FTE Holding GmbH Financial results for the three months ended March 31, 2016 May 30, 2016 Contents 1. Presentation of financial and other information .............................................. 3 2. Consolidated Income Statement Consolidated Statement of EBITDA Consolidated Statement of Cash Flows ......................................................... 6 3. Consolidated Statement of Balance Sheet ................................................... 14 4. Capitalization, liquidity and other financial data ............................................ 17 5. Changes in material debt instruments .......................................................... 21 6. Subsequent events and material changes to risk factors ............................. 21 7. Summary of significant accounting policies .................................................. 22 8. Interim Consolidated Financial Statements as of March 31, 2016 of FTE Holding GmbH ................................................ 34 2 1. Presentation of financial and other information Corporate and financing structure Falcon (BC) Germany Holding 3 and Falcon (BC) Germany Holding 2 (renamed FTE Holding GmbH) were formed in connection with the acquisition of FTE Verwaltungs GmbH by Falcon (BC) Germany Holding 3 (the "Transaction"). The following simplified chart sets forth certain aspects of our corporate and financing structure after giving effect to the Transaction. The Issuer closed the issuance of 9.000% Senior Secured Notes with an aggregate principal amount of € 240.0 million on July 12, 2013. The acquisition of the Target by the Issuer closed on the same date, July 12, 2013, with the transfer of the entire share capital of the Target (excluding treasury shares) to the Issuer. The Issuer merged with the Target effective as of January 1, 2013 and was subsequently renamed FTE Verwaltungs GmbH. On November 8, 2013, FTE Verwaltungs GmbH (formerly Falcon (BC) Germany Holding 3 GmbH) signed an agreement to sell € 23.3 million newly issued Senior Secured Notes in a Private Placement. Closing of the new issue was on November 22, 2013. The net cash proceeds were used in 2014 for an upstream loan to its indirect parent company FTE Group Holding GmbH (formerly Falcon (BC) Germany Holding 1 GmbH) who used such funds for a partial repayment of shareholder loans granted by its shareholders. Financial and operational data The Holding and the Issuer were formed on February 21, 2013; opening balance sheets for these entities were created on April 5, 2013 and they were registered on April 9, 2013. These companies obtained control over the Target within the meaning of IFRS 3 on July 12, 2013. The Holding prepared IFRS consolidated financial information as of March 31, 2015 and for the period from January 1, 2015 to March 31, 2015 with comparative data as of December 31, 2015 and for the period from January 1, 2015 to March 31, 2015. The financial results of the Holding and its subsidiaries are reported on a consolidated basis. This report contains data that was neither prepared in accordance with IFRS nor any other generally accepted accounting principles. It is for informational purposes only and does not purport to represent or to be indicative of the consolidated results of operations or financial position that the 3 Group would have reported had the transaction and related financing as defined in the Offering Memorandum been completed as of the dates presented, and should not be taken as representative of the Group’s future consolidated results of operations or financial position, nor does it purport to project the Group’s financial position as of any future date or results of operations for any future period. The following financial data, among other, is included herein: • the consolidated income statement for the three-month periods ended March 31, 2016 and March 31, 2015; • the consolidated statement of cash flows for the three-month periods ended March 31, 2016 and March 31, 2015; • the consolidated statement of balance sheets as of March 31, 2016 and December 31, 2015. The financial data as of December 31, 2015 is based on the audited IFRS consolidated financial statements of the Holding as of December 31, 2015. The financial data for the three-month periods ended March 31, 2016 and March 31, 2015 is based on the unaudited financial statements of the Holding for the respective periods in accordance with International Financial Reporting Standards (IFRS), which are included in section 8 of this report. In this report for the quarter ended March 31, 2016, we added a table showing our revenue by different product categories comprising (i) Brake Actuation Technology (“BAT”) including calipers, which includes products such as drum brakes, brake boosters brake hoses and remanufactured brake calipers, (ii) Manual Shift Transmission (“MST”), which includes products such as master cylinders, slave cylinders and clutch pipes, (iii) Electric Shift Transmission (“EST”) including CPx, which includes products such as dual concentric slave cylinders, shift rod actuators cooling oil valves and controlled piston units (CPx) (iv) Electric Pump Transmission (“EPT”), which includes products such as lubrication oil pumps, transmission fluid pumps and start-stop pumps. We believe that presenting revenue by these additional product categories reflects our product portfolio changes and will aide investors in getting a better understanding of our revenue streams and products sold. Some financial information in this report has been rounded and, as a result, the figures shown as totals in this report may vary slightly from the exact arithmetic aggregation of the figures that precede them. Percentage figures have not been calculated on the basis of rounded figures, but have instead been calculated on the basis of such amounts prior to rounding. Unless otherwise indicated, all financial information in this report has been prepared on the basis of IFRS applicable at the relevant date and is presented in million Euro. IFRS differs in certain material aspects from generally accepted accounting principles in the US. Other financial measures Certain financial measures and ratios related thereto in this report, including EBITDA and Adjusted EBITDA (collectively, the “EBITDA Metrics”), are not specifically defined under IFRS or any other generally accepted accounting principles. These measures are presented in this report because we believe that they are among the measures used by management to evaluate the cash available to us to fund ongoing, long-term obligations and they are frequently used by securities analysts, high yield investors and other interested parties for valuation purposes or as a common measure of the ability of issuers to incur and meet debt service obligations. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, and you should not consider such items as alternatives to net income (loss), operating income or any other performance measures derived in accordance with IFRS. 4 We believe that this information, along with comparable IFRS measures, may be useful to investors because it provides a basis for measuring the operating performance of the periods presented. These measures are used to manage our business, along with the most directly comparable IFRS financial measures and to evaluate the operating performance. The EBITDA Metrics have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results or any performance measures under IFRS as set forth in our financial statements. Some of these limitations are: • they do not reflect our cash expenditures or future requirements for capital expenditures; • they do not reflect changes in, or cash requirements for, our working capital needs; • they do not reflect the interest expense or cash requirements necessary to service interest or principal payments on our debt; • they do not reflect any cash income taxes that we may be required to pay; • they are not adjusted for all non-cash income or expense items that are reflected in our consolidated income statement; • they do not reflect the impact of earnings or charges resulting from certain matters that we consider not to be indicative of our ongoing operations; • assets are depreciated or amortized over differing estimated useful lives and often have to be replaced in the future, and these measures do not reflect any cash requirements for such replacements; and • other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Because of these limitations, the EBITDA Metrics should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our IFRS results and using these non-IFRS measures only supplementary to evaluate our performance. You are encouraged to evaluate each of the adjustments reflected in our presentation of the EBITDA Metrics and whether you consider each to be appropriate. Industry Data In this report, we may rely on and refer to information regarding our business and the market in which we operate and compete. We have obtained this information from various third party sources, including providers of industry data, discussions with our customers