Continental Ensures Stable Financing Structure

HANOVER, Germany - January 26, 2009: Continental AG has further secured its financing structure with the support of its banks. The automotive supplier has adapted the contractual terms with more than 50 banks to the changed economic situation. The proactively developed new concept for mastering 2009 and 2010 was convincing: Nearly 100% of the banks involved approved the proposals put forth by Continental, although just a two-thirds majority of the credit volume was required. "This outcome demonstrates the trust in Continental and its concepts," said Continental Executive Board Chairman Dr. Karl-Thomas Neumann.

"We have thus secured our financial basis and currently have at our disposal liquidity exceeding €3.5 billion in cash, cash equivalents and unused credit lines. We are thus very well poised to meet the upcoming challenges," said the Vice Chairman of the Executive Board and Continental CFO Dr. Alan Hippe. "With this foundation, we can continue to reduce our debt consistently, which will be our prime focus in the future as well."

In the scope of the renegotiations, the company and banks agreed to margins higher than in the previous conditions. Even with a rating below the investment grade, the additional interest cost based on the lower interest rate should not represent any additional interest expense compared with 2008. In return, Continental is granted further flexibility through the end of 2010 with regard to the ratio of net indebtedness to EBITDA.

In view of the changes in the company's situation and the economic environment, the amended agreement also comprises modifications to the other obligations of the company. The current credit lines totaling €11.8 billion, the breakdown and maturities of the individual tranches as well as their term from August 2009 to August 2012 are not affected by these modifications. As for dividend payments, restrictions were agreed upon that are, with the exception of fiscal 2008, oriented toward the dividend level for fiscal 2007.

In December 2008 Continental proactively approached the banks with a concept as it became apparent that the credit conditions might have to be adapted to the continuing deterioration in the economic situation. In particular, the concept addressed the defined upper limit for the ratio of net indebtedness to EBITDA. "When our scenarios indicated that this upper limit could be exceeded already in the course of 2009 as a result of the very difficult situation in the automotive industry at present, we took action early on. The banks welcomed this open approach, and their trust in Continental helped speed up the process. We thank all those involved for their support," Dr. Hippe added.

With targeted annual sales of €25 billion for 2008, the Continental Corporation is one of the top automotive suppliers worldwide. As a supplier of brake systems, systems and components for the powertrain and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, the corporation contributes towards enhanced driving safety and protection of the global climate. Continental is also a competent partner in networked automobile communication. Today, the corporation employs approximately 146,500 at nearly 200 locations in 36 countries.