | $                              | 4    |   |                                | $ | 6    |  
|                                                                                                            |  |                                |      |   |                                |   |      |  

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.



5



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Affinia Group Intermediate Holdings Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(Dollars in Millions)



|                                                                                |  |                                |     |   |                                |   |     |  
|------------------------------------------------------------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                                                                                |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|Operating activities                                                            |  |                                |     |   |                                |   |     |  
|Net income                                                                      |  | $                              | 3   |   |                                | $ | 8   |  
|Adjustments to reconcile net income to net cash (used in) operating activities: |  |                                |     |   |                                |   |     |  
|Depreciation and amortization                                                   |  |                                | 9   |   |                                |   | 9   |  
|Provision for deferred income taxes                                             |  |                                | (3  | ) |                                |   | (3  | )
|Change in trade accounts receivable                                             |  |                                | (49 | ) |                                |   | (48 | )
|Change in inventories                                                           |  |                                | 15  |   |                                |   | (21 | )
|Change in other current operating assets                                        |  |                                | (5  | ) |                                |   | 11  |  
|Change in other current operating liabilities                                   |  |                                | (6  | ) |                                |   | 11  |  
|Change in other                                                                 |  |                                | 7   |   |                                |   | (6  | )
|                                                                                |  |                                |     |   |                                |   |     |  
|Net cash (used in) operating activities                                         |  |                                | (29 | ) |                                |   | (39 | )
|                                                                                |  |                               
|Investing activities                                                            |  |                                |     |   |                                |   |     |  
|Proceeds from the sale of affiliates                                            |  |                                |    |   |                                |   | 11  |  
|Change in restricted cash                                                       |  |                                | (4  | ) |                                |   | (2  | )
|Additions to property, plant and equipment                                      |  |                                | (5  | ) |                                |   | (6  | )
|Other investing activities                                                      |  |                                |    |   |                                |   | (1  | )
|                                                                                |  |                                |     |   |                                |   |     |  
|Net cash provided by (used in) investing activities                             |  |                                | (9  | ) |                                |   | 2   |  
|                                                                                |  |                               
|Financing activities                                                            |  |                                |     |   |                                |   |     |  
|Net increase in other debt                                                      |  |                                | 10  |   |                                |   | 8   |  
|Net proceeds from ABL Revolver                                                  |  |                                |    |   |                                |   | 10  |  
|Payments on senior term loan facility                                           |  |                                | (10 | ) |                                |   |    |  
|                                                                                |  |                                |     |   |                                |   |     |  
|Net cash provided by financing activities                                       |  |                                |    |   |                                |   | 18  |  
|Effect of exchange rates on cash                                                |  |                                |    |   |                                |   | (1  | )
|Decrease in cash and cash equivalents                                           |  |                                | (38 | ) |                                |   | (20 | )
|Cash and cash equivalents at beginning of the period                            |  |                                | 77  |   |                                |   | 65  |  
|                                                                                |  |                                |     |   |                                |   |     |  
|Cash and cash equivalents at end of the period                                  |  | $                              | 39  |   |                                | $ | 45  |  
|                                                                                |  |                                |     |   |                                |   |     |  
|                                                                                |  |                               
|Supplemental cash flows information                                             |  |                                |     |   |                                |   |     |  
|Cash paid during the period for:                                                |  |                                |     |   |                                |   |     |  
|Interest                                                                        |  | $                              | 7   |   |                                | $ | 15  |  
|Income taxes                                                                    |  | $                              | 4   |   |                                | $ | 13  |  

The accompanying notes
are an integral part of the unaudited condensed consolidated financial statements.



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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business

Affinia Group Inc. (Affinia) is a global leader in the on and off-highway replacement products and
services industry. We derive approximately 98% of our sales from this industry and, as a result, are not directly affected by the market cyclicality of the automotive original equipment manufacturers. Our broad range of brake, filtration, chassis
and other products are sold globally. Our brands include WIX®,
Raybestos®,
McQuay-Norris®,
Nakata®,
Filtron®, and
BrakePro®. Additionally, we provide private label offerings for
NAPA®,
CARQUEST®,
ACDelco® and co-branded offerings for Federated Auto Parts (Federated) and Automotive Distribution
Network (ADN). Affinia is wholly-owned by Affinia Group Intermediate Holdings Inc., which, in turn, is wholly-owned by Affinia Group Holdings Inc., a company controlled by affiliates of The Cypress Group L.L.C. (Cypress).

Affinia, a Delaware corporation formed on June 28, 2004, entered into a stock and asset purchase agreement, as amended
(the Purchase Agreement), with Dana Corporation (Dana). The Purchase Agreement provided for the acquisition by Affinia of substantially all of Danas aftermarket business operations (the Acquisition).

Note 2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Affinia Group Intermediate Holdings Inc.
and its subsidiaries. In these notes to the condensed consolidated financial statements, the terms the Company, we, our and us refer to Affinia Group Intermediate Holdings Inc. and its subsidiaries on
a consolidated basis.

The interim financial information is prepared in conformity with accounting principles generally
accepted in the United States of America (U.S. GAAP) and such principles are applied on a basis consistent with information reflected in our Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted
pursuant to the rules and regulations promulgated by the SEC. In the opinion of management, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments, which are necessary for a fair
presentation of results for the respective interim period.

Note 3. Discontinued Operation

In the fourth quarter of 2009 the Company committed to a plan to sell the Commercial Distribution Europe segment. In accordance with
Accounting Standards Codification (ASC) Topic 360, the Commercial Distribution Europe segment qualified as a discontinued operation. The condensed consolidated statements of operations and the condensed consolidated balance sheets for
all periods presented have been adjusted to reflect this segment as a discontinued operation. The condensed consolidated statement of cash flows for the three months ended March 31, 2009 was not adjusted to reflect this segment as a
discontinued operation.

The Company entered into a Sale and Purchase Agreement with Klarius Group Limited (KGL)
and Auto Holding Paris S.A.S. (AHP) (collectively, the Purchaser) on February 2, 2010 (the Agreement), pursuant to which KGL purchased the shares of Quinton Hazell Automotive Limited and Quinton Hazell Italia
SpA and AHP purchased the shares of Quinton Hazell Deutschland GmbH and Affinia Holding S.A.S. (collectively, the Group Companies) for $12 million, subject to certain closing and post-closing purchase price adjustments. The Agreement
also called for the Purchaser to assume debt of $2.6 million. We also retained the cash in the Group Companies. As of March 31, 2010 we have received $11 million in cash. The business of the Group Companies and their subsidiaries consists of
manufacturing and distribution facilities in eight countries in Europe.



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The table below summarizes the Commercial Distribution Europe segments net sales,
income (loss) before income tax provision, income tax provision and income (loss) from discontinued operations, net of tax (Dollars in Millions).



|                                                       |  |                                 |    |   |                                 |   |   
|------------------------------------------------------ |  | ------------------------------- | -- | - | ------------------------------- | - | --
|                                                       |  | Three MonthsEndedMarch 
31,2009 |    |   | Three MonthsEndedMarch 31,2010*
|Net sales                                              |  | $                               | 54 |   |                                 | $ | 18
|Income (loss) before income tax provision              |  |                                 | (1 | ) |                                 |   | 1 
|Income tax provision                                   |  |                                 |   |   |                                 |   | 1 
|                                                       |  |                                 |    |   |                                 |   |   
|Income (loss) from discontinued operations, net of tax |  | $                               | (1 | ) |                                 | $ | 2 
|                                                       |  |                                 |    |   |                                 |   |   



|* | The three months ended March 31, 2010 includes the Commercial Distribution Europe segments one month of operations, which was prior to the sale on
February 2, 2010.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

At December 31, 2009, intangibles and other long-lived assets were assessed for
recoverability, in accordance with ASC Topic 360, due to circumstances which indicated that the carrying value may not be recoverable through the estimated undiscounted future cash flows resulting from the use of the assets. The Company determined
that the net carrying value of the Commercial Distribution Europe segment may not be recoverable through the sales process. As a result, an impairment charge of $75 million was recorded within discontinued operations in the fourth quarter of 2009 to
reduce the carrying value of the business to expected realizable value. A tax benefit to Affinia of $24 million was recorded resulting from this transaction. The sale was consummated on February 2, 2010 and the estimated loss has subsequently
decreased offset by the one month of operating losses of $1 million resulting in net income from discontinued operations, net of tax of $2 million in the first quarter of 2010. The post closing adjustments are still being negotiated.

The following table shows an analysis of assets and liabilities held for sale as of December 31, 2009 (Dollars in Millions):



|                                             |  |                     |     |  
|-------------------------------------------- |  | ------------------- | --- | -
|                                             |  | At December 31,2009 |    
|Accounts receivable                          |  | $                   | 34  |  
|Inventory                                    |  |                     | 67  |  
|Other current assets                         |  |                     | 6   |  
|Property, plant and equipment                |  |                     | 18  |  
|Long-term assets                             |  |                     | 5   |  
|Impairment of assets                         |  |                     | (75 | )
|                                             |  |                     |     |  
|Total assets of discontinued operations      |  | $                   | 55  |  
|                                             |  |                     |     |  
|Current liabilities                          |  | $                   | 41  |  
|Long-term liabilities                        |  |                     | 2   |  
|                                             |  |                     |     |  
|Total liabilities of discontinued operations |  | $                   | 43  |  
|                                             |  |                     |     |  

Note 4. Venezuelan Operations

As required by U.S. GAAP, effective January 1, 2010, we accounted for Venezuela as a highly inflationary economy because the
three-year cumulative inflation rate for Venezuela using the blended Consumer Price Index (which is associated with the city of Caracas) and the National Consumer Price Index (developed commencing in 2008 and covering the entire country of
Venezuela) exceeded 100%.

Effective January 1, 2010, our Venezuelan subsidiary will use the U.S. dollar as its
functional currency. The financial statements of our subsidiary must be re-measured into the Companys reporting currency (U.S. dollar) and future exchange gains and losses from the re-measurement of monetary assets and liabilities are
reflected in current earnings, rather than exclusively in the equity section of the balance sheet, until such time as the economy is no longer considered highly inflationary. The local currency in Venezuela is the bolivar fuerte (VEF).

On January 11, 2010, the Venezuelan government devalued the countrys currency and changed to a two-tier exchange
structure. The official exchange rate moved from 2.15 VEF per U.S. dollar to 2.60 for essential goods and 4.30 for non-essential goods and services, with Affinias products falling into the non-essential category. A Venezuelan currency control
board is responsible for



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foreign exchange procedures, including approval of requests for exchanges of VEF for U.S. dollars at
the official (government established) exchange rate. Our business in Venezuela has recently been unsuccessful in obtaining U.S. dollars at the official exchange rate. An unregulated parallel market exists for exchanging VEF for U.S. dollars
through securities transactions; our Venezuelan subsidiary has a recent history of entering into such exchange transactions. The Company uses the parallel market rate to translate the financial statements of its Venezuelan subsidiary because we
expect to obtain U.S. dollars at the parallel market rate for future dividend remittances.

Effective January 1, 2010, we
changed the rate used to translate our Venezuelan subsidiarys transactions and balances from the official exchange rate of 2.15 to the parallel exchange rate, which ranged between 6.30 and 7.00 VEF to the U.S. dollar during the first quarter
of 2010. The one-time devaluation had a $2 million negative impact on our pre-tax net income for the period ending March 31, 2010. The change to the parallel market rate reduced sales by $9 million in the first quarter of 2010 in comparison to
the first quarter of 2009.

Note 5. New Accounting Pronouncements

In December 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2009-16, an amendment to ASC Topic 860, Transfer and Services, that requires additional information regarding transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks
related to transferred financial assets. The concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets, and requires additional disclosures. The new guidance is effective for fiscal years
beginning after November 15, 2009 and is effective for us on January 1, 2010. We adopted this guidance in the first quarter of 2010 and it had no impact on our financial condition, results of operations, and disclosures.

In December 2009, the FASB issued ASU 2009-17, an amendment to ASC Topic 810 Consolidation, that modifies how a company
determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The guidance clarifies that the determination of whether a company is required to consolidate an entity is
based on, among other things, an entitys purpose and design and a companys ability to direct the activities of the entity that most significantly impact the entitys economic performance. The guidance requires an ongoing
reassessment of whether a company is the primary beneficiary of a variable interest entity. The guidance also requires additional disclosures about a companys involvement in variable interest entities and any significant changes in risk
exposure due to that involvement. The guidance is effective for fiscal years beginning after November 15, 2009 and is effective for us on January 1, 2010. We adopted this guidance in the first quarter of 2010 and it had no impact on our
financial condition, results of operations, and disclosures.

In January 2010, the FASB issued ASU 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current U.S. GAAP. It clarifies the decrease in ownership provisions
of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other U.S. GAAP. An entity will be required to follow the amended guidance
beginning in the period that it first adopts Financial Accounting Standards Statement 160 (FAS 160) Noncontroling Interest in Consolidated Financial Statements (FAS 160) (now included in Subtopic 810-10). For
those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. We adopted this guidance in the first quarter of 2010 and it had no impact on our financial condition, results of operations, and disclosures.

In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-6, Improving Disclosures about Fair Value
Measurements. This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of
the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures of the valuation
techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009. We adopted this guidance on disclosures in the
first quarter of 2010. There are also additional new disclosure requirements for purchases, sales, issuances and settlements of Level 3 measurements, which are effective for interim and annual periods beginning after December 15, 2010. We are
still evaluating the impact of these new requirements on our disclosures.



9



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Note 6. Fair Value Debt

The fair value of debt, net of discount, is as follows (Dollars in Millions):

Fair Value of Debt at March 31, 2010



|                                             |  |                   |     |                  |        |   |                   |   |    
|-------------------------------------------- |  | ----------------- | --- | ---------------- | ------ | - | ----------------- | - | ---
|                                             |  | Book Valueof Debt |     | Fair ValueFactor |        |   | Fair Valueof Debt
|Senior secured notes, due August 2016        |  | $                 | 222 |                  | 109.00 | % |                   | $ | 242
|Senior subordinated notes, due November 2014 |  |                   | 267 |                  | 99.50  | % |                   |   | 266
|ABL revolver, due August 2013                |  |                   | 100 |                  | 100    | % |                   |   | 100
|Haimeng and other debt                       |  |                   | 30  |                  | 100    | % |                   |   | 30 
|                                             |  |                   |     |                  |        |   |                   |   |    
|Total fair value of debt at March 31, 2010   |  |                   |     |                  |        |   |                   | $ | 638
|                                             |  |                   |     |                  |        |   |                   |   |    

Fair Value of Debt at December 31, 2009



|                                              |  |                   |     |                  |        |   |                   |   |    
|--------------------------------------------- |  | ----------------- | --- | ---------------- | ------ | - | ----------------- | - | ---
|                                              |  | Book Valueof Debt |     | Fair ValueFactor |        |   | Fair Valueof Debt
|Senior secured notes, due August 2016         |  | $                 | 222 |                  | 107.63 | % |                   | $ | 239
|Senior subordinated notes, due November 2014  |  |                   | 267 |                  | 98.75  | % |                   |   | 264
|ABL revolver, due August 2013                 |  |                   | 90  |                  | 100    | % |                   |   | 90 
|Haimeng and other debt                        |  |                   | 22  |                  | 100    | % |                   |   | 22 
|                                              |  |                   |     |                  |        |   |                   |   |    
|Total fair value of debt at December 31, 2009 |  |                   |     |                  |        |   |                   | $ | 615
|                                              |  |                   |     |                  |        |   |                   |   |    

Note 7. Inventories, net

Inventories are valued at the lower of cost or market. Cost is determined on the FIFO basis for all domestic inventories or average cost
basis for non-U.S. inventories. Inventories are reduced by an allowance for slow-moving and obsolete inventories based on managements review of on-hand inventories compared to historical and estimated future sales and usage. A summary of
inventories, net is provided in the table below (Dollars in Millions):



|                |  |                     |     |                  |   |    
|--------------- |  | ------------------- | --- | ---------------- | - | ---
|                |  | At December 31,2009 |     | At March 31,2010
|Raw materials   |  | $                   | 103 |                  | $ | 107
|Work-in-process |  |                     | 26  |                  |   | 31 
|Finished goods  |  |                     | 301 |                  |   | 313
|                |  |                     |     |                  |   |    
|                |  | $                   | 430 |                  | $ | 451
|                |  |                     |     |                  |   |    

Note 8. Comprehensive Income

The elements of comprehensive income are presented in the following table (Dollars in Millions):



|                                                                          |  |                                |     |   |                                |   |     |  
|------------------------------------------------------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                                                                          |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|Net income                                                                |  | $                              | 3   |   |                                | $ | 8   |  
|Interest rate swap, net of tax                                            |  |                                | 1   |   |                                |   |    |  
|Change in foreign currency translation adjustments, net of tax            |  |                                | (14 | ) |                                |   | (12 | )
|                                                                          |  |                                |     |   |                                |   |     |  
|Comprehensive income (loss)                                               |  |                                | (10 | ) |                                |   | (4  | )
|Less: Comprehensive loss (income) attributable to noncontrolling interest |  |                                | 1   |   |                                |   | (2  | )
|                                                                          |  |                                |     |   |                                |   |     |  
|Comprehensive income (loss) attributable to the Company                   |  | $                              | (9  | ) |                                | $ | (6  | )
|                                                                          |  |                                |     |   |                                |   |     |  



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Note 9. Goodwill

The goodwill relates to the initial acquisition in 2004, the acquisition of Affinia Hong Kong Limited in 2008 and a minor acquisition in
the second quarter of 2008. For the 2004 acquisition, the tax benefit for the excess of tax-deductible goodwill over the reported amount of goodwill is applied to first reduce the goodwill related to the Acquisition, in accordance with ASC Topic
805-740 (ASC Topic 805-740, originally issued as SFAS No. 109, Accounting for Income Taxes). The tax benefit for the excess of tax deductible goodwill reduced reported goodwill by approximately $8 million during 2009 to $18
million at the end of 2009 and $2 million during the first three months of 2010. We anticipate goodwill being reduced by another $6 million during 2010. Once the reported amount of goodwill for the 2004 acquisition is reduced to zero, the remaining
tax benefit reduces the basis of intangible assets purchased in the 2004 acquisition. Any remaining tax benefit reduces the income tax provision.

In conjunction with the acquisition of Affinia Hong Kong Limited, we determined the fair value of intangibles, property, plant and
equipment, other assets and liabilities. Based on our valuations and purchase accounting adjustments, we recorded $23 million as goodwill at the end of 2009.

During the second quarter of 2008, we purchased the remaining 40% interest in Wix Helsa Company. The purchase price exceeded the fair
value of the assets and the liabilities acquired by approximately $2 million, which was recorded to goodwill.

The following
table summarizes goodwill activity, which is related to the On and Off-Highway segment for the first three months of 2010 (Dollars in Millions):



|                             |  |                                |    |  
|---------------------------- |  | ------------------------------ | -- | -
|                             |  | Three MonthsEndedMarch 31,2010 |   
|Balance at December 31, 2009 |  | $                              | 43 |  
|Tax benefit reductions       |  |                                | (2 | )
|Other                        |  |                                | 1  |  
|                             |  |                                |    |  
|Balance at March 31, 2010    |  | $                              | 42 |  
|                             |  |                                |    |  

Note 10. Commitments and Contingencies

At March 31, 2010, the Company had purchase commitments for property, plant and equipment of approximately $2 million.

A reconciliation of the changes in our return reserves is as follows (Dollars in Millions):



|                           |  |                                |     |   |                                |   |     |  
|-------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                           |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|Beginning balance          |  | $                              | 18  |   |                                | $ | 17  |  
|Amounts charged to revenue |  |                                | 12  |   |                                |   | 12  |  
|Returns processed          |  |                                | (13 | ) |                                |   | (12 | )
|                           |  |                                |     |   |                                |   |     |  
|                           |  | $                              | 17  |   |                                | $ | 17  |  
|                           |  |                                |     |   |                                |   |     |  

Note 11. Income Taxes

The total amount of unrecognized tax benefits as of December 31, 2009 and March 31, 2010 was $2 million, and if recognized,
would affect the effective tax rate. The Company recognizes interest related to unrecognized tax benefits in interest expense and recognizes penalties as part of the income tax provision. As of March 31, 2010 the Companys accrual for
interest and penalties was less than $1 million. The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. For jurisdictions in which the Company transacts significant business, tax years ended
December 31, 2004 and later remain subject to examination by tax authorities. We do not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months. The effective tax rate was 25%
and 43% for the first three months of 2010 and 2009, respectively.



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Note 12. Legal Proceedings

On March 31, 2008, a class action lawsuit was filed by S&E Quick Lube Distributors, Inc. of Utah against several auto parts
manufacturers for allegedly conspiring to fix prices for replacement oil, air, fuel and transmission filters. Several auto parts companies are named as defendants, including Champion Laboratories, Inc., Purolator Filters NA LLC, Honeywell
International Inc., Cummins Filtration Inc., Donaldson Company, Baldwin Filters Inc., Bosch USA., Mann + Hummel USA Inc., ArvinMeritor Inc., United Components Inc and Wix Filtration Corp LLC (Wix), one of our subsidiaries. The lawsuit is
currently pending as a consolidated Multi-District Litigation (MDL) Proceeding in Chicago, IL because of multiple tag-along filings in several jurisdictions. Two suits have also been filed in the Canadian provinces of Ontario
and Quebec. Wix, along with other named defendants, have filed various motions to dismiss Plaintiffs complaints, which were denied by the court in December 2009, but are currently the focus of motions to reconsider. Initial discovery has begun
in the case. Significantly, the U.S. Justice Department has recently closed its investigation into this matter. Affinia believes that Wix did not have significant sales in this particular market at the relevant time periods so we currently expect
any potential exposure to be immaterial.

DPH Holdings Corp., a successor to Delphi Corporation and certain of its affiliates
(Delphi), has served Affinia Group Holdings, Inc. and certain of it subsidiaries with a complaint to avoid over $17 million in allegedly preferential transfers. Pursuant to certain court orders, Delphi filed its complaint under seal in
October 2007, shortly before the expiration of the statute of limitations, and did not unseal the complaint and commence the service process until March 2010. The Company plans to file a motion to dismiss based on due process and other defenses
connected to the unusual procedure Delphi used to conceal and delay the lawsuit. The Company has not yet analyzed its preference exposure.

The Company has various accruals for civil product liability and other costs. If there is a range of equally probable outcomes, we accrue
at the lower end of the range. The Company had $1 million accrued as of December 31, 2009 and March 31, 2010. There are no recoveries expected from third parties.

Note 13. Restructuring of Operations

In 2005, we announced two restructuring plans: (i) a restructuring plan that we announced at the beginning of 2005 as part of the
Acquisition, also referred to as the acquisition restructuring and (ii) a restructuring plan that we announced at the end of 2005, also referred to herein as the comprehensive restructuring. We have completed the acquisition restructuring and
we are continuing the comprehensive restructuring program.

Comprehensive Restructuring

The comprehensive restructuring plan was announced in December 2005 and should be completed by the end of 2010. We have closed many plants
over the last few years and we have two more plants that have been announced for closure that are still in the process of being closed (Milton, Ontario and Litchfield, Illinois). Once the two plants close in 2010 we will have completed the
comprehensive restructuring plan.

The Company also continues to expect that the major components of such costs will be
employee severance costs, asset impairment charges, and other costs (i.e. moving costs, environmental remediation, site clearance and repair costs) each of which should represent approximately 42%, 19% and 39% respectively, of the total cost of the
restructuring.

Other Restructuring

At the end of 2009 we approved the closure of our distribution operations located in Mississauga, Ontario, Canada. The operations were
closed by the end of the first quarter of 2010. The closure of this operation is part of the Companys continuing effort to improve its distribution system and serve the replacement parts market effectively and efficiently. The closure is
expected to result in the Company incurring pre-tax charges of approximately $5 million. The charges are comprised of employee severance costs of $1 million, lease termination costs of $2 million and other trailing liabilities of $2 million. We
incurred approximately $1 million in costs in the first quarter of 2010 related to the closure of this facility.



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##### Table of Contents

In connection with the comprehensive restructuring, we recorded $157 million in
restructuring costs to date. The comprehensive and other restructuring costs are disclosed by period in the chart below and were recorded in selling, general and administrative expense, cost of sales and as part of discontinued operations
(Dollars in Millions).



|                            |  |                        |    |                                           |   |               |  |       |    |  |   |    
|--------------------------- |  | ---------------------- | -- | ----------------------------------------- | - | ------------- |  | ----- | -- |  | - | ---
|                            |  | DiscontinuedOperations |    | Selling, GeneralandAdministrativeExpenses |   | Cost of Sales |  | Total
|Comprehensive Restructuring |  |                        |    |                                           |   |               |  |       |    |  |   |    
|2005                        |  | $                      |   |                                           | $ | 2             |  | $     | 21 |  | $ | 23 
|2006                        |  |                        | 1  |                                           |   | 38            |  |       | 1  |  |   | 40 
|2007                        |  |                        | 12 |                                           |   | 23            |  |       | 3  |  |   | 38 
|2008                        |  |                        | 12 |                                           |   | 27            |  |       | 1  |  |   | 40 
|2009                        |  |                        | 2  |                                           |   | 10            |  |       | 1  |  |   | 13 
|First three months of 2010  |  |                        |   |                                           |   | 2             |  |       | 1  |  |   | 3  
|                            |  |                        |    |                                           |   |               |  |       |    |  |   |    
|Total Comprehensive Cost    |  |                        | 27 |                                           |   | 102           |  |       | 28 |  | $ | 157
|                            |  |                        |    |                                          
|Other Restructuring         |  |                        |    |                                           |   |               |  |       |    |  |   |    
|2009                        |  |                        |   |                                           |   | 1             |  |       |   |  |   | 1  
|First three months of 2010  |  |                        |   |                                           |   | 1             |  |       |   |  |   | 1  
|                            |  |                        |    |                                           |   |               |  |       |    |  |   |    
|Total Restructuring Cost    |  | $                      | 27 |                                           | $ | 104           |  | $     | 28 |  | $ | 159
|                            |  |                        |    |                                           |   |               |  |       |    |  |   |    

We forecast that the comprehensive restructuring
program will result in approximately $163 million in restructuring costs, which exceeds preliminary expectations of $152 million. We anticipate that we will incur approximately $6 million more in comprehensive restructuring costs during 2010 to
complete the closure of the previously announced facilities.

The restructuring charges for the comprehensive restructuring
and further restructuring consist of employee termination costs, other exit costs and impairment costs. Severance costs are being accounted for in accordance with ASC Topic 420 Exit or Disposal Cost Obligations and ASC Topic 712
Compensation  Nonretirement Postemployment Benefits.

The following summarizes the restructuring charges and
activity for all the Companys restructuring programs (Dollars in Millions):

Accrued Restructuring



|                                    |  |               |    |   |       |   |       |  |   |    |  
|----------------------------------- |  | ------------- | -- | - | ----- | - | ----- |  | - | -- | -
|                                    |  | Comprehensive |    |   | Other |   | Total | 
|Balance at December 31, 2009        |  | $             | 6  |   |       | $ | 1     |  | $ | 7  |  
|Charges to expense:                 |  |               |    |   |       |   |       |  |   |    |  
|Employee termination benefits       |  |               |   |   |       |   |      |  |   |   |  
|Asset write-offs expense            |  |               | 1  |   |       |   |      |  |   | 1  |  
|Other expenses                      |  |               | 2  |   |       |   | 1     |  |   | 3  |  
|                                    |  |               |    |   |       |   |       |  |   |    |  
|Total restructuring expenses        |  |               | 3  |   |       |   | 1     |  |   | 4  |  
|Cash payments and asset write-offs: |  |               |    |   |       |   |       |  |   |    |  
|Cash payments                       |  |               | (4 | ) |       |   |      |  |   | (4 | )
|Asset retirements and other         |  |               | (1 | ) |       |   |      |  |   | (1 | )
|                                    |  |               |    |   |       |   |       |  |   |    |  
|Balance at March 31, 2010           |  | $             | 4  |   |       | $ | 2     |  | $ | 6  |  
|                                    |  |               |    |   |       |   |       |  |   |    |  



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At March 31, 2010, $6 million of restructuring charges remained in other accrued
expenses, relating to wage and healthcare continuation for severed employees and other termination costs. These remaining benefits are expected to be paid during 2010. The following table shows the restructuring expenses by segment (Dollars in
Millions):



|                                       |  |                                |   |                                |   |  
|-------------------------------------- |  | ------------------------------ | - | ------------------------------ | - | -
|                                       |  | Three MonthsEndedMarch 31,2009 |   | Three MonthsEndedMarch 31,2010
|On and Off-highway segment             |  | $                              | 1 |                                | $ | 4
|Brake South America segment            |  |                                |  |                                |   | 
|Corporate, eliminations and other      |  |                                |  |                                |   | 
|                                       |  |                                |   |                                |   |  
|                                       |  |                                | 1 |                                |   | 4
|Commercial Distribution Europe segment |  |                                | 1 |                                |   | 
|                                       |  |                                |   |                                |   |  
|Total                                  |  | $                              | 2 |                                | $ | 4
|                                       |  |                                |   |                                |   |  

Note 14. Segment and Geographic Information

The products, customer base, distribution channel, manufacturing process and procurement are similar throughout all of the Companys
operations. However, due to different economic characteristics in the Companys operations and in conformity with ASC Topic 280, the Company was previously presented as three separate reporting segments: (1.) the On and Off-highway
segment, which is composed of Filtration, Brake North America and Asia, Chassis, and Commercial Distribution South America, (2.) the Brake South America segment, and (3.) the Commercial Distribution Europe segment. All three segments are
in the On and Off-highway industry but for segment reporting purposes we refer to the first segment as the On and Off-highway segment. Because of the sale of our Commercial Distribution Europe segment the Commercial Distribution Europe segment was
classified as discontinued operations and, as such, is not presented in the net sales and operating profit segment tables below. Segment net sales, operating profit, total assets, depreciation and capital expenditures were as follows (Dollars in
Millions):



|                                  |  |                                |     |   |                                |   |     |  
|--------------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                                  |  | Net Sales                      |    
|                                  |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|On and Off-highway segment        |  | $                              | 402 |   |                                | $ | 444 |  
|Brake South America segment       |  |                                | 5   |   |                                |   | 3   |  
|Corporate, eliminations and other |  |                                | (4  | ) |                                |   | (4  | )
|                                  |  |                                |     |   |                                |   |     |  
|                                  |  | $                              | 403 |   |                                | $ | 443 |  
|                                  |  |                                |     |   |                                |   |     |  



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##### Table of Contents

|                                  |  |                                |       |   |                                |   |       |  
|--------------------------------- |  | ------------------------------ | ----- | - | ------------------------------ | - | ----- | -
|                                  |  | Operating Profit               |      
|                                  |  | Three MonthsEndedMarch 31,2009 |       |   | Three MonthsEndedMarch 31,2010 |  
|On and Off-highway segment        |  | $                              | 29    |   |                                | $ | 32    |  
|Brake South America segment       |  |                                |      |   |                                |   | (1    | )
|Corporate, eliminations and other |  |                                | (8    | ) |                                |   | (8    | )
|                                  |  |                                |       |   |                                |   |       |  
|                                  |  | $                              | 21    |   |                                | $ | 23    |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  | 
|                                  |  | Total Assets                   |      
|                                  |  | December 31,2009               |       |   | March 31,2010                  |  
|On and Off-highway segment        |  | $                              | 1,318 |   |                                | $ | 1,344 |  
|Brake South America segment       |  |                                | 8     |   |                                |   | 5     |  
|Corporate, eliminations and other |  |                                | 102   |   |                                |   | 118   |  
|Assets of discontinued operations |  |                                | 55    |   |                                |   |      |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  |  | $                              | 1,483 |   |                                | $ | 1,467 |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  | 
|                                  |  | Depreciation and Amortization  |      
|                                  |  | Three MonthsEndedMarch 31,2009 |       |   | Three MonthsEndedMarch 31,2010 |  
|On and Off-highway segment        |  | $                              | 5     |   |                                | $ | 6     |  
|Brake South America segment       |  |                                |      |   |                                |   |      |  
|Corporate, eliminations and other |  |                                | 3     |   |                                |   | 3     |  
|                                  |  |                                |       |   |                                |   |       |  
|Total from continuing operations  |  |                                | 8     |   |                                |   | 9     |  
|Discontinued operations           |  |                                | 1     |   |                                |   |      |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  |  | $                              | 9     |   |                                | $ | 9     |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  | 
|                                  |  | Capital Expenditures           |      
|                                  |  | Three MonthsEndedMarch 31,2009 |       |   | Three MonthsEndedMarch 31,2010 |  
|On and Off-highway segment        |  | $                              | 3     |   |                                | $ | 5     |  
|Brake South America segment       |  |                                | 1     |   |                                |   | 1     |  
|Corporate, eliminations and other |  |                                |      |   |                                |   |      |  
|                                  |  |                                |       |   |                                |   |       |  
|Total from continuing operations  |  |                                | 4     |   |                                |   | 6     |  
|Discontinued operations           |  |                                | 1     |   |                                |   |      |  
|                                  |  |                                |       |   |                                |   |       |  
|                                  |  | $                              | 5     |   |                                | $ | 6     |  
|                                  |  |                                |       |   |                                |   |       |  

Net Sales by geographic region were as follows (Dollars in Millions):



|                      |  |                                |     |                                |   |    
|--------------------- |  | ------------------------------ | --- | ------------------------------ | - | ---
|                      |  |                               
|                      |  | Three MonthsEndedMarch 31,2009 |     | Three MonthsEndedMarch 31,2010
|Brazil                |  | $                              | 59  |                                | $ | 95 
|Canada                |  |                                | 26  |                                |   | 27 
|Other Countries       |  |                                | 79  |                                |   | 61 
|                      |  |                                |     |                                |   |    
|Total Other Countries |  |                                | 164 |                                |   | 183
|United States         |  |                                | 239 |                                |   | 260
|                      |  |                                |     |                                |   |    
|                      |  | $                              | 403 |                                | $ | 443
|                      |  |                                |     |                                |   |    



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##### Table of Contents

Long-lived assets by geographic region were as follows (Dollars in Millions):



|                      |  |                  |     |               |   |    
|--------------------- |  | ---------------- | --- | ------------- | - | ---
|                      |  | December 31,2009 |     | March 31,2010
|China                 |  | $                | 71  |               | $ | 71 
|Canada                |  |                  | 11  |               |   | 10 
|Brazil                |  |                  | 10  |               |   | 9  
|Other Countries       |  |                  | 51  |               |   | 56 
|                      |  |                  |     |               |   |    
|Total Other Countries |  |                  | 143 |               |   | 146
|United States         |  |                  | 272 |               |   | 267
|                      |  |                  |     |               |   |    
|                      |  | $                | 415 |               | $ | 413
|                      |  |                  |     |               |   |    

Net sales by geographic region were determined based
on origin of sale. Geographic data on long-lived assets are comprised of property, plant and equipment, goodwill, other intangible assets and deferred financing costs.

We offer primarily three types of products: brake products, which include brake drums, rotors, pads and shoes and hydraulic brake system
components; filtration products, which include oil, fuel, air and other filters; and chassis products, which include steering, suspension and driveline components. Additionally, we have our Commercial Distribution South America products, which offer
brake, chassis, filtration and other products. Brake products are segregated below into Brake North America and Asia products and Brake South America products. The Companys sales by group of similar products are as follows:



|                                               |  |                                |     |   |                                |   |     |  
|---------------------------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                                               |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|Brake products                                 |  | $                              | 137 |   |                                | $ | 128 |  
|Filtration products                            |  |                                | 172 |   |                                |   | 185 |  
|Chassis products                               |  |                                | 36  |   |                                |   | 36  |  
|Commercial Distribution South America products |  |                                | 62  |   |                                |   | 98  |  
|Corporate, eliminations and other              |  |                                | (4  | ) |                                |   | (4  | )
|                                               |  |                                |     |   |                                |   |     |  
|                                               |  | $                              | 403 |   |                                | $ | 443 |  
|                                               |  |                                |     |   |                                |   |     |  

Note 15. Stock Option Plans

On July 20, 2005, we adopted a stock incentive plan with a maximum of 227,000 shares of common stock subject to awards. As of
March 31, 2010, 103,757 shares had been awarded, which included vested shares of 103,757 and zero unvested shares. Additionally, at March 31, 2010, there were 123,243 shares available for future stock option grants. Pursuant to the terms
of the stock incentive plan, each option expires August 1, 2015.

We account for our employee stock options under the
fair value method of accounting using a Black-Scholes model to measure stock-based compensation expense at the date of grant. Dividend yields were not a factor because there were no cash dividends declared during 2009 and the first three months of
2010. Our weighted-average Black-Scholes fair value assumptions include:



|                                                             |  |      |           |   |      |   |           |  
|------------------------------------------------------------ |  | ---- | --------- | - | ---- | - | --------- | -
|                                                             |  | 2009 |           |   | 2010 |  
|Weighted-average effective term                              |  |      | 5.2 years |   |      |   | 5.2 years |  
|Weighted-average risk free interest rate                     |  |      | 4.33      | % |      |   | 4.33      | %
|Weighted-average expected volatility                         |  |      | 40.8      | % |      |   | 40.8      | %
|Weighted-average fair value of options (Dollars in millions) |  | $    | 7         |   |      | $ | 7         |  



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The fair value of the stock option grants is amortized to expense over the vesting period.
The Company reduces the overall compensation expense by a turnover rate consistent with historical trends. Stock-based compensation expense, which was recorded in selling, general and administrative expenses, and related income tax benefits were
less than $1 million for each of the three month periods ending March 31, 2009 and 2010. A summary of our stock-based compensation activity for the year ended December 31, 2009 and the three months ended March 31, 2010 is presented
below:



|                                 |  |         |  
|-------------------------------- |  | ------- | -
|Outstanding at December 31, 2008 |  | 181,785 |  
|Granted                          |  | 1,500   |  
|Forfeited/expired                |  | (7,647  | )
|                                 |  |         |  
|Outstanding at December 31, 2009 |  | 175,638 |  
|Granted                          |  |        |  
|Forfeited/expired                |  | (71,881 | )
|                                 |  |         |  
|Balance at March 31, 2010        |  | 103,757 |  
|                                 |  |         |  

Note 16. Derivatives

The Companys financial derivative assets and liabilities consist of standard currency forward contracts. The fair value framework
requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires
significant management judgment. The three levels are defined as follows:



| |  |  | Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets
or quoted prices for identical assets or liabilities in inactive markets.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3: Unobservable inputs reflecting managements own assumptions about the inputs used in pricing the asset or liability.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

The fair value measurements of the Companys interest rate and the currency derivative instruments are
based upon Level 2 inputs consisting of observable current market data pertaining to relevant currency exchange rates, as reported by a recognized independent third-party financial information provider. Based upon the Companys assessment of
the creditworthiness of its derivative transactions counterparties, our derivative instruments fair value measurements have not been adjusted for incremental counterparty credit risk.

Currency Rate Derivatives

The Company transacts business in multiple currencies in various international markets. Therefore, our reported results from operations
and financial position are vulnerable to several forms of risk related to currency exchange rate volatility. The Companys use of currency rate derivatives (currency forward contracts) is limited to transactions intended to mitigate reported
currency gains and losses arising from the periodic re-measurement of monetary assets and liabilities denominated in a non-local currency. Our policy does not require hedging each individual exposure that may give rise to currency gain or loss.
However, our practice has been to execute hedge transactions in notional amounts that would be reasonably expected to result in gains and losses that approximately offset expected gains and losses arising from specific underlying net currency
exposures. Our policy strictly prohibits the use of currency rate derivatives for speculative purposes.

Our currency forward
transactions are undesignated hedges and are, therefore, not eligible for hedge accounting treatment. The Companys outstanding currency forward contracts are recorded in the Consolidated Balance Sheets as Other current assets or
Other accrued expenses, accordingly. Currency derivative gains and losses are recognized in Other income, net in the Consolidated Statements of Operations in the reporting period of occurrence. The Company has not recorded
currency derivative gains (losses) to other comprehensive income (loss) nor has it reclassified prior period currency derivative results from other comprehensive income to earning during the last twelve months. The Company does not anticipate that
it will record any currency derivative gains or losses to other comprehensive income (loss) or that it will reclassify prior period currency derivative results from other comprehensive income (loss) to earnings in the next twelve months.



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The notional amount and fair value of our outstanding currency forward contracts were as
follows (Dollars in millions):



|                        |  |                 |     |                  |   |                      |  |   |  
|----------------------- |  | --------------- | --- | ---------------- | - | -------------------- |  | - | -
|                        |  | Notional Amount |     | Asset Derivative |   | Liability Derivative
|As of March 31, 2010    |  | $               | 204 |                  | $ |                     |  | $ | 2
|As of December 31, 2009 |  | $               | 133 |                  | $ |                     |  | $ | 

Note 17. Subsequent
Event

On May 3, 2010, we announced the closure of our brake manufacturing operations located in Maracay, Edo Aragua,
Venezuela. The operations are expected to close by the end of the second quarter of 2010. These actions are expected to result in the Company incurring pre-tax charges of approximately $7 million, of which approximately $4 million will be future
cash expenditures. The charges are comprised of employee severance costs of $3 million, asset impairments of $3 million, and other trailing liabilities of $1 million. The Company will recognize the severance costs in the second quarter of 2010 with
substantially all the remaining costs recognized during 2010.

Note 18. Financial Information for Guarantors and Non-Guarantors

Affinia Group Intermediate Holdings Inc. (presented as Parent in the following schedules), through its 100%-owned
subsidiary, Affinia Group Inc. (presented as Issuer in the following schedules), issued the Secured Notes on August 13, 2009 in the principal amount of $225 million and Subordinated Notes on November 30, 2004 in the principal amount of
$300 million. As of March 31, 2010 there were $225 million and $267 million of Secured Notes and Subordinated Notes outstanding, respectively. The notes were offered only to qualified institutional investors and certain persons in offshore
transactions.

The Secured Notes are fully, unconditionally and jointly and severally guaranteed on a senior secured basis and
the Subordinated Notes are fully, unconditionally and jointly and severally guaranteed on an unsecured senior subordinated basis. The Subordinated Notes are general obligations of the Issuer and guaranteed by the Parent and all of the Issuers
wholly owned current and future domestic subsidiaries (the Guarantors). The Issuers obligations under the Secured Notes are guaranteed by the Guarantors and are secured by first-priority liens, subject to permitted liens and
exceptions for excluded assets, on substantially all of the Issuers and the Guarantors tangible and intangible assets (excluding the ABL Collateral as defined below), including real property, fixtures and equipment owned or acquired in the
future by the Issuer and the Guarantors (the Non-ABL Collateral) and are secured by second-priority liens on all accounts receivable, inventory, cash, deposit accounts, securities accounts and proceeds of the foregoing and certain assets
related thereto held by the Issuer and the Guarantors, which constitute collateral under the asset-based revolving credit facility (the ABL Revolver) on a first-priority basis (the ABL Collateral).

The following unaudited information presents Condensed Consolidating Statements of Operations for the three months ended March 31,
2009 and 2010, Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2009 and 2010 and Condensed Consolidating Balance Sheets as of December 31, 2009 and March 31, 2010 of (1) the Parent,
(2) the Issuer, (3) the Guarantors, (4) the Non-Guarantors, and (5) eliminations to arrive at the information for the Company on a consolidated basis. Other separate financial statements and other disclosures concerning the
Parent and the Guarantors are not presented because management does not believe that such information is material to investors.



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Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Balance Sheet

December 31, 2009

(Dollars in Millions)



|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|----------------------------------------------------- |  | ------ | --- | ------ | - | ----- | --------- |  | ------------- | ----- |  | ------------ | ---- | - | ----------------- | - | ------ | - |  | - | -----
|                                                      |  | Parent |     | Issuer |   |       | Guarantor |  | Non-Guarantor |       |  | Eliminations |      |   | ConsolidatedTotal
|Assets                                                |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Current assets:                                       |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Cash and cash equivalents                             |  | $      |    |        | $ | 9     |           |  | $             |      |  | $            | 56   |   |                   | $ |       |   |  | $ | 65   
|Restricted cash                                       |  |        |    |        |   |      |           |  |               |      |  |              | 9    |   |                   |   |       |   |  |   | 9    
|Trade accounts receivable                             |  |        |    |        |   | 1     |           |  |               | 168   |  |              | 124  |   |                   |   |       |   |  |   | 293  
|Inventories, net                                      |  |        |    |        |   |      |           |  |               | 256   |  |              | 174  |   |                   |   |       |   |  |   | 430  
|Other current assets                                  |  |        |    |        |   | 51    |           |  |               | 4     |  |              | 66   |   |                   |   |       |   |  |   | 121  
|Current assets of discontinued operations             |  |        |    |        |   |      |           |  |               |      |  |              | 55   |   |                   |   |       |   |  |   | 55   
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Total current assets                                  |  |        |    |        |   | 61    |           |  |               | 428   |  |              | 484  |   |                   |   |       |   |  |   | 973  
|Investments and other assets                          |  |        |    |        |   | 228   |           |  |               | 20    |  |              | 63   |   |                   |   |       |   |  |   | 311  
|Intercompany investments                              |  |        | 391 |        |   | 1,147 |           |  |               | 278   |  |              |     |   |                   |   | (1,816 | ) |  |   |     
|Intercompany receivables                              |  |        |    |        |   | (366  | )         |  |               | 497   |  |              | (131 | ) |                   |   |       |   |  |   |     
|Property, plant and equipment, net                    |  |        |    |        |   | 5     |           |  |               | 91    |  |              | 103  |   |                   |   |       |   |  |   | 199  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Total assets                                          |  | $      | 391 |        | $ | 1,075 |           |  | $             | 1,314 |  | $            | 519  |   |                   | $ | (1,816 | ) |  | $ | 1,483
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|                                                      |  |        |     |        |   |      
|Liabilities and shareholders equity                  |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Current liabilities:                                  |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Accounts payable                                      |  | $      |    |        | $ | 15    |           |  | $             | 109   |  | $            | 77   |   |                   | $ |       |   |  | $ | 201  
|Notes payable                                         |  |        |    |        |   |      |           |  |               |      |  |              | 12   |   |                   |   |       |   |  |   | 12   
|Accrued payroll and employee benefits                 |  |        |    |        |   | 11    |           |  |               | 5     |  |              | 11   |   |                   |   |       |   |  |   | 27   
|Other accrued expenses                                |  |        |    |        |   | 22    |           |  |               | 53    |  |              | 79   |   |                   |   |       |   |  |   | 154  
|Current liabilities of discontinued operations        |  |        |    |        |   |      |           |  |               |      |  |              | 43   |   |                   |   |       |   |  |   | 43   
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Total current liabilities                             |  |        |    |        |   | 48    |           |  |               | 167   |  |              | 222  |   |                   |   |       |   |  |   | 437  
|Deferred employee benefits and noncurrent liabilities |  |        |    |        |   | 11    |           |  |               |      |  |              | 9    |   |                   |   |       |   |  |   | 20   
|Long-term debt                                        |  |        |    |        |   | 579   |           |  |               |      |  |              | 10   |   |                   |   |       |   |  |   | 589  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Total liabilities                                     |  |        |    |        |   | 638   |           |  |               | 167   |  |              | 241  |   |                   |   |       |   |  |   | 1,046
|Total shareholders equity                            |  |        | 391 |        |   | 437   |           |  |               | 1,147 |  |              | 278  |   |                   |   | (1,816 | ) |  |   | 437  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      
|Total liabilities and shareholders equity            |  | $      | 391 |        | $ | 1,075 |           |  | $             | 1,314 |  | $            | 519  |   |                   | $ | (1,816 | ) |  | $ | 1,483
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |      |   |                   |   |        |   |  |   |      



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Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Balance Sheet

March 31, 2010

(Dollars in Millions)



|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|----------------------------------------------------- |  | ------ | --- | ------ | - | ----- | --------- |  | ------------- | ----- |  | ------------ | --- | - | ----------------- | - | ------ | - |  | - | -----
|                                                      |  | Parent |     | Issuer |   |       | Guarantor |  | Non-Guarantor |       |  | Eliminations |     |   | ConsolidatedTotal
|Assets                                                |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Current assets:                                       |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Cash and cash equivalents                             |  | $      |    |        | $ | 7     |           |  | $             |      |  | $            | 38  |   |                   | $ |       |   |  | $ | 45   
|Restricted cash                                       |  |        |    |        |   |      |           |  |               |      |  |              | 11  |   |                   |   |       |   |  |   | 11   
|Trade accounts receivable                             |  |        |    |        |   |      |           |  |               | 211   |  |              | 126 |   |                   |   |       |   |  |   | 337  
|Inventories, net                                      |  |        |    |        |   |      |           |  |               | 266   |  |              | 185 |   |                   |   |       |   |  |   | 451  
|Other current assets                                  |  |        |    |        |   | 52    |           |  |               |      |  |              | 59  |   |                   |   |       |   |  |   | 111  
|Current assets of discontinued operations             |  |        |    |        |   |      |           |  |               |      |  |              |    |   |                   |   |       |   |  |   |     
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Total current assets                                  |  |        |    |        |   | 59    |           |  |               | 477   |  |              | 419 |   |                   |   |       |   |  |   | 955  
|Investments and other assets                          |  |        |    |        |   | 229   |           |  |               | 21    |  |              | 63  |   |                   |   |       |   |  |   | 313  
|Intercompany investments                              |  |        | 385 |        |   | 1,174 |           |  |               | 305   |  |              |    |   |                   |   | (1,864 | ) |  |   |     
|Intercompany receivables                              |  |        |    |        |   | (386  | )         |  |               | 481   |  |              | (95 | ) |                   |   |       |   |  |   |     
|Property, plant and equipment, net                    |  |        |    |        |   | 4     |           |  |               | 89    |  |              | 106 |   |                   |   |       |   |  |   | 199  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Total assets                                          |  | $      | 385 |        | $ | 1,080 |           |  | $             | 1,373 |  | $            | 493 |   |                   | $ | (1,864 | ) |  | $ | 1,467
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|                                                      |  |        |     |        |   |      
|Liabilities and shareholders equity                  |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Current liabilities:                                  |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Accounts payable                                      |  | $      |    |        | $ | 14    |           |  | $             | 129   |  | $            | 80  |   |                   | $ |       |   |  | $ | 223  
|Notes payable                                         |  |        |    |        |   |      |           |  |               |      |  |              | 20  |   |                   |   |       |   |  |   | 20   
|Accrued payroll and employee benefits                 |  |        |    |        |   | 12    |           |  |               | 11    |  |              | 12  |   |                   |   |       |   |  |   | 35   
|Other accrued expenses                                |  |        |    |        |   | 18    |           |  |               | 58    |  |              | 60  |   |                   |   |       |   |  |   | 136  
|Current liabilities of discontinued operations        |  |        |    |        |   |      |           |  |               |      |  |              |    |   |                   |   |       |   |  |   |     
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Total current liabilities                             |  |        |    |        |   | 44    |           |  |               | 198   |  |              | 172 |   |                   |   |       |   |  |   | 414  
|Deferred employee benefits and noncurrent liabilities |  |        |    |        |   | 13    |           |  |               | 1     |  |              | 7   |   |                   |   |       |   |  |   | 21   
|Long-term debt                                        |  |        |    |        |   | 590   |           |  |               |      |  |              | 9   |   |                   |   |       |   |  |   | 599  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Total liabilities                                     |  |        |    |        |   | 647   |           |  |               | 199   |  |              | 188 |   |                   |   |       |   |  |   | 1,034
|Total shareholders equity                            |  |        | 385 |        |   | 433   |           |  |               | 1,174 |  |              | 305 |   |                   |   | (1,864 | ) |  |   | 433  
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      
|Total liabilities and shareholders equity            |  | $      | 385 |        | $ | 1,080 |           |  | $             | 1,373 |  | $            | 493 |   |                   | $ | (1,864 | ) |  | $ | 1,467
|                                                      |  |        |     |        |   |       |           |  |               |       |  |              |     |   |                   |   |        |   |  |   |      



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Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2009

(Dollars in Millions)



|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|----------------------------------------------------------------------------------------------------------- |  | ------ | - | ------ | - | --- | --------- |  | - | ------------- | - |  | ------------ | ---- | - | ----------------- | - | --- | - |  | - | ---- | -
|                                                                                                            |  | Parent |   | Issuer |   |     | Guarantor |  |   | Non-Guarantor |   |  | Eliminations |      |   | ConsolidatedTotal |  
|Net sales                                                                                                   |  | $      |  |        | $ |    |           |  | $ | 285           |   |  | $            | 198  |   |                   | $ | (80 | ) |  | $ | 403  |  
|Cost of sales                                                                                               |  |        |  |        |   |    |           |  |   | (244          | ) |  |              | (162 | ) |                   |   | 80  |   |  |   | (326 | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Gross profit                                                                                                |  |        |  |        |   |    |           |  |   | 41            |   |  |              | 36   |   |                   |   |    |   |  |   | 77   |  
|Selling, general and administrative expenses                                                                |  |        |  |        |   | (5  | )         |  |   | (33           | ) |  |              | (18  | ) |                   |   |    |   |  |   | (56  | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Operating profit (loss)                                                                                     |  |        |  |        |   | (5  | )         |  |   | 8             |   |  |              | 18   |   |                   |   |    |   |  |   | 21   |  
|Other income (loss), net                                                                                    |  |        |  |        |   | 4   |           |  |   | (3            | ) |  |              | (1   | ) |                   |   |    |   |  |   |     |  
|Interest expense                                                                                            |  |        |  |        |   | (14 | )         |  |   |              |   |  |              |     |   |                   |   |    |   |  |   | (14  | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Income from continuing operations before income tax provision, equity in income and noncontrolling interest |  |        |  |        |   | (15 | )         |  |   | 5             |   |  |              | 17   |   |                   |   |    |   |  |   | 7    |  
|Income tax provision                                                                                        |  |        |  |        |   | 2   |           |  |   |              |   |  |              | (5   | ) |                   |   |    |   |  |   | (3   | )
|Equity interest in income, net of tax                                                                       |  |        | 4 |        |   | 16  |           |  |   | 11            |   |  |              |     |   |                   |   | (31 | ) |  |   |     |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income from continuing operations                                                                       |  |        | 4 |        |   | 3   |           |  |   | 16            |   |  |              | 12   |   |                   |   | (31 | ) |  |   | 4    |  
|(Loss) from discontinued operations, net of tax                                                             |  |        |  |        |   |    |           |  |   |              |   |  |              | (1   | ) |                   |   |    |   |  |   | (1   | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income (loss)                                                                                           |  |        | 4 |        |   | 3   |           |  |   | 16            |   |  |              | 11   |   |                   |   | (31 | ) |  |   | 3    |  
|Less: net income attributable to noncontrolling interest, net of tax                                        |  |        |  |        |   | (1  | )         |  |   |              |   |  |              |     |   |                   |   |    |   |  |   | (1   | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income (loss) attributable to the Company                                                               |  | $      | 4 |        | $ | 4   |           |  | $ | 16            |   |  | $            | 11   |   |                   | $ | (31 | ) |  | $ | 4    |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  



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Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2010

(Dollars in Millions)



|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|----------------------------------------------------------------------------------------------------------- |  | ------ | - | ------ | - | --- | --------- |  | - | ------------- | - |  | ------------ | ---- | - | ----------------- | - | --- | - |  | - | ---- | -
|                                                                                                            |  | Parent |   | Issuer |   |     | Guarantor |  |   | Non-Guarantor |   |  | Eliminations |      |   | ConsolidatedTotal |  
|Net sales                                                                                                   |  | $      |  |        | $ |    |           |  | $ | 280           |   |  | $            | 237  |   |                   | $ | (74 | ) |  | $ | 443  |  
|Cost of sales                                                                                               |  |        |  |        |   |    |           |  |   | (233          | ) |  |              | (194 | ) |                   |   | 74  |   |  |   | (353 | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Gross profit                                                                                                |  |        |  |        |   |    |           |  |   | 47            |   |  |              | 43   |   |                   |   |    |   |  |   | 90   |  
|Selling, general and administrative expenses                                                                |  |        |  |        |   | (7  | )         |  |   | (35           | ) |  |              | (25  | ) |                   |   |    |   |  |   | (67  | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Operating profit (loss)                                                                                     |  |        |  |        |   | (7  | )         |  |   | 12            |   |  |              | 18   |   |                   |   |    |   |  |   | 23   |  
|Other income (loss), net                                                                                    |  |        |  |        |   | 5   |           |  |   | (3            | ) |  |              | (1   | ) |                   |   |    |   |  |   | 1    |  
|Interest expense                                                                                            |  |        |  |        |   | (16 | )         |  |   |              |   |  |              |     |   |                   |   |    |   |  |   | (16  | )
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Income from continuing operations before income tax provision, equity in income and noncontrolling interest |  |        |  |        |   | (18 | )         |  |   | 9             |   |  |              | 17   |   |                   |   |    |   |  |   | 8    |  
|Income tax provision                                                                                        |  |        |  |        |   | 3   |           |  |   |              |   |  |              | (5   | ) |                   |   |    |   |  |   | (2   | )
|Equity interest in income, net of tax                                                                       |  |        | 6 |        |   | 21  |           |  |   | 14            |   |  |              |     |   |                   |   | (41 | ) |  |   |     |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income from continuing operations                                                                       |  |        | 6 |        |   | 6   |           |  |   | 23            |   |  |              | 12   |   |                   |   | (41 | ) |  |   | 6    |  
|Income from discontinued operations, net of tax                                                             |  |        |  |        |   |    |           |  |   |              |   |  |              | 2    |   |                   |   |    |   |  |   | 2    |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income (loss)                                                                                           |  |        | 6 |        |   | 6   |           |  |   | 23            |   |  |              | 14   |   |                   |   | (41 | ) |  |   | 8    |  
|Less: Net income attributable to noncontrolling interest, net of tax                                        |  |        |  |        |   |    |           |  |   | 2             |   |  |              |     |   |                   |   |    |   |  |   | 2    |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  
|Net income (loss) attributable to the Company                                                               |  | $      | 6 |        | $ | 6   |           |  | $ | 21            |   |  | $            | 14   |   |                   | $ | (41 | ) |  | $ | 6    |  
|                                                                                                            |  |        |   |        |   |     |           |  |   |               |   |  |              |      |   |                   |   |     |   |  |   |      |  



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##### Table of Contents

Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2009

(Dollars in Millions)



|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|---------------------------------------------------- |  | ------ | - | ------ | - | --- | --------- |  | - | ------------- | - |  | ----------- | -- | ----------------- |  | - | - |  | - | --- | -
|                                                     |  | Parent |   | Issuer |   |     | Guarantor |  |   | Non-Guarantor |   |  | Elimination |    | ConsolidatedTotal | 
|Operating activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Net cash provided by (used in) operating activities  |  | $      |  |        | $ | (26 | )         |  | $ | 3             |   |  | $           | (6 | )                 |  | $ |  |  | $ | (29 | )
|Investing activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Proceeds from sale of assets                         |  |        |  |        |   |    |           |  |   |              |   |  |             |   |                   |  |   |  |  |   |    |  
|Change in restricted cash                            |  |        |  |        |   |    |           |  |   |              |   |  |             | (4 | )                 |  |   |  |  |   | (4  | )
|Additions to property, plant and equipment           |  |        |  |        |   |    |           |  |   | (3            | ) |  |             | (2 | )                 |  |   |  |  |   | (5  | )
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Net cash (used in) investing activities              |  |        |  |        |   |    |           |  |   | (3            | ) |  |             | (6 | )                 |  |   |  |  |   | (9  | )
|Financing activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Net increase in other debt                           |  |        |  |        |   |    |           |  |   |              |   |  |             | 10 |                   |  |   |  |  |   | 10  |  
|Payments on senior term loan facility                |  |        |  |        |   | (10 | )         |  |   |              |   |  |             |   |                   |  |   |  |  |   | (10 | )
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Net cash provided by (used in) financing activities  |  |        |  |        |   | (10 | )         |  |   |              |   |  |             | 10 |                   |  |   |  |  |   |    |  
|Effect of exchange rates on cash                     |  |        |  |        |   |    |           |  |   |              |   |  |             |   |                   |  |   |  |  |   |    |  
|Decrease in cash and cash equivalents                |  |        |  |        |   | (36 | )         |  |   |              |   |  |             | (2 | )                 |  |   |  |  |   | (38 | )
|Cash and cash equivalents at beginning of the period |  |        |  |        |   | 59  |           |  |   |              |   |  |             | 18 |                   |  |   |  |  |   | 77  |  
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  
|Cash and cash equivalents at end of the period       |  | $      |  |        | $ | 23  |           |  | $ |              |   |  | $           | 16 |                   |  | $ |  |  | $ | 39  |  
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |    |                   |  |   |   |  |   |     |  



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##### Table of Contents

Affinia Group Intermediate Holdings Inc.

Supplemental Guarantor

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2010

(Dollars in Millions)



|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|---------------------------------------------------- |  | ------ | - | ------ | - | --- | --------- |  | - | ------------- | - |  | ----------- | --- | ----------------- |  | - | - |  | - | --- | -
|                                                     |  | Parent |   | Issuer |   |     | Guarantor |  |   | Non-Guarantor |   |  | Elimination |     | ConsolidatedTotal | 
|Operating activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Net cash provided by (used in) operating activities  |  | $      |  |        | $ | (23 | )         |  | $ | 3             |   |  | $           | (19 | )                 |  | $ |  |  | $ | (39 | )
|Investing activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Proceeds from the sale of affiliates                 |  |        |  |        |   | 11  |           |  |   |              |   |  |             |    |                   |  |   |  |  |   | 11  |  
|Change in restricted cash                            |  |        |  |        |   |    |           |  |   |              |   |  |             | (2  | )                 |  |   |  |  |   | (2  | )
|Additions to property, plant and equipment           |  |        |  |        |   |    |           |  |   | (2            | ) |  |             | (4  | )                 |  |   |  |  |   | (6  | )
|Other investing activities                           |  |        |  |        |   |    |           |  |   | (1            | ) |  |             |    |                   |  |   |  |  |   | (1  | )
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Net cash provided by (used in) investing activities  |  |        |  |        |   | 11  |           |  |   | (3            | ) |  |             | (6  | )                 |  |   |  |  |   | 2   |  
|Financing activities                                 |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Net increase in other debt                           |  |        |  |        |   |    |           |  |   |              |   |  |             | 8   |                   |  |   |  |  |   | 8   |  
|Net proceeds from ABL Revolver                       |  |        |  |        |   | 10  |           |  |   |              |   |  |             |    |                   |  |   |  |  |   | 10  |  
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Net cash provided by financing activities            |  |        |  |        |   | 10  |           |  |   |              |   |  |             | 8   |                   |  |   |  |  |   | 18  |  
|Effect of exchange rates on cash                     |  |        |  |        |   |    |           |  |   |              |   |  |             | (1  | )                 |  |   |  |  |   | (1  | )
|Decrease in cash and cash equivalents                |  |        |  |        |   | (2  | )         |  |   |              |   |  |             | (18 | )                 |  |   |  |  |   | (20 | )
|Cash and cash equivalents at beginning of the period |  |        |  |        |   | 9   |           |  |   |              |   |  |             | 56  |                   |  |   |  |  |   | 65  |  
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  
|Cash and cash equivalents at end of the period       |  | $      |  |        | $ | 7   |           |  | $ |              |   |  | $           | 38  |                   |  | $ |  |  | $ | 45  |  
|                                                     |  |        |   |        |   |     |           |  |   |               |   |  |             |     |                   |  |   |   |  |   |     |  



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Company Overview

Affinia
is a global leader in the on and off-highway replacement products and services industry, also commonly known as the aftermarket. Our extensive aftermarket product offering, which consists principally of brake, steering, suspension and filtration
products, fits nearly every car, truck, off-highway and agricultural make and model, allowing us to serve as a full line supplier in our product categories to our customers. We derive approximately 98% of our sales from this industry and, as a
result, are not directly affected by the market cyclicality of the automotive original equipment manufacturers (OEM). The following charts illustrate the aggregation of net sales by product grouping, together with a
representative brand, for the first three months of 2010 and the concentration of On and Off-Highway replacement product sales and OEM sales as of December 31, 2009.

LOGO

We sell our broad range of aftermarket products in North America, Europe, South America
and Asia under a variety of brands including: WIX®,
Raybestos®,
McQuay-Norris®,
Nakata®,
Filtron® and
Brake-Pro®. Additionally, we provide private label offerings for
NAPA®,
CARQUEST® and
ACDelco® and co-branded offerings for Federated Auto Parts (Federated) and Automotive Distribution
Network (ADN), as well as filtration products for industrial applications. We believe we have achieved our leading market positions due to the quality and reputation of our brands, the broad product offering, quality products, brand
recognition (e.g., Wix and Raybestos), value-added services, and distribution and global sourcing capabilities. Due to these key advantages, we believe we hold the number one market position in North America in filtration products and in brake
product sales and the number two market position in North America in chassis product sales. Additionally, we hold a significant presence in South America and Europe, which we believe is demonstrated by our number two position as a distributor of
aftermarket products in Brazil and our number one position in filtration products in Poland.

Among the value-added services we
bring to our customers are our customer focused sales force, professional tech support, and e-cataloging services to name a few. The value we bring to our customers has been recognized with numerous awards over the last several years. We believe
that these key advantages strategically position us for growth in North America and globally.

Recent Developments

In the fourth quarter of 2009 the Company committed to a plan to sell the Commercial Distribution Europe segment. In accordance with ASC
Topic 360, the Commercial Distribution Europe segment qualified as a discontinued operation. The condensed consolidated statements of operations and the condensed consolidated balance sheets for all periods presented have been adjusted to reflect
this segment as a discontinued operation. The Company entered into a Sale and Purchase Agreement with Klarius Group Limited (KGL) and Auto Holding Paris S.A.S. (AHP) (collectively, the Purchaser) on
February 2, 2010 (the Agreement), pursuant to which KGL purchased the shares of Quinton Hazell Automotive Limited and Quinton Hazell Italia SpA and AHP purchased the shares of Quinton Hazell Deutschland GmbH and Affinia Holding
S.A.S. (collectively, the Group Companies) for $12 million, subject to certain closing and post-closing purchase price adjustments. The Agreement also called for the Purchaser to assume debt of $2.6 million. We also retained the cash in
the Group Companies. The business of the Group Companies and their subsidiaries consists of manufacturing and distribution facilities in eight countries in Europe.



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##### Table of Contents

Effective January 1, 2010, and as required by U.S. GAAP, we accounted for
Venezuela as a highly inflationary economy because the three-year cumulative inflation rate for Venezuela using the blended Consumer Price Index (which is associated with the city of Caracas) and the National Consumer Price Index (developed
commencing in 2008 and covering the entire country of Venezuela) exceeded 100%. The local currency in Venezuela is the Bolívar Fuertes (VEF). Effective January 1, 2010, we changed the rate used to translate our Venezuelan
subsidiarys transactions and balances from the official exchange rate, which was 2.15 VEF to U.S. dollar, to the parallel exchange rate, which ranged between 6.30 and 7.00 VEF to the U.S. dollar during the first quarter of 2010. The one-time
devaluation had a $2 million negative impact on our pre-tax net income for the period ending March 31, 2010. The change to the parallel market rate reduced sales by $9 million in the first quarter of 2010 in comparison to the first quarter of
2009.

Strategic Focus

We are focusing on expanding our manufacturing and distribution capabilities globally to position us to take advantage of global growth
opportunities. Currently, we have manufacturing and distribution operations in North America, South America, Asia and Europe. Our net sales by continent excluding the Commercial Distribution Europe segment are shown in the table below.

LOGO

We have recently completed or are in the process of completing the following transformation projects:



| |  |  | We have recently formed a filtration company in China with the intention to manufacture and distribute products principally in Asia.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our Brazilian distribution company opened one new branch in 2009 and we plan on opening two new branches in 2010. The new branches have contributed to
the growth in the Brazilian distribution company.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Effective October 31, 2008, Affinia Acquisition LLC purchased a controlling interest in HBM Investment Limited, a Hong Kong company, now known as
Affinia Hong Kong Limited (Affinia Hong Kong). Affinia Hong Kong owns one of the worlds largest drum and rotor manufacturing companies, Haimeng, which is located in China. Haimeng has over 1 million square feet of modern
manufacturing and machining capacity.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the fourth quarter of 2008, we started production of brake products at a new facility in northern Mexico. We have recently ramped up our new
facility to its full capabilities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We recently completed our 50% owned manufacturing site in India. The initial testing and manufacturing of brake friction products began during the
fourth quarter of 2008, and initial shipments began in the first quarter of 2009. We have ramped up to full capacity at this facility as of the end of the first quarter 2010.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We opened a new filter manufacturing plant in Ukraine on April 1, 2007 to help meet increased demand for filtration products in Eastern
Europe. The plant was fully operational in 2009.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our first filter manufacturing operation in Mexico opened in the third quarter of 2007. During 2008, the manufacturing operation was brought up to its
full capabilities. This operation serves markets in both North America and Central America. We are currently expanding our distribution capabilities at this operation to increase our sales in the Mexican market.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

These new business ventures reinforce our commitment to expanding our position as a global
manufacturer. The chart below illustrates our global change in square footage from December 31, 2004 to March 31, 2010, excluding our Commercial Distribution Europe segment.

LOGO

As the chart shows, our manufacturing capabilities are spread throughout North America, Asia, Europe and
South America. In the last five years the diversification of our manufacturing locations has transformed us from a domestic manufacturer to a global manufacturer with a significant portion of our manufacturing base in low cost countries. We are also
focusing on growing our business in emerging markets as we continue to diversify our global manufacturing and distribution capabilities. We will continue to expand our global capabilities as we pursue our objective of becoming a world class on and
off-highway replacement products and services company. We categorize our customers into three channels (1) traditional distributors, (2) retailers and (3) Original Equipment Service distributors (OES). OES consists
primarily of vehicle manufacturers service departments at vehicle dealerships. As the majority of our sales are to traditional distributors and retailers rather than to OES, closure of a large number of automotive dealerships in connection
with the bankruptcies of General Motors and Chrysler may benefit our business if vehicle owners who previously relied on dealership service centers turn to traditional aftermarket distributors and retailers.



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##### Table of Contents

Restructuring Activity

In 2005, we announced two restructuring plans: (i) a restructuring plan that we announced at the beginning of 2005 as part of the
Acquisition, also referred to herein as the acquisition restructuring and (ii) a restructuring plan that we announced at the end of 2005, also referred to herein as the comprehensive restructuring. We have completed the acquisition
restructuring and we are in the process of completing the comprehensive restructuring program. We have closed 46 facilities during the last four years and have shifted some of our manufacturing base to countries such as China, India, Ukraine and
Mexico. In connection with the comprehensive restructuring, we have recorded $157 million in restructuring costs to date. We recorded $23 million in 2005, $40 million in 2006, $38 million in 2007, $40 million in 2008, $13 million during 2009 and $3
million during the first three months of 2010. We anticipate that we will incur approximately $6 million more in restructuring costs during 2010 in order to complete the closure of the previously announced facilities. The restructuring plans have
had a favorable impact on our gross margin over the last five years as shown in the chart below. The chart shows the consolidated gross margin without the Commercial Distribution Europe segment and the gross margin for the Commercial Distribution
Europe segment.

LOGO

Critical Accounting Policies

The Companys critical accounting policies are those related to asset impairment, inventories, revenue recognition, sales returns and
rebates, estimated costs related to product warranties, pensions, income taxes, contingency reserves and restructuring expenses. These policies are more fully described in the notes to the consolidated financial statements in the Companys
Annual Report on Form 10-K for the year ended December 31, 2009.

The preparation of interim financial statements
involves the use of certain estimates that are consistent with those used in the preparation of the annual financial statements.



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##### Table of Contents

Basis of Presentation

The On and Off-Highway segment is comprised of the following operations: Filtration, Brake North America and Asia, Commercial Distribution
South America, and Chassis. The Company also has two other reportable segments, which are Commercial Distribution European, which is classified as a discontinued operation, and Brake South America. In the Results of Operations tables below, we have
identified in tabular format the revenue by product. Previously reported consolidated statements of operations for all periods presented have been adjusted to reflect the Commercial Distribution Europe segment as a discontinued operation.

Results of Operations

Three months ended March 31, 2009 compared to the three months ended March 31, 2010

Net sales.Consolidated sales increased by $40 million in the first quarter of 2010 in comparison to the first quarter of
2009 due mainly to favorable foreign currency translation effects of $23 million. The following table summarizes the consolidated net sales results for the three months ended March 31, 2009 and the consolidated results for the three months
ended March 31, 2010 (Dollars in Millions):



|                                               |  |                                            |     |   |                                            |   |     |              |  |   |               |   |  |                |   |  |   |    |  
|---------------------------------------------- |  | ------------------------------------------ | --- | - | ------------------------------------------ | - | --- | ------------ |  | - | ------------- | - |  | -------------- | - |  | - | -- | -
|                                               |  | ConsolidatedThree MonthsEndedMarch 31,2009 |     |   | ConsolidatedThree MonthsEndedMarch 31,2010 |   |     | DollarChange |  |   | PercentChange |   |  | CurrencyEffect |  
|Net sales                                      |  |                                            |     |   |                                            |   |     |              |  |   |               |   |  |                |   |  |   |    |  
|Filtration products                            |  | $                                          | 172 |   |                                            | $ | 185 |              |  | $ | 13            |   |  | 8              | % |  | $ |   |  
|Brake North America and Asia products          |  |                                            | 132 |   |                                            |   | 125 |              |  |   | (7            | ) |  | -5             | % |  |   | 3  |  
|Commercial Distribution South America products |  |                                            | 62  |   |                                            |   | 98  |              |  |   | 36            |   |  | 58             | % |  |   | 21 |  
|Chassis products                               |  |                                            | 36  |   |                                            |   | 36  |              |  |   |              |   |  |               |   |  |   | 1  |  
|                                               |  |                                            |     |   |                                            |   |     |              |  |   |               |   |  |                |   |  |   |    |  
|On and Off-highway segment                     |  |                                            | 402 |   |                                            |   | 444 |              |  |   | 42            |   |  | 10             | % |  |   | 25 |  
|Brake South America segment                    |  |                                            | 5   |   |                                            |   | 3   |              |  |   | (2            | ) |  | -40            | % |  |   | (2 | )
|Eliminations and other                         |  |                                            | (4  | ) |                                            |   | (4  | )            |  |   |              |   |  |               |   |  |   |   |  
|                                               |  |                                            |     |   |                                            |   |     |              |  |   |               |   |  |                |   |  |   |    |  
|Total net sales                                |  | $                                          | 403 |   |                                            | $ | 443 |              |  | $ | 40            |   |  | 10             | % |  | $ | 23 |  
|                                               |  |                                            |     |   |                                            |   |     |              |  |   |               |   |  |                |   |  |   |    |  

On and Off-highway segment product sales increased due to the following:

Filtration productssales increased in the first quarter of 2010 in comparison to the first quarter of 2009 due in part to
increased sales in our Polish operation and due to increased sales with one of our customers. Our Polish operations sales increased partly due to a $6 million strengthening of the Polish Zloty and $5 million related to gaining market share in
Western and Eastern Europe. Our sales increased $5 million to a large customer in the first quarter of 2010 as we converted new stores and warehouses to our products. The remaining $4 million increase was mainly related to increased sales in our
U.S. filtration products and due to the expansion of our customer base in Mexico which was related to our increased distribution capabilities in that country. Offsetting these increases was a $7 million decrease in sales in our Venezuela operations
due to the devaluation of currency.

Brake North America and Asia products sales decreased in the first quarter
of 2010 in comparison to the first quarter of 2009 due to market conditions and lost business. Sales decreased $2 million due to decreased sales on certain brake products with a large U.S. customer. We also lost business with a customer in Canada
that resulted in a loss of $4 million in the first quarter of 2010 in comparison to the first quarter of 2009. Sales also decreased in our branded business due to market conditions.

Commercial Distribution South America productssales increased in the first quarter of 2010 in comparison to the first
quarter of 2009 partially due to favorable foreign currency translation effects of $21 million. The Real weakened significantly in the first half of 2009 and then strengthened in the last half of the year. Excluding currency effects, our Brazilian
distribution company sales grew 28% in the first quarter of 2010 in comparison to the first quarter of 2009. This growth is due to introduction of new product lines for Motorcycle applications, Heavy Duty applications and related Accessories and due
to market share growth.

Other operating segments:

Brake South America segmentsales for the first quarter of 2010 decreased in comparison to the first quarter of 2009 due to the devaluation
of the Venezuelan currency. The devaluation of the Venezuelan currency resulted in a decrease in sales of $2 million.



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The following table summarizes the consolidated results for the three months ended
March 31, 2009 and the consolidated results for the three months ended March 31, 2010 (Dollars in Millions):



|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------ | ---- | - | ------------------------------------------ | - | ---- | ------------ |  | - | ------------- | - |  | --- | -
|                                                                                                             |  | ConsolidatedThree MonthsEndedMarch 31,2009 |      |   | ConsolidatedThree MonthsEndedMarch 31,2010 |   |      | DollarChange |  |   | PercentChange |  
|Net Sales                                                                                                    |  |                                            | 403  |   |                                            |   | 443  |              |  |   | 40            |   |  | 10  | %
|Cost of
sales(1)                                                                                             |  |                                            | (326 | ) |                                            |   | (353 | )            |  |   | 27            |   |  | 8   | %
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Gross profit                                                                                                 |  |                                            | 77   |   |                                            |   | 90   |              |  |   | 13            |   |  | 17  | %
|Gross margin                                                                                                 |  |                                            | 19   | % |                                            |   | 20   | %            |  |   |               |   |  |     |  
|Selling, general and administrative
expenses(2)                                                              |  |                                            | (56  | ) |                                            |   | (67  | )            |  |   | 11            |   |  | 20  | %
|Selling, general and administrative expenses as a percent of sales                                           |  |                                            | 14   | % |                                            |   | 15   | %            |  |   |               |   |  |     |  
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Operating profit (loss)                                                                                      |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|On and Off-highway segment                                                                                   |  |                                            | 29   |   |                                            |   | 32   |              |  |   | 3             |   |  | 10  | %
|Brake South America segment                                                                                  |  |                                            |     |   |                                            |   | (1   | )            |  |   | (1            | ) |  | NM  |  
|Corporate, eliminations and other                                                                            |  |                                            | (8   | ) |                                            |   | (8   | )            |  |   |              |   |  | NM  |  
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Operating profit                                                                                             |  |                                            | 21   |   |                                            |   | 23   |              |  |   | 2             |   |  | 10  | %
|Operating margin                                                                                             |  |                                            | 5    | % |                                            |   | 5    | %            |  |   |               |   |  |     |  
|Other income, net                                                                                            |  |                                            |     |   |                                            |   | 1    |              |  |   | 1             |   |  | NM  |  
|Interest expense                                                                                             |  |                                            | (14  | ) |                                            |   | (16  | )            |  |   | 2             |   |  | 14  | %
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Income from continuing operations, before income tax provision, equity in income and noncontrolling
interest |  |                                            | 7    |   |                                            |   | 8    |              |  |   | 1             |   |  | 14  | %
|Income tax provision                                                                                         |  |                                            | (3   | ) |                                            |   | (2   | )            |  |   | 1             |   |  | 33  | %
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Net income from continuing operations                                                                        |  |                                            | 4    |   |                                            |   | 6    |              |  |   | 2             |   |  | 50  | %
|Income (loss) from discontinued operations, net of tax                                                       |  |                                            | (1   | ) |                                            |   | 2    |              |  |   | 3             |   |  | NM  |  
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Net income                                                                                                   |  |                                            | 3    |   |                                            |   | 8    |              |  |   | 5             |   |  | 167 | %
|Less: net income (loss) attributable to noncontrolling interest, net of tax                                  |  |                                            | (1   | ) |                                            |   | 2    |              |  |   | 3             |   |  | 300 | %
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  
|Net income attributable to the Company                                                                       |  | $                                          | 4    |   |                                            | $ | 6    |              |  | $ | 2             |   |  | 50  | %
|                                                                                                             |  |                                            |      |   |                                            |   |      |              |  |   |               |   |  |     |  



|(1) | No restructuring costs were recorded in cost of sales in the first quarter of 2009 and $1 million was recorded in 2010.
|--- | -----------------------------------------------------------------------------------------------------------------------

|(2) | We recorded $1 million and $3 million of restructuring costs in selling, general and administrative expenses for the first quarter of 2009 and 2010, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NM | (Not Meaningful)
|-- | ----------------

Cost of sales/Gross margin. Gross margin increased in the first quarter of 2010 to 20% from 19% in the first quarter of
2009. The gross margin percentage increased due to an increase in sales volume, due to the effects of our comprehensive restructuring program and due to currency effects related to the strengthening of the U.S. Dollar. The comprehensive
restructuring program began at the end of 2005 and will be completed by the end of 2010.

Selling, general and
administrative expenses.Our selling, general and administrative expenses for the first quarter of 2010 increased $11 million from the first quarter of 2009 due to the following: i) Workers compensation and general liability expenses in the
first quarter of 2009 were $4 million lower than the first quarter of 2010 due to favorable actuarial studies relating to improved historical experience and the reduction in our domestic manufacturing base; ii) Restructuring expenses increased $2
million in the first quarter of 2010 in comparison to 2009, which was mainly related to our Brake North America operations; and iii) The remaining increase relates to an increase in commission expenses and a weaker dollar in the first quarter of
2010 in comparison to 2009.

Operating profit. Operating profit increased by $2 million in
the first quarter of 2010 in comparison to the first quarter of 2009. The increase in operating profit was due to an increase in gross margin partially offset by an increase in selling, general and administrative expenses. Operating profit in our
On and Off-Highway segmentincreased by 3 million in the first quarter of 2010 in comparison to the first quarter of 2009 due primarily to the increased gross margin mainly in our Filtration products. Offsetting this increase was a decrease
of approximately $1 million in our Brake South America segment due mainly to the devaluation of the Venezuelan currency.



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Interest expense.Interest expense increased by $2 million in the first
quarter of 2010 in comparison to the first quarter of 2009. On August 13, 2009, we refinanced our former term loan facility, revolving credit facility and accounts receivable facility. The refinancing consisted of the ABL Revolver and the
Secured Notes, the proceeds of which were used to repay outstanding borrowings under our former term loan facility, revolving credit facility and accounts receivable facility. The new debt structure has higher interest rates than the previous debt
structure and as a result the interest expense was higher in the first quarter of 2010 in comparison to the first quarter of 2009.

Income tax provision. The income tax provision was $2 million and $3 million for the first quarter of 2010 and 2009,
respectively. The effective tax rate for the first quarter of 2009 was negatively impacted by a nonrecurring item. Otherwise, the effective tax rates were similar in the first quarter of 2010 and 2009, respectively.

Net income (loss) attributable to noncontrolling interest, net of tax. The noncontrolling interest mainly relates to
Affinia Acquisition LLC, which indirectly owns 85% of Haimeng, a drum and rotor manufacturer in China. We started consolidating Affinia Acquisition LLC, a VIE, during the fourth quarter of 2008. Affinia Group Inc. increased its ownership in Affinia
Acquisition LLC from 5% to 40% effective on June 1, 2009. Therefore our noncontrolling interest related to Affinia Acquisition LLC, net of tax, eliminates 60% for the first quarter of 2010, and 95% for the first quarter of 2009 resulting in net
income attributable to noncontrolling interest of $2 million in the first quarter of 2010 and a net loss attributable to noncontrolling interest of $1 million in the first quarter of 2009.

Income (loss) from discontinued operations, net of tax.The discontinued operations net loss was $1 million in the first
quarter of 2009 and $2 million of income in the first quarter of 2010. In the fourth quarter of 2009 we recorded an impairment of $75 million for the estimated loss on sale of the Commercial Distribution Europe segment. The sale was consummated on
February 2, 2010 and the estimated loss has subsequently decreased offset by one month of operating losses of $1 million resulting in income from discontinued operations, net of tax of $2 million in the first quarter of 2010.

Net income.The net income increased by $5 million mainly due to the increase in gross profit and $2 million of income in
the first quarter of 2010 in discontinued operations, net of tax.

Liquidity and Capital Resources

The Companys primary source of liquidity is cash flow from operations and available borrowings from our ABL Revolver. On
August 13, 2009 we refinanced our former term loan facility, revolving credit facility and accounts receivable facility. The refinancing consisted of the ABL Revolver and the Secured Notes, the proceeds of which were used to repay outstanding
borrowings under our former term loan facility, revolving credit facility and accounts receivable facility, as well as to settle interest rate derivatives and to pay fees and expenses related to the refinancing. Our primary liquidity requirements
are expected to be for debt servicing, working capital, restructuring obligations and capital spending. Our liquidity requirements are significant, primarily due to debt service requirements, restructuring and expected capital expenditures.

We are significantly leveraged as a result of the Acquisition in 2004 and refinancing that occurred in 2009. Affinia Group
Inc. issued senior subordinated notes, the Secured Notes, and entered into an ABL Revolver in 2009. As of March 31, 2010, the Company had $619 million in aggregate indebtedness. As of March 31, 2010, we had an additional $168 million of
borrowing capacity available under our ABL Revolver after giving effect to $17 million in outstanding letters of credit, none of which was drawn against, and $3 million for borrowing base reserves. In addition, we had cash and cash equivalents of
$65 million and $45 million as of December 31, 2009 and March 31, 2010, respectively.

We spent $5 and $6 million on
capital expenditures during the first three months of 2009 and 2010, respectively. Based on the current level of operations, the Company believes that cash flow from operations and available cash, together with available borrowings under its ABL
Revolver, will be adequate to meet our liquidity needs.

ABL Revolver. Our ABL Revolver, which matures in 2013,
consists of a revolving credit facility that provides for loans in a total principal amount of up to $315 million of which $100 million was outstanding at March 31, 2010.

Subordinated Notes and Senior Secured Notes Indenture. The indentures governing the notes limit our (and most or all of our
subsidiaries) ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of transactions with affiliates, use assets as security in
other transactions and sell certain assets or merge with or into other companies. Subject to certain exceptions and limitations, Affinia and its restricted subsidiaries are permitted to incur additional indebtedness, including secured indebtedness,
under the terms of the notes.



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Net cash provided by or used in operating activities

Net cash provided by or used in operating activities for the three months ended March 31, 2009 and 2010 was a $29 million and $39
million use of cash, respectively. There were significant changes in the following operating activities (Dollars in Millions):



|                                                                 |  |                                |     |   |                                |   |     |  
|---------------------------------------------------------------- |  | ------------------------------ | --- | - | ------------------------------ | - | --- | -
|                                                                 |  | Three MonthsEndedMarch 31,2009 |     |   | Three MonthsEndedMarch 31,2010 |  
|Summary of significant changes in operating activities:          |  |                                |     |   |                                |   |     |  
|Net income                                                       |  | $                              | 3   |   |                                | $ | 8   |  
|Change in inventories                                            |  |                                | 15  |   |                                |   | (21 | )
|Change in other current operating liabilities                    |  |                                | (6  | ) |                                |   | 11  |  
|                                                                 |  |                                |     |   |                                |   |     |  
|Subtotal                                                         |  |                                | 12  |   |                                |   | (2  | )
|Other less significant changes in operating activities           |  |                                | (41 | ) |                                |   | (37 | )
|                                                                 |  |                                |     |   |                                |   |     |  
|Net cash (used in) operating activities from cash flow statement |  | $                              | (29 | ) |                                | $ | (39 | )

Inventories  The
change in inventories was a $21 million use of cash in the first three months of 2010 and a $15 million source of cash in the first three months of 2009. The change from source to use in cash is primarily due to increased demand and sales in
comparison to the same period last year.

Change in other current operating liabilities  The change in other operating
liabilities was a $6 million use of cash in the first three months of 2009 as compared to a $11 million source of cash during the first three months of 2010. The change from source to use in cash is primarily due to accounts payable, which was an
$11 million use of cash during the first three months of 2009 and a $22 million source of cash during the first three months of 2010. Accounts payable fluctuates from quarter to quarter due to the timing of payments.

Net cash provided by or used in investing activities

Net cash provided by or used in investing activities for the three months ended March 31, 2009 and 2010 was a $9 million use of cash
and a $2 million source of cash, respectively. The majority of the change related to $11 million of proceeds from the sale of an affiliate. The Company entered into a Sale and Purchase Agreement with Klarius Group Limited (KGL) and Auto
Holding Paris S.A.S. (AHP) (collectively, the Purchaser) on February 2, 2010, pursuant to which KGL purchased the shares of Quinton Hazell Automotive Limited and Quinton Hazell Italia SpA and AHP purchased the shares of
Quinton Hazell Deutschland GmbH and Affinia Holding S.A.S. for $12 million, subject to certain closing and post-closing purchase price adjustments. As of March 31, 2010 we have received $11 million in cash.

Net cash provided by financing activities

Net cash provided by financing activities for the three months ended March 31, 2009 and 2010 was zero and an $18 million source,
respectively. Our Asia subsidiary increased its debt by $8 million during the first three months of 2010. We also borrowed an additional $10 million on the ABL Revolver during the first three months of 2010.

Asset based credit facilities. On August 13, 2009, Affinia and the Guarantors entered into a new four-year $315 million ABL
Revolver that includes (i) a revolving credit facility (the U.S. Facility) of up to $295 million for borrowings solely to the U.S. domestic borrowers, including (a) a $40 million sub-limit for letters of credit and (b) a
$30 million swingline facility, and (ii) a revolving credit facility (the Canadian Facility) of up to $20 million for Canadian Dollar denominated revolving loans solely to a Canadian borrower. Availability under the ABL Revolver
will be based upon monthly (or more frequent under certain circumstances) borrowing base valuations of the Affinias eligible inventory and accounts receivable and will be reduced by certain reserves in effect from time to time. The ABL
Revolver and the Secured Notes replaced the former term loan facility, revolving credit facility and accounts receivable facility and does not have the same restrictive performance covenant ratios. The ABL Collateral consists of all accounts
receivable, inventory, cash (other than certain cash proceeds of Notes Collateral (as defined in the indenture governing the Secured Notes)) and proceeds of the foregoing and certain assets related thereto, in each case held by the Company, Affinia,
and the Guarantors.

Mandatory Prepayments. If at any time Affinias outstanding borrowings under the ABL Revolver
(including outstanding letters of credit and swingline loans) exceed the lesser of (i) the borrowing base as in effect at such time and (ii) the aggregate revolving commitments as in effect at such time, Affinia will be required to prepay
an amount equal to such excess and/or cash collateralize outstanding letters of credit.



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Voluntary Prepayments. Subject to certain conditions, the ABL Revolver will allow
Affinia to voluntarily reduce the amount of the revolving commitments and to prepay the loans without premium or penalty other than customary breakage costs for LIBOR rate contracts.

Covenants. The ABL Revolver contains affirmative and negative covenants that, among other things, limit or restrict Affinias
ability (as well as those of the Affinias subsidiaries) to: create liens and encumbrances; incur debt; merge, dissolve, liquidate or

consolidate; make acquisitions and investments; dispose of or transfer assets; pay dividends or make other payments in respect of Affinias capital
stock; amend certain material documents; change the nature of Affinias business; make certain payments of debt; engage in certain transactions with affiliates; change Affinias fiscal periods; and enter into certain restrictive
agreements, in each case, subject to certain qualifications and exceptions.

In addition, if availability under the ABL
Revolver is less than the greater of 15% of the total revolving loan commitments and $47.25 million, Affinia will be required to maintain a fixed charge coverage ratio, which is defined in the ABL Revolver, of at least 1.10x measured for the last
twelve-month period.

Interest Rates and Fees. Outstanding borrowings under the U.S. Facility will accrue interest at
an annual rate of interest equal to (i) a base rate plus the applicable spread or (ii) a LIBOR rate plus the applicable spread. Swingline loans will bear interest at a base rate. Outstanding borrowings under the Canadian Facility will
accrue interest at an annual rate of interest equal to (i) the Canadian prime rate plus the applicable spread or (ii) the BA rate (the average discount rate of bankers acceptances as quoted on the Reuters Screen CDOR page) plus the
applicable spread. The LIBOR rate and the BA rate are, in each case, subject to a floor of 1.50%. We will pay a commission on letters of credit issued under the U.S. Facility at a rate equal to the applicable spread for loans based upon the LIBOR
rate.

Affinia will pay certain fees with respect to the ABL Revolver, including (i) an unused commitment fee of
1.00% per annum on the undrawn portion of the credit facility (subject to a step-down to 0.75% in the event more than 50% of the commitments (excluding swingline loans) under the credit facility are utilized) and (ii) customary annual
administration fees and fronting fees in respect of letters of credit equal to 0.125% per annum on the stated amount of each letter of credit outstanding during each month. During an event of default, the fee payable under clause (i) shall
be increased by 2% per annum.

Secured Notes. On August 13, 2009, Affinia issued the Secured Notes as part of
the refinancing. Subject to our compliance with the covenants described in the indenture securing the Secured Notes we are permitted to issue more Notes from time to time under the Indenture. The Notes and the Additional Notes, if any, will be
treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers to purchase. The Secured Notes will mature in 2016 and will accrue interest at rate of 10.75% per annum and will be payable
semiannually. The Secured Notes are senior obligations of Affinia.

Indenture.The indenture governing the Subordinated
Notes limits Affinias (and most or all of our subsidiaries) ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of
transactions with affiliates, use assets as security in other transactions and sell certain assets or merge with or into other companies. Subject to certain exceptions, Affinia and its restricted subsidiaries are permitted to incur additional
indebtedness, including secured indebtedness, under the terms of the Subordinated Notes.

Pursuant to the Indenture, Affinia
issued and sold to the initial purchasers $300 million aggregate principal amount at maturity of the Notes. The outstanding balance for March 31, 2010 was $267 million. The terms of the Indenture provide that, among other things, the Notes will
rank equally in right of payment to all of Affinias existing and future senior debt and senior in right of payment to all of Affinias existing and future subordinated debt. The guarantees will rank equally in right of payment with all of
the Guarantors (as defined in the indenture) existing and future senior debt and senior in right of payment to all of the Guarantors existing and future subordinated debt.



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##### Table of Contents

|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

We are exposed to various market risks, such as currency exchange and interest rate fluctuation. Where necessary to minimize such risks we
may enter into financial derivative transactions, however we do not enter into derivatives or other financial instruments for trading or speculative purposes.

Currency risk

We conduct
business throughout the world. Although we manage our businesses in such a way as to reduce a portion of the risks associated with operating internationally, changes in currency exchange rates may adversely impact our results of operations and
financial position.

The results of operations and financial position of each of our operations are measured in their
respective local (functional) currency. Business transactions denominated in currencies other than an operations functional currency produce foreign exchange gains and losses, as a result of the re-measurement process. To the extent that our
business activities create monetary assets or liabilities denominated in a non-local currency, changes in an entitys functional currency exchange rate versus each currency in which an entity transacts business have a varying impact on an
entitys results of operations and financial position, as reported in functional currency terms. Therefore, for entities that transact business in multiple currencies, we seek to minimize the net amount of cash flows and balances denominated in
non-local currencies. However, in the normal course of conducting international business, some amount of non-local currency exposure will exist. Therefore, management monitors these exposures and may engage in business activities or execute
financial hedge transactions intended to mitigate the potential financial impact related to changes in the respective exchange rates.

The Companys consolidated results of operations and financial position, as reported in U.S. dollars, are also affected by changes in
currency exchange rates. The results of operations of our non-U.S. dollar functional entities are translated into U.S. dollars for consolidated reporting purposes each period at the average currency exchange rate experienced during the period. To
the extent that the U.S. dollar may appreciate or depreciate over time, the contribution of non-U.S. dollar denominated results of operations to the Companys U.S. dollar reported consolidated earnings will vary accordingly. Therefore, changes
in the various local currency exchange rates, as applied to the revenue and expenses of our non-U.S. dollar operations may have a significant impact on the Companys sales and, to a lesser extent, consolidated net income trends. In addition, a
significant portion of the Companys consolidated financial position is maintained at foreign locations and is denominated in functional currencies other than the U.S. dollar. The non-U.S. dollar denominated monetary assets and liabilities are
translated into U.S. dollars at each respective currencys exchange rate then in effect at the end of each reporting period. The financial impact of the translation process is reflected within the other comprehensive income component of
shareholders equity. Accordingly, the amounts shown in our consolidated shareholders equity account will fluctuate depending upon the cumulative appreciation or depreciation of the U.S. dollar versus each of the respective functional
currencies in which the Company conducts business. Management seeks to mitigate the potential financial impact upon the Companys consolidated results of operations due to exchange rate changes by engaging in business activities or by executing
financial derivative transactions intended to mitigate specific transactional underlying currency exposures. We do not engage in activities solely intended to counteract the impact that changes in currency exchange rates may have upon the
Companys U.S. dollar reported statement of financial condition.

Our foreign currency exchange rate risk management
efforts primarily focus upon operationally managing the net amount of non-functional currency denominated monetary assets and liabilities. In addition, we routinely execute short-term currency exchange rate forward contracts with the intent to
mitigate the earnings impact related to the re-measurement process. At March 31, 2010, we had currency exchange rate derivatives with an aggregate notional value of $204 million having fair values of zero million in assets and $2 million in
liabilities.

Interest rate risk

The Company is exposed to the risk of rising interest rates to the extent that it funds its operations with short-term or variable-rate
borrowings. At March 31, 2010, the Companys aggregate debt outstanding was $619 million. The total amount of interest bearing debt, which excludes $3 million of discount on the Secured Notes, was $622 million as of March 31, 2010.
This consisted of $114 million of floating-rate debt and $508 million of fixed-rate debt.

Pursuant to the Companys
written interest rate risk management policy we actively monitor and manage our fixed versus floating rate debt composition within a specified range. At quarter-end, fixed rate debt composed approximately 82% of our total debt. Based on the amount
of floating-rate debt outstanding at March 31, 2010, a 1% rise in interest rates would result in insignificant incremental interest expense.

At March 31, 2010, the majority of our floating-rate debt relates to $100 million of borrowings under our ABL Revolver. The interest
expense related to the ABL Revolver is LIBOR based and subject to a 1.5% LIBOR rate floor. If the LIBOR rate remains less than 1.00%, a 50 basis point change in the level of interest rates would not affect the cost of our ABL Revolver borrowings nor
would it materially impact our consolidated interest expense.



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|Item 4T. | Controls and Procedures
|-------- | -----------------------

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (Exchange Act)) that are designed to ensure that information required to be disclosed in the Companys reports under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Companys
management, with the participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Companys disclosure controls and procedures as of March 31,
2010. Based upon that evaluation and subject to the foregoing, the Companys Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2010, the design and operation of the Companys disclosure controls and
procedures provided reasonable assurance that the disclosure controls are effective to accomplish their objectives.

During the
quarter ended March 31, 2010, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.

PART
II

OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

On
March 31, 2008, a class action lawsuit was filed by S&E Quick Lube Distributors, Inc. of Utah against several auto parts manufacturers for allegedly conspiring to fix prices for replacement oil, air, fuel and transmission filters. Several
auto parts companies are named as defendants, including Champion Laboratories, Inc., Purolator Filters NA LLC, Honeywell International Inc., Cummins Filtration Inc., Donaldson Company, Baldwin Filters Inc., Bosch USA., Mann + Hummel USA Inc.,
ArvinMeritor Inc., United Components Inc and Wix Filtration Corp LLC (Wix), a subsidiary of Affinia. The lawsuit was filed in U.S. District Court for the District of Connecticut and seeks damages and injunctive relief on behalf of a
nationwide class of direct purchasers of filters. Since this initial complaint was filed, over 56 tag-along suits in multiple jurisdictions have been filed on behalf of both direct and indirect purchasers of automotive filtration
products. Two suits have also been filed in the Canadian provinces of Ontario and Quebec. As a result, all U.S. lawsuits have been consolidated in a Multi-District Litigation (MDL) Proceeding in Chicago, IL. Wix, along with other named
defendants, filed various motions to dismiss Plaintiffs complaints, which are under consideration by the court. Affinia believes that Wix did not have significant sales in this particular market at the relevant time periods so we currently
expect any potential exposure to be immaterial. Additionally, as of April 2009, the Florida Attorney Generals office had filed a tag along suit also naming Wix as a defendant.

DPH Holdings Corp., a successor to Delphi Corporation and certain of its affiliates (Delphi), has served Affinia Group
Holdings, Inc. and certain of it subsidiaries with a complaint to avoid over $17 million in allegedly preferential transfers. Pursuant to certain court orders, Delphi filed its complaint under seal in October, 2007, shortly before the expiration of
the statute of limitations, and did not unseal the complaint and commence the service process until March 2010. The Company plans to file a motion to dismiss based on due process and other defenses connected to the unusual procedure Delphi used to
conceal and delay the lawsuit. The Company has not yet analyzed its preference exposure.



|Item 1A. | Risk Factors
|-------- | ------------

In addition
to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009, which could materially
affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial condition and/or operating results.



|Item 6. | Exhibits
|------- | --------



|(a) | Exhibits
|--- | --------



|     |  |                                                                                                                                              
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act, as amended.            
|     | 
|31.2 |  | Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act, as amended.
|     | 
|32.1 |  | Certifications of Executive Officers pursuant to 18 U.S.C. Section 1350(b)                                                                   



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



AFFINIA GROUP INTERMEDIATE HOLDINGS INC.By:

/s/ Terry R. McCormackTerry R. McCormackChief Executive Officer, President, and Director
(Principal Executive Officer)By:

/s/ Thomas H. MaddenThomas H. Madden
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)


Date: May 7, 2010



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