Annual Report 2011 - Knorr-Bremse

Annual Report
2011
K n o r r - B r e m s e G r o u p

At a Glance
KNORR-BREMSE GROUP 2007 2008 2009 2010 2011
Sales EUR mill. 3,251 3,384 2,761 3,712 4,241
Net income EUR mill. 198 192 99 239 329
Employees (as per Dec. 31)* 15,235 15,890 15,613 18,053 20,050
Personnel costs EUR mill. 622 686 641 721 805
Balance-sheet total EUR mill. 1,735 1,788 1,664 2,194 2,530
Equity EUR mill. 566 639 533 754 902
Capital expenditure ** EUR mill. 140 134 101 113 159
Depreciation ** EUR mill. 113 115 118 147 165
Incoming orders EUR mill. 3,767 3,209 3,185 4,040 4,073
Research and development expenditure EUR mill. 159 171 153 175 209
* incl. Leasing
* *not including investments in financial assets

Main Majority-owned
Subsidiaries
of Knorr-Bremse AG
The Americas
Knorr Brake Holding Corporation,
Watertown, NY (US)*
Anchor Brake Shoe Company LLC (US)
Bendix Commercial Vehicle
Systems LLC (US)
Bendix Spicer Foundation
Brake LLC (US)*
IFE North America LLC (US)
Knorr Brake Corporation (US)
Knorr Brake Ltd. (CA)
Merak North America LLC (US)
New York Air Brake Corporation (US)
Technologies Lanka Inc. (CA)*
* Minority holding in subsidiary by
non-group companies
** 20 % stake held by Robert Bosch GmbH,
Stuttgart (DE)
As per December 31, 2011
Knorr-Bremse Brasil
(Holding) Administração e
Participação Ltda.,
São Paulo (BR)
Knorr-Bremse Sistemas para
Veículos Comerciais Brasil Ltda. (BR)
Knorr-Bremse Sistemas para
Veículos Ferroviários Ltda. (BR)
Europe – Middle East – A
Knorr-Bremse Systeme für
Schienenfahrzeuge GmbH,
Munich (DE)
Freinrail Systèmes Ferroviaires S.A. (FR)
Knorr-Bremse Rail Systems Italia S.r.I. (IT)
IGE-CZ s.r.o. (CZ)
Knorr-Bremse Ges.m.b.H. (AT)
Knorr-Bremse Nordic Rail Services AB (SE)
Knorr-Bremse Systemy dla Kolejowych
Srodków Lokomocji PL Sp. z o.o. (PL)
Knorr-Bremse Rail Systems (UK) Ltd. (GB)
Knorr-Bremse S.A. (Pty.) Ltd. (ZA)*
Knorr-Bremse Vasúti Jármű Rendszerek
Hungária Kft. (HU)
Merak Sistemas Integrados de
Climatización S.A. (ES)
Microelettrica Scientifica S.p.A. (IT)
Oerlikon-Knorr Eisenbahntechnik AG (CH)
Sociedad Española de Frenos, Calefacción y
Señales S.A. (ES)
Dr. techn. Josef Zelisko Ges.m.b.H. (AT)

frica Asia – Australia
Knorr-Bremse Systeme für
Nutzfahrzeuge GmbH,
Munich (DE)**
Bost Ibérica S.L. (ES)
Hasse & Wrede GmbH (DE)
Knorr-Bremse Benelux B.V.B.A. (BE)
Knorr-Bremse Fékrendszerek Kft. (HU)
Knorr-Bremse KAMA Systems for
Commercial Vehicles OOO (RU)*
Knorr-Bremse Polska SfN Sp. z o.o. (PL)
Knorr-Bremse Sistemi per Autoveicoli
Commerciali S.p.A. (IT)
Knorr-Bremse Systèmes pour Véhicules
Utilitaires France S.A. (FR)
Knorr-Bremse System för Tunga
Fordon AB (SE)
Knorr-Bremse Systems for
Commercial Vehicles Ltd. (GB)
Knorr-Bremse Systémy pro užitková vozidla
ČR, s.r.o. (CZ)
Knorr-Bremse Asia Pacific
(Holding) Ltd.,
Hongkong (HK)
Hasse & Wrede CVS Dalian, China Ltd. (CN)*
IFE-VICTALL Railway Vehicle Door Systems
(Qingdao) Co., Ltd. (CN)*
Knorr-Bremse Australia Pty. Ltd. (AU)
Knorr-Bremse Brake Equipment (Shanghai) Co.,
Ltd. (CN)
Knorr-Bremse Braking Systems for Commercial
Vehicles (Dalian) Co., Ltd. (CN)
Knorr-Bremse CARS LD Vehicle Brake Disc
Manufacturing (Beijing) Co., Ltd. (CN)*
Knorr-Bremse CAFF Systems for Commercial
Vehicles Chongqing Ltd. (CN)*
Knorr-Bremse Commercial Vehicle Systems
Japan Ltd. (JP)**
Knorr-Bremse India Pvt. Ltd. (IN)
Knorr-Bremse / Nankou Air Supply Unit (Beijing)
Co., Ltd. (CN)*
Knorr-Bremse Rail Systems Japan Ltd. (JP)*
Knorr-Bremse Rail Systems Korea Ltd. (KR)
Knorr-Bremse Systems for Commercial Vehicles
India Pvt. Ltd. (IN)
Knorr-Bremse Systems for Rail Vehicles
(Suzhou) Co., Ltd. (CN)
Sigma Transit Systems Pty. Ltd. (AU)
Sydac Pty. Ltd. (AU)
Westinghouse Platform Screen Doors
(Guangzhou) Ltd. (CN)*

Overview
Reports
Consolidated
Financial
Statements
04
06
08
10
12
38
40
42
56
64
68
76
78
82
92
104
110
118
120
128
138
144
150
171
172
174
175
176
177
2011 at a Glance
The Executive Board of Knorr-Bremse AG
The Supervisory Board of Knorr-Bremse AG
Report of the Supervisory Board
The State and Development of Knorr-Bremse AG
and the Knorr-Bremse Group
Rail Vehicle Systems
Markets
Market Successes
Products
Aftermarket
Site-specific Projects
Commercial Vehicle Systems
Markets
Market Successes
Products
Aftermarket
Site-specific Projects
Knorr-Bremse Group
Knorr Excellence
Responsibility
Employees
Trade Fairs
Notes to the Consolidated Financial Statements
Consolidated Cash Flow Statement
Segment Reporting
Statement of Changes in Group Equity
Independent Auditors’ Report
Consolidated Balance Sheet
Consolidated Statement of Income

2011 at a Glance
Ansgar Fries joins the Executive
Board of Knorr-Bremse Commercial
Vehicle Systems, taking charge of
the Center of Competence for chassis
and brake control
Bendix opens third plant in Acuña,
Mexico
Knorr-Bremse IT-Services founded
January
February
Knorr-Bremse Commercial
Vehicle Systems receives 2011
VDA Logistics Award
Dr. Stefan Haas, Head of Innovation and
Development at Knorr-Bremse Rail
Vehicle Systems, receives the European
Railway Award for development of the
eddy-current brake
Knorr-Bremse KAMA named Company
of the Year by the President of the
Russian Federation
Start of production at the Knorr-Bremse
CAFF joint venture in Chongqing
Knorr-Bremse makes donation to help
victims of natural disaster in Japan
István Lepsényi, Managing Director of
Knorr-Bremse’s Hungarian subsidiary,
named Manager of the Year 2010 in
Hungary
Expanded production facilities at
IFE-VICTALL in Qingdao officially
opened
Knorr-Bremse plant in Suzhou
celebrates completion of third
expansion phase
The 2011 Financial Statements Press
Conference takes place at headquarters
in Munich
March May
Presentation of the in-house 2011
Knorr Excellence and CSR Awards
Knorr-Bremse showcases products and
services at the UITP trade fair in Dubai
Group-wide Knorr-Bremse Identity
project kicks off
Knorr-Bremse and Deutsche Bank
celebrate a century of successful
collaboration
Knorr-Bremse voted “Best Brand in the
Commercial Vehicle Sector” for the sixth
time running
Merak Railway Technologies completes
expansion of Shanghai plant
Heinz Hermann Thiele is made an
honorary citizen of Aldersbach
April June
Knorr-Bremse celebrates 30th
anniversary of ABS anti-lock brakes
Knorr-Bremse supports DocStop and
donates a “DocMobil”
Knorr-Bremse sets out its stall at the
Railtex fair in London
“North American Product Leadership of
the Year Award” goes to Knorr-Bremse
subsidiary Bendix

Knorr-Bremse Global Care provides
emergency aid for Horn of Africa famine
10,000th Chinese metro car fitted with
Knorr-Bremse systems
Microelettrica acquires Comet Fans
S.r.l., an Italian manufacturer of axial fans
for rail vehicles
Knorr-Bremse wins major order for
metro project in Beijing
Bendix acquires select assets from
US traffic data management provider
Iteris Inc.
Knorr-Bremse again receives
excellent ratings from
Standard & Poor’s and Moody’s
Knorr-Bremse stages “Girls for
Technology” camp in Munich
The first turf is cut for a new
Knorr-Bremse plant in Brazil
Knorr-Bremse conducts its fourth
worldwide employee survey
Series production of ESP celebrates
tenth anniversary
Knorr-Bremse joins the exhibitors at
the ComTrans and Railway Salon Expo
fairs in Russia
July September November
Heinz Hermann Thiele awarded the
Beuth Medal of Honor
Knorr-Bremse obtains approval
for KAB60 control valve for the
Russian market
Jochen Hahn wins European Truck
Racing Championship
TATA Tec Day staged at TATA Motors
premises in Pune, India
In Barcelona, Knorr-Bremse receives the
European Business Award
Knorr-Bremse KAMA honored for best
charitable project
The first turf is cut for the new
Knorr-Bremse Manufacturing &
Development Center in Pune, India
August October December
The 500,000th drum brake is
produced at Knorr-Bremse KAMA
Knorr-Bremse Corporation in the USA
purchases a 75% stake in
Technologies Lanka in Canada
Expansion measures successfully
completed at Knorr-Bremse plant in
Liberec, Czech Republic

6
The Executive Board of Knorr-Bremse AG

Klaus Deller
Dr. Lorenz Zwingmann
Spokesman of the Executive
Board since October 10, 2011
Dr. Dieter Wilhelm
E X E C U T I V E B O A R D
Dr. Raimund Klinkner
Chairman of the Executive Board until October 10, 2011
7

8
The Supervisory Board of Knorr-Bremse AG
Wolfgang
Hubert*
Munich
(since March 18, 2011)
Representative of the
disabled, Chairman of
the Works Council of
Knorr-Bremse Systeme
für Schienenfahrzeuge
GmbH, Knorr-Bremse
AG, KB Media GmbH,
Knorr-Bremse
IT-Services GmbH
*Employee representative
Dr. Hans-Peter
Binder
Berg
Retd. Member
of the Board of
Management
of Deutsche Bank
AG, Munich Branch
Werner
Ratzis berger*
Munich
Project engineer,
mechanical surface
treatment,
Knorr-Bremse
Systeme für
Nutzfahrzeuge
GmbH
Dr. Kurt
Kiethe
Munich
Attorney at law
Dr. Martin
Kimmich*
Munich
IG Metall Trade
Union Secretary,
Munich Office
Manfred
Wennemer
Bensheim
2nd Deputy
Chairman,
Former Chairman of
the Executive Board
of Continental AG

Heinz Hermann
Thiele
Munich
Chairman,
Entrepreneur
Dr. Eduard
Gerum*
Rosenheim
1st Deputy
Chairman,
Consultant to the
Executive Board
of Knorr-Bremse
Systeme für
Nutzfahrzeuge GmbH
Dr. Wolfram
Mörsdorf
Essen
Retd. Member of the
Executive Board of
ThyssenKrupp AG
Frank Hellmer* Munich (until March 18, 2011)
Test engineer, Knorr-Bremse Systeme für Schienenfahrzeuge GmbH
Günter
Wiese*
Berlin
(since March 18, 2011)
Full-time Chairman
of the Works Council
of Knorr-Bremse
Systeme für
Schienenfahrzeuge
GmbH, Berlin plant
Dr. h. c. Horst
Zimmer
Lampertheim-
Hofheim
Retd. Member
of the Board of
Management of
Mercedes-Benz AG
S U P E R V I S O R Y B O A R D 9
Heinz
Hausner*
Salzweg
Klaus Gegen furtner* Aidenbach (until March 18, 2011)
Assistant Representative
of the IG
Metall Trade Union,
Passau Office
Toolmaker, Knorr-Bremse Systeme für Nutzfahrzeuge GmbH

1 0
Report of the Supervisory Board
In the course of fiscal 2011, the Supervisory Board concerned itself in detail with the state
and development of Knorr-Bremse AG and all Group companies.
Along with important individual transactions and human
resources decisions, this also included consideration of
fundamental aspects of strategic direction and corporate
planning. In addition, the Supervisory Board received
regular reports from the Executive Board either in the
course of its meetings or in written or oral form. The Supervisory
Board examined important individual transactions,
as well as deciding on items of business that required
its approval either by law or in line with company
statutes. The information and analyses upon which the
decisions of the Supervisory Board were based were discussed
and assessed in depth together with the Executive
Board. In order to comply with the requirements of
the German Accounting Law Modernization Act in terms
of corporate governance, a second meeting of the Financial
Statements Committee was held in mid year. At its
meetings, the Financial Statements Committee dealt in
particular with the supervision of the accounting process,
the efficacy of the internal controlling system, the risk
management system and the internal audit system, as
well as the work of the auditors.
In fiscal 2011 the Knorr-Bremse Group was able to increase
sales to EUR 4.24 billion (2010: EUR 3.71 billion).
The Rail Vehicle Systems division posted further sales
growth assisted primarily by the recovery of the freight
market in North America, but also by positive impetus
from the European region. The Commercial Vehicle Systems
division benefited from the recovery of the markets
in Europe and North America in particular, as well as from
the expansion of its business across all regions, and was
also able to report substantial sales growth.
To safeguard the future development of the company, in
2011 Knorr-Bremse continued to invest in the strategic
development and expansion of its production plants. In
the year under review, a new Commercial Vehicle Systems
plant was opened in Acuña (Mexico). Also in 2011, two
extensions to the Rail Vehicle Systems plants in Shanghai
and Suzhou were officially opened in China. Moreover,
the Commercial Vehicle Systems plant in Liberec (Czech
Republic), which was only inaugurated in 2010, was expanded
in the year under review.
In addition to organic growth, the year under review saw
corporate strategy continue to focus on targeted acquisitions
and joint ventures with the aim of optimizing the
product portfolio. In the rail vehicle sector the acquisition
of the Kalmar Tågkompetens AB in Kalmar (Sweden), a
specialist in the door aftermarket segment, and Technologies
Lanka Inc. in La Pocatière (Canada), who specialize in
linear door motors, led to a strengthening of the onboard
system portfolio. In addition, Microelettrica Scientifica
S.p.A., Milan (Italy), acquired Comet Fans S.r.l., Solaro
(Italy), an Italian manufacturer of axial fans for locomotives,
vehicle drive systems and other industrial applications,
also expanding the portfolio. The acquisition of an
additional 25% of the Icer Rail S.L. joint venture in Pamplona
(Spain) also reinforced the friction materials product
segment (subject to official approval). Also, Knorr-
Bremse Systeme für Schienenfahrzeuge GmbH, Munich
(Germany), purchased the remaining 25% of Knorr-
Bremse Nordic Rail Services AB, Lund (Sweden), from HVL
BaneTeknik A/S, Snekkersten (Denmark). In the commercial
vehicle sector, Knorr-Bremse’s US subsidiary Bendix
Commercial Vehicle Systems LLC, Elyria (USA), acquired
select assets of Iteris Inc., Santa Ana (USA), strengthening
its product portfolio in the field of active safety systems. In
addition, the joint venture Knorr-Bremse CAFF Systems
for Commercial Vehicles Chongqing Ltd. was founded in
Chongqing (China) for the production of commercial vehicle
braking system and drivetrain components, representing
a further important strategic step forward in the
world’s largest commercial vehicle market.
Against the backdrop of rising sales, the company’s top
priority remained ensuring the highest quality standards
in its products and processes. In 2011, work continued on
the optimization of processes and structures in all of the
key areas. In particular, the FIT (Finance & IT Excellence)
initiative introduced in 2010 was further expanded in the
year under review. In the context of the ONE IT project the
company’s organizational IT structures were refined and,
effective January 1, 2011, merged to form Knorr-Bremse IT
Services GmbH.

The 2011 Financial Statements and the Management Report
on Knorr-Bremse AG, the 2011 Consolidated Financial
Statements and the Management Report on the
Knorr-Bremse Group drawn up by the Executive Board,
and the company‘s accounts were examined by the auditors
elected by the Annual Shareholders‘ Meeting, KPMG
AG Wirtschaftsprüfungsgesellschaft, Munich, and endorsed
with their unqualified opinion dated March 2,
2012. The Supervisory Board also examined the Financial
Statements for fiscal 2011, the Management Report, the
proposed allocation of unappropriated retained earnings,
and the Consolidated Financial Statements and Management
Report on the Knorr-Bremse Group. No objections
were raised. At its meeting on March 16, 2012, the Supervisory
Board approved the 2011 Financial Statements,
which thereby became legally binding. The Supervisory
Board concurs with the Executive Board’s proposal for the
allocation of unappropriated retained earnings. The Consolidated
Financial Statements were also approved.
The auditors attended the meeting of the Financial Statements
Committee on February 24, 2012 as well as the financial
statements meeting of the Supervisory Board on
March 16, 2012, reported on their key findings and answered
outstanding questions.
KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, also
examined the Executive Board‘s report on relations with
affiliated companies, drawn up in line with Paragraph 312
German Corporation Law (AktG). The auditors endorsed
this report with the following opinion:
“Having audited and assessed this report in accordance
with professional standards, we confirm that: 1. The factual
contents of the report are correct. 2. The consideration
furnished by the Company in the legal transactions
set out in the report was not unreasonably high.”
The Supervisory Board also examined the Executive
Board‘s report on relations with affiliated companies and
has no objections to the concluding statement by the Executive
Board or to the auditors‘ findings.
S U P E R V I S O R Y B O A R D
The term of office of the existing Supervisory Board expired
in 2011. At the Annual Shareholders’ Meeting on
March 18, 2011 the previous representatives of the shareholders
were re-elected to the Supervisory Board of
Knorr-Bremse AG. The employees are now represented by
Wolfgang Hubert, Werner Ratzisberger, Dr. Martin Kimmich,
Dr. Eduard Gerum, Günter Wiese and Heinz Hausner.
On behalf of Knorr-Bremse AG, the Supervisory Board
wishes to thank all its former members for their contributions
to the work of this body.
Effective October 10, 2011, Dr. Raimund Klinkner resigned
his seat on the Executive Board and all other positions at
Knorr-Bremse by mutual agreement and left the company
on December 31, 2011. On October 10, 2011, Dr. Lorenz
Zwingmann assumed the interim role of Spokesman of
the Executive Board of Knorr-Bremse AG in addition to his
existing duties in the areas of Finance, Controlling and IT.
It is with a deep sense of gratitude that we honor the
memory of Dr.-Ing. E. h. Wilfried Lochte, who passed away
on March 7, 2011. Dr. Lochte was a member of the Supervisory
Board of Knorr-Bremse AG and of the Supervisory
Board of Knorr-Bremse Systeme für Nutzfahrzeuge GmbH
from 1993 to 2008. With his extensive experience and
pronounced entrepreneurial thinking, throughout this
period Dr. Lochte stewarded the progress of Knorr-Bremse
with great commitment and was instrumental in shaping
the company’s development through fundamental decisions
on its strategic direction. He maintained close,
friendly and trusting relations with the company’s shareholders.
We will not forget him.
Munich, March 16, 2012
The Supervisory Board
Heinz Hermann Thiele,
Chairman
1 1

Management
Report
IN FISCAL 2011, THE KNORR-BREMSE GROUP SAW SALES CLIMB MORE
THAN HALF A BILLION EUROS OR 14% TO EUR 4.24 BILLION (2010:
EUR 3.71 BILLION). The Rail Vehicle Systems division posted a further 8%
increase in sales in 2011, reaching a total of EUR 2.19 billion (2010: EUR
2.02 billion). In the year under review, growth was driven not least by the
North American region, on the back of a resurgent freight car market, and
by Europe. Knorr-Bremse´s Commercial Vehicle Systems division reported
22% growth in 2011 with business expanding in every region as sales
reached EUR 2.07 billion (2010: EUR 1.70 billion). A key contributory factor
here was the ongoing buoyancy of the commercial vehicle markets in
Europe and North America in particular.

1 4
The State and Development
of Knorr-Bremse AG and the
Knorr-Bremse Group
An overview of the
Knorr-Bremse Group
The Knorr-Bremse Group is the world‘s leading manufacturer
of braking systems for rail and commercial vehicles.
For more than 100 years now the company has pioneered
the development, production, marketing and servicing of
state-of-the-art braking systems. Other lines of business
in the rail vehicle systems sector include automatic door
systems, HVAC systems, control components and windscreen
wiper systems, platform screen doors, friction material,
simulators and driver assistance systems. In the
commercial vehicle systems sector, the product range includes
complete braking systems with driver assistance
systems, as well as torsional vibration dampers and powertrain-related
solutions, and transmission control systems
for enhanced energy efficiency and fuel economy.
The structure of the Knorr-Bremse Group is based on the
regions Europe, North America and South America, and
Asia/Australia, and the development of the Group is
geared to meeting the specific requirements of the markets
and customers in these regions.
This regional organizational structure is designed to offer
globally active customers uniform technical platforms
worldwide, while at the same time taking specific local
needs into account. It also ensures that customers who
operate on a regional basis are supplied with globally
proven systems and components.
General
economic developments
Compared to the recovery of the worldwide markets in
the previous year, the global economy proved far more
volatile in 2011, with marked differences in developments
from one region to the next. In overall terms, however,
worldwide growth can be said to have continued.
A slowdown in the pace of growth became evident in
both industrialized and emerging nations, with the latter
continuing to make a larger contribution to growth. In
2011, the gross domestic product (GDP) of the emerging
economies increased by 6.2% (2010: 7.3%) compared to
average GDP growth of just 1.6% (2010: 3.2%) for the industrialized
nations of the world. Global figures showed
overall economic growth of around 3.8% (2010: 5.2%).
The economic performance of the Eurozone was particularly
hard hit by the pronounced sovereign debt of several
EU member countries, including Greece, Spain and
Portugal. Following on from 1.9% growth in 2010, economic
output in the Eurozone rose by a similarly modest
1.6% in 2011. With growth of 3.0% (2010: 3.6%), Germany
made a substantial contribution to GDP growth in the
Eurozone.
Following the same pattern as in the Eurozone, in the USA
economic growth slowed from 3.0% in 2010 to 1.8% in
2011. The reasons here included the high level of sovereign
debt, a weak housing market and the continuing
weak state of consumer confidence. In Brazilian economy
too, the pace of GDP growth slowed to 2.9%, down from
7.5% in 2010.
China and India, by contrast, retained their role as drivers
of global economic growth. In 2011, GDP in China was up
9.2% (2010: 10.4%), while India saw GDP rise 7.4% (2010:

9.9%). In Japan, however, GDP sank 0.9% as a result of the
natural disaster that occurred in the spring of 2011 (2010:
+4.4%).
The growing uncertainty surrounding the development
of the real economy was also reflected in the commodity
markets in 2011. Following a sharp rise in the first half
year, commodity prices faded strongly towards year-end
in what was a highly volatile market environment. From
around USD 90 per barrel at the end of 2010, the price of
oil rose to USD 127 per barrel at the beginning of the second
quarter of 2011, before falling back to USD 107 per
barrel at year end. Aluminum prices followed a similar
pattern and, after rising as high as USD 2,800/t (top price
in 2008 approx. USD 3,300/t, lowest price in 2009 approx.
USD 1,300/t) declined again to approximately USD 2,000/t
in the course of the year under review. On the balance
sheet date the value of the US dollar – which lines up
alongside the euro as one of the Group’s main operating
currencies – had risen 3.2% against the euro compared to
December 31, 2010, with one euro worth USD 1.29. As an
annual average, the euro traded at USD 1.40.
3,251
198
M A N A G E M E N T R E P O R T
Sales and net income for the Knorr-Bremse Group
in EUR millions
Sales
3,384
192
2,761
99
2007 2008 2009 2010 2011
Net income
3,712
239
4,241
329
1 5

1 6
Development of the
Knorr-Bremse Group in 2011
Consolidated sales for the Knorr-Bremse Group were up
14.2% from EUR 3,712.2 million in 2010 to EUR 4,240.8 million
in fiscal 2011. This figure includes negative currency
translation effects in the amount of approximately EUR 60
million (compared to positive effects of EUR 170 million in
2010). In an economic environment that remained volatile,
the company benefited from its strong strategic position
with two globally active divisions, Rail Vehicle Systems
and Commercial Vehicle Systems, in markets that
developed differently.
The Rail Vehicle Systems division witnessed diverse regional
developments in the year under review and was
able to increase sales to EUR 2,186.9 million (2010: EUR
2,024.4 million). Positive impetus was mainly generated
by the North American region, led by the recovery of the
freight market, and by Europe.
In 2011 the Commercial Vehicle Systems division grew its
business across all regions and posted sales of EUR 2,068.2
million (2010: EUR 1,700.7 million). In Europe and North
America in particular, the division benefited from the ongoing
positive development of the commercial vehicle
markets.
The business environment by sector
The development of the global markets and the ongoing
overall increase in the volume of freight transportation had
different impacts on the various regions across the Group.
For the Rail Vehicle Systems division, the market environment
was shaped by a modest recovery in the rail freight
sector. In Europe demand for freight cars stabilized, while
the locomotive market showed 15% growth. In South
America, by contrast, demand for freight cars more than
doubled, while in North America it reached three times its
prior-year level. Demand for locomotives was also up in
both of these regions. In Asia, demand for freight cars increased
by 16%, while demand for locomotives showed a
24% decline.
Following their 2010 recovery, the commercial vehicle
markets stabilized in 2011 with truck production (airbraked
trucks of 6t and over) rising 4%. In Europe, truck
production was up by a further 31% in 2011 (2010:
+53%). Even so, the market remained 24% below the
level of its record year 2008. The North American market
was vitalized by rising replacement investments, growing
54% in the year under review (2010: +23%). In South
America, truck output was 14% up in 2011 (2010: +54%).
The Asian region was unable to sustain the growth of
past years, with truck production falling 9% in 2011
(2010: +46%).
Acquisitions, additions and joint ventures
In the year under review Knorr-Bremse continued its
strategy of improving its market position through targeted
acquisitions.
Effective January 1, 2011, Knorr-Bremse Nordic Rail Services
AB, Lund (Sweden), acquired the Swedish door aftermarket
specialist Kalmar Tågkompetens AB, Kalmar
(Sweden), thereby strengthening its portfolio in the
Northern European market.
Also effective January 1, 2011, the organizational structures
of Knorr-Bremse IT-Services GmbH, Munich (Germany),
became operational, uniting the IT functions of
Knorr-Bremse AG, Munich (Germany), Knorr-Bremse Systeme
für Nutzfahrzeuge GmbH, Munich (Germany), and
Knorr-Bremse Systeme für Schienenfahrzeuge GmbH,
Munich (Germany).
With effect from January 19, 2011, Knorr-Bremse Asia Pacific
(Holding) Ltd., Hong Kong (China), and the Chinese
manufacturer Chongqing CAFF Automotive Braking &
Steering Systems Co., Ltd., Chongqing (China), founded
the joint venture Knorr-Bremse CAFF Systems for Commercial
Vehicles Chongqing Ltd., Chongqing (China).
Knorr-Bremse holds a 66% stake in the joint venture
company, which manufactures brake components in the

air supply and brake control segments, as well as transmission
and clutch control components.
On July 27, 2011, Microelettrica Scientifica S.p.A., Rozzano
(Italy), acquired Comet Fans S.r.l., Solaro (Italy), an
Italian manufacturer of axial fans for locomotives, vehicle
drive systems and other industrial applications,
thereby expanding its product portfolio. In addition,
Microelettrica Scientifica S.p.A., Rozzano (Italy), extended
its worldwide sales activities through the establishment
of two joint ventures, one in Brazil (Microelettrica
do Brasil Ltda., São Paulo (Brazil), founded on January
14, 2011) and the other in Turkey (Microelettrica Scientifica
Aktif Ltda., Istanbul (Turkey), founded on November
1, 2011).
On July 29, 2011, North American subsidiary Bendix
Commercial Vehicle Systems LLC, Elyria (USA), purchased
select assets of Iteris Inc., Santa Ana (USA). This led to
Bendix adding the Lane AutoVue Departure Warning system
and the Safety Direct data management system to
its portfolio in the North American market.
On October 27, 2011, Sociedad Española de Frenos, Calefacción
y Señales S.A., Getafe (Spain), acquired an additional
25% stake in the Icer Brakes S.A. joint venture in
Pamplona (Spain), enabling it to further strengthen its
position in the manufacturing of brake pads (subject to
approval by the antitrust authorities).
On December 2, 2011, the newly founded Knorr Brake
Corporation Canada Holdings Ltd., Montreal (Canada),
acquired the onboard systems specialist Technologies
Lanka Inc., La Pocatière (Canada), not least adding linear
drive technology to the company’s door systems business
in North America.
On December 30, 2011, Knorr-Bremse Systeme für
Schienenfahrzeuge GmbH, Munich (Germany), purchased
the outstanding 25% of the shares in Knorr-
Bremse Nordic Rail Services AB, Lund (Sweden), from HVL
M A N A G E M E N T R E P O R T
BaneTeknik A/S, Snekkersten (Denmark), with retroactive
effect from December 31, 2010.
Overall, these acquisitions had no substantial effect on
the assets, financial status and profitability of the Knorr-
Bremse Group in fiscal 2011.
Major projects
In 2011 Knorr-Bremse continued its rigorous strategy of
localizing assembly operations and creating production
capacity on site in the various markets. Aligned with Knorr-
Bremse’s regional approach, this enabled the company to
further enhance its global market position in a series of
business areas and thereby secure its commercial success.
The aim is also to always ensure the same customary high
standards in terms of production processes and product
quality at all Knorr-Bremse plants around the world. In
January 2011 a new Commercial Vehicle Systems plant
was opened in Acuña (Mexico). Among other things this
plant will be producing brake and spring brake cylinders
for the commercial vehicle market in North America. The
physical proximity to the two established plants in Acuña
means that optimum utilization of corporate shared services
and processes is assured. The resultant lean and costeffective
processes ensure a lasting boost for the competitiveness
of Knorr-Bremse. Elsewhere, in Liberec (Czech
Republic) the need for greater capacity led to the Commercial
Vehicle Systems plant, which was only inaugurated
in June 2010, being expanded in 2011 by a further
7,500 m². The additional space was taken up in part by
new production lines for bayonet-type filter cartridges
and double-diaphragm brake cylinders.
Three new production lines were also set up at the Naberezhnye
Chelny plant in Russia, where the Knorr-Bremse
KAMA Systems for Commercial Vehicles OOO joint venture
is based. September 2011 saw the start of production of
three new products – manual slack adjusters, power
clutches and clutch master cylinders – all further additions
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1 8
to the portfolio of the joint venture, which had previously
concentrated on the manufacture of drum brakes and torsional
vibration dampers.
In China the Rail Vehicle Systems division geared up to
meet changing local market conditions and invested in
the expansion of production capacity. In 2011, this led to
the opening of two extensions to existing facilities. One of
these was at the Shanghai plant, where Knorr-Bremse subsidiary
Merak manufactures HVAC systems. The newly extended
plant is designed to comply with the highest international
standards of process organization, labor efficiency,
logistics and quality, based on full implementation of the
globally applicable Knorr-Bremse Production System
(KPS). The extension was officially opened in May 2011.
The second extension, opened in March 2011, was at the
Suzhou plant, originally founded in 2005 and since twice
extended – in 2007 and again in 2010. The latest measures
brought an additional 5,700 m² of production space and
office facilities covering around 3,300 m².
Quality and processes
Knorr-Bremse continues to target best-in-class processes
as the foundation on which its competitive capabilities
are based. In 2011, processes and structures were again
reviewed and enhanced across all key areas.
For several years now, Knorr-Bremse has been bundling
initiatives designed to drive the continuous improvement
of its business processes within the Knorr Excellence
(KE) business model, which has been rolled out
across the Group. In this context, the company has
brought together all process optimization initiatives
from across the divisions. In addition, in 2011 Knorr-
Bremse also merged its management systems within a
single, harmonized process model, leading to the creation
of a common platform within the Group that facilitates
access to the business processes and enhances
communications.
In the Rail Vehicle Systems division, one key measure was
to anchor the specific requirements of the International
Railway Industry Standard (IRIS) in the various processes
and ensure compliance across all plants. Knorr-Bremse
has become one of the first companies in the rail transportation
sector to implement certification to this standard
across the Group.
For several years now the Strong Focus program has successfully
brought together all activities designed to
boost productivity, cut costs and promote growth. As
part of a multi-year forward projection, valuable ideas
submitted by the workforce and management are collected,
evaluated and gradually implemented. In 2011
this brought further substantial cost savings and improvements
in productivity along the value chain, helping
safeguard the company’s competitiveness.

Assets, financial status and profitability
In 2011 the main factors in the development of the
Knorr-Bremse Group’s business were the continuing recovery
of the commercial vehicle markets and growth in
the rail vehicle sector which varied from one region to
the next.
Consolidated sales rose 14.2% in 2011 to EUR 4,240.8 million
(2010: EUR 3,712.2 million). In Europe, consolidated
sales were up 15.0% to EUR 2,169.5 million (2010: EUR
1,886.0 million), which corresponds to 51.2% of the consolidated
total (2010: 50.8%). The Americas contributed
EUR 1,020.0 million (2010: EUR 827.0 million) or 24.1%
(2010: 22.3%) to consolidated sales. In the Asia/Australia
region, sales amounted to EUR 1,051.3 million (2010: EUR
999.2 million), which equates to 24.7% (2010: 26.9%) of
the consolidated total.
Incoming orders were valued at EUR 4,072.5 million
(2010: EUR 4,040.0 million), 4.0% below the level of annual
sales and 0.8% up on the previous year. Orders on
the books at the Knorr-Bremse Group declined 3.4% in
the year under review to EUR 3,268.1 million (2010: EUR
3,381.8 million).
Net income for the Knorr-Bremse Group increased in the
year under review to EUR 329.3 million (2010: EUR 239.4
million). Net return on sales reached 7.8% (2010: 6.4%).
The European region contributed EUR 173.9 million to
net income, corresponding to a net return on sales of
8.0%. Net income from the Americas totaled EUR 76.0
million, with a net return on sales of 7.5%. The Asia/Australia
region posted net income of EUR 79.4 million,
which equates to a net return on sales of 7.6%.
In fiscal 2011, the door systems business unit (Knorr-
Bremse Ges.m.b.H, Mödling (Austria), IFE Division) had to
contend with a drop in profitability due to product quality
and delivery performance issues. Appropriate provisions
have been made in the financial statements. The
M A N A G E M E N T R E P O R T
rail vehicle HVAC systems business unit, Merak Sistemas
Integrados de Climatización S.A., Getafe (Spain), reported
a loss in the year under review. This was largely down to
the loss of high-margin sales to a Chinese customer, as
well as the substantial impact on income of quality problems,
primarily affecting supply obligations in China.
The consolidated balance sheet total rose 15.3% in 2011
to EUR 2,530.4 million (2010: EUR 2,194.2 million), largely
influenced by investments in fixed assets, the volumeled
increase in inventories, and the rise in liquid funds. At
year-end 2011, total assets represented 59.7% of sales. As
a proportion of the balance sheet total, intangibles, fixed
assets, and investments were down against the prioryear
level to 32.7% (2010: 36.5%). Working capital, defined
as the sum of inventories and accounts receivable,
minus accounts payable trade, rose as a result of the increased
volume of orders to EUR 470.6 million at yearend
(2010: EUR 415.6 million) or 39.9 days’ sales (2010:
40.3 days). The equity ratio rose by 1.3 percentage points
from 34.4% to 35.7%.
Of the Group’s total assets, 48.9% are tied up in the European
region, 23.8% in the Americas, and 27.3% in the
Asia/Australia region. Net cash flow of EUR 194.7 million
led to net liquidity of EUR 397.0 million and was achieved
primarily by an inflow of funds from gross cash flow
equivalent to 12.1% of sales. Substantial capital requirements
were generated in 2011 by investments (EUR
158.9 million), dividends (EUR 177.4 million) and an increase
in working capital (EUR 54.9 million). The ratio of
net liquidity to shareholders’ equity stood at 44.0%, compared
with 26.8% in 2010.
Knorr-Bremse’s robust strategic positioning, the positive
development of the company’s business and its excellent
working capital management were confirmed by
the external rating agencies Standard & Poor’s and
Moody’s, who have been rating the Knorr-Bremse Group
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2 0
since 2000. Moody’s awarded Knorr-Bremse an “A3/Outlook
stable” rating, while Standard & Poor’s rated the
company “A-/Outlook stable”. That makes Knorr-Bremse
the only family-owned company in the Standard & Poor’s
Global Automotive Suppliers Ranking 2011 with investment
grade status to be awarded an “A” rating.
Overall assessment of the economic
position of the Group
Within the general economic environment described
above, the Knorr-Bremse Group maintained its overall position
with regard to its assets and financial status, and
was able to further increase its net liquidity in 2011. The
Group’s profitability was ensured by rigorous cost management
and above all by the internal optimization of
processes and structures.
With an equity ratio of 35.7% and net liquidity of EUR
397.0 million, the structure of the Group’s assets is extremely
stable, so that it can continue to readily meet its
financial obligations.
Knorr-Bremse AG
As the parent company, Knorr-Bremse AG performs the
role of service provider and holding company, as well as a
strategic management function on the operational side.
Rising income from investments in associated and related
companies meant that income before taxation increased
to EUR 183.2 million in the year under review (2010: EUR
119.3 million).
Along with interests in affiliated companies, the balance
sheet of Knorr-Bremse AG largely reflects receivables from
and payables to Group companies and these are centrally
administered, partly within the framework of the cashpooling
process managed by Knorr-Bremse AG. Knorr-
Bremse AG acts as an in-house bank for its subsidiaries
around the world. This includes handling the central
hedging of market price risks. The subsidiaries contract
their hedging transactions with Knorr-Bremse AG, which
in turn hedges part or all of the net residual risk for the
Group with external banks.
With the aid of the global process standardization and
transparency achieved through Knorr Excellence, Knorr-
Bremse AG is able to efficiently control its own business
and that of the associated and related companies.

Appropriation of retained earnings
Knorr-Bremse AG posted unappropriated retained earnings
of EUR 263.9 million in 2011 (2010: EUR 262.6 million).
The Annual Shareholders Meeting will be asked to approve
the proposal that an amount of EUR 156.0 million
from the unappropriated retained earnings of Knorr-
Bremse AG be used to pay a dividend of EUR 60.00 (2010:
EUR 60.00) per dividend-bearing share with a par value of
EUR 26.00, with the balance to be carried forward to new
account.
Balance sheet total
in EUR millions
Structure of assets, liabilities and finances of the Knorr-Bremse Group
M A N A G E M E N T R E P O R T
Relations with affiliated companies
KB Holding GmbH, Grünwald, Germany, directly holds
more than half the share capital of Knorr-Bremse AG. Pursuant
to § 312 German Corporation Law (AktG), a report
on relations with affiliated companies has been drawn up
which includes the following statement: “In the legal
transactions listed in the Report on Relations with Affiliated
Companies, in accordance with the circumstances
known to us at the time at which the said transactions
took place, our company received appropriate counterperformance
in each case.” The report was audited by the
Auditors and received their unqualified opinion.
Assets Liabilities
FIxed assets/intangibles 34%
30% 34% 36% Shareholders‘ equity
3%
3%
9% 8%
Investments Pension accruals
Current assets/RAP 49%
46% 52% 51%
Short-term debt
Liquid assets
14%
2,194.2 2,530.4
21%
2,194.2 2,530.4
5%
2010 2011 2010 2011
5%
Balance sheet total
in EUR millions
Borrowings
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Regional developments by division
In the year under review, the Rail Vehicle Systems division
contributed EUR 2,186.9 million (2010: EUR 2,024.4 million)
to consolidated Group sales, while the Commercial Vehicle
Systems division posted sales of EUR 2,068.2 million (2010:
EUR 1,700.7 million). The continuing buoyancy of the commercial
vehicle markets and the expansion of the division’s
global market position led to convergence of the contribution
to sales of the two divisions in 2011. The Commercial
Vehicle Systems division accounted for 49% (2010:
46%) and the Rail Vehicle Systems division for 51% (2010:
54%) of consolidated sales.
The development of the two divisions is set out below for
the individual regions that make up the Group.
Europe
Rail Vehicle Systems
2011 brought an end to the decline in rail freight transportation
that set in towards the end of 2008 under the
influence of the financial and economic crisis. The market
situation in both the original equipment and aftermarket
sectors showed a modest recovery. Compared to the previous
year, more locomotives were purchased in the year
under review and locomotive output increased by around
15%. Production of freight cars remained at the prior-year
level, settling at 7,000 units. In the European passenger
transportation sector too, a recovery set in and several important
large-scale projects were revived or newly awarded
in both the mass transit and mainline sectors.
Knorr-Bremse was among the beneficiaries of European
market developments and in 2011 was again able to win
some important orders. The company’s position in the European
mass transit sector was strengthened by incoming
orders. One example here was the framework agreement
that Knorr-Bremse concluded with Alstom to equip
the LINT mass transit multiple units. The first job under
this agreement will cover 65 DMU cars for the Neckar-
Köln line. In the metro segment, Knorr-Bremse is to supply
door systems, oil-free compressors, shoe brake units
and brake resistors to the Moscow Metro.
In the multiple unit and high-speed rail markets too,
Knorr-Bremse was able to conclude significant sales
agreements. For example, Knorr-Bremse was the successful
bidder in the tender for the new V300 ZEFIRO highspeed
trains for operator Trenitalia and is to equip 50
eight-car sets with HVAC and door systems. The company
also won the order to supply the braking systems for Kazakh
Railways’ twin-unit KZ8A locomotives. The equipment
concerned (the EP Compact brake control system
with electronic brake pressure control and wheel slide
protection) was specially developed to operate at temperatures
down to minus 55 °C. Also, after many years of
development and marketing activities, a pilot order in the
European region was obtained for the LEADER driver assistance
system.
Commercial Vehicle Systems
After truck output in Western Europe had fallen in 2009,
the market began to recover in 2010. This trend continued
in 2011 with truck production reaching 422,000 units.
However, while this equated to a 30% increase year-onyear,
the market still trailed 25% behind its pre-crisis level
of 562,000 vehicles built. All of Knorr-Bremse’s customers
in the original equipment sector benefited almost equally
from this upturn, which therefore had a positive impact on
the full range of products manufactured and marketed by
the Commercial Vehicle Systems division’s European production
network. Trailer output in Western Europe also
showed 30% growth in 2011, rising to 156,000 units. However,
this was still 23% down on the 2008 peak of 202,000
trailers built. Production of trucks in Central and Eastern
Europe also increased, rising 35% from around 75,000
units in 2010 to 101,000 units in 2011, slightly outpacing
the growth in Western European truck output. In the aftermarket
sector too, Knorr-Bremse benefited from the positive
development of the European market.

Along with the disc brake, the key sales drivers in Europe
in 2011 were the electronic braking systems ABS and EBS.
Also in the year under review, two important electronic
safety systems celebrated an anniversary: Series production
of ABS anti-lock brakes for commercial vehicles began
30 years ago, laying the foundation for the electronic braking
system EBS, and the electronic stability program ESP
celebrated its tenth anniversary. In the context of the SFTP
vehicle platform that went into series production in September
2011, for the first time Knorr-Bremse is supplying
an electronic braking system for the heavy-duty trucks
built by Daimler AG, including the new Actros model.
Knorr-Bremse is also to equip the vehicles with Electronic
Air Control (EAC), an air supply system including compressors,
and disc brakes.
2011 also brought successes for Knorr-Bremse with smaller
vehicle manufacturers. One such order was obtained
from the European subsidiary of the Japanese manufacturer
Nissan, NISSAN Motor Iberica S.A. This concerns the
supply of the entire braking system, which along with ABS
also includes the integrated electronic stability program
(ESP), the air supply system, disc bakes and brake cylinders.
In addition, Knorr-Bremse’s Polish subsidiary was able to
conclude new long-term agreements with the leading
Polish commercial vehicle manufacturers, thereby creating
a stable basis for future business development.
In 2011 Knorr-Bremse also benefited from the upswing in
the Eastern European market. By way of example, the year
under review brought the next stage in the expansion of
the successful Knorr-Bremse KAMA Systems for Commercial
Vehicles OOO joint venture initiated in 2007 between
Knorr-Bremse and the largest Russian commercial vehicle
builder, KAMAZ. September 2011 saw the start of production
of three new products – manual slack adjusters, power
clutches and clutch master cylinders – all further additions
to the portfolio of the joint venture, which had previously
concentrated on the manufacture of drum brakes and torsional
vibration dampers. Also in 2011, the joint venture
celebrated production of its 500,000th drum brake.
North America
M A N A G E M E N T R E P O R T
Rail Vehicle Systems
In 2011 the freight car market in North America experienced
its first upturn since 2008 in terms of unit output.
New freight car construction increased from 17,000 units
in the prior year to 47,000 units in the year under review.
On top of this, North American customers took delivery
of some 890 locomotives in 2011, which equates to
growth of over 150%. A further 420 locomotives built in
North America were exported in the year under review.
In the passenger transportation sector, the market was
buoyant, not least on account of the expansion and construction
of mass transit networks.
Knorr-Bremse benefited from the positive development
of the rail freight market and was able to increase its
market share significantly in this segment. Knorr-Bremse
was selected by the largest US freight car manufacturer,
Trinity Rail Group, as its preferred supplier of braking systems
and components and in that capacity supplied
braking systems for the majority share of approximately
14,000 freight cars delivered by Trinity in 2011. Also worthy
of note is an order by TTX of 3,600 car sets of Knorr-
Bremse freight car brake equipment for new intermodal
cars.
In the mass transit sector, Knorr-Bremse was able to build
on its existing position and won orders for several additional
important mass transit projects. Thus Knorr-Bremse
Rail Vehicle Systems will be supplying air treatment systems
and bogie equipment for over 460 MPM-10 metro
cars for the Montreal Metro. This major order and the accompanying
product development work has also assured
Knorr-Bremse of a good starting point from which
to acquire pending orders for the Paris Metro, which is
based on the same technology. Knorr-Bremse also
strengthened its collaboration with the Northeast Illinois
Regional Commuter Railroad Corporation and will be
equipping a total of 160 regional passenger cars for central
and suburban Chicago with oil-free compressors,
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rapid-action brake control units, ESRA brake control electronics,
bogie equipment, and shoe brakes.
Commercial Vehicle Systems
The recovery of the North American truck market continued
in 2011. Compared to the prior year, vehicle output
was up 54% at 335,000 units. Replacement purchases had
a positive impact on this upward trend. Nevertheless the
market still trails 33% behind its 2006 peak of 500,000
units. Calendar year 2011 saw significant legislative and
regulatory changes impacting the US commercial vehicle
market. “The Greenhouse Gas Emissions Standards and
Fuel Efficiency Standards for Medium- and Heavy-Duty
Engines and Vehicles,” for example, establishes standards
which will help reduce greenhouse gas emissions and increase
fuel efficiency in medium- and heavy-duty commercial
vehicles.
Knorr-Bremse’s North American business is handled by its
subsidiary Bendix Commercial Vehicle Systems LLC under
the Bendix brand. Bendix made use of the positive market
climate to expand capabilities and capacity at key manufacturing
facilities to meet rising customer demand. Thus
a third production plant at the Acuña, Mexico campus
was opened in January 2011. The products manufactured
at the Acuña III plant include spring brake actuators and
brake chambers for the commercial vehicle market.
In 2011 Bendix was able to build on its position as the
leading supplier of effective active safety solutions in the
North American market. With Bendix Wingman Advanced,
Bendix launched an innovative system that delivers Adaptive
Cruise Control with Braking features along with collision
mitigation technology. In addition, Bendix once
again expanded its product portfolio in this area, acquiring
the data management system SafetyDirect and the
vision-based Lane Departure Warning (LDW) system
AutoVue from Iteris, Inc. This acquisition rounds out the
current portfolio and helps Bendix further secure its
strong position in the market for active driver assistance
systems. Bendix is also to equip coaches built by Prevost,
a leading North American manufacturer of premium
touring and conversion coaches with Adaptive Cruise
Control (ACC) systems. This makes Prevost the first coach
manufacturer to launch Adaptive Cruise Control with
Braking as an option.
South America
Rail Vehicle Systems
Global demand for raw materials again exerted a positive
influence on freight volumes in South America. As a result,
production of freight cars continued to rise in 2011, climbing
over 100% to 4,300 units and thus gradually approaching
its 2008 peak of 5,000 units. The number of locomotives
built also increased by over 100%. Procurement levels, by
contrast, remained very low, with just 50 locomotives purchased.
The passenger transportation market also remains buoyant.
Two major events in the shape of the 2014 World Cup in
Brazil and the 2016 Olympics in Rio de Janeiro are driving
the expansion of the mass transit networks in Brazil.
The aftermarket sector in South America also showed positive
development in 2011. Knorr-Bremse was able to benefit
from the upward trend and signed an agreement with MRS
Logistica S.A., one of the largest transportation companies
in the Brazilian rail freight market. Up to 2013, Knorr-Bremse
is to handle the servicing of the company’s CCB II brake control
systems, handling some 200 systems a year.
Commercial Vehicle Systems
2011 brought a further improvement in the South American
commercial vehicle market, which saw truck production
rise 14% to 209,000 units. As in 2010, the market is in
fine shape, driven not least by developments in Brazil,
where the introduction of the EURO 5 standard in 2012

led to purchases in the Brazilian commercial vehicle market
being brought forward to 2011.
In 2011 Knorr-Bremse was again successful in obtaining
important orders from its customers. For example, shipments
of 24,000 pedal units and the same number of
automatic air treatment systems to Ford Caminhões
began in the year under review. Also, Knorr-Bremse
began supplying 110,000 brake shoes a year to Mercedes-
Benz in Brazil.
Asia/Australia
Rail Vehicle Systems
The rail vehicle market in Asia/Australia showed positive
development in 2011. On the one hand the region’s main
growth driver to date, China, throttled back its demand
for new vehicles, above all in the high-speed train and locomotive
sectors, where state stimulus packages and extensive
infrastructure projects had been driving growth.
On the other hand the Indian market developed very
strongly, with substantial growth in both rail freight and
passenger transportation. Positive impetus was also generated
by the markets in Australia and Southeast Asia.
Despite the slowdown in the Chinese market, Knorr-
Bremse was still able to acquire further significant orders
in the mass transit sector. By way of example, Knorr-
Bremse will be supplying the braking systems for 64
eight-car sets for an additional metro line in Beijing. This is
the largest single order in the metro sector for Knorr-
Bremse in Asia. In addition, Knorr-Bremse is to supply the
braking systems for 234 metro cars for Guangzhou Metro
and 402 cars for Nanjing Metro. In total, 2011 brought
Knorr-Bremse incoming orders to equip over 2,000 metro
cars in China. Knorr-Bremse brake equipment for mass
transit vehicles is installed in 14 cities across the country
and in all, the company has to date received orders for
brake equipment for more than 10,000 metro cars.
M A N A G E M E N T R E P O R T
In Southeast Asia an initial major order governing braking
systems for 1,200 coal wagons for Indonesia was acquired.
In India Knorr-Bremse scored additional successes in
both the rail freight and passenger transportation sectors
and more than doubled its sales. Following on from
the equipment of some 11,000 freight cars with modern
Bogie Mounted Brake Systems (BMBS) in 2010/2011, the
refurbishment of 600 freight cars with BMBS began in the
year under review. Knorr-Bremse is also supplying brake
calipers for state-of-the-art LHB coaches in an order that
will increase from 780 coaches per year in 2012 to 3,000
LHB coaches per year in the next five years.
In Australia Knorr-Bremse was able to further strengthen
its market position with orders received for braking systems
for more than 1,940 freight cars. In addition, Knorr-
Bremse received an initial order to supply 180 LEADER
driver assistance systems and eleven simulators to Rio
Tinto in Pilbara, Western Australia. Knorr-Bremse will also
be supplying the braking systems for 66 streetcars for the
mass transit network in Adelaide. Significant business
was also generated by the Australian aftermarket, where
Knorr-Bremse won the order to overhaul the complete
braking systems of 76 multiple units for the Melbourne
Metro.
Commercial Vehicle Systems
The Asia/Australia region reported a 9% drop in truck production
in 2011. This was due to developments in China,
the world’s largest commercial vehicle market in unit output
terms. In China truck production was 16% down in
2011 at 1,119,000 units compared to the record year 2010,
thus still performing at a very high level. While 2010 was
strongly influenced by government stimulation directly
influencing truck production, a new five-year plan came
into effect in 2011 with still positive but more moderate
effects on the truck industry.
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2 6
Chinese manufacturers hold a dominant 98% share of the
domestic commercial vehicle market, which explains why
foreign manufacturers and suppliers are increasingly entering
into joint ventures in order to secure a share of the
growing market. By starting a joint venture early in 2011
with the Chinese company Chongqing CAFF Automotive
Braking & Steering Systems Co. Ltd. for the production of
commercial vehicle braking system and drivetrain components,
Knorr-Bremse too took another important strategic
step forward in the Chinese market. The joint venture
opened for business at the beginning of 2011.
Knorr-Bremse’s local presence in China through its companies
in Dalian and Shanghai already dates back several
years.
The commercial vehicle markets in India and Japan, by
contrast, experienced an upswing in 2011. Japan, which
was hard hit by a major earthquake and tsunami early in
the year under review, recovered in the course of the year
and actually increased its truck production by 5% to
163,000 units. Commercial vehicle output in India rose
15% to 322,000 units. The majority of commercial vehicles
in the Indian market are still equipped with more basic
braking systems. In the year under review, Knorr-Bremse
India presented an effective anti-roll-back system designed
to match these braking systems and prevent vehicles
rolling backwards when moving off on an uphill
incline.
Americas 24.1%
Asia/Australia 24.7%
Europe 51.2%
Consolidated sales by region

Capital expenditure and depreciation
In 2011, the Knorr-Bremse Group invested EUR 158.9 million
in fixed and intangible assets, which was 40.1% more
than in the previous year (2010: EUR 113.4 million). This
upward trend accompanied the positive development of
sales in the year under review.
At EUR 85.3 million, 53.7% of the company‘s capital expenditure
was invested in Europe. EUR 38.1 million
(24.0%) was invested in the Americas and EUR 35.5 million
(22.3%) in Asia/Australia.
Broken down by division, the allocation of capital expenditure
was such that the Rail Vehicle Systems division
benefited in the amount of EUR 65.9 million (2010: EUR
61.2 million) and the Commercial Vehicle Systems division
in the amount of EUR 74.7 million (2010: EUR 50.4 million).
Depreciation on intangible and fixed assets showed a
slight increase across the Group, rising from EUR 146.9
140
2007 113
134
2008 115
101
2009 118
113
2010 147
159
2011 165
Capital expenditure
Depreciation
Consolidated capital expenditure and depreciation in EUR millions
M A N A G E M E N T R E P O R T
million in 2010 to EUR 164.6 million in the year under review.
With EUR 76.1 million, Europe accounted for the
largest share of depreciation, followed by Asia/Australia
with EUR 55.2 million and the Americas with EUR 33.3 million.
A breakdown of depreciation by division shows that
the larger proportion of EUR 97.7 million (2010: EUR 82.9
million) was accounted for by Rail Vehicle Systems, while
depreciation at the Commercial Vehicle Systems division
amounted to EUR 60.8 million (2010: EUR 61.0 million).
In 2011, investment activity focused primarily on the expansion
of worldwide production capacities and on replacement
investments, as well as on the start of construction
of new production plants in India (Faridabad/
Pune), the US (Westminster) and Brazil (Itupeva).
2 7

2 8
Research and development
As a technology group, Knorr-Bremse continued to drive
forward its research and development efforts in the year
under review in close collaboration with its customers.
Total expenditure on research and development and
project planning amounted to EUR 208.8 million in 2011
(2010: EUR 175.3 million), which equates to 4.9% (2010:
4.7%) of consolidated sales.
As the global technology leader in the fields of braking
systems for rail and commercial vehicles, Knorr-Bremse
develops innovative products distinguished by their safety,
high quality, reliability and customer benefits. This applies
in equal measure to the other fields covered by the
product portfolios of the Rail Vehicle Systems division (automatic
door systems, air-conditioning and driver assistance
systems, control components and platform screen
doors) and the Commercial Vehicle Systems division (driver
assistance systems, fuel-saving systems and powertrain-related
innovations such as PBS and transmission
control systems).
Knorr-Bremse’s success in the market with these products
is founded on its comprehensive command of electronics,
pneumatics, and mechanical engineering. These capabilities
enable the company to adopt an integrated approach
and provide its customers with complete systems.
The long-standing trend towards the introduction of innovative
system solutions and modular solutions involving
the increasing use of mechatronic systems is continuing,
which gives Knorr-Bremse a competitive edge in the
marketplace.
2007 159
2008 171
2009 153
2010 175
2011 209
Consolidated research and development expenditure in EUR
millions
In 2011, development activities in the rail vehicle sector
focused among other things on the development of innovative
products for the growth markets of the BRIC
states as well as for Middle Eastern countries. Thus, for example,
the KAB60 control valve was inspected and approved
as compliant with the specific product requirements,
such as major variations in temperature. The HVAC
systems built by Knorr-Bremse subsidiary Merak can also
withstand extreme climatic conditions. Moreover they
have been equipped with an efficient sand filtration system
that can also extract the sand and dust particles from
the air in desert regions to ensure optimum on-board air
quality.
In the commercial vehicle sector, development activities
in the year under review focused – as in the previous year
– on the next-generation ABS, EBS and ESP systems and
on the further enhancement of the electronically controlled
air treatment system (EAC2). Also on the development
agenda were the Pneumatic Booster System (PBS)
and the mechatronic control system for automatic transmissions.
In addition, work began on the development of
a new generation of disc brakes.
In line with Knorr-Bremse’s regional strategy, in 2011 the
proportion of the Group’s development capacity located
in emerging markets such as India and China was further
increased. At year-end 2011, the Knorr-Bremse Group employed
a worldwide total of 2,486 people in the field of
research, development and project planning (2010:
2,059).
In 2011 the Group continued to pursue its ambition of
realizing innovative solutions that meet local market and
customer requirements, and of continuously improving
these solutions in the interests of its customers, as evidenced
by an impressive number of innovations and
awards.

Human resources
At year-end 2011, the Knorr-Bremse Group employed a total
of 20,050 persons (18,143 excluding leasing) compared
to 18,053 (16,277 excl. leasing) one year earlier. This equates
to a year-on-year increase of 11.1% (11.5% excl. leasing).
In the European region, there were 10,442 employees on
the payroll at year-end 2011 (9,957 excl. leasing) compared
to 9,861 (9,243 excl. leasing) at the end of 2010. Thus the
proportion of employees in Europe declined from 54.6% in
2010 to 52.1% in 2011. The workforce in Germany totaled
3,848 employees (3,587 excl. leasing), which is 417 more
than in 2010 (3,431 or 3,235 excl. leasing) and equates to
19.2% of the total Group payroll. The number of employees
in the Americas also rose in 2011, reaching 4,569 (4,363 excl.
leasing) at year-end compared to 3,854 (3,556 excl. leasing)
in 2010. The proportion of the total Group workforce in the
Americas rose to 22.8% (2010: 21.4%). In Asia/Australia the
size of the workforce increased from 4,339 in 2010 (3,478
excl. leasing) to 5,039 (3,823 excl. leasing). The proportion of
the total headcount employed in the region reached 25.1%
in 2011, up from 24.0% in 2010.
Americas 22.8%
Asia/Australia 25.1%
Europe 52.1%
Group workforce by region on Dec. 31, 2011
M A N A G E M E N T R E P O R T
The number of employees in both divisions increased, although
without keeping pace with the rise in sales. In the
Rail Vehicle Systems division, the number of employees at
year-end 2011 was again up at 11,083 (9,955 excl. leasing)
compared to 10,824 (9,523 excl. leasing) one year earlier. In
the Commercial Vehicle Systems division too, the headcount
continued to rise, reaching 8,636 employees (7,858
excl. leasing) at year-end 2011 compared to 7,063 (6,590
excl. leasing) in 2010. The number of employees in the holding
companies also increased from 166 (164 excl. leasing) to
331 (330 excl. leasing) at the end of 2011.
In view of demographic trends and in line with the company‘s
international growth strategy, Knorr-Bremse attaches
great importance to sustained human resources development.
The importance of HR development is underlined by
the People Excellence (PEX) initiative, which bundles all the
necessary measures. The targeted advancement of high potentials
and the creation of the appropriate development
and career opportunities provide a source of employee motivation
and support long-term loyalty. Through cooperation
with key universities and participation at recruiting and
university job fairs, Knorr-Bremse is regularly perceived as an
innovative employer by young talents. In line with the increasingly
international nature of its HR efforts, the company
continues to support periods of employment at foreign
locations within the Group.
We would like to thank all of the company‘s employees for
their commitment and hard work in 2011. Our thanks also
go to the employee representatives for their constructive
collaboration.
2007 15,235
2008 15,890
2009 15,613
2010 18,053
2011 20,050
Group workforce on Dec. 31, 2011
2 9

3 0
Social responsibility and sustainability
Particularly in times of globalization and climate change,
being successful invariably also means conducting all aspects
of one‘s business, from planning to execution, with
foresight. Doing so in awareness of a responsibility for the
impact of one‘s actions on people, the environment, and
society, and working relentlessly to improve that impact,
has become a maxim of modern corporate management.
In 2011, several projects were initiated to further enhance
Knorr-Bremse‘s sustainability performance. Thus, Knorr-
Bremse published its first Communication on Progress
since becoming a signatory to the United Nations Global
Compact initiative, thereby documenting its commitment
to observe and implement the Global Compact‘s
principles. To foster the dialog between the Group’s various
regions, in the year under review a Group-wide network
with a focus on corporate responsibility topics was
founded. This CR Roundtable is made up of corporate responsibility
representatives from all the regions and is designed
to facilitate regular communication regarding ongoing
projects, strategic goals and operational measures,
as well as the exchange of best practices.
As a technology leader, Knorr-Bremse has a duty to develop
innovative products and system solutions that support
sustainable value creation and provide maximum
benefits for its customers. The company therefore engages
in the systematic pursuit of innovative technologies
that help optimize safety, functionality, energy efficiency
and environmental compatibility. In 2011, for example,
the Rail Vehicle Systems division launched the Ecodesign
project to assess and continuously improve the environmental
impact of products over their entire life cycle. Initial
measures to optimize environmental compatibility
were already derived and implemented in the year under
review. These Life Cycle Assessments are to be extended
in the coming year.
As in previous years, in 2011 Knorr-Bremse supported the
charitable organization Knorr-Bremse Global Care e. V.,
which was founded in 2005, providing funding for its ac-
tivities in the amount of approximately EUR 1,500,000.
The main focus of the organization‘s activities in 2011 was
again on long-term projects, such as the construction of a
high school in Rwanda and a vocational training center in
Faridabad, India. In 2011, Global Care also provided emergency
aid following the disasters in Japan and during the
drought in East Africa.
Knorr-Bremse Global Care e. V. was founded in response
to the tsunami disaster of December 26, 2004 to provide
unbureaucratic, effective and lasting help to the victims.
In the year under review, 42 aid projects were realized in a
total of 24 countries on four continents. The projects are
supervised on a voluntary basis and with great dedication
by Knorr-Bremse employees. In 2011, with donations totaling
EUR 1.73 million, Knorr-Bremse Global Care e. V.
reached out to help some 65,000 people.

Follow-up report
No events with a material influence upon the assets,
financial or earnings position of the Knorr-Bremse Group
at the balance-sheet date have since taken place.
M A N A G E M E N T R E P O R T
3 1

3 2
Report on risks and opportunities
The Knorr-Bremse Group operates an established, multistage,
worldwide planning, reporting and controlling
system. Standard reporting periods and report contents
have been defined across the Group. These formal reports
are supplemented in greater depth by presentations
on routine and special subjects at monthly review
meetings.
In addition, the Knorr-Bremse Group has put in place a
standardized risk management system at top management
level. This is based on a risk report that is discussed
at regular top management and Executive Board meetings
and used as a basis for introducing appropriate
measures. This ensures that the operational risk management
system is duly complemented at strategic level. In
its entirety, this control system has proved an effective,
reliable network for the early identification and remediation
of potentially undesirable developments.
Risk assessment and management also forms an important
part of the process of describing, documenting, and
continuously improving business processes across the
Knorr-Bremse Group (Knorr Excellence model).
Business risks
The Knorr-Bremse Group is active in business segments
that for some years have been characterized by a dynamic
process of consolidation on the customer side. This has
resulted in powerful demand-side leverage, with corresponding
pressure on prices. Knorr-Bremse responds to
these factors with innovative products and systems, positioning
itself as a partner for long-term relationships
that target cost-effective solutions for the customer. The
earlier Knorr-Bremse is involved in the customer’s project
as a whole, the better the chance of attaining that target.
Regional commercial vehicle and rail vehicle markets are
subject to irregular cycles. Market volatility and fluctuating
growth can affect individual suppliers, market segments
or entire regions. As a globally active corporate
group, Knorr-Bremse is particularly exposed to the risks
implicit in the changing state of the global economy. The
development of the economies of individual countries
and the worldwide flow of trade are carefully monitored
in order to minimize risks affecting the company’s sales.
At the same time, Knorr-Bremse’s international presence
renders the Group largely immune to risks that are restricted
to an individual region. The increased volatility
being encountered worldwide in the commercial vehicle
industry also affects Knorr-Bremse and continues to be
carefully monitored. If customer creditworthiness falls,
the risk of the loss of receivables outstanding increases
and Knorr-Bremse counters this risk through effective receivables
management.
In the course of its dynamic growth in recent years,
Knorr-Bremse has integrated a number of companies
and shareholdings into the Group. The financial and cultural
risks typically associated with such integration processes
were effectively minimized by means of systematic
analysis and assessment of the target companies.
When it comes to overcoming cultural barriers, Knorr-
Bremse can draw on 20 years of experience with integration
processes related to the acquisition of numerous
companies as well as to joint ventures in which the company
holds a majority stake and is responsible for operational
management. This experience will pay dividends
in any future mergers and acquisitions and has been
mapped in the form of structured processes.
Knorr-Bremse and its systems are at the leading edge of
technological development. This also engenders risks
which, because of the safety-critical nature of the applications
concerned, require particularly careful monitoring.
To this end, Knorr-Bremse routinely employs comprehensive
quality planning, quality assurance and
testing procedures. To ensure continuous improvement
of its business processes, Knorr-Bremse takes its lead
from international standards. The individual plants regularly
undergo internal and external audits in this context.
Above and beyond this, despite having already attained
a very high level of quality, both divisions work intensively
to continuously improve the quality and reliability of

their products with the aid of the Knorr Excellence quality
program “Quality First.”
Operational risks
Risks due to production downtimes are covered by commercially
appropriate insurance contracts. Flexible working
time models enable unexpected short-term shifts in
capacity requirements to be accommodated efficiently.
Knorr-Bremse maintains a close working relationship
with suppliers and service providers. In order to avoid delivery
delays or quality defects, which in turn could lead
to lost production time and have a negative impact on
earnings, Knorr-Bremse attaches great importance to
careful supplier selection procedures. Suppliers are also
continuously subjected to technical and commercial audits.
In the current economic environment, there is also a
risk of business partners becoming insolvent – a risk to
which the company responds directly.
Exchange rate risk is not of crucial importance for the
Knorr-Bremse Group because geographic diversification
over recent years has enabled the Group to establish a
high proportion of local manufacturing and local suppliers
within the respective currency zones. In order to limit
the residual exchange rate risk related to transactions
across different currency zones, Knorr-Bremse is increasingly
identifying opportunities to exploit compensatory
supply volumes within the Group. In selected cases, currency
risks are also hedged by means of derivatives. Such
measures, however, serve exclusively to hedge basic
transactions within the scope of normal business operations.
The basis for managing foreign exchange risks is provided
by the Guideline on Managing Currency Exposure in
the Knorr-Bremse Group, which sets out the procedures
to be followed and the necessary scope of hedging
transactions in binding form for all Group companies.
The monitoring of compliance with this guideline is part
of the relevant Knorr Excellence process.
M A N A G E M E N T R E P O R T
The risk of fluctuations in the price of commodities that
are of relevance to Knorr-Bremse is also hedged to an appropriate
extent by means of derivatives in so far as these
fluctuations could have a substantial impact on the
Group’s profitability. In the case of steel and aluminum,
basis hedging is undertaken to cover a part of the risk.
Business processes within the Knorr-Bremse Group are
supported by powerful and state-of-the-art IT systems. In
order to avoid malfunctions, Knorr-Bremse attaches great
importance to harmonization of the hardware and software
architecture, the integrity and security of existing
data, appropriate back-up solutions, and careful management
of access control. Compliance with the IT Security
Guideline is comprehensively monitored with the aid
of internal and external audits at all major sites around
the world. The Corporate Data Center in Munich, Germany,
meets the very highest requirements (industry standard)
in terms of efficiency, reliability and security. Based
on this platform, the necessary global transparency and
the integration of all corporate sites – and of recent additions
in particular – are being further enhanced.
In response to increasingly stringent environmental requirements,
Knorr-Bremse has aligned its worldwide activities
with the international standard ISO 14001. The
majority of the company’s sites have already been certified
or recertified accordingly.
In Asia, as well as in the other regions, imitation and
counterfeit products remain a serious threat to business
in the commercial vehicle and rail vehicle sectors. The
most effective countermeasure to this threat is Knorr-
Bremse’s technical expertise, which on account of the
safety-critical applications of its products is both recognized
and appreciated by customers around the world.
Careful analysis of the Group-wide risk profile has revealed
that no identifiable risks exist that would threaten
the survival of the company or have a substantial impact
on its assets, financial status or profitability. Nor are any
such risks currently expected to arise in the future.
3 3

3 4
Outlook
In the next two years, Knorr-Bremse is expecting to see a
slowdown in the pace of economic growth, accompanied
by further volatility in markets around the world. In
regional terms the markets will probably continue to
show divergent developments. In Europe, the high level
of sovereign debt of certain EU member states represents
a threat to Eurozone stability. In the US, too, the
high level of sovereign debt and its impact on the real
economy are considered critical, so that no major
growth-driving impetus can be expected here. And
while forecasts predict continuing strong growth for the
emerging markets in South America and Asia, here too
initial recessionary trends are making themselves felt as a
result of inflation and restrictive monetary policies.
Against this backdrop, for the next two years we are anticipating
widespread moderate economic growth, albeit
exposed to high risks and uncertainties in the regional
markets. The emerging markets of Asia will
probably continue to account for the lion’s share of global
economic growth in 2012 and 2013, although by no
means on the same scale as in previous years.
In the European rail vehicle market we are currently anticipating
modest growth for the next two years. The rail
freight market is expected to stage a recovery, while a
stable market environment is expected in the passenger
sector. In the UK, three major projects are due to be
awarded in 2012 that will have a decisive impact on the
development of the market. Other growth drivers are expected
to include the modernization of the rail network
in Russia and the expansion of the mass transit sector in
South Africa, not least via the PRASA project. The rapidly
progressing Middle Eastern region will move toward
center stage through the planned creation of a rail network
and the accompanying expansion of the rail vehicle
fleet.
In the European commercial vehicle sector the market is
expected to stabilize in 2012 and 2013. The volume of
trucks built in 2012 will probably be slightly down on the
prior-year level. The period covered by our outlook is unlikely
to see a return to the record level of 2008.
In fiscal 2012, the main challenge for the Commercial Vehicle
Systems division in Europe will be posed by the increasing
globalization of its business. Further expansion
into markets of the future, such as Russia, China and India,
and the shipments this calls for from Europe, along
with the introduction of products that meet specific local
requirements and selective penetration of new fields
of activity should drive the growth of the company‘s
business in the medium term. In all growth projects, the
focus is on increasing customer benefits and extending
our technology leadership, with the quality and reliability
of all products being assigned top priority.
In the North American OEM rail vehicle market, Knorr-
Bremse is anticipating a further increase in the output of
freight cars and locomotives in 2012 and 2013. In the
freight car segment, growth will be driven by two factors:
rising demand for raw materials and growing numbers of
replacement purchases. In the locomotive segment, new
emissions legislation from 2015 means that high purchase
volumes can be expected between now and 2014.
Other contributory factors will include fleet modernization
measures and continuing dynamic export activities
on the part of US locomotive builders. Completing the
picture, there are major mass transit orders pending in
San Francisco and New York City, for example, so that
positive market developments are forecast for the next
few years in this area as well.
Knorr-Bremse is expecting to see further growth in the
North American commercial vehicle market in 2012 and
2013. The aftermarket segment looks set to become increasingly
important over time as market shares in the
OEM sector increase.
In the South American region the rail freight sector is expected
to show further growth, driven by the ongoing
rise in global demand for raw materials. Demand for

freight cars will likely settle at a high level, while demand
for locomotives looks set to show a further increase. In
the passenger transportation sector additional projects
are anticipated, not least in conjunction with the forthcoming
major sports events.
In the South American commercial vehicle sector, truck
output is expected to fall in 2012 compared to 2011 as a
result of the introduction of the EURO 5 emissions standard.
Production volumes will probably pick up again
from 2013 onwards.
In the rail vehicle sector in the Asia/Australia region, the
outlook for 2012 and 2013 shows marked regional differences.
In China future developments remain uncertain
on account of the cutback in investments in the expansion
of the rail network. The mass transit sector could
well contribute to market buoyancy through the planned
placement of orders for 10,000 cars in the next few years.
Further growth is anticipated in India, Australia and
Southeast Asia.
In the commercial vehicle sector, the region as a whole is
expected to show a moderate increase in truck production
in 2012 and 2013. Following on from “over-stimulated”
record production in China in 2010, truck and bus
output returned to normal levels in 2011 and is expected
to show moderate growth in the next few years. The
commercial vehicle markets in India may well remain
stagnant but Japan is expected to continue its positive
development unabated.
Based on the regional backdrops set out above, Knorr-
Bremse expects to see moderate sales growth in 2012
and 2013 in a business environment marked by uncertainty.
Regional developments will be influenced by the
risks for the further growth of the global economy described
above, which differ from one region to the next.
Presuming that the economic picture does not deteriorate
any further, Knorr-Bremse expects earnings to remain
stable. Based on the assumptions made for the
M A N A G E M E N T R E P O R T
Group, the assets, financial status, and profitability of
Knorr-Bremse AG too can be expected to remain stable
– depending on income from the company‘s investments.
In the coming years, Knorr-Bremse will continue to pursue
a policy geared to safeguarding the company‘s longterm
health and in particular will be driving forward the
steps already introduced to expand its capacities in regions
where demand is growing. These include, for example,
an intensive marketing effort in the BRIC countries
and the introduction of innovative products, as well
as the selective expansion of the company‘s fields of activity.
The focus here will remain on boosting customer
benefits and securing the company’s technology leadership.
3 5

Report
AGAINST A BACKGROUND OF CONTINUED ECONOMIC RECOVERY,
KNORR-BREMSE POSTED FURTHER GROWTH IN 2011. This demonstrates
the success of its two divisions – Knorr-Bremse Rail Vehicle Systems and
Knorr-Bremse Commercial Vehicle Systems – in developing and marketing
products that meet highly specialized customer requirements. With a view
to maintaining this capability, the Group continued to innovate during
2011, developing new markets and fine-tuning its corporate processes. Its
global strategy of maintaining a broad base in a wide range of markets and
regions once again earned it excellent ratings from two prestigious rating
agencies.

Rail Vehicle
Systems
2011 saw Knorr-Bremse Rail Vehicle Systems once again increase its sales revenues – by 8%
to EUR 2.19 billion (previous year: EUR 2.02 billion) – thanks mainly to recovery in the North
American freight market and positive developments in Europe during the course of the year.

4 0 R e p o R t | R A I L V e H I C L e S Y S t e M S

Markets
R e p o R t
Developments in the global rail market during the course of the year were satisfactory,
with production of freight cars level-pegging in Europe and rising significantly in North
and South America. In the mass transit, mainline passenger and freight sectors, Knorr-Bremse
was able to conclude a number of important contracts. And in India the company succeeded
in almost doubling sales revenues in both mainline sectors.
Europe
The decline in freight transportation caused by the financial and economic crisis appears to be over for
the time being. During the course of the year, the situation in both the OE sector and the aftermarket
improved for the first time since the end of 2008. Locomotive production rose by some 15%, and the
number of freight cars produced leveled off at around 7,000 units. Knorr-Bremse was able to sign a
number of important contracts, particularly for multiple units and high-speed trains.
North America
During the period under review, production in the North American freight market rose for the first time
since 2008. Output of new freight cars increased from 17,000 to 47,000 units, and Knorr-Bremse was able
to benefit from this positive trend, signing a number of major contracts in the segment. Developments
in the passenger segment were also positive, particularly due to the expansion of existing mass transit
projects and the launching of new ones.
South America
An increase in global demand for raw materials triggered a significant increase in freight transportation
in South America. This, in turn, had an impact on freight car production, which was up more than
100% at 4,300 units. Two major events – the Soccer World Cup in Brazil in 2014 and the Olympic Games
in Rio de Janeiro in 2016 – were the main drivers of efforts to expand mass transit networks.
Asia/Australia
Developments in the rail market in Asia/Australia during the year under review were once again positive,
with strong growth in both the freight and passenger sectors. Despite a slight downturn in the
Chinese market, Knorr-Bremse achieved a number of successes in the Asia/Australia region, the main
drivers being Australia, Southeast Asia and India – where Knorr-Bremse succeeded in almost doubling
sales revenues in the passenger and freight sectors.
4 1

Market Successes
R e p o R t
Knorr-Bremse Rail Vehicle Systems’ reputation as a reliable and innovative supplier enabled
it to conclude a range of contracts with customers all over the world. In North America two
well-known operators ordered braking systems for several thousand new freight cars, and
in China the company equipped its 10,000th metro car
with brakes. Important orders also came from India,
Kazakhstan, the Gulf region and many other markets.
Development of worldwide sales revenues
for the Rail Vehicle Systems division in eUR
millions
2009 1,553
2010 2,024
2011 2,187
Europe
Framework contract for revised LINT platform
In order to meet the new technical specifications for interoperability (TSI) in Europe, Alstom has revised
its popular LINT platform – and Knorr-Bremse is once again involved with this diesel multiple unit for
local transport applications. On the basis of a follow-up framework contract signed during the year
under review, the company will be contributing brake control systems, bogie equipment and air dryers
to future LINT orders. The contract covers some 400 vehicles.
Alstom’s positive experience with Knorr-Bremse systems in the past and its longstanding good working
relationship with the company contributed to the decision to select it to supply the LINT platform once
again. In addition to the products previously supplied, Knorr-Bremse will also be supplying Alstom with
magnetic track brakes.
Door and HVAC systems for Italian high-speed trains
Trenitalia, Italy‘s national railroad operating company, is intending to run more new high-speed trains
in the future. The high-speed car-sets will travel at up to 360 km/h and offer real competition for air
travel. Along with cross-border routes, Trenitalia is focusing on rapid and safe domestic rail connections
in particular.
4 3

4 4 R e p o R t | R A I L V e H I C L e S Y S t e M S
For its high-speed project Trenitalia is aiming to use V300 ZEFIRO trains, also known in Italy as the ETR
1000. The car-sets are to be developed by a consortium comprising vehicle builders Ansaldobreda and
Bombardier. The Italian operating company has placed an order with the two firms for 50 eight-car
sets to be delivered over a five-year period starting in 2012. Knorr-Bremse is also on board and will be
equipping the new trains with innovative door and HVAC systems.
Like the advanced design of the trains themselves, the E3D door system to be supplied by Knorr-
Bremse subsidiary IFE will set new standards in the high-speed train segment. Despite its low weight,
the door system nevertheless presents impressive levels of pressure tightness and flexibility in service.
For example, the clear opening widths of 800-1,600 mm in various types of vehicle can be realized
with the same door concept.
The HVAC systems are being entirely sourced from Knorr-Bremse’s Spanish subsidiary Merak. To ensure
pressure tightness and guarantee comfort levels, several subsystems are required: roof-mounted compact
HVAC saloon units, temperature sensors, fan heaters (in vestibules and toilets), oxygen sensors
and the entire air ducting system.
First order for LEADER in Europe
Locomotive manufacturers Vossloh Spain have placed an order with Knorr-Bremse subsidiary Sociedad
Española de Frenos for 30 units of the driver assistance system LEADER.
LEADER is a sophisticated train management system that helps locomotive engineers drive their trains
as economically and safely as possible by displaying recommendations on how to save fuel and minimize
in-train forces. The system enables fuel savings and thus emissions reductions of up to 15%.
LEADER helps train operators reduce energy consumption by calculating an optimum speed profile
for every stretch of track. It also assists schedule compliance.
Along with track and topography profiles, the system takes account of the schedule and the specific
technical data of the locomotives and trains, drawing on this data to deliver energy-optimized train
handling recommendations.
In all, Vossloh is to equip 15 Euro 3000 diesel locomotives destined for Israel Railways with LEADER. The
locomotives will be working in passenger transportation and each of the two cabs will feature a
LEADER unit. The systems are slated for shipment to Vossloh in the first quarter of 2012. In June 2011,
a locomotive and control car already in service with the operator were equipped with two LEADER
units by way of pre-series installation. This way the engineers have a chance to familiarize themselves
with the system and Knorr-Bremse has an opportunity to acquire initial long-term experience with it
under real conditions in Israel.
Systems for Moscow metro
Absolute reliability is crucial for the vehicles operating on Moscow metro. In very low winter temperatures
more than 9 million people use it at peak times – considerably more than it was designed
to cope with. As a result, trains enter and leave the stations at very short intervals. And because
some of the metro is above ground, they also have to operate at extremely low temperatures.

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During the year under review, Knorr-Bremse was selected on the basis of its experience in the Russian
rail vehicle market to supply various systems for new metro trains being built by the two Russian
companies Metrowagonmash and OAO TVZ. Factors that clinched the deal for Knorr-Bremse
included the low overall cost, the high level of aftermarket service offered by local personnel and
Knorr-Bremse’s plan to manufacture the systems directly in Russia. The contracts cover braking,
door and HVAC systems, as well as resistors and high-speed circuit breakers from Knorr-Bremse’s
subsidiary Microelettrica.
Locomotive braking systems for extremely low temperatures in Kazakhstan
As part of an upgrade and expansion of its freight transportation system, Kazakhstan is purchasing a
large number of new locomotives. The state railway system recently placed an order with French vehicle
builder Alstom for 200 KZ8A double locomotives for freight trains and 95 locomotives for mainline passenger
operations.
Knorr-Bremse is involved in supplying complete locomotive braking systems for the initial order of 25
double locomotives from Alstom – the first time it has developed such a system for the Russian GOST
standard. The company also has a further option to supply systems for the remaining 175 vehicles, which
will be built by a joint venture between Alstom, Kazakhstan State Railways and Transmash Holding. Contracts
for the 95 mainline passenger train locomotives are due for signature during 2012.
Knorr-Bremse was once again able to draw on its extensive experience with projects in Russia involving
the development of components for extremely cold conditions. The requirement for braking systems to
withstand temperatures down to minus 55 °C is a huge challenge. Working in some cases with suppliers,
Knorr-Bremse had already developed new, cold-resistant plastics and elastomeres capable of functioning
under such extreme conditions. Cast parts also had to be made largely with new materials. The requirements
in terms of tolerances for moving parts were also extremely high, as temperature changes
cause different degrees of expansion of the materials involved.
The bogies are being equipped with Type PEC7 block brakes, and the BP Compact system – including
slide protection with valves adapted for the GOST market – is being used for the electronic HL pressure
control.
The new KAB60 distribution valves specially developed by Knorr-Bremse for Russian freight trains will
also be supplied for the new locomotives. Even though they are installed inside the locomotives, these
systems are also capable of withstanding temperatures down to minus 50 °C or below. The large number
of electric locomotives involved in the project clearly shows the huge expansion of the national rail system
being planned by Kazakhstan State Railways.
Knorr-Bremse Systems for Deutsche Bahn
In April 2011, Deutsche Bahn signed a framework agreement with vehicle builder Bombardier for the supply
of up to 200 diesel locomotives for mainline passenger and freight operations. The agreement, which
runs till 2020, involves locomotives based on the Bombardier TRAXX platform. Instead of one large diesel
engine, they will have four innovative industrial diesel engines designed for speeds of up to 160 km/h. The
first twenty locomotives – due for delivery by mid 2013 for service on Deutsche Bahn’s regional passenger
network – will be fitted with Knorr-Bremse systems that include the VV270-T oil-free compressor, the MBS
locomotive brake control system and the RZS compact brake caliper with cast iron disc.
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Braking systems for new Hyundai Rotem locomotives
As part of a modernization project, the Turkish state railway operator Türkiye Cumhuriyeti Devlet Demiryollari
(TCDD) is planning wide-scale electrification of the country’s rail network. As a first step, 80 or more
newly developed electric diesel locomotives ordered from Hyundai Rotem are to go into service.
Knorr-Bremse is involved in the project and will be equipping the locomotives with complete braking
systems including the brake control system, VV270-T oil-free compressors, compact brake calipers and
wheel brake discs. It is no coincidence that Knorr-Bremse was chosen to supply these systems – the company
has been working with vehicle builder Hyundai Rotem and operator TCDD for many years. Delivery
of the braking systems is slated for the period from mid-2012 to the end of 2013.
Important orders for Merak from Alstom and Bombardier
During the year under review, Knorr-Bremse’s Spanish subsidiary Merak delivered on two important
orders in the European rail market: HVAC systems manufactured by Merak were installed in Regio2N
double-decker trains ordered by French operator SNCF from the Canadian conglomerate Bombardier
and also in Régiolis regional trains, for which SNCF has signed a supply contract with French manufacturer
Alstom.
The Régiolis regional trains consist of low-floor 4- and 6-car trainsets that offer high levels of comfort
thanks to their broad aisles and colorful, bright interiors. Of a total of 166 trainsets ordered, 100 are being
equipped with Merak HVAC systems. By the end of 2011, Merak had already delivered 51 of these for
installation in the pre-series trains. The Régiolis trains are destined to replace older trains in the SNCF
fleet and also help expand rail services in some of the French regions.
Bombardier’s Regio2N double-decker trains consist of six, seven or eight cars that feature an articulated
architecture and wide connectors, which create transparency and offer easy access throughout the

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length of the train. In the year in question, Merak worked on developing the HVAC systems for the first
batch of 129 trains ordered. Delivery is expected to run until 2015.
Innovative freight car braking system for the United Arab Emirates
The United Arab Emirates have started to invest in a country-wide rail network called “Etihad Railways“
which is intended to link the UAE with other countries in the Middle East. The first step involves building
a line some 270 km in length, on which 110 freight cars will carry pure sulfur granulate between the gas
fields in the Western Desert region of Shah and the port of Ruwais. Two subsequent phases in the program
will involve expanding the network to more than 1,000 km. The first line is scheduled to go into
operation early in 2014.
As part of the project, the state operator Etihad-Rail has ordered seven diesel locomotives from U.S.
manufacturer EMD and 240 bulk freight cars from CSR in China. All the locomotives and freight cars will
be equipped with a state-of-the-art electronic AAR braking system – the EP60 – from New York Air
Brake.
New York Air Brake will also be providing a new, innovative technology that enables the locomotive
engineer to open and close the freight car loading doors by remote control and also to monitor their
status via the main control line of the EP60 system. In addition, wireless sensors installed in the freight
cars will alert the locomotive engineer to hot boxes or derailment further down the train.
North and South America
New York metro to test HVAC systems
New York City Transit (NYCT) is operational 24 hours a day, 365 days a year. It is one of the largest and most
complex metro systems in the world. Anyone who wants to supply systems to NYCT must go through a
lengthy qualification process that includes in-service testing. Knorr-Bremse’s braking systems have already
passed this test. In the year under review, Knorr-Bremse subsidiary Merak began preparing for the qualification
process for HVAC systems. The tests to prove the reliability of the Merak systems are due to start in
the summer of 2012.
Framework contract with Trinity Rail Group
In the year under review, Knorr-Bremse subsidiary New York Air Brake (NYAB) concluded a framework
agreement governing the supply of braking systems to Trinity Rail Group (TRG), one of the largest
freight car builders in North America, with a market share of approximately 35%. Under this agreement,
NYAB will supply at least 55% of the braking systems installed at TRG up to the end of 2014. In 2011 it
supplied some 14,000 systems.
This makes NYAB the first choice braking system supplier to TRG within what is a long-standing partnership
with this OEM. Along with the mutual trust established over the years and the strong focus on
customer service among NYAB employees, the main arguments in clinching the agreement were the
reliability and life cycle cost of the NYAB systems. Given that TRG is changing its business model to focus
more on leasing freight cars, total cost of ownership considerations played a major role in the company’s
purchase decision.
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High volume of orders for passenger trains from North and South America
North American company Knorr-Bremse Corporation can look back on a successful year, during which it
received a large number of orders, particularly from the passenger rail sector. The biggest of these came
from Montreal Metro, for which Knorr-Bremse is to supply air treatment systems, bogie equipment and
HVAC systems to be installed in 468 new trains being built by a consortium consisting of Bombardier and
Alstom. Knorr-Bremse also received orders from São Paulo to equip 378 maglev cars, from American train
operator Amtrak for equipment for 70 e-locomotives and from Toronto for systems for a large number of
new metro cars.
New York City Transit also placed a major order with Knorr-Bremse: during the course of the year in question
the company began deliveries of 352 Type VV120-T oil-free compressors. As this is the only oil-free
compressor currently licensed for North America, Knorr-Bremse is expecting further significant orders
during the course of the coming year.
Although there are few signs of any major investment in the North American high-speed market, the
mass transit infrastructure was expanded during the past year. Many cities are planning new lines or expanding
existing networks, and Knorr-Bremse received orders from Houston, Atlanta and Minneapolis.
After supplying streetcars for Minneapolis with braking, door and HVAC systems some 10 years ago, the
company received a further order for braking systems for 59 street cars ordered by Minneapolis from
Siemens.
Major orders from TTX
U.S. freight car provider TTX owns a fleet of more than 200,000 freight cars of many different kinds. In
the year under review, the company continued to expand and for the majority (approx. 80%) of its
newly ordered cars opted for the DB-60 braking system from Knorr-Bremse’s North American subsidiary
New York Air Brake (NYAB).
A breakdown of the orders shows that some 2,700 braking systems are to be provided for freight cars
from OEM National Steel Car and around 1,000 for cars to be built by Gunderson of Portland, Oregon.
Initial systems were shipped at the end of the year under review. Shipments to Gunderson are scheduled
for completion in the second quarter of 2012, with the final deliveries to National Steel Car to be
made one month later.
EP60 for the world’s biggest producer of iron ore
The world’s biggest producer of iron ore, the Vale company of Brazil, is to equip its latest ore train with
the EP60 braking system specially developed by Knorr-Bremse for very long and heavy freight trains.
The electronic transmission of the braking signal in the EP60 system means that the brakes are applied
or released simultaneously along the entire train.
This system prevents a situation arising in which the brakes on the front cars are already being applied
while the rear cars are still unbraked and pushing forwards. A similar effect occurs when the brakes are
not released simultaneously and the rear cars hold the train back until the brakes are fully released.
Thanks to the faster transmission of the command data, the EP60 system eliminates this problem, leading
to a more even braking profile, shorter stopping distances, less wear and tear, and lower fuel consumption.

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The newly equipped train comprises 330 cars and is hauled by four locomotives. With an axle load of
37.5 tons, each car can take a payload of 150 tons, making them the biggest in the world. The train is
due to enter service in 2012.
Mass transit orders from Brazil
Two substantial orders enabled Knorr-Bremse to maintain a strong position in the Brazilian mass transit
market in the year under review. First the São Paulo Metro placed an order with vehicle manufacturer
CAF for 26 new car-sets comprising a total of 156 cars. The trains are destined for metro line 5. Knorr-
Bremse is manufacturing the air supply systems, brake control units, bogie equipment and HVAC systems
for the new vehicles.
Another order that went to CAF was for 60 cars for the Recife Metro. In this case, Knorr-Bremse is providing
the air supply, brake control systems and bogie equipment. One of the main reasons why the orders
were placed with Knorr-Bremse was that much of the content of these systems is manufactured locally
in Brazil. In addition, Knorr-Bremse products stand for absolute reliability and very high quality, and
these factors also played an important part in the purchase decision of the Brazilian customers.
Asia/Australia
Major order for metro project in Beijing
Knorr-Bremse has been awarded the contract to equip another metro line in Beijing in what is the
largest single order in the metro sector for Knorr-Bremse in Asia. The company is to supply the braking
systems for 64 eight-car metro units built by Chinese manufacturer CNR Changchun Railway Vehicles
Co. Ltd. (CRC), destined to operate on the new metro line 6 in Beijing. This latest order has enabled
Knorr-Bremse to further strengthen its market position in the high-growth metro segment in China.
The order includes the supply of EP2002 brake control units, Type VV120 compressors and brake calipers
for all 512 cars of the new multiple units. The components are to be manufactured at Knorr-
Bremse’s Chinese plant in Suzhou. Metro line 6 links the eastern and western suburbs of Beijing, covering
almost 43 kilometers and serving 27 stations. The first segment of 33 kilometers is due to become
operational in 2012. The second construction phase is scheduled for completion in 2015.
This further order is the next step in the successful partnership between Knorr-Bremse and CRC in
China. Back in 2009, Knorr-Bremse won four orders for the metro network in Beijing and to date has
supplied the brake equipment for seven metro lines in the Chinese metropolis.
10,000th Chinese metro car equipped
Knorr-Bremse has further underpinned its strong position in the Chinese market. The order to equip
240 cars for metro line 1 in Kunming, the capital of the Chinese province of Yunnan, ensured that
Knorr-Bremse was able to supply the braking system for its 10,000th metro car in China. Total incoming
orders in the Asian metro sector in the year under review covered equipment for more than 2,000
cars.
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7,000 of the 10,000 metro cars with Knorr-Bremse brakes are in service in the three major conurbations
of Shanghai, Beijing and Guangzhou alone. Outside the major conurbations, Knorr-Bremse has also
supplied systems for the metro networks in numerous other Chinese cities, including Shenzhen, Nanjing,
Tianjin, Hangzhou, Shenyang, Suzhou, Dalian and Xi’an. Given the planned expansion of the local
mass transit networks in over 30 Chinese cities, Knorr-Bremse is anticipating further orders for the
Chinese metro sector in the medium term.
Knorr-Bremse upgrades Indian freight car brakes
The Indian national rail operator, Indian Railways, has launched a staged upgrade of its freight car fleet,
installing modern bogie brakes that are easier to maintain, more efficient and more reliable.
By the end of the year under review Knorr-Bremse India had shipped more than 10,000 bogie brakes
to various vehicle builders for installation in new cars. At the same time Indian Railways started the
process of retrofitting its existing fleet with the new systems.
The braking systems were developed in cooperation between Knorr-Bremse India and Knorr-Bremse’s
North American subsidiary New York Air Brake (NYAB). Along with modern bogie brakes, the Knorr-
Bremse plant in India also continues to manufacture conventional brakes, but demand is progressively
shifting toward the more technically advanced bogie brakes.
Supplying the Japanese high-speed train market
In the year under review, Knorr-Bremse supplied a large proportion of the braking components for the
23 sets that make up the new E5 generation of Shinkansen trains. These high-performance brakes bring
the high-speed trains operated by Japanese railroad company JR East safely to a halt from speeds of up
to 360 km/h. To this end, Knorr-Bremse developed an ultra-compact lightweight type of brake caliper
based on its tried-and-tested modular design. The brake discs and flexible Isobar sintered brake pads
were specially designed to cope with the extreme demands of possible emergency braking in the
event of an earthquake.
The new E5 generation is rapidly becoming a genuine competitor for air travel. On the “Tohoku” Shinkansen
line, the trains cover the route from Tokyo via Hachinohe to Aomori on the east coast of the
main island of Honshu in less than three hours. This meant increasing operating speeds from 275 to
320 km/h, which called for a much more powerful braking system. Some of the brake equipment
supplied to JR East in 2011 is already in successful operation on scheduled services.
Braking systems for coal wagons for Indonesia
Indonesia’s largest state-owned railroad operator, PT. Kereta Api Indonesia (Persero), has ordered 1,200
freight cars for the transportation of coal from Chinese rail vehicle manufacturer Baotou Beifang
Chuangye Co. Ltd. Knorr-Bremse won the order to supply the braking systems.
Following successful completion of negotiations, a supply contract for braking systems for the 1,200
coal wagons for Indonesia was signed in April 2011. A delegation from Baotou Beifang Chuangye Co.
Ltd. visited Knorr-Bremse’s Suzhou site in China for the signing ceremony. The guests were officially
welcomed by the COO of Knorr-Bremse Asia Pacific (Holding) Ltd., Domingo Mendieta. This project
marks a milestone for Beifang Chuangye in its strategic drive to access additional markets in Asia. Over

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the next few years, Beifang Chuangye is aiming to secure another order for between 7,000 and 10,000
freight cars for the Indonesian market.
Australian operators opt for Knorr-Bremse
Knorr-Bremse benefited during the year in question from growth in the Australian rail freight market,
supplying braking systems for some 2,000 freight cars destined for the country’s railroad system. The
main growth driver was the ongoing expansion of iron ore and mineral mining, particularly in the north
and west of the country. The biggest project in 2011 involved an order by BHP Billiton Iron Ore from
manufacturers Bradken and Qiqihar Railway Rolling Stock Co. Ltd. (QRRS) for 720 freight cars equipped
with Knorr-Bremse EP60 or TMB60 braking systems. Over the course of the year Knorr-Bremse supplied
braking systems for a total of 1,946 freight cars in Australia.
The company was also successful in securing new orders including braking systems for 1,022 freight
cars for the company Iron Ore and 360 freight cars for BHP Billiton Iron Ore for delivery over the next few
months. Knorr-Bremse’s activities in Australia involve close cooperation with its North American subsidiary
New York Air Brake (NYAB). For example the two companies have started jointly developing a braking
system for the narrow-gauge railroads that are transporting increasing volumes of coal in the Australian
state of Queensland.
Sigma overhauls HVAC systems in Sydney
370 Tangara Electric Multiple Units from the original fleet dating back to 1980 are currently in service
with City Rail in Sydney, Australia. Because the HVAC systems in these popular urban trains were not
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functioning reliably, particularly in high summer temperatures, Knorr-Bremse subsidiary Sigma
Coachair was tasked with bringing them up to the latest industry standards.
After a detailed examination of operational failures, a review of the technological options and – in particular
– consideration of City Rail’s specific fleet requirements, the design of the HVAC systems and the
maintenance concept were completely upgraded. Following successful field testing, Sigma Coachair
replaced large numbers of HVAC components – some of which were around 30 years old – with new
ones during the course of 2011. Amongst other things, compressors, heat exchangers, thermostats,
switches and air intakes were replaced and refrigerant circuits and wiring layouts redesigned.
The aim throughout was to improve the reliability of the units, increase maintenance periods and extend
the life of the HVAC systems. Additional temperature sensors and a new automatic data logging
system will also make it easier to identify overhaul requirements, plan maintenance work and avoid
costly system failures.
Systems for new metro trains in Delhi
The metro system operated by Delhi Metro Rail Corporation (DMRC) has a total of 13 lines. As part of its
program of modernization and expansion, DMRC recently increased the size of its order for new trains
from Indian manufacturer Bharat Earth Movers Limited: instead of the 70 trainsets originally ordered
each having four cars, they are now to be delivered with six.
This has benefited Knorr-Bremse, as the company is supplying the electro-pneumatic braking systems,
bogie equipment and door systems. The contracts were signed in late summer 2011 and the first deliveries
are scheduled for spring 2012.
CCB II deliveries for Indian diesel locomotives
In November of the year under review, Knorr-Bremse India delivered the CCB II braking systems for the first
50 new diesel locomotives that the Indian State railway system is adding to its fleet. The delivery process
will run continuously until the year 2013.
CCB II is the standard brake control system for the AAR market and therefore for North America as well. For
India, Knorr-Bremse has adapted the North American CCB II system to meet the special requirements of
Indian operations.
LEADER AutoPilot for Rio Tinto
Knorr-Bremse’s LEADER system is a unique locomotive instrumentation and control technology that reduces
fuel consumption while effectively managing trip time and minimizing in-train forces. LEADER operates
in real time, evaluating the state of the train and determining driving strategies to improve the
overall energy efficiency of the train movement. LEADER has proven capable of providing fuel savings of
between 8 and 12%, reducing in-train force events by 50% and managing schedules to improve network
throughput.
Knorr-Bremse is currently engaged in six deployments of LEADER with key account customers around the
globe, focused on heavy haul freight applications. The most ambitious project for LEADER is for the mining
group Rio Tinto in Western Australia, where the goal is to achieve driverless trains by 2015, controlled by

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LEADER. There are significant engineering developments necessary to reach the operational goal of driverless
trains but the potential operational improvements are compelling.
Rio Tinto’s application of LEADER extends the system’s capability from advising to full control – this has
been titled LEADER AutoPilot. The system includes active communication links to the network control
system and to the onboard locomotive control systems to directly actuate train commands. LEADER will
optimize train movements including multi-locomotive consists and ECP braking systems.
The system’s core software is capable of this type of control today, but currently issues only recommendations
to the locomotive driver. To meet rigorous engineering requirements and the safety levels necessary
for driverless trains, the entire software program is being rewritten to CENELEC standards. The Rio Tinto
project started in 2011 with a series of studies and laboratory exercises. LEADER will deploy at Rio Tinto in
assistant mode in 2012 and evolve to increasing stages of automation during the 2013/2014 period until
driverless trains controlled by LEADER are achieved.
Prizes and awards
European Railway Award for Knorr-Bremse
The European Railway Award is presented annually by the Community of European Railways (CER), the
Association of the European Rail Industry (UNIFE), and the European Rail Infrastructure Managers (EIM)
in recognition of outstanding services to the railway sector. During the year in question, Dr. Stefan Haas,
Head of Innovation and Technology at Knorr-Bremse Rail Vehicle Systems, was presented with the
Award in the “Technical Achievements” category for the development, industrialization and successful
introduction of the linear eddy-current brake.
The French physicist Léon Foucault first described the principle of the linear eddy-current brake back in
the 19th century. However, before Knorr-Bremse was able to launch an eddy-current brake for rail vehicles
in commercial operation there were numerous technical challenges to be resolved, not least in
terms of braking force limits, signaling compatibility, power supply, availability, and mechanical installation
in the bogie. Today the linear eddy-current brake offers an ideal complement for conventional
friction brakes and regenerative brakes. It operates independently of any wheel-rail adhesion, is not
subject to wear and tear and applies the braking force evenly and without delay.
EEF Future Manufacturing Award
In 2011 Knorr-Bremse Rail Systems (UK) Ltd., based in Wiltshire in the south of England, won the “Future
Manufacturing Award” presented by the Engineering Employers Foundation (EEF). The EEF awards are
designed to recognize innovation and excellence in the fields of manufacturing and technology. Knorr-
Bremse received the award in recognition of its complete redesigning of the production cell and process
for the manufacture of its EP2002 brake control system.
Due to the rise in worldwide demand for the EP2002 system – for metro trains in China and Dubai, for
example – Knorr-Bremse’s UK subsidiary needed to increase production capacity and output. In totally
revamping the EP2002 production process, the company not only focused on increasing output but
also adopted a far-reaching approach designed to minimize waste and potential error in the manufac-
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turing process as a whole. As well as enhancing productivity, the redesigned cell also provides a better
working environment for the employees and at the same time raises the quality of the product even
further.
Three awards for Knorr-Bremse UK
Knorr-Bremse Rail Systems (UK) Ltd. received three awards from Siemens during the course of the year
in question. The “Going the Extra Mile“ award recognized the company’s problem-solving skills and
rapid reaction times as well as the excellent partnership between Siemens and Knorr-Bremse. And the
“2011 Award for Class 444 Overhaul“ went to Knorr-Bremse in two areas: Knorr-Bremse Rail Systems received
it for its work as a partner in overhauling braking systems, and Sigma (Burton) received it for the
overhaul of HVAC systems.
Knorr-Bremse Poland wins TRAKO award
The TRAKO 2011 International Railway Trade Fair took place in Gdansk, Poland, over a period of four days
in October. During the course of this important European event Knorr-Bremse Poland was presented
with the “TRAKO 2011 Trade Fair Polish Business Locomotive 2011 Award,” one of the most prestigious
awards in the Polish rail industry. Every year since 2007, the trade journal Rynek-Kolejowy has singled
out companies whose products and innovations have made a significant contribution to the Polish rail
market. Presenting the award to Jacek Bilas, Managing Director of Knorr-Bremse Poland, the managing
directors of the journal paid tribute to the role played by the company in helping to develop the Polish
market.

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Products
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During the course of 2011, Knorr-Bremse Rail Vehicle Systems launched new, innovative
products in many areas with the aim of making rail transportation even more efficient, safe
and environmentally friendly. In Russia, a distribution valve specially developed for the
country’s freight transportation system achieved approval, and in Germany, Knorr-Bremse
collaborated with a partner to develop a system that paves the way for a condition-dependent
approach to maintenance.
Tests start on KAB60 control valve in Russia
In terms of territory, Russia is the world’s largest country. Every day, huge volumes of freight, including
many raw materials, are transported via the country’s 85,500 km of railroad track – and the rail network
is constantly being expanded. As such, the country offers a promising market for Knorr-Bremse. At the
end of October 2011, the KAB60 control valve specially developed for the Russian freight market received
official approval. Knorr-Bremse was initially commissioned to manufacture 1,500 of the valves
for field-testing. The valves are compatible with the components used in the Russian market and during
overhaul the current valves are replaced with the new ones, enabling them to be tested under real
conditions.
Official approval was preceded by several years of development work on ensuring the valves’ ability to
function reliably at ambient temperatures down to minus 55 °C – conditions under which valves manufactured
for other markets would quickly reach the limits of their capabilities. The new KAB60 valve
developed by the Knorr-Bremse engineers can actually function down to minus 60 °C. Another priority
was durability: whereas Russian valves currently have to be overhauled approximately every two
years, laboratory tests showed that the Knorr-Bremse valves could function for six years – considerably
reducing lifecycle costs. Knorr-Bremse also offers considerable advantages in terms of reliability and
operation. The brakes can be controlled more rapidly and precisely, with reduced variation of brake
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cylinder pressure and shorter fill and release times. This makes it easy to operate the relatively long
trains used in Russia.
Once the initially limited quantity of Knorr-Bremse valves have demonstrated their reliability during
two winter periods, restrictions can be lifted and the approval process completed, putting series production
of the valves – planned to take place in Russia itself – firmly on the horizon.
New sand separation for HVAC systems
In desert regions, airborne sand and dust particles represent a serious problem when it comes to ensuring
high air quality on board trains. Knorr-Bremse subsidiary Merak has responded by engineering an
efficient sand separation system for HVAC systems that removes the sand and dust from the ambient
air uptake.
The new filtration system is based on three cleaning stages. First of all a fresh air grille prevents large
particles or water droplets from entering the system. The air is drawn in from the more favorable side of
the train depending on the wind direction and the direction of travel. In the event of a sandstorm, all of
the grilles on both sides can also be closed. In the next step the air is directed through several cyclonic
filters so that the sand is separated out and only clean air enters the system. A turbo ventilator removes
the sand from the cyclonic filters automatically, keeping maintenance costs low. In the third and final
stage the air passes through several filter bags with different size filters, removing any remaining particles.
The result of this filtration architecture is that only entirely clean air enters the HVAC system, hugely
improving air quality on board the train.
Monitoring the sanding process
Trains and streetcars use sand to increase the traction between wheel and rail and ensure safe braking
even in poor weather conditions. To ensure that the sanding system always functions properly, it has to
be checked – usually by the driver – every time the train goes into service. Now Knorr-Bremse has developed
a sensor-based system that enables this checking routine to be carried out automatically in a
few seconds. The sensors are currently being used on urban trains operated by the Berlin S-Bahn.
The sand flow sensor is based on a principle developed 20 years ago that involves measuring the induction
effect triggered by the electrostatically charged sand particles as they pass through a conductor
loop. The system is used in industry, for example, to measure the mass flow of coal dust in power stations,
where there is a need to detect blockages in the transport pipes.
Knorr-Bremse Rail Vehicle Systems has now adapted this principle for use in rail vehicles. Sensors monitor
the volume of sand being blown between the wheel and the rail through the sand pipe, and if they
identify any malfunctions in the sanding process, the driver is informed via a cab display. Thanks to the
new automatic sensor-based monitoring system, lengthy manual checking of the sanding system is no
longer required – saving time and helping make train operations more efficient.

R e p o R t
Shared platforms for train simulators
Up till now, the train simulator markets served by New York Air Brake (NYAB) and Sydac were clearly
separated. With its TDS model series, NYAB developed and supplied an excellent platform for simulating
extremely long freight trains that is currently used above all in NYAB’s home market of North
America but also in similar markets elsewhere. Sydac, on the other hand, supplies simulators for passenger
trains and is well known for its highly realistic, high-definition displays of tracks, controls and
passengers. The company has a strong presence in Australia, Asia and the UK.
The successful merger of the two companies’ platforms means that Knorr-Bremse is now in a position
to combine the advantages of the two systems on a modular basis. Thus, for example, the high-definition
display offered by Sydac’s passenger train simulators can be integrated into NYAB’s TDS simulators.
And conversely, NYAB’s highly complex train models can be easily reproduced on Sydac simulators.
This means that when operators are setting up customized simulators they can choose from a wide
range of new options, making it easier to meet their specific demands. A further advantage is the fact
that their regional supplier can now offer expertise in all types of simulator.
In addition to enabling a wider range of simulators to be offered, integration of the two platforms has
also enhanced their quality. Because the joint platform consists entirely of tried-and-tested modules
from both systems, overall quality has been enhanced and duplication of effort avoided.
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On track for greater efficiency
Microelettrica Scientifica S.p.A., a member of the Knorr-Bremse Group based in the Italian town of
Rozzano, develops and manufactures ecometers for measuring electricity consumption on trains, identifying
potential savings and ensuring maximum operating efficiency. To make sure the train operates
at maximum efficiency, the energy consumption on the various networks has to be precisely measured
and the data passed from the train to the operator’s control room. For some time, systems such as
Eurometer, Integrameter and City Metering have offered reliable consumption data capture and management.
But the new ecometer from Microelettrica Scientifica now combines all these functions into
a single system.
The ecometer measures the current and voltage on both AC and DC networks and can therefore be
used on all European systems to calculate the vehicle’s consumption in relation to the current available
from the catenary system. Combined with the Knorr-Bremse driver assistance system LEADER, Sydac
simulators and appropriate consumption data management, it constitutes an important element in a
comprehensive energy saving system for trains.
Weighing in at less than 30 kg and with a height of no more than 480 mm, the Ecometer can be swiftly
installed by a technician and is designed to be maintenance-free. With a mere 0.2% deviation it is particularly
accurate, and its modular design makes it very good value for money. Data transfer can take
place according to the needs of the particular operator via optical fiber cable, existing loops or radio
frequency.

R e p o R t
Knorr-Bremse launches Ecodesign
From the point of view of both manufacturers and customers, the efficient use of resources is an important
driver of innovation in the rail vehicle sector. The Ecodesign project launched by Knorr-Bremse in
2011 aims to further develop resource-efficient product solutions for rail vehicles. Specific products are
selected on the basis of environmental criteria – for example energy consumption – and their impact
on the environment during the entire lifecycle is analyzed with a view to improving product sustainability
and minimizing overall energy requirements, for example by intelligent design and optimum
operational management.
In the course of various pilot projects, Knorr-Bremse looked at the materials it was using, focusing mainly
on the scope for utilizing lightweight materials for certain components with a view to minimizing the
vehicle’s overall energy requirements. Another aspect examined was the energy required to manufacture
and process the products. Here, again, the idea was to reduce the use of resources to a minimum
– while always ensuring the safety, quality and functionality of all products.
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6 2 R e p o R t | R A I L V e H I C L e S Y S t e M S
Intelligent monitoring
Knorr-Bremse and SKF, a specialist in rolling bearings and industrial monitoring
systems, have joined forces to develop COMORAN, a system that combines
safety monitoring for rolling stock sub-systems with comprehensive condition
monitoring. The European TSI High Speed directive that came into force in
February 2008 defines the requirements for monitoring critical safety-relevant
systems. Damage to wheelset bearings, derailment, unstable running or hot
axle boxes must be reliably identified and immediately reported to the locomotive
engineer. For some years
now, Knorr-Bremse systems have
provided these functions in highspeed
trains.
Reducing lifecycle costs
It is not just in terms of safety that the demands
made on rail systems are growing. Fleet operators
are increasingly calling for preventive diagnosis
of wear and damage so as to prolong the
life of components. In collaboration with SKF’s
Condition Monitoring Center, Knorr-Bremse developed
COMORAN (Condition Monitoring for
Railway Applications) to meet this demand.
COMORAN uses data already available from the
train’s monitoring functions for an on-line diagnostic
system that helps identify the first signs of
wear or damage.
The system facilitates long-term condition monitoring
of critical components to identify wear or
damage, with operational data being relayed to
the maintenance specialists to enable them to
carry out preventive maintenance throughout
the system’s entire life.

Cooperation between Knorr-Bremse and SKF did
not come about by chance. Knorr-Bremse has
decades of experience in control and monitoring
systems for rail vehicles, and SKF is a globally
recognized leader in the field of industrial monitoring
and machine diagnostics.
Cost-effective
In order to offer a cost-effective system it makes
sense to combine the required functions with
systems already installed in the vehicle. Integrating
the system with the existing brake control
and wheel slide protection system has obvious
advantages: combining various individual systems
reduces complexity and improves overall
system availability. Extra power supplies, communication
interfaces and pulse generators are
not required. Information already generated by
the wheel slide protection system – for example
rotation speeds – can be drawn on directly by
the diagnostic system.
Permanent diagnostic function
COMORAN consists of two main components –
an additional 19” electronic monitoring board
that can be integrated into the existing Knorr-
Bremse ESRA system for brake control and wheel
slide protection, and combined multifunctional
sensors that measure revolutions, temperatures
and acceleration, for example on axle bearings,
transmissions or motors.
The interplay of the various components is best
illustrated using the example of the axle bearings,
whose replacement represents a significant
R e p o R t 6 3
cost factor in rail vehicle maintenance. COMORAN
axle bearing diagnostics enable the impulse
generators for the wheel slide protection system
and the additional acceleration data from the
wheelset bearings to be used to continuously
evaluate speed-related bearing frequencies. The
frequency spectrums thus identified make it
easy to differentiate between intact bearings
and worn or faulty ones. Tools specially developed
by SKF enable such defects to be portrayed
graphically in the form of a trend analysis so that
future performance can be predicted with maximum
accuracy. A configurable parameter database
ensures that bearings of any type or from
any manufacturer can be monitored. Similar options
exist for monitoring drive components,
motors, shafts and clutches.
The same sensors can be used to monitor wheel
treads and flats. Here, too, using the same interfaces
and sensor signals as the brake control system
saves extra cost.

Aftermarket
R e p o R t
Knorr-Bremse’s Rail Services bring together all the company’s aftermarket services for brakes
and onboard systems into a single flexible program focused on efficiency, comfort, delivery
reliability and spare parts availability. As part of the program the company has further developed
its aftermarket logistics – an effort that paid off when it won a prestigious service
contract from Russia.
Servicing the “Peregrine”
Bringing a train to a safe halt from 250 km/h calls for a high-performance braking system. But even the
best brakes in the world cannot be guaranteed to work safely unless they are regularly serviced.
Siemens, the company responsible for servicing the eight Velaro RUS high-speed trains operating in
Russia, has opted to put this task in the hands of Knorr-Bremse, and has awarded the company a
30-year contract for full servicing of the braking systems.
“Sapsan,” which means “peregrine” in Russian, is the name given by Russian railway operator RZD to the
Velaro RUS high-speed train that serves the important line between Moscow and St. Petersburg. Despite
calling at several halts on the way, the Sapsan covers the 650-odd kilometers in a mere three
hours and 45 minutes.
One of the reasons Siemens awarded Knorr-Bremse the contract was that the company was able to
offer its own local service center in St. Petersburg. This is already at the planning stage and will enable
the company to carry out all the necessary technical work in modern workshops equipped with stateof-the-art
assembly and testing technology operated by a team of highly trained specialist engineers.
After it comes on stream in August 2014 the facility will be used over a period of 30 years to overhaul
the air supply and brake control systems four times and the bogie equipment five times.
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6 6 R e p o R t | R A I L V e H I C L e S Y S t e M S
With effect from 2011, the contract also includes checking safety valves and pressure switches and
overhauling the Isobar brake pads in addition to the regular overhauling of brake components. It also
involves supplying Knorr-Bremse original spare parts and providing regular training in braking systems.
If required, Knorr-Bremse specialists will travel to Russia to hold training courses in braking systems
and commissioning for the Velaro RUS operators and Siemens employees.
1,000th screw compressor block overhauled
In the fall of 2011, Knorr-Bremse overhauled its 1,000th compressor despite having only launched the
service three years ago. To avoid compressor failure, which could even put a vehicle out of service, it
makes sense for operators to have the compressor block – the heart of any screw compressor – regularly
overhauled. The process involves returning the compressors to an “as-new” condition in terms of
wear, performance, service life and appearance.
Specially trained technicians check what individual components can be reused. Casings and rotors are
refurbished, seals and bearings are removed using a specially developed process, reusable parts are
carefully cleaned and all seals and wear-prone parts such as roller bearings are replaced. But the most
important step involves the precise adjustment of the rotors – crucial if the overall system, which is
specially designed for the requirements of a rail vehicle, is to function reliably in the long term. At the
end of the overhaul process, extensive testing under real conditions ensures that the compressor has
been returned to an “as new” condition in the usual Knorr-Bremse quality.
The customer benefits in many different ways from such a professional overhaul process. It offers better
value for money than complete compressor replacement and improves vehicle availability by
avoiding downtimes caused by compressor failure. It also saves office work, because in addition to the
overhaul, the customer receives original spare part kits from a single source. Using screw blocks overhauled
by Knorr-Bremse reduces the lifecycle costs for the customer without any concessions being
made in terms of quality.
The process was developed in Munich and established there on the basis of special assembly systems.
Demand for local compressor overhaul in the Chinese market is on the increase, and Knorr-Bremse
responded in 2011 by setting up its own repair line based on company production standards. Chinese
colleagues were provided with exhaustive training both in Munich and locally.
Service contract for Merak in the United States
In the year under review, Knorr-Bremse subsidiary Merak won the service contract for the overhaul of
64 HVAC systems in New York‘s “AirTrain JFK.“ The AirTrain units provide the mass transit link between
New York‘s John F. Kennedy Airport, the New York City Transit subway network and the Long Island
Railroad.
For some time now the U.S. market has been experiencing a rise in demand for HVAC system overhauls.
One driving factor here is increasing system complexity, which means that train operators prefer
to have the HVAC systems overhauled by specialists instead of by their own workshop personnel. Then
there is the change in legislation prohibiting the use of the widespread R-22 refrigerant from 2014
onward. This has led to operators using the opportunity of a scheduled overhaul to have their systems
converted to more modern refrigerants.

R e p o R t
Merak is expecting this kind of contract to account for a major proportion of the service business in
the U.S. in the next five years.
Aftermarket activities regrouped in Australia
Knorr-Bremse Australia and Sigma Coachair, the manufacturer of HVAC systems for rail vehicles and
industrial applications acquired in 2010, began the process of merging their aftermarket activities in
the year under review. The idea is that the two formerly separate manufacturers should in future present
one face to the customer.
The process of bundling the aftermarket business was accompanied by further progress in terms of
service activities. Thus, for example, Knorr-Bremse Australia developed new training courses, based on
which customers are no longer instructed in individual product areas but at cross-product level in a
single course that covers the Group‘s braking, HVAC and door systems.
New aftermarket partner in Brazil
MRS Logistica is one of the biggest freight transportation companies in the Brazilian rail market. It
operates some 18,000 freight cars and almost 700 locomotives on a network of more than 1,600 kilometers
serving three federal states which together account for approx. 56% of Brazilian GDP. Most of
the freight carried by MRS consists of products such as iron ore, finished steel products, cement and
agricultural goods, which have to be transported reliably from A to B, often to tight deadlines. In order
to ensure continuous vehicle availability, the Brazilian company has initially contracted Knorr-Bremse
Brazil to service the CCB II control valves on 254 of its locomotives up till spring 2013.
Although this is the first such service contract, the two companies are not entirely unknown to each
other – Knorr-Bremse is already extensively involved in providing equipment for the operator’s rolling
stock, being responsible for all the CCB II valves for the locomotives and DB-60 systems for approximately
70% of the freight cars.
6 7

Site-specific Projects
With a view to securing the company’s long-term success, Knorr-Bremse Rail Vehicle
Systems launched a large number of site-specific projects during the year under review.
R e p o R t
On virtually all continents the company either set up new facilities or expanded existing
ones. In the Chinese city of Suzhou it opened a new service center, and in Italy the acquisition
of a specialist manufacturer of ventilators and a well-known producer of electronics for
rail vehicle applications enabled the division to further expand its product portfolio.
New plant opened in England
Knorr-Bremse has relocated the UK and Eire business of the Australian rail vehicle HVAC systems
manufacturer, Sigma Coachair, acquired in 2010, to a new factory in Burton upon Trent, Staffordshire,
England.
Now officially known as Knorr-Bremse Rail Systems (Burton) Limited, the company will continue to
pursue its established activities in the development and production of HVAC systems for rail vehicles
and industrial applications. The portfolio of services also includes customer service and overhaul work
for Knorr-Bremse subsidiary Merak, as well as for several other manufacturers of rail vehicle HVAC systems.
Comet Fans S.r.l. acquired
Knorr-Bremse subsidiary Microelettrica is pushing ahead with the vertical integration of its operations
through the acquisition of Comet Axial Fans S.r.l., a niche supplier of fans for rail vehicle and industrial
applications. Given the expansion of the portfolio beyond axial fans, the company has been renamed
Comet Fans S.r.l. Based in Milan, Italy, this specialist manufacturer develops and produces not only fans
but also ventilation systems, condensers, radiators and wet cooling towers.
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In the rail vehicle sector Comet fans are used, for example, in HVAC and air supply systems for passenger
coaches, but also for cooling brake resistors. In the industrial sector the fans are used in a wide
range of electrical machinery, heat exchangers and radiators, not least in refineries, chemical plants or
the cement industry. In the year under review, Microelettrica began the integration of Comet into its
own structures.
Plan for new joint venture in Russia
The Russian state railway company RZD set up its second freight car subsidiary back in 2010 in the
form of the “Second Freight Company” (Vtoraya Gruzovaya Kompaniya, or WGK). As from 2015 the new
company is to take over some 20% of Russian rail freight transportation. It is also planned for this
wholly-owned subsidiary of RZD to be the partner in a new Russian joint venture being set up with
Knorr-Bremse.
During the course of the year in question, both companies laid the foundation for the joint venture in
the form of a Declaration of Intent. An important element was the decision to set up and operate a
joint production facility in Russia that will initially manufacture disc brakes, air supply systems for passenger
trains and control valves for freight cars.
Green light for new U.S. plant
The positive development of business at Knorr Brake Corporation (KBC) in North America and the
forecast mid-term demand were the main factors in the decision to start planning a new production
shop in Westminster in the year under review, in the immediate vicinity of the existing plant. From
2013 onwards this 18,000 square meter site will provide work for around 250 employees, manufacturing
a portfolio including train brake systems, bogie equipment, compressors and air dryers, as well as
HVAC systems.

R e p o R t
In line with Knorr-Bremse’s strategy of localized production, the company will manufacture systems
for the North American market in collaboration with certified local suppliers. Standardized processes
anchored in the Knorr-Bremse Production System (KPS) will ensure the customary high quality of
Knorr-Bremse products, from raw material processing to final quality control.
Compliance with the LEED (Leadership in Energy and Environmental Design) guidelines means that
the new facility will also be built to the latest environmental standards. These include measures to
ensure minimum water consumption and the efficient use of energy in production operations and in
the building’s HVAC systems. KBC will achieve a further reduction in its carbon footprint through the
ingenious use of natural daylight for lighting purposes.
Acquisition of Technologies Lanka
Knorr Brake Corporation (KBC) has added to its product portfolio with the acquisition of Technologies
Lanka, an innovative developer and manufacturer of rail vehicle electronics systems and components
located in Quebec, Canada. The purchase will enable KBC to leverage its diverse product portfolio
ranging from linear door systems to HVAC system controllers as well as its highly innovative Research
& Development team. Since entering the rail industry in 1997, Lanka has had steady growth in revenues
and profits. Now as a member of the Knorr-Bremse Group, Lanka has the opportunity for further
growth through access to Knorr-Bremse’s extensive distribution channels, diverse inter-company relationships
and industry expertise.
Operations begin at Suzhou II+
The Knorr-Bremse facility in Suzhou is the Group’s largest production plant in China. In the space of
just twelve months, Knorr-Bremse Suzhou has doubled its output – which was one reason for the new
extension to the plant, which was opened in March 2011. Knorr-Bremse began production of rail vehicle
systems in China by opening an assembly plant in Shanghai in 2000. With the start of production
at the new Suzhou II+ plant, the company has developed into one of the largest suppliers in the Chinese
rail vehicle market. By the end of the year under review, the addition of the new extension had
brought the workforce at the plant to almost 800 employees.
Through the extension, Knorr-Bremse created additional floor space for machining centers. Workpiece
throughput was enhanced by optimizing the routing and machining times of the parts, with fixed
cycles for everything from assembly to inspection and packaging. To respond to and foster the expansion
of aftermarket activities in China, Knorr-Bremse also set up a new Service Center at the site, covering
1,800 m 2 .
The recently set-up Technical Solution Team is also supporting aftermarket activities. In direct contact
with customers, the team works closely with them to draw up overhaul schedules, for example, and
discuss technical details of agreements. At the same time, Knorr-Bremse expanded its Field Service
Team for locomotives, extending the area covered from Suzhou to the west of the country. By the end
of 2011 more than 100 service technicians were deployed covering a total of 51 cities. In addition, the
company established a new Systems Engineering and Commissioning Center staffed by some 50 engineers
and technicians.
In the course of the expansion, Knorr-Bremse also took ecological aspects into account. A rainwater
tank now provides water for watering the grounds. Solar modules for the production of hot water are
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7 2 R e p o R t | R A I L V e H I C L e S Y S t e M S
installed on the roofs. And to ensure ideal conditions on site for up to 1,000 employees the company
has also built a state-of-the-art canteen and new changing rooms and showers.
IFE VICTALL joint venture grows
Steady growth in demand meant that the IFE Victall joint venture in Qingdao, China, reached the limits
of its capacity within a few years of first being set up in 2006. After expanding the facility to more than
12,000 m², Knorr-Bremse relaunched production in the spring of 2011. During the course of the year
IFE Victall, with its workforce of 650, produced more than 28,000 access systems, making it the biggest
manufacturer of door systems within the Knorr-Bremse Group.
In line with Knorr-Bremse’s global KPS production system the plant is being equipped with state-ofthe-art
machinery and modern workplaces, with particular emphasis put on the design of the production
lines. The opportunity has also been taken to upgrade the existing production area with a view to
saving energy and protecting the environment.
A special feature of the IFE Victall plant in Qingdao is the fact that all production processes take place
in one building, with even the paint shop integrated into the production chain. This makes it possible
to achieve huge time savings.
Merak expands in Shanghai
Merak Railway Technologies Shanghai was founded by Knorr-Bremse‘s Spanish subsidiary Merak in
January 2001. Operations began with a staff of ten, working on roughly 500 m 2 , but the plant was soon
caught up in rapid growth. To meet the ongoing rise in demand for HVAC systems in the region, the
Shanghai facility was expanded yet again in the year under review, so that today some 360 employees
are engaged in operations on more than 13,000 m 2 .
During the expansion, Knorr-Bremse implemented the highest international standards in terms of
efficient logistics, excellent quality and optimal industrial safety in line with the Knorr-Bremse Production
System (KPS). But the importance of the Shanghai plant for the region cannot be defined by sales
figures and employee numbers alone. The plant is also responsible for coordinating the numerous
HVAC system projects taking place in Asia, which are characterized by a high level of localization.
Plants to merge in Australia
The plans for the cross-functional merger of the four Australian locations that Knorr-Bremse has been
operating since the acquisition of HVAC system manufacturer Sigma Coachair in 2010 have been finalized.
The official groundbreaking ceremony for the expansion of the existing plant in Granville is
scheduled to take place in the first quarter of 2012, with the move slated to follow approximately
twelve months later. The main drivers of the expansion to almost 14,000 m 2 of office and production
space are the growth in sales over recent years and the additions to the product range.
Merging the different locations will make cross-functional cooperation far more efficient. Knorr-
Bremse is keen to bring together the ongoing Australian development and production activities for
Sigma Coachair HVAC systems and for rail and commercial vehicle brake components under one roof.
In addition, the aftermarket business in the rail vehicle HVAC and brake systems segments will also be
managed by the Granville plant from 2013 onwards.

R e p o R t
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New plant in India
With more than a billion inhabitants – about half of them under the age of 25
– robust economic growth and a steadily growing middle class that is keen on
traveling and whose willingness to consume is stimulating the economy, India
has the fastest growing rail transportation market in the world. In response to
this, Knorr-Bremse started constructing a new plant in Faridabad in December
2011.
Levels of orders for Knorr-Bremse products are a
good indication of the relatively steady economic
growth enjoyed by the Indian subcontinent in
recent years. And all the signs are that the high
growth rates are set to continue in the medium
and long term.
One of the main drivers is the Indian government’s
infrastructure expansion plan, which includes
modernization of the rail network. Existing
rail vehicles are being upgraded and orders
placed for new ones – both areas in which Knorr-
Bremse has played an active role in India for
many years.

Close to the existing plant
The existing plant in the north Indian city of
Faridabad no longer has the capacity to cope
with expected future levels of demand – which
was why Knorr-Bremse began construction of a
new plant during 2011. The new facility is being
built in the immediate vicinity of the current one
– avoiding the loss of staff that usually results
from relocation and retaining workforce skills.
On a 22,000 m 2 site housing state-of-the-art production
and office facilities, a workforce of some
400 will produce brake control systems, bogie
equipment, compressors and air dryers for rail
vehicles. As part of Knorr-Bremse’s international
strategy these components will be manufactured
largely for the Indian market in close collaboration
with certified regional suppliers.
Improved working
conditions and a green focus
As elsewhere, Knorr-Bremse will be applying the
principles of its global production system (KPS)
to ensure uniform processes across the entire
value chain from raw material processing via surface
treatment right down to assembly and
quality control.
The new facility is state-of-the-art – and not just
in terms of an improved working environment,
easier communication between departments
and offices situated close to the production areas.
The design of the building also conforms to
green building standards, with effective air conditioning
and high levels of insulation considerably
reducing carbon dioxide emissions.
R e p o R t 7 5
Involvement in development center in Pune
Parallel to the construction of the new building
in Faridabad, Knorr-Bremse Rail Vehicle Systems
is also involved in the new Technology Center
India (TCI) currently being built in Pune by the
Commercial Vehicle Systems division as a software
development center for commercial vehicle
products manufactured for the Asian market.
In order to benefit from synergies, the new
building will also house a software development
center for the Rail division.

Commecial Vehicle
Systems
During the year under review Knorr-Bremse Commercial Vehicle Systems expanded its
business in all regions and grew by 22% overall. Truck production in Europe and North
America was up 30% and 54% respectively, but there was also strong growth in Asia and
South America as the division benefited from the ongoing recovery in global commercial
vehicle markets.

7 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S

Markets
R e p o R t
During the year in question the global commercial vehicle market recorded strong growth.
Although levels of production in China declined, overall production figures around the world
continued to rise compared with the previous year, and Knorr-Bremse won many tenders
and orders in the sector.
Europe
The recovery in the Western European commercial vehicle market that had set in during the previous
year continued in 2011. Truck production was up 30% at a total of around 420,000 units, but the market
still remained below the levels achieved before the crisis. Apart from disc brakes, the most important
source of sales revenues for Knorr-Bremse was ABS and EBS systems.
North America
As in Europe, there was also a recovery in the North American commercial vehicle market, with production
up 54% at 335,000 units. Knorr-Bremse used the favorable market conditions to adapt its production
facilities in line with customer requirements. The company also opened a third plant in Acuña, Mexico.
South America
A positive boost also came from South America, where developments that had started in 2010 continued.
The commercial vehicle market grew by some 14% to 209,000 units, driven in particular by the
Brazilian market, where the planned introduction of the EURO 5 standard in 2012 triggered advance
purchases of vehicles.
Asia/Australia
Intervention by the Chinese government in the capital markets had a dampening effect on the truck
market in that country and levels of production were down 16% at 1,119,000 units. The successful
launch of its joint venture in Chongqing was an important strategic step for Knorr-Bremse in the Chinese
market. 2011 saw the Indian and Japanese markets grow by 11% and 5% respectively.
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Selling systems to
China and Russia
The commercial vehicle markets in China and Russia are amongst the biggest
in the world. In both regions Knorr-Bremse is using its years of experience and
its skills in the field of braking systems to support local OEMs.
When major OEMs in the traditional markets are
planning new vehicle platforms, they often buy
individual systems from various suppliers and
then put these together in-house so that they fit
perfectly into the architecture of the new vehicle.
Up till now, however, manufacturers in China or
Russia have tended to use the strengths of their
own engineers to develop appropriate vehicle
platforms for the market, with a main focus on
the chassis and drivetrain. They often buy in entire
braking systems from elsewhere, thereby ensuring
that their vehicles are fitted with systems
that are perfectly suited to the particular application.

Several system projects in
development or already approved
In both China and Russia, Knorr-Bremse is increasingly
being brought in to supply entire systems,
with the company assuming complete responsibility
– including initial design, calcula-
tions, layout and across-the-board technical
consultancy. This means that although the markets
are only beginning to show signs of growth,
the local OEMS are already able to equip their
vehicles with high-end products.
Projects such as these have enabled Knorr-
Bremse to build up business relations in both
China and Russia and expand its share of these
markets.
During the year under review both countries
saw the launch of various ABS and disc brake
projects supervised by the regional Knorr-
Bremse companies with the help of the parent
company. Drum brakes and EBS systems – usually
for heavy-duty trucks or buses – are also currently
being developed by some manufacturers
or have reached the approval stage.
Knorr-Bremse’s close involvement in these projects
is due above all to the company’s globally
recognized role as a technological pacemaker in
the development of braking systems. The manufacturers
have ambitious plans and want their
vehicles to be equipped with high-end technologies
from trusted partners who deliver top
quality.
R e p o R t 8 1
Growing markets require modern solutions
All the indications are that the commercial vehicle
sectors in China and Russia are set to grow
further. New legislation in China means that ABS
is increasingly being installed in trucks. And in
Russia there is already a statutory requirement
for commercial vehicles to be fitted with ABS.
Furthermore the electronic stability program
ESP is to become compulsory in all new trucks in
Russia from 2016. As one the world’s leading
manufacturers of electronic vehicle safety systems,
Knorr-Bremse is once again the right partner
to turn to.
Demanding challenges
for Knorr-Bremse experts
When it comes to selling systems in China and
Russia, one of the challenges – in addition to the
need to bring together the right specialists for
the various components, whatever their normal
location or department – is that there is often
also a requirement to source as many components
as possible from local manufacturers. This
is partly because imported products would seldom
meet the strict cost objectives of the OEMs,
but partly also because a certain level of local
content enables manufacturers to qualify for
government support.

Market Successes
R e p o R t
Against a background of market recovery, Knorr-Bremse Commercial Vehicle Systems
achieved a number of important successes. For the first time the company provided an EBS
electronic braking system for installation in heavy-duty trucks manufactured by Daimler AG.
In Germany, the company was designated “Best Brand in
the Truck Industry” in the “Brakes” category for the sixth
Development of worldwide sales revenues
for the Commercial Vehicle Systems divi- year in succession. And Knorr-Bremse’s North American
sion in eUR millions
subsidiary Bendix Commercial Vehicle Systems celebrat-
2009 1,221
2010 1,701 ed delivery of its 750,000th air compressor.
2011 2,068
Europe
Knorr-Bremse drives forward business with SOEMs
There are roughly 250 companies in the SOEM (Special Original Equipment Manufacturer) category in
Europe, Russia, Turkey, the Middle East and North Africa. In addition to well-known manufacturers of
trucks, buses and off-road vehicles, this sector also includes manufacturers of special-purpose vehicles
used, for example, by airport fire services or for certain agricultural applications. In these specific cases,
safety systems such as the electronic stability program ESP, the Autonomous Emergency Braking System
AEBS or the Lane Departure Warning system LDW have an increasingly important role to play.
Not least on account of the closely defined application areas of their products, many SOEMs build only
a small number of their highly specialized vehicles and are therefore unlikely to have their own braking
systems specialists on the staff. This is increasingly leading these manufacturers to engage the
services of Knorr-Bremse as an experienced system supplier, to provide them with the necessary expertise,
from the planning of their vehicles to final delivery. This professional, competent and customized
support from Knorr-Bremse ensures that the braking system is perfectly geared to the respective
application of the vehicle.
8 3

8 4 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
In the year under review, Knorr-Bremse deliberately intensified its efforts to bundle the expertise of the
sales staff responsible for the various regions and to expand its technical support team. The resultant
more intensive exchange of experience and knowledge is intended to help identify trends and developments
in the SOEM sector early on, as well as generating the ideal response to the diverse range of
customer needs.
In total, Knorr-Bremse’s business with SOEMs showed an increase of around 35% over the previous
year, thanks to numerous new orders that were successfully completed in 2011. For instance, Knorr-
Bremse supplied the complete braking system for the new vehicle platforms of Nissan in Spain and
Ford in Turkey. The company also obtained the orders to equip the state-of-the-art electric minibuses
built by Gruau in France and the light trucks manufactured by SCAM of Italy. And buses manufactured
by British builder Alexander Dennis for the New Zealand market are also being equipped with Knorr-
Bremse EBS systems. But SOEM demand is not restricted to braking systems: Knorr-Bremse also supplies
Belgian manufacturer Van Hool, for example, with ELC Electronic Level Control and the Tire Pressure
Monitoring System TPMS for many of its new buses.
500,000th drum brake made at Knorr-Bremse KAMA
On December 1, 2011, Knorr-Bremse KAMA, a joint venture between Knorr-Bremse and the biggest
Russian commercial vehicle manufacturer KAMAZ, produced the 500,000th drum brake at its Naberezhnye
Chelny facility in the Russian Republic of Tatarstan. At a small celebration, Klaus Deller, Knorr-
Bremse Executive Board member responsible for the Commercial Vehicle Systems division, officially
presented the brake to KAMAZ Director General Sergey Kogogin. Along with drum brakes, the joint
venture in Naberezhnye Chelny also manufactures torsional vibration dampers for the Russian truck
market.
ABS for new Fendt 900
During the year in question, vehicle manufacturer Fendt was the first company to install Knorr-Bremse’s
newly developed ABS anti-lock braking system for agricultural vehicles as standard equipment in its
tractors.
As tractors become increasingly powerful and faster, this ABS system ensures reliable braking and a
high degree of safety as well as better steering and control on both dry and wet surfaces. The vehicle
can also brake safely on loose surfaces such as gravel or snow without any danger of the wheels locking.
Long-term contracts with Polish vehicle manufacturers
Five years on from the foundation of Knorr-Bremse’s Polish subsidiary Knorr-Bremse Polska SfN Sp. z o.o
the company posted its best ever results. In both the aftermarket and trailer sectors the company was
able to sign long-term contracts with the leading Polish commercial vehicle manufacturers, thereby
creating a stable basis for future business development. With the companies Zaslaw, Wielton and Feber
Knorr-Bremse signed contracts in particular for the supply of complete EBS braking systems and
pneumatic suspension systems over several years.
During the year in question, in addition to consolidating and expanding its market share, Knorr-Bremse
was particularly concerned to take action against product piracy and the use of non-original spare

R e p o R t
parts which are increasingly being sold on the Polish market. The company provided comprehensive
information to workshops on product liability and the risks involved in marketing and using nonoriginal
spare parts.
Knorr-Bremse supplies complete braking systems to Nissan Europe
Japanese automotive company Nissan’s European subsidiary NISSAN Motor Iberica S.A. is planning to
launch a newly developed light truck on the European market in 2014. In order to meet rigorous market
requirements, the vehicles are to be equipped with state-of-the-art braking technology and a
whole range of safety features. Knorr-Bremse is developing and supplying the entire braking system
for the new vehicles – including not only the ABS8 anti-lock system with integrated ESP electronic
stability program but also the air control system and the disc brakes with brake cylinders for the front
and rear axles.
Knorr-Bremse succeeded in winning this order because the company was able to support Nissan in
meeting its delivery deadlines and supply complete solutions tailored to customers’ requirements. The
company was heavily involved in designing and configuring the braking system for the new truck at
an early stage in the project. As well as providing the axle-mounted pneumatic disc brakes, Knorr-
Bremse is also offering across-the-board technical support during the course of the project.
For Knorr-Bremse, Nissan is one of the first customers in Europe to fit the new ABS8 system in conjunction
with ESP as standard. With Knorr-Bremse as a competent supplier, the Japanese manufacturer
hopes to expand its market share in Europe. Production is slated to start at the end of 2013.
8 5

8 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Hasse & Wrede supplies visco-dampers for Audi and BMW
During the year in question, Knorr-Bremse’s subsidiary Hasse & Wrede, manufacturer of visco-dampers
and hydraulic dampers for passenger car, truck, marine and stationary engines, received further orders
for visco-dampers for the new generations of engines being developed by leading automotive manufacturers.
The company is to develop and design visco-dampers for Audi’s new V8 engines and parts
of its V6 engines. Hasse & Wrede will also again be supplying visco-dampers for all BMW’s four and six
cylinder diesel engines.
Thanks to its excellent engineering and manufacturing skills, Hasse & Wrede posted strong growth in
all regions of the world during 2011.
Knorr-Bremse involved
in new Daimler platform
Knorr-Bremse has enjoyed a close and constructive working relationship with
Daimler AG for many years. The launch of volume production of various Knorr-
Bremse components for the SFTP platform marks an important milestone in
the successful partnership:
The company will for the first time also be supplying Daimler with an EBS electronic braking system for
the heavy-duty trucks – including the new Actros – produced by this world leader. Knorr-Bremse will
be equipping the twin-axle semitrailer tractor units with an EBS5.1 electronic braking system. A variant
of EBS5, the system was designed specifically for the requirements of the new vehicle platform and its
new electronic architecture. It integrates a wide range of functions that are now regarded as essential
for commercial vehicles into a single brake control system. In addition to driver assistance systems
such as EPS and ABS, these include coupling force and wear control and retarder control.

North and South America
R e p o R t
ACC in Prevost coaches
Prevost, a leading North American manufacturer of premium touring coaches, has launched Prevost
Aware – a system based on Adaptive Cruise Braking from Knorr-Bremse’s U.S. subsidiary Bendix – as an
option for its H-series motor coach models. This makes Prevost the first coach manufacturer in the
world to offer the option of Adaptive Cruise Control (ACC) with braking.
The innovative technology of the ACC system delivers warnings and active interventions that help
coach drivers avoid accidents and collisions. The system also includes Bendix ESP full stability to help
drivers mitigate loss of control, particularly on wet or snow- and ice-covered roads, by acting on selected
wheels to stabilize the vehicle. In addition, the Bendix Stationary Object Alerts system provides
audible and visual driver alerts when the vehicle is approaching a stationary metal object such as a car.
Thanks to ACC, the driver can respond to the impending hazard in a timely and appropriate way.
Mercedes and Ford opt for Knorr-Bremse in South America
In the year under review, Knorr-Bremse secured two substantial orders in Brazil. One of these involves
the company supplying all the air control systems and pedal units for the new medium and heavyduty
trucks built by Ford. The other concerns Knorr-Bremse Brazil equipping a proportion of the new
buses and medium and heavy-duty trucks built by Mercedes-Benz with brake shoes for their drum
brakes.
Knorr-Bremse is also supplying the EAC2.5 intelligent electronic air control system and the compressors.
The company had already supplied air control systems for the previous platform, but only some
of the various vehicle types within the platform had been equipped with EAC. In the case of the current
SFTP platform, virtually 100% are fitted with EAC systems – half of which are being supplied by
Knorr-Bremse. In the case of the disc brakes for the new vehicles, Knorr-Bremse has complete responsibility,
with the latest generation of SM and SL disc brakes being fitted to the front and rear axles.
Knorr-Bremse subsidiary Hasse & Wrede is also supplying visco-dampers for the entire range of engines.
8 7

8 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Asia/Australia
Volume production starts at Chinese OEMs
Following on from initial shipments of air dryers from Knorr-Bremse India in 2010, relations with the
Chinese truck manufacturer Foton continued to expand in the year under review. In June, Knorr-
Bremse began deliveries of power clutches for the current H3 generation of Foton vehicles. The clutch
units are produced locally in China at the Knorr-Bremse Dalian plant. The next-generation H4 trucks
are also to feature equipment from Knorr-Bremse. Back in 2010 an agreement was signed with Foton
governing the development and supply of pedal units, power clutches and handbrake valves for the
new H4 generation of heavy-duty trucks.
Starting with the H4 platform, local assembly operations were joined by the increasingly localized
procurement of numerous components. In this way, Knorr-Bremse has laid the foundation for the industrialization
of additional product variants in China, which will enable the company to cover an
even wider market for high-quality components.
In addition, Knorr-Bremse also managed to step up its disc brake business in China. The company
further strengthened its position with Yutong, the world‘s largest bus builder, where disc brakes are
becoming more prominent in both buses and coaches. On top of this, Knorr-Bremse was able to engage
in new disc brake projects for trucks with OEMs Foton and Shaanxi. To be ideally prepared for the
breakthrough of the disc brake in the Chinese truck market, Knorr-Bremse also localized the entire assembly
operation in Dalian in line with its own high production standards.

R e p o R t
Important new orders from India
In the year under review, a number of new production projects enabled Knorr-Bremse India to reinforce
its position on the subcontinent. Among other projects, the company obtained a substantial
order from Ashok Leyland for pedal units for the new generation of truck cabs that the Indian OEM will
be manufacturing from 2012 onwards.
The company also began volume production of exhaust brakes for truck builder Mahindra Navistar for
their Type MN25, MN31 and MN40 heavy-duty trucks. For the MN40 models Knorr-Bremse is also supplying
the entire braking system including anti-lock braking system (ABS). In 2011, Knorr-Bremse also
received orders from numerous other OEMs, including one from Tata Cummins for air compressors
and another from Ashok Leyland for drum brakes.
Electronic braking systems for New Zealand
British bus manufacturer Alexander Dennis Limited (ADL) won the order to supply 120 vehicles to bus
operator NZ Bus in Auckland, New Zealand, one of the country’s leading passenger transport companies
with a fleet of more than 1,000 vehicles. Knorr-Bremse is also benefiting from this order as the chosen
electronic braking system (EBS) supplier. The NZ Bus project is of particular strategic significance for Knorr-
Bremse, not only on account of its volume but also because one of the company’s main competitors is the
incumbent electronics partner to ADL. This demonstrates the strong position that Knorr-Bremse has developed
with ADL over the last few years. The order from the UK also documents the level of trust that ADL
is investing in Knorr-Bremse as the supplier for the very first EBS-equipped models the manufacturer has
ever supplied. The first of the new vehicles – all ADL’s single-deck Enviro 200 midi buses – were delivered
in time for the Rugby World Cup hosted by New Zealand in the summer of 2011, with the remainder to
follow over the subsequent twelve months.
Prizes and awards
“Best Brand” – for the sixth year running
The “Best Brand” award is regarded as a reliable indicator of quality and recognizes the reliability and
safety of the products concerned. It is also an important indicator of the general acceptance of a brand
and its image. In 2011, readers of the trade journals trans aktuell, lastauto omnibus and FERNFAHRER
were once again invited by publishers ETM and DEKRA, the vehicle inspection experts, to vote for the
best vehicles and brands in the industry. More than 8,000 readers took part in the process, and Knorr-
Bremse Commercial Vehicles Systems was again declared “Best Brand” in the “Brakes” category.
Knorr-Bremse was particularly pleased to receive this award as it comes from industry experts with a
thorough knowledge of the business who deal with the vehicles, products and services on a daily
basis. The fact that Knorr-Bremse has been designated “Best Brand” for six years running is a matter of
considerable pride to the company. At the same time it is an incentive to continue to use the expertise
and experience of its workforce to create even more innovative and competitive products and services
that set the market standard and make an important contribution to road safety.
8 9

9 0 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Knorr-Bremse wins VDA Logistics Award
The VDA Logistics Award is a widely-recognized accolade with which the German Association of the
Automotive Industry (VDA) has honored forward-looking logistics concepts in the automotive supply
chain since 2008. In the year in question this prestigious award went to Knorr-Bremse Commercial
Vehicle Systems.
The VDA sees the role of the award as being to draw attention to the importance of logistical processes.
The assessment criteria for deciding on the winner include the visionary quality and innovativeness
of their ideas as well as their economic usefulness. The jury congratulated Knorr-Bremse Commercial
Vehicle Systems on its optimization of logistics processes along the entire value chain and the
permanent impact this approach has had on the roles and duties of all concerned.
As part of the Supply Chain Excellence initiative Knorr-Bremse succeeded in achieving an unprecedented
degree of process-orientation through cross-location and cross-company supply chain management.
By implementing a large number of innovative, high-quality projects to optimize flows of
materials and information, the company has achieved considerable success. For example, inventories
were reduced by more than 25% and schedule effectiveness was also significantly improved. By optimizing
the transport network the company was also able to reduce carbon dioxide emissions by 16%.
Bendix wins Frost & Sullivan Award
In June 2011, internationally renowned management consultants Frost & Sullivan presented their
“North American Product Leadership of the Year Award” to Knorr-Bremse’s U.S. subsidiary Bendix Commercial
Vehicle Systems. With this award, Frost & Sullivan recognize companies demonstrating outstanding
achievement and superior performance in areas such as leadership, technological innovation,
customer service and strategic product development.
Bendix Commercial Vehicle Systems was singled out for its outstanding contribution to safety technologies
in the North American commercial vehicle market and won the award for its Wingman Advanced
technology, an innovative collision warning system with emergency brake assist. Wingman
Advanced is a further development of Bendix Wingman Active Cruise with Braking (ACB) and combines
adaptive cruise control with braking and collision mitigation technology. According to Frost & Sullivan,
Bendix with Wingman Advanced takes the integrated safety systems market to the next level by combining
three critical active safety technologies – electronic stability control, adaptive cruise control with
braking, and forward collision mitigation braking and warning – into a single unit.
István Lepsényi receives “Manager of the Year 2010” award
The Managing Director of Knorr-Bremse Hungary, István Lepsényi, was named Manager of the Year
2010 by the Hungarian National Association of Managers, Menedzserek Országos Szövetsége. At the
presentation ceremony in January 2011, the Association praised the company’s sustained success in
Hungary, Mr. Lepsényi’s management skills, his effective market strategy, and his outstanding contribution
to the health of the Hungarian economy and of the automotive industry in particular.
Particular tribute was paid to the important part Mr. Lepsényi played in the economic development of
the Hungarian region in which Knorr-Bremse’s operations are located. The Association also singled out
his intensive cultivation and expansion of university links for special mention, as well as the successful
implementation of corporate social responsibility programs at Knorr-Bremse Hungary.

R e p o R t
Knorr-Bremse KAMA voted “Best Company of the Year 2011” and wins quality award
Knorr-Bremse KAMA, the joint venture between Knorr-Bremse and KAMAZ, the Russian market leader
for commercial vehicles, received several honors in 2011. It was voted “Best Company of the Year 2011”
in a competition set up by the president of the Russian Federation, Dmitry Medvedev, with a view to
recognizing efforts to modernize the Russian economy.
The managing director of Knorr-Bremse KAMA, Manfred Kindermann, was also presented with the
Quality Prize of the regional government of the Republic of Tatarstan by Farid Mukhametshin, Chairman
of the State Council of the Republic of Tatarstan. The prize is awarded annually by the Prime
Minister of the Republic.
Knorr-Bremse KAMA voted “Well-doer of the Year”
Since 2009 the charitable organization Knorr-Bremse Global Care e. V. and Knorr-Bremse KAMA have
been supporting a local project in an old people’s home in the vicinity of the Knorr-Bremse site in Naberezhnye
Chelny. In 2011 the Knorr-Bremse KAMA joint venture was once again voted “Well-doer of
the Year” by the Republic of Tatarstan.
With the help of Knorr-Bremse, several parts of the home have been renovated. In Russia, older people
are usually cared for by the daughters of their family, but in cases where women are single parents or
have to go to work it is difficult for them to do so. When old people’s homes are looking for help, they
often find it difficult to compete with institutions for children or adolescents.
The home being supported by Knorr-Bremse houses a total of 60 people, of whom 40 have a disability.
They are now accommodated in two completely renovated blocks with rooms that have been adapted
to cope with disabled patients. For the first time the home has also been equipped with multi-functional
beds, which are more comfortable for the patients and facilitate the work of the staff. But the role of
Knorr-Bremse is not limited to financial support – Knorr-Bremse KAMA employees also regularly visit the
home and spend time with the old people.
9 1

Products
Products from Knorr-Bremse have a reputation for reliability, safety, performance and effi-
R e p o R t
ciency. They are also precisely tailored to the specific requirements of international custom-
ers. During the year under review, Knorr-Bremse developed a special rear axle ABS module
for the BRIC states and launched volume production of an ABS system for agricultural vehicles.
In the aftermarket, the company launched its original remanufacturing service for the
EBS2 braking system and the EAC1 electronic air control system.
Growing demand for air dryers with OSC cartridges
Air dryers for commercial vehicle braking systems fulfill an important function – they dry the compressed
air supplied by the compressor and in so doing help to prevent corrosion of the braking system.
Modern oil separating cartridges (OSCs) not only remove humidity from the air but also filter more
than 95% of the aerosols and residues of the oil needed to ensure the smooth running of many compressors.
This additional cleaning function plays a particularly important role in prolonging the life of
modern ESP and ABS systems, as certain aerosols attack the rubber seals commonly used in these systems.
In the year under review the trend to move from conventional filter cartridges to modern OSCs continued
at Knorr-Bremse, with OSCs accounting for around a third of all filter cartridge production – an increase
of some 26% compared with the previous year.
9 3

9 4 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Jochen Hahn
wins championship
Jochen Hahn is the new Truck Race European Champion. At the final held at Le
Mans on October 9, 2011 he achieved a superb victory – with a little help from
Knorr-Bremse.
By crossing the line in second place at the end of
an exciting final race at France’s legendary Le
Mans racetrack on October 9, 2011, Jochen Hahn
ensured that nobody could prevent him from
securing the overall title of FIA European Truck
Racing Champion 2011 for himself.
His victory was celebrated by his entire team
and countless fans as well as by Knorr-Bremse,
which was delighted to have contributed to his
success. The company has been pleased to support
Jochen Hahn and his team continuously
since 2001 and since 2003 has been an official
sponsor.

Perfectly tuned
23 men and one woman took part in the race
this season. The event is a huge challenge for the
drivers, as it takes considerable skill to steer a
truck round a race track rather than an ordinary
road. The equipment has to be right as well – the
tires, engines and brakes must all be perfectly
tuned. The latter in particular are crucial for ensuring
that the drivers can brake with complete
accuracy, circuit after circuit. According to
Jochen Hahn, having the right brakes accounts
for at least a third of the overall truck performance.
The race is always led by drivers who are
able to brake at the very last minute before the
bends – and that calls for top-quality materials.
In Jochen Hahn’s case the high-performance
brakes come from Knorr-Bremse. The company
uses the opportunity offered by the truck race to
see how individual components react under extreme
conditions and applies any insights thus
gained to its volume production of braking systems.
The FIA regulations for the European Truck
Race championship require all the trucks’ components
to be taken from normal series production,
so the braking systems tested by Knorr-
Bremse in conjunction with the Hahn Racing
Team are not prototypes, as often happens in
Formula One racing, for example.
R e p o R t 9 5
Knorr-Bremse organizes “Go & Stop”
competition at Nürburgring
At the race organized at the historic Nürburgring
in early July the Knorr-Bremse logo was not just
confined to the truck it was sponsoring. This is an
event that attracts not only the truck racing elite
of Europe, but also a veritable Who’s Who of
manufacturers and suppliers, many of whom set
up exhibition stands to showcase their products.
Knorr-Bremse had a double role, as a longstanding
partner to Jochen Hahn’s racing team, and as
the organizer of the “Go & Stop” competition – an
event that never fails to draw the crowds. The Go
& Stop competition is not just about maximum
speeds but also driver skills: competitors need to
cover the 400 meter-long straight as quickly as
possible, but they cannot simply sweep past the
grandstand and zoom across the finishing line.
Instead, they have to stop precisely on a predetermined
point. It is a tricky challenge that makes
for a lot of fun for both drivers and spectators.
Klaus Deller, Member of the Executive Board of
Knorr-Bremse AG responsible for the Commercial
Vehicle Systems division, presented the cup
to the 2011 winner.

9 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Fuel savings achieved by PBS even higher than expected
Knorr-Bremse’s Pneumatic Booster System (PBS), for which a global patent has been applied for, solves
the problem of so-called turbo-lag in diesel-engined commercial vehicles, ensuring improved performance
and reduced fuel consumption. At the end of November 2011, the specialist journal lastauto
omnibus measured the actual fuel savings in a series of independent tests carried out on a 27-kilometer
circuit using an almost fully loaded 430 hp semitrailer roadtrain. The results were impressive: up to
6.9% fuel savings – considerably more than Knorr-Bremse’s initial conservative estimate of between
2% and 5%.
A large turbodiesel can take several seconds to build up to maximum torque, so PBS blows compressed
air from the braking system into the engine’s inlet manifold to briefly boost engine performance,
thereby bridging the gap caused by turbo-lag at start-off, during overtaking or on gradients.
PBS makes the engine respond much more rapidly, enabling the driver to change into a higher gear
earlier on, reducing average engine revs and leading to a significant cut in fuel consumption.
A vehicle equipped with PBS accelerates as though it had an engine with between 20% and 30% less
cubic capacity. In other words, a smaller engine, provided it is equipped with PBS, can replace a larger
one. For local delivery journeys or passenger transportation the reduced space requirements for the
engine are advantageous – but PBS is also enormously useful in countries where commercial vehicles
are traditionally equipped with smaller engines. The Pneumatic Booster System is due to go into volume
production in 2012.
New functions integrated into TEBS
Knorr-Bremse’s TEBS electronic trailer braking system is now available in a second generation. TEBS
combines almost all the braking functions for a vehicle and trailer into a single, compact mechatronic
module. In addition to basic brake control, today’s market is increasingly looking for intelligent monitoring
and control systems to improve the operational efficiency of vehicles. Knorr-Bremse’s response has
been to create a clear added-value for vehicle operators by further developing functions that analyze
and make intelligent use of the information available from the trailer. The focus is not just on developing
new, safety-relevant functions but also ones that solve some of the problems faced by freight companies
on a daily basis.
During the year in question, two of these functions were developed under the names of iCargo and
iCorner. The iCargo function kicks in when uneven loading means that either the drive axle of the tractor
vehicle or the central trailer axle is overloaded. Trailer EBS distributes the load – figuratively speaking
– by using the iCargo function to ensure that the trailer’s individual axles receive a different bellows
pressure. The changed load distribution is also taken into account by the brake pressure control system
so that each axle contributes precisely the right amount to the braking process.
iCorner comes into play when a truck finds itself “in a tight corner.“ Every vehicle has to meet certain
statutory requirements in terms of cornering ability in order to be able to negotiate the roundabouts
that are becoming increasingly common on our road systems. If the vehicle design comes up against
its limitations, the manufacturer can make use of steered axles, but this involves considerable unnecessary
cost. iCorner offers an alternative by making intelligent use of the lift axles or by reducing the effective
wheelbase in combination with iCargo, thus facilitating cornering on roundabouts.

R e p o R t
Knorr-Bremse improves agricultural vehicle safety
Agricultural tractors are becoming increasingly powerful and are therefore capable of pulling increasingly
heavy trailers at ever higher speeds. As a result the demands made on agricultural trailers are
more and more similar to those made on truck trailers, and safety-relevant products are becoming
increasingly important. Knorr-Bremse was quick to respond to this trend and in 2011 launched a comprehensive,
innovative braking system for agricultural vehicles based on its tried-and-tested electronic
truck braking system.
At the heart of the new braking system for agricultural trailers over 3.5 tons is the EBS G2.1 electronic
braking system that includes ABS, load-related braking and the RSP roll stability program, which brakes
individual wheels in critical situations, reducing speed and in particular lateral acceleration. During
drastic avoidance maneuvers this can help prevent vehicle rollover caused by the high center of gravity
of agricultural vehicles. TEBS G2.1 can operate on power systems between 8 and 32 volts and can
therefore be used anywhere in the world. A system prototype was installed in a high-performance
JUMBO trailer built by the Upper Austrian agricultural machinery manufacturer Pöttinger and first
presented to the public at the Agritechnica trade fair.
Trailer Roadtrain Module (TRM) for EuroCombis and Roadtrains
Combined with TEBS G2, Knorr-Bremse’s Trailer Roadtrain Module (TRM) enables very long truck/trailer
or tractor/semi-trailer combinations to be braked rapidly and safely. Now Knorr-Bremse has developed
a version suited to so-called EuroCombi roadtrains.
A EuroCombi is an extra-long combination of tractor, trailers and/or semitrailers that can be up to
25.25 meters in length – more than the current European limit of 18.75 meters – and can weigh up to
60 t. The EuroCombi is already authorized for use in some parts of Europe, and in Germany initial field
testing is due to be running by 2012. In the USA, Canada and Australia, roadtrains can even reach
lengths of up to 100 m. The idea is that by increasing the load volume and payload, transportation
costs can be minimized and the efficiency of road transport increased.
The length of the roadtrains and the changed payload means that the demands made on the braking
system are also different. In the case of a 60 m transporter with a conventional pneumatic braking
system, for example, this results in 75% of braking power only being available after a delay of 1.6 seconds.
But by conveying the signal electronically, TRM combined with EBS can reduce that delay to less
than a quarter of a second. And TRM can even be used on vehicle combinations in which the tractor
unit does not have an electronic braking system. In this case the traditional pneumatic signal is converted
into an electronic one by pressure sensors and relayed instantly to the TEBS unit via the CAN
bus system.
Remanufacturing of EBS2 and EAC1
Remanufacturing, that is to say the reconditioning of used components, is a key topic across the entire
automobile and commercial vehicle industry. From both economic and ecological angles it is becoming
increasingly important to reduce the consumption of energy and resources. For many years now,
Knorr-Bremse has been investing in the development and testing of solutions that enable the company
to offer remanufactured options in the aftermarket – with a special focus on technically complex
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9 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Technological
milestones
30 years of ABS, 10 years of ESP – during the year under review Knorr-Bremse
celebrated two milestones in the history of the commercial vehicle industry in
which the company had played a central role. The history of one of the most
successful systems in the commercial vehicle sector – the ABS anti-lock braking
system – started in 1968. Compared
with the passenger car ABS
systems that existed at the time, the
requirements for an ABS system for
commercial vehicles were much
more demanding.
Developing an ABS system for trucks was considerably
more complicated because of the wide
variety of different vehicle models and types of
braking system involved, the extreme load
changes and the more complex installation environment.
Building on its wide experience with wheel slide
protection systems for rail vehicles, Knorr-
Bremse, together with MAN, was able to showcase
an ABS system for trucks at the IAA Commercial
Vehicles in 1969.
Joint success
From the 1970s onwards, Knorr-Bremse worked
together with Bosch on commercial vehicle ABS
development. The two companies pooled their
expertise, with Bosch working on the control
unit and Knorr-Bremse developing the 2-chan-

nel pressure modulator valve. But it was still
many years before a concept finally emerged – a
simplified 4-channel system with an innovative
2-channel axle valve module – that met the ambitious
targets in terms of vehicle stability, steerability
and stopping distance, as well as offering
value for money. Volume production by the two
companies started in 1981, and a year later this
electronic safety device was already making rapid
advances in the European market.
From 1985 onwards, Knorr-Bremse worked on its
own, developing a new, microprocessor-based
control unit that was not only more cost-efficient
but could also be more easily modified to
meet new market requirements. The fact that
ABS has been fitted on virtually all European
commercial vehicles since the early 1990s is not
just down to common sense on the part of vehicle
manufacturers and their customers. Since
1991 there has also been a legal requirement for
new trucks over 3.5 tons, all buses seating more
than eight people, and trailers to be fitted with
this system. In the late 1990s, Knorr-Bremse
Commercial Vehicle Systems took over the Bosch
and Bendix activities in the field of air-braked
commercial vehicles, which allowed the various
different ABS solutions to be united into a single
global product family.
The addition of many new functions, combined
with ongoing further development of the system
and – last but not least – close consultation
with customers, has enabled Knorr-Bremse to
become one of the world’s leading suppliers of
commercial vehicle ABS systems. In technical
terms, though, this is no coincidence: ABS is a
R e p o R t 9 9
product that brings together all the company’s
main areas of expertise: brake control, air pressure
regulation and wheel brakes.
ABS experience as the
basis for developing ESP
In 1996, parallel to Knorr-Bremse’s ongoing development
of ABS, the company also embarked on
another major project in the field of electronic
safety systems for commercial vehicles – the electronic
stability program ESP. The challenges were
similar to those the company had faced with ABS
– ESP for commercial vehicles is also much more
complex than for passenger cars. But because the
approach was similar to that used for ABS, it took a
mere five years before ESP for commercial vehicles
was ready for volume production.
Initially the system was only used for 4x2 semitrailers,
but over the years Knorr-Bremse achieved a
further breakthrough with the development of an
ESP system for 8x4 trucks and combinations with
pony trailers – a difficult challenge because of the
even more complex acceleration forces involved.
To this day Knorr-Bremse remains the only supplier
for this category of truck.
Looking well beyond Europe
Throughout this period Knorr-Bremse had more
than just Europe in mind. Nowadays the company’s
North American subsidiary Bendix sells
many more EPS systems – adapted to local requirements
– than are sold in Europe. And Knorr-
Bremse ESP systems can be found all over the
world.

1 0 0 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
products and modules – thus keeping service costs down for the customer. In the year under review,
the Knorr-Bremse plant in Aldersbach began remanufacturing of the electro-pneumatic modules for
the EBS2 electronic braking system and the EAC1 electronic air control unit.
Original parts returned from the field are disassembled, cleaned, inspected and processed at Knorr-
Bremse’s UK subsidiary in Bristol. The re-usable parts are then shipped to Aldersbach for use in volume
production of remanufactured products. Knorr-Bremse uses the same assembly equipment for the
remanufactured products as for original equipment, so that the modules undergo the same end-ofline
quality and safety tests as original parts. The overriding principle is that remanufactured products
must always comply with the same standards in terms of functionality and quality as the comparable
OEM parts.
As products become increasingly complex, Knorr-Bremse endeavors to offer its customers service options
that meet their requirements and guarantee complete functionality of the parts concerned.
Bendix launches new spring brake
In the year under review, Bendix Spicer Foundation Brake – a joint venture between Knorr-Bremse’s
North American subsidiary Bendix Commercial Vehicle Systems and the manufacturer of truck components
Dana Commercial Vehicle products LLC – launched the Bendix EverSure, a new double-diaphragm
spring brake for drum brakes that sets new standards. The Bendix EverSure is significantly
lighter and therefore offers better fuel efficiency. It is also considerably more robust and requires less
maintenance while at the same offering enhanced performance.
Trucks and trailers fitted with the lighter Bendix EverSure spring brake can carry an increased payload.
At the same time the lightweight design helps compensate for the increased weight of commercial
vehicle engines as a result of the requirement to comply with stricter emissions regulations. Another
positive effect of the lighter weight is the brake’s greatly superior vibration resistance. The very low vibration
levels help prolong the life of the spring brake and its supporting components substantially.
Another key advancement in the Bendix EverSure spring brake is the elimination of contact between
the power spring coils. This “no-touch technology” means that the protective coating remains intact,
enabling the Bendix EverSure to offer far better corrosion resistance than competitive products. The
spring brake also sets new standards of performance: the new diaphragm design means the Bendix
EverSure delivers higher braking power during both normal and prolonged braking.
750,000th compressor from Bendix
Knorr-Bremse subsidiary Bendix Commercial Vehicle Systems, the top supplier of compressors in North
America, celebrated another production milestone at the start of 2011 when the company’s Acuña
plant in Mexico manufactured the 750,000th Bendix BA-921 air compressor – less than ten years after
production of the compressor first began in 2002. Fleet operators and freight companies value the
BA-921 on account of its robust design and high performance as a compressor for pneumatic braking
systems.
The single-cylinder air compressor was originally designed to reduce weight and oil consumption despite
the higher system pressure. The BA-921 model also features a long service life and low mainte-

R e p o R t
nance costs. It ensures better air quality and a high delivery rate to the vehicle tanks with minimum fuel
consumption. The compressor has a boost capability up to 3 bar for turbo compressors and generates
torque of up to 170 Nm, for example for an auxiliary power-steering pump.
New Wingman Advanced active safety system launched
In the year under review, Knorr-Bremse’s North American subsidiary Bendix Commercial Vehicle Systems
launched the new Bendix Wingman Advanced system, an innovative active safety system that
combines adaptive cruise control with new collision mitigation technology.
Using a radar sensor mounted to the front of the vehicle, Wingman Advanced constantly measures the
distance to the forward vehicle. The radar sensor can also detect stationary objects in the vehicle’s lane
of travel. If the distance to the forward vehicle or stationary object closes too fast, the system first provides
audible and visual alerts to the driver. If the driver fails to respond adequately and the distance
continues to close, Wingman Advanced acts to initiate emergency braking. Wingman Advanced remains
available even when – in inclement weather or heavy traffic – the driver deactivates the adaptive
cruise control function that helps maintain a safe following distance.
The Wingman Advanced collision mitigation feature delivers about two-thirds of the available braking
power of the vehicle to minimize the risk of a rear-end collision or reduce its severity. This compares
with about one-third of the available braking power delivered through Bendix Adaptive Cruise Control
with Braking. Wingman Advanced uses the Bendix electronic stability program not only to prevent
rear-end collisions but also to mitigate loss of control and roll-over. Numerous major truck manufacturers
in North America have shown an interest in the system. As a result, in the year under review,
Knorr-Bremse’s U.S. subsidiary was already engaged in discussions with OEMs regarding the possible
launch of volume production of the new active safety system.
Lift axle system for India developed
Towards the end of the year under review, Knorr-Bremse India successfully completed preparations for
volume production of the second generation of a pneumatic lift axle system for the Indian market.
Start of production for a variety of OEMs is scheduled for the first quarter of 2012.
Lift axles are additional axles that are usually lifted but can be lowered to distribute the weight of a
heavy payload more evenly across the axles. This not only helps reduce tire wear but also serves to
provide better grip, which is important for the optimal performance of the braking system.
With the second generation of the pneumatic lift axle system, Knorr-Bremse was able to further reduce
the number of parts and the overall system costs. In addition, the company has also developed
an anti-tire-theft system. The new lift axle system is also backward-compatible with existing applications,
as well as with systems from other manufacturers.
Anti-Roll-Back System for conventional trucks
High-end commercial vehicles never encounter the problem of rolling back as they move off uphill.
Their electronic braking systems have a functionality that ensures they can pull away from a standstill
on even steep gradients with no risk of rolling back. In more conventional trucks, such as those fre-
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quently encountered on Indian roads, moving off uphill is often a risky business, particularly with a
full payload. If the driver is too slow on the gas as he lets in the clutch, he risks rolling back into the
vehicle behind. Now Knorr-Bremse India has developed an Anti-Roll-Back System (ARB) that effectively
minimizes this risk.
At the heart of the Anti-Roll-Back System is a mechatronic valve module. If the driver is intending to
move off uphill, he activates the ARB system with a manual switch. When he then releases the brakes,
the front brakes are released as usual, but thanks to the ARB system the rear brakes are only released
with a delay of around three seconds. That gives the driver plenty of time to drive off normally uphill,
without rolling back.
ABS rear axle module developed for BRIC states
ABS anti-lock braking systems for the BRIC states have to meet special requirements. As well as being
extremely robust, they have to be cost-effective in design and cover the entire spectrum from simple
ABS systems to complex EBS electronic systems. This was the brief for Knorr-Bremse’s development of
the Compact Rear Axle Module (CRAM ), which completed beta-testing during the year in question. The
first modules are due for delivery to two customers for field testing in 2012.
The module combines all the components into a single, compact system that can be manufactured
with a high local added value and installed at relatively low cost by manufacturers, as there is no need
for individual systems to be linked up to the vehicle.
New 20-inch disc brake for China
Knorr-Bremse has been successfully marketing its 22.5-inch brake disc for Chinese commercial vehicles
for some years. But as 20-inch wheels with tube-type tires are still commonly used in China, particularly
for off-road vehicles, Knorr-Bremse also developed a new 20-inch disc brake specially designed for Chinese
conditions during 2011. At the same time, the company started negotiating with potential Chinese
suppliers to ensure local content and also began the process of transferring an entire disc brake
production line from Aldersbach (Germany) to Dalian (China) in a bid to ensure uniform high quality
standards worldwide.
One of the main drivers of demand for disc brakes in China is the need to improve braking performance,
particularly on urban roads. Rapid infrastructure expansion has meant that trucks and buses are operating
at increasing speeds, and there is a need for ways to improve road safety. One of the main advantages
of the disc brake is that the braking force can be applied very precisely, which improves bus
safety and comfort – factors that are of increasing importance for fleet operators. In any case the law
now requires buses over 12 m in length to be fitted with ABS and disc brakes on their front axles.

R e p o R t
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Aftermarket
R e p o R t
Customized, value-for-money solutions, superbly trained personnel and a strong regional
presence are the basic elements of Knorr-Bremse’s comprehensive service offer to dealerships,
workshops and fleet operators. During the year under review the company further
improved the excellent aftermarket service, for which it has gained an enviable reputation.
Active Service
Everything at Knorr-Bremse – from the development of its products to their installation, operation and
maintenance – is designed to offer top quality and service throughout their lifecycle. The company
has brought together its entire range of services for dealerships, repair shops, fleet managers and drivers
under the title of “Active Service,” with the aim of enabling them to achieve maximum efficiency
and economy in all aspects of their operational and business processes. The service portfolio is based
on the criteria of safety, quality and economy.
Active service offers a concept tailored to each particular application and designed for the increasing
complexity of commercial vehicle systems. The efficiency of the servicing carried out by repair shops
is ensured by the use of OEM-quality products, the provision of technical training to enhance practical
skills and the availability of telephone and on-line support. Despite the increasing variety of products
involved, standardization reduces inventory costs and capital tie-up and ensures product availability
in the case of servicing.
Service manuals and a wide range of other technical information can be rapidly consulted on the Internet,
and the availability of other web-based services such as product catalogues with full technical
details means all the required servicing information can be easily found.
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Linking of product searches, web shop, legacy parts and warranty information via SAP makes for easy
access right across the board. European warranty information is also directly relayed to Knorr-Bremse’s
QSYS quality system.
Training capacity significantly expanded
In response to rising demand for technical training, Knorr-Bremse significantly expanded its training
capacity and range of courses in 2011, especially in the field of EBS electronic braking systems. A total
of 1,500 people received training during the course of the year.
The main beneficiaries are repair shops and dealerships, for whom the courses offer an opportunity to
acquire important practical skills for servicing safety-critical systems. Building on basic theoretical
knowledge, the courses use functional models to explain how the braking system works and interacts
with the entire vehicle. Such realistic, practical training improves the efficiency and quality of service
offered by repair shops.
Further development in e-services
Web shop, training portal, warranty processing and reporting, legacy parts management or downloads
of software updates are just some of the many services on offer from the e-services department at
Knorr-Bremse Commercial Vehicle Systems. Over the years, the range of content and functions has
steadily increased – in line with the need to respond rapidly to the precise requirements of the customer.
In 2011 a comprehensive strategy was drawn up for further developing the existing e-services. It includes
targeting the portals at the various groups, improving the systems’ user-friendliness and establishing
a uniform graphical design. One vital element – albeit invisible to the on-line user – is a system
architecture that enables future functions to be simply and rapidly integrated.
Modified European warehousing system improves parts availability
Reliable delivery performance and constant availability are the basis for any successful business. In the
aftermarket service sector the availability of spare parts is particularly crucial. In the year under review
Knorr-Bremse therefore focused on the structure of its European warehousing. The existing distribution
warehouses in Sweden and the Czech Republic were merged with the Berlin one, and – in close consultation
with customers – a new materials disposition system was introduced for the German, Austrian
and Swiss aftermarkets. This has brought lasting improvement to the availability of spare parts for servicing
operations.
Integration of the Swedish and Czech warehousing locations with the one in Berlin, which supports not
only the aftermarket but also trailer sales, SOEMs (Special Original Equipment Manufacturers) and exports,
means that customers can benefit from the existing wide range of products and also enjoy an
excellent delivery performance. The distribution warehouse in Berlin coped smoothly with the increased
throughput volumes and turnover of articles.
The basic idea of the new warehousing and distribution strategy is a carefully balanced division of labor
and responsibilities between Knorr-Bremse and its partners. A highly transparent ordering system in

R e p o R t
terms of logistical throughout and replacement times increases efficiency for both parties, enhances
parts availability across the entire portfolio and ensures reliable delivery performance.
EAC diagnostics included in NEO platform
NEO System Diagnostics is an electronic diagnostic platform developed by Knorr-Bremse for commercial
vehicles that provides rapid, comprehensive, professional support for servicing of electronic vehicle systems.
NEO either communicates directly with the vehicle’s electronic control module or via a diagnostic
interface. It covers a wide range of functions from error code diagnostics down to complete system analysis,
enabling even complex faults to be rapidly identified and localized. Using state-of-the-art hardware
and software, testing procedures are carried out step by step, providing information on faults and how to
rectify them.
Regular software updates ensure that repair shops provide a service that is based on the very latest technology.
During the year under review, Knorr-Bremse made the testing software for all Electronic Air Control
(EAC1) applications available on the diagnostic platform. This also includes the service functions for
the OSC desiccant cartridges for the EAC electronic air control unit, which have to be regularly replaced
and recalibrated, as well as diagnostics for all applications related to the EBS5.X electronic braking system.
In addition to basic functions, they offer data mirroring, enabling the repair shop to reliably replace the
electronic control unit itself. The software can also be used to carry out calibration of the sensors.
New service concept for the SM and SL generation of disc brakes
During the year under review the company started to introduce a service concept for Type SM and SL
pneumatic disc brakes, following their successful incorporation as original equipment. The service
philosophy for SM-SL brakes is very much on the same lines as the approach taken in the past, which
means the service kits can be used for most application scenarios. These consist of brake pad, tappet
and carrier guide seal kits, caliper units and brake carriers. As the service and maintenance units have
remained the same, no additional training is required in using the kits. There is one important difference
in the case of the SL brake – the format of the brake pads is not compatible with the existing
generation of SB, SN and SK brakes.
The SM and SL brakes are all fitted with the new ProTecS brake pad holders, which offer improved
economy and greater safety thanks to optimum application of the brake pads.
In order to enable the advantages of ProTecS to be applied to braking systems already in service,
Knorr-Bremse has also developed backward-compatible, OEM-quality brake pads with ProTecS for SN-
SB brakes.
EAC2 concept for excellent service
The demands made on truck and bus air supply systems have continued to evolve over time. In addition
to the increasingly compact design of systems, further functions – for example aimed at reducing
fuel consumption – have been incorporated. In response to all these requirements, Knorr-Bremse developed
the EAC2 electronic air control unit, the first of which were used for the new Daimler Actros
platform during the year under review.
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Even during the development phase of the EAC2, Knorr-Bremse focused on the entire product lifecycle,
paving the way for creating a product that retains its value. Depending on requirements, the vehicle
owner can opt for the entire mechatronic unit to be replaced or for a repair to be carried out
using Knorr-Bremse Original Service Kits. This new service concept is now being applied as part of the
market launch of this product and is available to OEMs and independent repair shops alike.
Service collaboration with Scania
Commercial vehicle manufacturers are increasingly extending the range of services offered by their
repair shop networks to cover other products and brands. In response to this trend Scania is determined
to extend the range of services offered by its approved service centers. One potential area
identified by the company is trailers and semi-trailers pulled by Scania trucks. To put this idea of “Vehicle
Related Parts” (VRPs), as Scania calls it – into practice, the company requires additional systemspecific
expertise as well as the necessary parts for all current trailer systems.
During the year under review, Knorr-Bremse and Scania agreed to work closely together in this field. In
future, the equipping of repair shops and the training of service personnel will be shared between
Scania, Knorr-Bremse’s Munich headquarters and its European sites. Knorr-Bremse customers will have
access to Scania network, thus ensuring high uptime. Under a joint implementation plan the repair
shops are already being prepared for these additional service tasks, and their personnel is undergoing
training. The project will enable Knorr-Bremse to further expand its existing specialist aftermarket support
network in Europe.
Significant increase in Chinese aftermarket sales
The rapid development of the Chinese economy has triggered equally rapid growth in the commercial
vehicle population. In the last five years alone, the number of trucks and buses has increased by
some 37% to around 8 million vehicles. As a result, demand for spare parts for these vehicles is now
also beginning to grow.
In response to this, Knorr-Bremse launched an extensive program in 2011 aimed at strengthening its
aftermarket service to Chinese fleet operators and persuading them to rely on the company’s triedand-tested
OE spare parts. The program was an immediate success, with sales in the Chinese aftermarket
rising by more than 50% compared with the previous year. As well as the growing vehicle population,
the innovative technologies involved have resulted in new approaches and increased demand
for servicing. Growing numbers of urban bus operators and logistics companies in particular are investing
in Knorr-Bremse OE spare parts to minimize downtimes and keep their vehicles on the road.
Expansion of Southeast Asian service network
During the year under review, Knorr-Bremse succeeded in further expanding its aftermarket service
network in Southeast Asia. Developments in the fields of trailer ABS, electronic braking systems, tire
pressure and temperature monitoring systems and original spare parts kits for trailer brakes were particularly
encouraging – helped by the fact that the market remained relatively stable despite the Japanese
tsunami and the flooding in Thailand.

R e p o R t
Nevertheless, widespread sales of non-original parts and product counterfeits remained a challenge,
despite the fact that these are of lower quality, are potentially dangerous and reduce vehicle availability.
Local Knorr-Bremse staff made great efforts to raise awareness of this issue amongst dealers and
repair shops. Many operators see spare parts as a “necessary evil,” involving expenditure that they are
anxious to keep to a minimum. It is therefore a major task to convince dealers and repair shops of the
advantages of the Knorr-Bremse systems in their vehicles and to inform them of the risks involved in
using non-refurbished components and non-original parts and in delaying overdue servicing.
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Site-specific Projects
R e p o R t
During the year under review a number of site-specific projects enabled Knorr-Bremse
Commercial Vehicle Systems to further strengthen its market position. The division expanded
its plant in Liberec, Czech Republic in order to increase its capacity and flexibility; in China,
Russia and the USA it developed extra production capacity; and in India it started the construction
of a new manufacturing and development center.
Production capacity expanded in Liberec
During 2011 Knorr-Bremse expanded its plant in the Czech town of Liberec, increasing capacity for
manufacturing current products and also creating scope for additional ones. During the construction
process back in 2009 an option for further expansion had already been included, and Knorr-Bremse
made use of this in the year under review.
In all an area of 7,500 additional square meters was added to the plant, around a third of which was put
to immediate use. The Czech plant set up new production lines for bayonet filter cartridges and Type
NG4 double-diaphragm brake cylinders and also took over the processing of compressor crank cases
from Aldersbach, with air dryers being transferred from Liberec to Kecskemét.
To generate further synergies, Knorr-Bremse is also planning to transfer production of further crank
cases from various external suppliers to Liberec, thereby increasing its own value creation. In addition,
further insourcing projects are due to be implemented in the near future. To make full use of the remaining
5,000 m 2 on the new site, Knorr-Bremse has brought in an external logistics provider whose
services the company can make cost-effective use of. But as its space requirements grow over the
years, Knorr-Bremse has an option to take over these parts of the site itself at short notice, enabling it
to respond swiftly to any changes in the market.
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New production lines in Russia
Knorr-Bremse KAMA, the joint venture set up by Knorr-Bremse and Russian truck manufacturer KAMAZ,
started manufacturing three new products in Russia in September 2011: mechanical slack adjusters,
clutch servos and master cylinders.
The three assembly lines were relocated from KAMAZ subsidiary OOO KAMAZ Autotekhnika Zainsk to
the joint venture’s production site in Naberezhnye Chelny, following complete modernization to bring
them up to Knorr-Bremse’s production and logistics standards. To ensure that the new products were
manufactured by experienced personnel, many of the assembly specialists previously employed on
the lines were re-employed by Knorr-Bremse KAMA. They also received a thorough introduction to
Knorr-Bremse standards that has already resulted in improved quality and productivity.
New plant in Acuña, Mexico
In January 2011, Bendix Commercial Vehicle Systems celebrated the opening of its new manufacturing
facility in Acuña, Mexico, which is already the company’s third plant in Acuña. At the Acuña III site Bendix
manufactures actuator products including spring brakes and service chambers for the commercial vehicle
market.
The former brownfield site on which the new plant was built was first refurbished and upgraded to
meet the company’s rigorous and globally applicable manufacturing and quality standards for facilities
and equipment. In another preparatory measure, lean manufacturing experts reviewed the entire production
process using a Systematic Layout Planning model to ensure maximum efficiency.
By opening the new plant at the end of 2011, Bendix Commercial Vehicle Systems was able to add 112
jobs to the regional economy. Expanding the existing Acuña operations also enabled the company to
further leverage corporate shared services while maintaining lean and cost-effective manufacturing
processes to allow Bendix to operate competitively in the marketplace.
Bendix acquires systems from Iteris
To reinforce its market position as a leading supplier of effective safety solutions, Knorr-Bremse’s North
American subsidiary Bendix has acquired the SafetyDirect system and the AutoVue Lane Departure
Warning system from the renowned U.S. supplier of traffic management technologies, Iteris LCC. Within
the Knorr-Bremse Group the acquisitions round out a suite of leading safety systems that already includes
the ESP electronic stability program, Bendix Wingman Advanced collision mitigation technology,
and SmarTire, a tire pressure monitoring system. The integration of the technologies and associated research,
development, sales and service operations into the electronics business units at Bendix and
Knorr-Bremse had been largely completed by the end of the year under review.
SafetyDirect is a Web portal that allows fleet owners the opportunity to analyze safety information about
their vehicles that is wirelessly transmitted – in real time – via existing fleet communication systems. The
system can provide an immediate warning to fleet operators if their drivers are braking too hard when
cornering or traveling too fast. This helps fleet managers identify risky driver behavior and provide drivers
with targeted training.

R e p o R t
AutoVue – the market-leading visual Lane Departure Warning (LDW) system in North America – alerts
truck drivers if they inadvertently drift out of lane. The system contains a camera that tracks visible lane
markings and continually detects when the vehicle begins to drift toward an unintended lane change.
When this occurs, AutoVue automatically emits an alarm signal, alerting the driver to make a correction.
Joint venture in China starts production
First set up in early 2011 as a joint venture between Knorr-Bremse Asia Pacific (Holding) Ltd. and Chinese
manufacturer Chongqing CAFF Automotive Braking & Steering Systems Co. Ltd., Knorr-Bremse CAFF
Systems for Commercial Vehicles Chongqing Ltd. started production at the end of April 2011. Knorr-
Bremse has a 66% share in the new company and its Chinese partner 34%.
Founded in 1952, Chongqing CAFF Automotive Braking & Steering Systems Co. Ltd. was one of the first
manufacturers of automotive components in China. It enjoys an excellent reputation in the country and
has helped shape the Chinese automobile and truck industry over the last few decades.
Based in Chongqing, the joint venture manufactures components in the air supply (e.g. air dryers) and
brake control (e.g. valves) segments as well as transmission and clutch control components for medium-
and heavy-duty trucks. The entire production process – from manufacture of die-cast aluminum parts to
machining, surface treatment and assembly – takes place in Chongqing. The joint venture is also responsible
for sales and marketing. The medium-term plan is to develop the joint venture into one of the leading
suppliers to the truck industry in the People’s Republic of China.
The process of integrating two companies from very different cultural backgrounds is a great challenge
for all concerned, but both joint-venture partners are driving it forward with great energy. In addition to
renovating the buildings and upgrading the plant equipment, Knorr-Bremse is also focusing on training
the local staff to ensure that the company’s uniform global production and quality standards are adhered
to in China. But a priority at the outset was providing customers with information about this latest development.
Knorr-Bremse’s customer portfolio in China includes well-known vehicle builders such as
Shaanxi Heavy Truck, CNHTC, SIH, North Benz, Dongfeng and in the bus segment Kinglong, Ankai,
Huanghai – as well as the transmission manufacturer Fast.
New production and development center in India
In November 2011, Knorr-Bremse began construction of a new production and development center for
commercial vehicle products just a few hundred meters from the existing plant in Pune, India. The new
buildings will not only enable current processes to be optimized but will also increase the level of vertical
production at the plant. Options for additional vertical integration within the product portfolio are also
being examined. The new plant in Pune is taking its lead from the value stream factory that Knorr-Bremse
set up in Liberec in the Czech Republic in 2010. Consequently, all processes at the new Indian plant will
also be geared rigorously to value creation.
At the same time, the new facilities will open up extensive expansion opportunities for the company. All
production modules can be expanded separately with no negative impact on structures at the plant,
making it possible to respond quickly to changes in market needs. The new plant will also permit further
product lines to be added to the portfolio made in India. To date this has been prevented by a lack of
space at the existing plant.
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Expansion
in Brazil
It is already the largest joint facility for rail and commercial vehicle systems
within the Knorr-Bremse Group. In response to significant growth in recent
years and the expectation of positive business developments in the medium
term, the Knorr-Bremse Group is investing in a new facility in South America
that offers considerably greater capacity.
In the rail vehicle sector Knorr-Bremse will use
the new plant to manufacture brake control systems,
bogie equipment for freight and mainline
passenger trains and also onboard systems. And
in the truck sector Knorr-Bremse Brazil will produce
the entire Knorr-Bremse product portfolio
for the local market, including brake control, air
supply and treatment, brake cylinders, disk and
drum brakes and torsional vibration dampers.
The move to the city of Itupeva, some 85 kilometers
from the current site, is necessary because
the latter has reached the limits of its capacity.
The restricted production space available in the
current buildings offers little scope to make additional
products or to improve processes. And
further expansion is no longer permitted because
the surrounding area is increasingly turning
into a residential district.

Capacity significantly expanded
The new site has enabled Knorr-Bremse to significantly
expand its capacity in production and
equipment refurbishment, surface treatment,
functional and endurance testing and vehicle
testing. The offices and staff facilities have also
been extended and upgraded as part of the rebuild.
As the new site is not far from the old one, many
of the 750-strong workforce will be moving to
Itupeva with Knorr-Bremse, so the company will
be able to rely on their experience and expertise
to maintain the same high standards of quality
and product reliability as before.
New logistics concept
In addition to an optimal layout and improved
production processes, the main focus in the new
facility has been on installing an in-house surface
treatment plant and introduction of a new
logistics concept based on the Knorr-Bremse
KPS production system. In collaboration with
suppliers these measures should considerably
reduce manufacturing throughput times and
achieve significant cost savings. Care was taken
during the planning process to ensure that the
product development section and all production-related
departments were located directly
inside the new plant.
With its consistent focus on the products, the
new facility features attractive, functional architecture
and was especially designed to have a
reduced energy requirement and a minimal environmental
footprint.
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1 1 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
The Knorr Bremse Technology Center India (TCI) is to be located directly alongside the new production
plant. At the TCI, Knorr-Bremse’s Commercial Vehicle Systems and Rail Vehicle Systems divisions will be
bundling their software development activities for products for the Asian market. By 2015 the Center is
expected to employ some 200 people. Pune is a leading IT and software center in India, which means
there is a good local supply of highly qualified software development engineers.
Tried-and-tested production standards worldwide
In 2011 Knorr-Bremse drove forward the expansion of its production capacity by establishing local assembly
operations in all the relevant markets. After adaptation to local requirements, two long-serving
disc brake lines in Aldersbach were transferred to Bowling Green, USA and Dalian, China with the aim of
ensuring uniformly high production and quality standards at all Knorr-Bremse sites worldwide. The assembly
line in the USA went into operation in 2011, and production start-up in China is slated for 2012.
Creation of the new production line in Dalian is Knorr-Bremse’s response to growing demand for a disc
brake specially designed for the Chinese market. The new plant, which was established using the expertise
of experienced specialists at Aldersbach and at the Disc Brake Center of Competence in Munich, is
capable of turning out up to 300,000 disc brakes per year. As well as supervising the establishment of
production in Dalian, the Knorr-Bremse experts also provided training for the personnel who assisted
them. Large numbers of Chinese maintenance engineers and operators also received training on the
new machines in Aldersbach.
In the summer of 2011 Knorr-Bremse brought on stream a disc brake line specially designed for the U.S.
market at the Bowling Green site operated by its North American subsidiary Bendix Commercial Vehicle
Systems. Again this was part of Knorr-Bremse’s strategy of offering products with a maximum of local

R e p o R t
content. The new assembly line has considerably increased production capacity in Bowling Green – as
in China, up to 300,000 disc brakes can now be produced each year.
One of the special features of both the new assembly lines is the fact that they are directly linked to the
Aldersbach site. If any problems occur with the equipment or control systems, colleagues in Aldersbach
can, if necessary, offer remote support in real time.
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Knorr-Bremse Group
In addition to the targeted pursuit of product innovations, the key success factors for the
future of Knorr-Bremse include process optimization, employee development, corporate
responsibility, environmental protection and social engagement, aspects which remained
among the top priorities for this family-owned company in 2011.

Knorr Excellence
R e p o R t
Under the heading of Knorr Excellence (KE), Knorr-Bremse has introduced a standardized
model for all its management systems and has merged all process optimization initiatives
across the entire Group. The declared aim of KE is to achieve excellence in all corporate
processes. Knorr-Bremse works continuously to improve the Group’s performance, not least
with a view to ensuring higher levels of customer satisfaction. In 2011, Knorr-Bremse continued
the program, focusing in particular on the FIT (Finance & IT Excellence) initiative.
PEX
PEX
The PEX – People Excellence – initiative was re-launched in 2011 with human resources and executive
development projects. Development of the initiative continued in the reporting period with a view to
systematically describing all human resources work throughout the employee life cycle and successively
improving the worldwide human resources organization on this basis.
Initial focus processes were defined for the PEX key elements “Strategy,” “Source,” “Development,“ “Place“
and “Administration“ and a self-assessment exercise to determine the current status was carried out in
cooperation with the various sites. Plans envisage adding to this process landscape in 2012. At the
same time, the implementation of the focus processes at the sites is to be evaluated at regular intervals
and further local improvements are to be made. Within the human resources function, PEX represents
a future-oriented basis on which to take the quality of human resources work forward around
the world. PEX thus defines the basic principles of excellent people management in HR.
Q-First
Within the Q-First quality campaign, in the year under review Knorr-Bremse once again defined a large
number of specific measures to ensure that each and every component developed and supplied by
Knorr-Bremse is of the highest possible quality. Q-First comprises a raft of measures covering areas
such as management, human resources, development, production, supplier development, complaints
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management and customer relations. As a manufacturer of safety-critical products, Knorr-Bremse considers
these measures indispensable.
One fundamental principle of the Knorr-Bremse quality management policy is prevention rather than
cure. Potential errors must be detected and eliminated in good time before they lead to defects in
product components in service. In 2011, Knorr-Bremse therefore once again dedicated its efforts to
ensuring that safety-relevant requirements were taken into consideration from the beginning of the
development process. In addition, the company again conducted a large number of Product Safety
Audits (PSA) throughout the world. These especially strict audits that are specific to Knorr-Bremse ensure
that internal and external suppliers comply with the Group’s very high quality standards.
Supply Chain Excellence
In 2011, the Supply Chain Excellence (SCE) project focused on the global development and harmonization
of logistics performance levels. In both divisions, further progress was made with the optimization
of processes from suppliers through factories to the customer, and flexibility was improved. The
measures taken correspond to the steadily mounting challenges faced as a result of the growing importance
of the BRIC countries, with their longer supply chains and more volatile demand behavior.
Finance &
IT Excellence
The FIT (Finance & IT Excellence) initiative is one of the cornerstones of the Knorr
Excellence Program. In the year under review, the initiative was mainly focused on
one major project: the new company Knorr-Bremse IT-Services GmbH, a direct
subsidiary of Knorr-Bremse AG, which started operations on January 1, 2011.
The IT units in Germany, which were previously spread across the divisions, have now been combined
in a single organization. Since the beginning of 2011, the new company has been responsible for
providing the IT services required by the divisions throughout the world.
Despite this fundamental change, the launch of the new company was more of an evolution than a
revolution. A number of preparatory steps had already been taken in previous years and technicallyoriented
areas such as applications development and support for Human Resources, Finance and
Controlling had been brought together in Corporate IT at cross-divisional level.

R e p o R t
Experience at the 5-day factory operated by Knorr-Bremse Rail Vehicle Systems in Budapest and the
value stream factory of Knorr-Bremse Commercial Vehicle Systems in Liberec was very important in
this context. This experience was used consistently for the planning and implementation of plant optimization
and construction projects and played a key role in the further development of the global
Knorr-Bremse production and logistics network.
In 2011, the SCE initiative received the Logistics Award of the Association of the German Automobile
Industry, VDA.
KPS
In 2011, the main focus of the Knorr-Bremse Production System (KPS) was on the introduction of a
uniform shop floor management system throughout the Group. This ensures that the opportunities
for process improvements in production are identified and systematically realized day by day. In the
Rail and Commercial Vehicle Systems divisions, value streams were optimized with a view to reducing
throughput times and making processes more flexible. One of the key aspects was the more intensive
involvement of suppliers.
In the Rail Vehicle Systems division, Knorr-Bremse standardized its approaches for measuring and improving
machinery utilization. A uniform production material supply system was developed that already
takes account of the production sector’s zero-defect approach at the material supply stage.
Faster financial statements
Another key focus of the FIT initiative in 2011 was the “Fast Close” project, which combines all the procedures
and methods needed for the fast completion of annual financial statements soon after the
end of the financial year. The project is challenging because faster processing must not be allowed to
have any adverse effect on quality. Despite the faster close, the quality of the information provided
must be just as high as in the past. After Fast Close had been implemented for the first time in 2010,
work in 2011 focused on process stabilization.
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In the Commercial Vehicle Systems division, value stream planning was further intensified at various
sites including the Dalian plant in China. In addition, the company laid the foundation for employees
and managers to be trained at a Knorr-Bremse Value Stream Academy in the future.
GPE
Supplier management is a key success factor in the Knorr-Bremse value chain. All measures for the
further improvement of supplier management are grouped together in the Global Purchase Excellence
program. Further improvement of processes, methods and resources was consistently pursued
in 2011 and will continue to drive the ongoing worldwide improvement of efficiency and quality in
the future.
PROGRESS
In 2011, the optimization and harmonization of business processes on the basis of improvements resulting
from Knorr Excellence initiatives was continued under the PROGRESS program. To support
business processes, SAP was introduced in nine further projects in 2011. Almost all Knorr-Bremse
Group sites now utilize SAP or SAP-harmonized processes. This has proven its worth and will be continued
going forward.
In addition, in the year under review Knorr-Bremse adopted the latest version of SAP and migrated its
IT platform to state-of-the-art technology. This represents an important milestone in safeguarding the
future and ensuring process efficiency at Knorr-Bremse.
ECCO 2
Under its ECCO 2 (Efficient Cut of CO 2 ) initiative, Knorr-Bremse had already set Group-wide climate
protection targets based on the 20/20/20 formula in 2009. By 2020, the energy efficiency of the Group
is to be improved by 20% and CO 2 emissions thereby cut by 20%. In 2011, Knorr-Bremse again deployed
a variety of measures to help reach this target. In addition, the CO 2 balance of new buildings
was made a major consideration in the planning and construction of new facilities.
External ratings again outstanding
The globally-oriented strategy of the Knorr-Bremse Group, its broad-based positioning in numerous
markets and regions and an intelligent and prudent financial policy have again led to outstanding
ratings from two prominent rating agencies. These creditworthiness ratings again placed Knorr-
Bremse among the highest-rated automotive and commercial vehicle suppliers worldwide. After rating
agency Standard & Poor‘s had already upgraded Knorr-Bremse from “BBB+/Outlook positive” to “A-/
Outlook stable” in 2010 and confirmed this in 2011, in the year under review Moody’s followed suit,
awarding the company an upgrade from “Baa1 Outlook positive” to “A3 Outlook stable.” Both rating
agencies thus reaffirmed the Group’s investment grade status.
In their ratings the two agencies acknowledged in particular the intelligent financial management
and stable cash flow generation at Knorr-Bremse. Based on a very robust and conservative financial
policy, the agencies reported, even under what were at times difficult economic conditions the com-

R e p o R t
pany was able to further consolidate and strengthen the liquidity base it put down in 2010. Knorr-
Bremse’s rapid and rigorous response to the sharp downturn in the world’s commercial vehicle markets
in 2009 proved vital in positioning the Group to benefit when the market recovery began to pick
up speed in 2010.
The expansion and targeted ongoing development of the Group’s geographic presence, with local
companies in all of the major countries and markets, was also expressly mentioned by both rating
agencies as a particular strength of Knorr-Bremse. The company’s continued systematic expansion of
its rail vehicle systems activities in Asia came in for special mention in this respect. In addition, both
Standard & Poor’s and Moody’s again pointed to product diversification at Knorr-Bremse as a decisive
stability factor. The Group’s separate business areas, rail vehicle and commercial vehicle systems, are
subject to different economic cycles that can take very different courses in terms of time and from one
region to the next. In times of crisis this makes a substantial contribution to minimizing risk. In addition,
the intensification of activities in the aftermarket sector in both divisions was seen to help mitigate
the impact of the economic cycles in the OEM sector.
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A successful combination:
Deutsche Bank and
Knorr-Bremse 100 years on
The partnership between Knorr-Bremse and Deutsche Bank is marked by
solidarity, constancy and reliability. The two companies now have a 100-year
history of successful cooperation.
In May 2011, senior figures from Deutsche Bank
met with Heinz Hermann Thiele, the proprietor
of Knorr-Bremse and Chairman of the Supervisory
Board, as well as members of both the Executive
and Supervisory Boards to mark this special
anniversary. The high-ranking guests from
Deutsche Bank included Dr. Josef Ackermann,
Chairman of the Board and of the Group Executive
Committee, as well as Jürgen Fitschen,
Member of the Management Board of Deutsche
Bank.
Close ties for many years
“The rapport between Deutsche Bank and
Knorr-Bremse has always been more than just a
run-of-the-mill business relationship based on
financial participation,” Heinz Hermann Thiele
underlined in his anniversary address. Over the

past century a trusting and constructive working
relationship has sprung up between the
two companies. From 1929 onwards, the former
Director General of and Partner in Knorr-Bremse,
Johannes Philipp Vielmetter, was both a shareholder
and a Supervisory Board member at
Deutsche Bank. As the financial crisis of the day
reached its peak, Vielmetter and other members
of the bank’s Supervisory Board acquired substantial
portions of equity, supporting Deutsche
Bank through the troubled economic times. In
1931 Knorr-Bremse itself also held a stake in
Deutsche Bank. For its part, in the 1930s
Deutsche Bank was the majority shareholder in
Knorr-Bremse AG, with 51% of the company‘s
share capital.
Shared success in internationalization
In times of rapid economic growth too, the two
companies continued to stand side-by-side. In
the post-war years, with the support of Deutsche
Bank, Knorr-Bremse drove forward the internationalization
of its business.
For Heinz Hermann Thiele it was the close personal
ties between the companies and their representatives
that invariably held the key to their
shared success. And over recent decades, starting
roughly in the 1970s, Thiele noted ever-closer
and decidedly amicable relations between
the two companies. In 1985, Dr. Hans-Peter Binder
– a member of the Board of Management at
Deutsche Bank’s Munich branch – became a
member of the Supervisory Board of Knorr-
R e p o R t
Bremse AG, placing his expertise and experience
at the company’s disposal. “He was a decisive figure
in the development of the company from a
medium-sized supplier to what is today a profitable
technology group with sales of over EUR 4
billion. From the outset, his personal advice and
support were crucial to the development of
Knorr-Bremse,” declared Thiele.
Positive outlook for future collaboration
In the opinion of the proprietor of Knorr-Bremse,
relations between the two companies will draw
closer still in the future. “Our mutual solidarity in
both turbulent and successful times, our reciprocal
personal involvement in the various development
phases of the two enterprises and the resultant
close ties are something special and a
characteristic feature of the relationship between
our companies.“
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Deutsche Bank AG, Historisches Institut

Responsibility
R e p o R t
Sustainability and corporate responsibility are important priorities for a forward-looking
family business like Knorr-Bremse. For more than 100 years the company has been assuming
responsibility for its products, employees, business partners, society and the environment.
Corporate Responsibility (CR)
Operating in a manner that is both sustainable and socially responsible is an important element in
Knorr-Bremse’s corporate philosophy. Confidence in the company is increased by responsible behavior
towards the workforce, customers and suppliers – and society in general. With a view to maintaining
this, Knorr-Bremse is actively working on a program of environmental sustainability and social responsibility
as well as innovation and value creation.
CR strategy
The CR strategy launched by the company in 2010 represents a logical extension of its commitment to
responsible corporate governance. It systematizes the company’s responsibilities for its employees,
the environment and society in general, and determines the main focus of its activities in the area. The
strategy is based on the Group’s core values and the internationally recognized principles of the UN
Global Compact, which sets standards for companies and organizations in the fields of human rights,
labor, environment and anti-corruption. The Knorr-Bremse Group signed up to the UN Global Compact
in 2010, and by doing so signaled its commitment to adhering to the Compact’s ten basic principles.
Knorr-Bremse has defined six areas as the central focus of its CR strategy: CR Management, Products,
Workforce, Environmental and Climate Protection, Social Commitment and CR Communication. These
are described in greater detail below.
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CR Management
CR Management involves systematic implementation of the CR strategy within the company – identifying
areas of focus, defining goals and developing specific measures for implementation within the
various departments. For the purpose of discussion and decision-making the company has set up a CR
Council consisting of a representative of the Executive Board, two members of management from
each of the two divisions and the head of the Corporate Responsibility department.
Knorr-Bremse draws ideas for the further development of its CR management from a regular dialogue
with internal and external stakeholders. For example the company regularly analyzes customer requirements
and future market trends with a view to incorporating these into the various CR management
areas and developing appropriate measures. During the year under review, the company set up
a Group-wide network to discuss CR issues – the CR Round Table – in order to promote an exchange
of ideas amongst the regions represented within the Group. The Round Table makes it possible for
regions and divisions/departments to talk to internal CR representatives about strategic goals, current
CR projects and their operational implementation.
A car for DocStop
Knorr-Bremse not only contributes towards greater road safety with its
products – the company also sponsors the organization “DocStop for
Europeans.”
DocStop was launched in 2007 in order to provide truck drivers at home and abroad with easy access
to professional medical care. As well as continuing to sponsor the DocStop project during the year
under review, Knorr-Bremse also donated a VW Golf to this mobile emergency medical service. Since
June 2011, staff at DocStop have been able to use the vehicle for their travel needs.
It might be toothache, migraine or sudden eye problems – whatever the complaint, professional truck
drivers tend to just grit their teeth and keep going. The pressure to meet deadlines makes them reluctant
to go to a doctor and they often either ignore medical symptoms or try to treat them themselves.

R e p o R t
When it comes to the actual integration of ecological and social aspects into corporate processes, the
latter are first analyzed from the point of view of sustainability before appropriate measures are drawn
up. For example, during the year in question, the principles of the UN Global Compact were integrated
into the company‘s procurement structures, with the requirements of the Compact being incorporated
into the quality management guidelines for the area. The company intends to use audits and
self-disclosure forms to check the extent to which individual suppliers adhere to these principles.
Products
As one of the leading companies in its sector, Knorr-Bremse develops solutions that combine maximum
customer benefit with lasting value-added. Its innovative technologies are known to offer high
levels of safety, quality and functionality, but criteria such as energy and resource efficiency and environmental
compatibility are also becoming increasingly important for both products and production
processes. Knorr-Bremse is therefore concentrating on developing manufacturing processes and
product applications that have a minimal impact on the environment. As part of its drive towards
developing sustainable products, the company launched the Ecodesign project in 2011 with the aim
of analyzing the ecological footprint of selected products during their entire lifecycle and using the
information to further enhance their environmental compatibility. During the year in question, analyses
of the value-added process for individual products in the Rail Vehicle Systems division yielded
important insights into the use of materials and resources, environmental compatibility and product
use. The next step involves implementing specific improvement measures.
This is where DocStop comes in. Any truck driver on trans-European roads who experiences medical
problems can contact DocStop at any time of day or night. The DocStop hotline is staffed 24 hours a
day, 365 days a year by trained personnel who are able to speak most European languages and can
provide information about a DocStop partner, usually with opening times, contact details and availability
of parking. The contact points are normally located at service areas or medical practices and
hospitals in direct proximity to motorway slip roads. The service staff then help the driver to find a suitable
doctor.
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Workforce
The Knorr-Bremse Group is concerned to offer an attractive and responsibly managed working environment
to its entire global workforce of over 20,000 employees, wherever they are and whatever area
they work in. Committed, well-trained employees form the company’s backbone and are the key to its
future success. That is why Knorr-Bremse’s global human resources strategy aims to encourage and
motivate current employees and ensure their long-term loyalty, as well as enhancing the company’s
attractiveness to potential recruits.
During the year under review, Knorr-Bremse once again carried out a global employee survey aimed
at measuring levels of satisfaction within the Group and identifying possible areas for improvement.
The results and the insights they offer are currently being analyzed and evaluated, and the first improvements
are due for introduction in 2012.
It is crucial for a globally operating company like Knorr-Bremse to maintain common values and an
active corporate culture throughout the Group. To this end, Knorr-Bremse continued to work on developing
its corporate and management culture during the year in question. As part of a constructive
dialogue with international specialists and managers, the existing corporate culture was analyzed –
with a focus on current and future challenges – and new approaches were identified. This enabled
new corporate values and management guidelines to be developed, and during the coming year
these will be communicated to all members of the workforce and integrated into management training
measures.
Knorr-Bremse puts great store by workplace health and safety for its employees. The year under review
saw a wide variety of health-promotion campaigns and activities at the company’s various sites, including
health days, examinations by the company doctors, advisory sessions on health and sports
programs. As part of its comprehensive health and safety and environmental protection policy the
company takes a systematic approach to safety management, carrying out extensive workplace risk
assessments, promoting safety awareness amongst employees, analyzing any accidents that occur
and planning appropriate measures to avoid them in the future. The majority of its European sites are
also certified under the OHSAS (Occupational Health and Safety Series) 18001 standard. During the
year in question IFE North America and the Johannesburg site in South Africa also achieved OHSAS
18001 certification.
Environmental and Climate Protection
Knorr-Bremse also acts responsibly in the field of environmental and climate protection. The company’s
aim is to minimize the environmental impact of the manufacture and use of its products. To ensure
that this happens throughout the company, Knorr-Bremse organizes initiatives aimed at increasing
employees’ awareness of the issue.
This responsibility for environmental and climate protection is laid down in the official Group-wide
health and safety and environmental protection policy, which covers aspects such as resource efficiency,
ecological awareness-raising, environmental management and product responsibility. To put
this commitment into practice Knorr-Bremse has set up a mandatory environmental management
system covering internal and external environmental regulations and standards. The Group’s production
and service sites in Europe and the Americas – and most of those in the Asia/Pacific region – are
already certified to the ISO 14001 environmental management standard, and further sites will be un-

R e p o R t
dergoing the certification process over the next few years. In the year under review, Knorr-Bremse’s
subsidiary IFE North America also achieved ISO 14001 certification.
In addition to this, the energy efficiency initiative ECCO 2 (Efficient Cut of CO 2 ) is designed to contribute
to climate and environmental protection. Knorr-Bremse has set itself the ambitious target of increasing
energy efficiency by 20% and achieving a 20% reduction in CO 2 emissions by the year 2020 (base
year: 2009), and during the year under review the company came significantly closer to achieving this
goal. The main focus of activities under the ECCO 2 initiative in 2011 was on improving waste heat recovery,
increasing the use of energy-saving lighting, adapting and optimizing assembly lines and
launching an across-the-board awareness-raising campaign amongst the workforce. The measures
adopted in 2011 enabled CO 2 emissions to be cut by 11% compared with the base year and energy
efficiency to be increased by 15%.
Social Commitment
For Knorr-Bremse, the concept of corporate responsibility also includes social commitment. The company
perceives its role as participating in the life of the community and helping to shape and positively
influence its social environment. Social commitment for Knorr-Bremse covers both local and
international projects.
The charitable organization Knorr-Bremse Global Care e. V. supports people all over the world who are
in need as a result of environmental disasters, accidents, armed conflict, poverty or illness. The main
focus of the aid programs run by the charity is on medium- and long-term education and infrastructure
projects, but it also offers rapid emergency relief in the aftermath of natural disasters.
The company also organizes so-called Local Care Initiatives – social projects run in the neighborhood
of company sites that rely on the involvement of local Knorr-Bremse employees. Local Care projects
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1 3 4 R e p o R t | K n o R R - B R e M S e G R o U p
can range from financial support for social institutions to so-called Corporate Volunteering Projects, in
which individual employees become involved on a voluntary basis. During the coming year, Knorr-
Bremse intends to systematize its local support activities and increase awareness of them within the
company. The aim is to have an exchange of information about successful initiatives, generate new
ideas for further projects, create synergies and – last but not least – establish local commitment as an
integral part of corporate culture.
CR Communication
Knorr-Bremse is aware of the importance of communicating the strategies and goals of its corporate
responsibility program and providing information about progress made in achieving them. In order to
strengthen confidence in the company it welcomes dialogue with its various stakeholders – employees,
customers, business partners and representatives of civil society.
The company attaches particular importance to internal communication and uses a variety of different
channels to strengthen employee awareness of its sustainability goals and activities. It organizes
regular internal presentations and publishes articles on specific CR activities in its in-house magazine
as well as running training sessions in corporate responsibility and corporate values for new members
of staff. The company also presents annual Group-wide CR Awards for outstanding projects in the
fields of environment and social commitment. The 2011 winner in the “Environment” category was the
Knorr-Bremse site in Aldersbach for its project to optimize the energy efficiency of an assembly line.
The CR Award in the “Social Commitment” category went to Knorr-Bremse KAMA in Russia for the
long-term involvement of its employees in an old people’s home in the vicinity of the production facility.

R e p o R t
In order to keep external stakeholders informed, Knorr-Bremse is increasingly publishing reports on its
CR activities. The UN Global Compact Progress Report published for the first time in 2011 documented
annual measures taken and results achieved in relation to the ten principles of the UN Global Compact.
Knorr-Bremse is also working on providing more information about its sustainability achievements
on the Internet, so that the various interest groups can receive a more complete picture of the
company’s adherence to its corporate responsibilities.
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Long-term
aid worldwide
A regular income, a roof over your head, access to medical care and education
– all these things cannot be taken for granted in many countries of the world.
Which is why, for the past six years, the charity Knorr-Bremse Global Care e. V.
has been supporting people affected by environmental disasters, accidents,
armed conflict, poverty or illness. Ever since the charity was first set up in 2005,
the Knorr-Bremse Group has been
expanding its social commitment
year on year.
During 2011, Knorr-Bremse Global Care e. V. was
provided with additional resources that enabled
it to expand its social commitment and increase
the number of projects it implemented. The
Knorr-Bremse Group stepped up its annual funding
of the charity by EUR 500,000 to EUR 1.5 million
– boosting the motivation of members of
the organization to continue improving the lives
of people in need.
Faced with steady growth in the number of projects,
higher levels of donations and the challenge
of ambitious quality targets, Knorr-Bremse
Global Care decided to carry out a review of its
internal processes during 2011, as a result of
which the charity revised and expanded its project
selection criteria. To receive funding, projects
have to aim to help people in need to achieve
greater self-reliance. Only carefully planned,
long-term measures can identify new possibilities
and achieve long-lasting change. Knorr-

Bremse Global Care e. V. focuses on providing
support to groups and entire communities in a
bid to achieve far-reaching structural change.
Members of the organization endeavor to help
people to improve their lives and determine
their own destinies. That is why – wherever possible
– future projects will entail hands-on involvement
by members of the Knorr-Bremse
workforce.
Long-term aid for some 65,000 people
During the year under review, Knorr-Bremse
Global Care e. V. ran 42 projects in 24 countries
– 24 of them carried over from 2010 and 18 new
ones. Some 65,000 individuals all over the world
benefited from total funding of EUR 1.73 million.
In no fewer than 21 of the projects, the commitment
of Knorr-Bremse colleagues at local level
was crucial to their successful implementation.
The organization’s aim is always to support projects
that have a long-term impact and promote
self-reliance, enabling those affected to become
economically independent. But Knorr-Bremse
Global Care e. V. also takes action in the aftermath
of unforeseen disasters, providing rapid
support to ensure the survival of those affected.
For example, in 2011 the organization provided
emergency aid following the tsunami in Japan
and the famine in East Africa.
Examples of the organization’s activities during
the year under review include the construction
of a new children’s home near Nairobi, in Africa,
and also an important aid project in India.
R e p o R t
Training Center in Faridabad, India
The aim of the training center for young people
in the vicinity of the Knorr-Bremse site in Faridabad,
India is to enable young people to become
independent and determine their lives for
themselves.
The local organization Prayas Social Welfare Society
(Prayas SWS) already provides free elementary
education to a total of some 6,000 children
from poor backgrounds by making use of unused
school facilities in the afternoons.
In a bid to offer the children a chance to receive
vocational training as well, Prayas SWS and
Knorr-Bremse Global Care e. V. are supporting
the construction of a training center that will
give them the prospect of making a living for
themselves. Learning a trade would normally be
beyond the means of these children and adolescents.
Together with some of his colleagues, A. P. Garg,
Managing Director of Knorr-Bremse India Private
Ltd., a subsidiary of the Knorr-Bremse Group, has
energetically supported and supervised the
project.
1 3 7

Employees
R e p o R t
Thanks to the outstanding work ethic and motivation of its employees, in 2011 Knorr-Bremse
again achieved significant sales growth in both its divisions. Knorr-Bremse sees this work
ethic as the basis for its long-term success. During the year under review the Group therefore
made significant efforts to further enhance its attractiveness as an employer and to give its
employees the opportunity to participate in shaping the company’s future – through its
employee survey, for example, which was repeated in 2011.
Employment situation
By the end of 2011, the workforce of the Knorr-Bremse Group had risen from 18,053 employees in the
previous year (16,277 excluding leasing) to 20,050 (18,143 excl. leasing). This represents an 11.1% increase
in staffing levels compared to 2010.
Employee numbers rose in both divisions, reflecting the positive growth trend in Knorr-Bremse’s business.
In the Rail Vehicle Systems division the number of employees grew from 10,824 (9,523 excl. leasing)
to 11,083 (9,955 excl. leasing). In the Commercial Vehicle Systems division the number of employees
rose from 7,063 (6,590 excl. leasing) in 2010 to 8,636 (7,858 excl. leasing) in 2011. The number of
employees in the holding companies also increased, from 166 (164 excl. leasing) to 331 (330 excl. leasing)
at the end of 2011.
Employees in the regions
In the European region – which also includes Africa and the Middle East in Knorr-Bremse’s organization
– the Group employed 10,442 people on December 31, 2011 (9,957 excl. leasing). This represents an
increase of 5.9% over the previous year. Europe therefore accounted for 52.1% of all Group employees,
compared with 54.6% in the previous year.
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1 4 0 R e p o R t | K n o R R - B R e M S e G R o U p
The number of employees in Germany at the end of the year under review was 3,848 (3,587 excl. leasing),
12.2% more than one year previously. Germany therefore accounted for 19.2% of the Knorr-Bremse
workforce. In the rest of Europe excluding Germany the number of employees grew from 6,430 (6,008
excl. leasing) to 6,594 (6,370 excl. leasing), which equates to 32.9% (2010: 35.6%) of the total workforce.
The Group had 3,758 employees in North America on December 31, 2011 (3,558 excl. leasing), up 24.1%
from the previous year. This represents an increase in the proportion of group employees in North
America from 16.8% to 18.7%. The Group had 826 employees in South America in 2010 (806 excl. leasing),
compared to 811 in 2011 (805 excl. leasing).
The Asia/Australia region saw another rise in staffing levels, from 4,339 employees at the end of 2010
(3,478 excl. leasing) to 5,039 on December 31, 2011 (3,823 excl. leasing). This represented an increase of
16.1%. The proportion of the Group workforce employed in the Asia/Australia region grew from 24.0%
to 25.1%.
Human resources development
Outstanding, globally recognized products, processes and services can only be delivered by an outstanding
workforce. The human resources policy plays a vital supporting role here by providing systematic
and targeted human resources development and placing particular emphasis on international
job assignments around the entire globe.
A comprehensive talent management program, which was further enhanced during the year under
review, develops qualified successors for key management positions and offers high potentials attractive
career opportunities across the whole of the Group. Development Centers are held several times
each year, allowing Knorr-Bremse to identify individual strengths and areas for improvement and to
define targeted and systematic professional development measures for each participant.

R e p o R t
Management Evolution Program (MEP)
Knorr-Bremse has been running its successful Management Evolution Program (MEP) for 13 years now,
giving recent graduates the opportunity to participate in three important projects as management
trainees, gaining valuable insights into operations in different parts of the Group.
In the year under review the number of trainees was increased from 10 to 16, reflecting the ongoing
internationalization of the Group’s business. The three six-month placements develop trainees’ hard
and soft skills in a professional context. Direct project responsibility and a structured, rotating training
program teach the young people how to handle responsibility in an international environment at an
early stage in their career.
Global Employee Survey (GES)
Any company’s long-term success in the marketplace is crucially dependent on its ability to subject its
own actions to critical scrutiny. In September of the year under review the Group conducted its fourth
Global Employee Survey. The high response rate of 77% indicates that many employees took this opportunity
to play an active part in shaping their future and the future of the business.
All Group employees worldwide were invited to complete one of the questionnaires, which were
available in 14 languages. The completed questionnaires were evaluated anonymously, ensuring that
individuals could not be identified in the process. Representatives of the specialist departments and
the works council were involved in updating the questionnaires from previous years. The aim was to
ensure comparability with the key findings of previous employee surveys, while at the same time incorporating
new subject areas such as Corporate Responsibility (CR).
In the year under review the questionnaires could also be completed online for the first time. Employees
without internet access were able to participate using paper questionnaires, as in previous years.
In future the Employee Survey will take place every two years, alternating with the Leadership Feedback
survey in which employees evaluate their managers.
Staff Dialogue (SD)
Growing together, learning from each other – the performance review process is an active dialogue,
not a one-way street. This dialogue is more than just an important human resources management tool
– it is also the basis and prerequisite for successful working relationships between managers and their
teams. Knorr-Bremse therefore continued to implement its Staff Dialogue program systematically in
the year under review. Managers across the entire Group are required to conduct a comprehensive
review dialogue with each of their employees at least once a year, during the first quarter.
During the dialogue, manager and employee review the previous year’s work together. The aim is to
identify, in concrete terms, how far the employee has fulfilled his or her objectives and responsibilities,
their strengths and weaknesses, the challenges that lie ahead and career development prospects for
the future.
The Staff Dialogue focuses on professional performance and also on people skills. But these regular
dialogues fulfill other important functions, too: setting targets for the coming year, discussing further
development opportunities and above all building a relationship of trust between manager and employee.
1 4 1

1 4 2
R e p o R t | K n o R R - B R e M S e G R o U p
Focus on leadership
Good leadership is the basis for a contented workforce and efficient teamwork.
Numerous studies have also demonstrated a significant correlation between
leadership and corporate success. Leadership Development was therefore one
of the top priorities of Knorr-Bremse’s human resources policy during the year
under review, with greater emphasis
placed on this topic across a diverse
range of human resources instruments
in order to strengthen and
enhance the Group’s management
culture.
A new management development concept
They must be conversant with the latest management
techniques, they must be consistent,
they must allow their staff appropriate levels of
autonomy, and they must always be ready to listen
to their employees’ concerns. These are just
some of the skills effective managers need to
possess. Knorr-Bremse is dedicated to supporting
a systematic development and training process
in order to achieve this goal – a process that
was reconfigured during the year under review.
The new development program focuses on
leadership at all management levels – from the
newly appointed team leader through to managers
with many years of experience behind
them. This leadership initiative was launched
with training events for senior executives in the
top management tier which were rolled out dur-

ing the year under review. One of the primary
aims was to deliver a focused program to update
senior managers on the latest leadership tools
and strategies, to build awareness of the corporate
values and develop new leadership guidelines
– helping to establish a uniform approach
to leadership throughout the Group. Following
the completion of this initiative, the next step in
2012 will be to provide systematic training for
the lower management tiers, which will be
aligned with globally harmonized standards.
High potentials
programs for future managers
The focus was also on leadership in tailored
training programs for high potentials in the mid
and upper management tiers.
In Knorr-Bremse’s newly launched Senior Potential
Program – designed to train potential candidates
for departmental management roles –
participants were able to select the modules
most appropriate to their needs from a package
of training offers, putting together a program
tailored to their individual requirements. Leadership
skills were a core element in all the modules
provided, although building and developing an
international network was another key aim of
this program.
The Group has also staged two International
Management Promotion Groups to date, inviting
international high potentials for specialist
departmental management roles to Germany
R e p o R t
for training in line with a comprehensive, timetabled
curriculum covering self-management,
strategic thinking and leadership skills.
Leadership Feedback
promotes team cohesion
The Leadership Feedback initiative, which was
successfully completed in November 2010, for
the first time featured a uniform international
questionnaire and made use of a supporting online
program. Approximately 1,000 managers in
over 50 locations were evaluated by around
13,000 employees. The second part of this initiative
followed during the year under review:
drawing on the Feedback results, teams took
part in workshops, joining forces to develop
strategies for improving and optimizing their
teamwork in the future.
1 4 3

Trade Fairs
R e p o R t
Local presence as a global player: Knorr-Bremse was represented by expert teams at all the
major trade fairs in the rail and commercial vehicle sectors and presented its innovative
products to an international audience. Over the next few years, the business of both Knorr-
Bremse divisions will be influenced by the megatrends of energy efficiency, safety, urbanization
and globalization.
Rail Vehicle Systems
In the coming years, major global trends will have a significant impact on the rail vehicle industry and
will pose considerable challenges. With its focus on energy efficiency, safety, urbanization and globalization,
Knorr-Bremse is already developing the products and systems that will be needed in the future.
As a global player, in 2011 the company again presented its systems expertise to a broad-based
specialist audience throughout the world.
UITP, Dubai, April 2011
Under the motto of “Boosting public transport: Action!,“ a large number of exhibitors from around the
world presented their latest solutions for the rail market. The Knorr-Bremse Group and its subsidiaries
displayed ground-breaking products to make rail transportation more efficient, more environmentally
compatible and, most important, safer.
Railways & Harbours, Johannesburg, April 2011
This event comprised two components: a conference with a large number of presentations on the
background to and specific features of the South African rail market and a trade fair, where more than
80 exhibitors showcased their products.
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1 4 6 R e p o R t | K n o R R - B R e M S e G R o U p
SIFER, Lille, April 2011
Since its return to Lille, the only French trade fair solely for the rail sector has increasingly become a
platform for the exchange of ideas and experience, which is why it is a firm fixture in the events calendar
of Knorr-Bremse.
Korea Railways & Logistics Fair, Busan, June 2011
“RailLog” in Busan is Korea‘s only rail trade fair, as well as being one of the few held in Asia. Apart from
product presentations, the event concentrates on the logistics sector. In 2011, one of the main issues
at RailLog was how to ensure the efficient organization of the growing volumes of rail traffic in Asia.
Railtex, London, June 2011
In 2011, Britain‘s largest railway technology exhibition was once again a key venue for the international
rail industry. The exhibition for rail equipment, systems and services was held at London‘s Earls
Court exhibition center.
Conference on Modern Rolling Stock, Graz, September 2011
The conference has become a popular meeting-point for many international rail experts. The two and
a half days of the event included a large number of technical presentations with topics ranging from
new results of basic research on rolling stock technology to questions of infrastructure and approval.
Innovative products from components to systems and even entire vehicles were also on show.
EXPO 1520, Moscow, September 2011
At the third International Salon of Rolling Stock and Rail Technologies, “EXPO 1520,” record orders were
placed in 2011. The Russian rolling stock market is growing and so too is EXPO 1520: compared with
the previous event, there was an increase of about 50% in the exhibition space used by manufacturers
from around the world to showcase their products.
IREE, New Delhi, September 2011
Every day, the Indian rail network carries some 20 million passengers and about 2.5 million tons of
freight. This was one of the reasons why the International Railway Equipment Exhibition attracted
more than 300 exhibitors to New Delhi, where they showcased their solutions for the modern rail vehicle
market on a total exhibition area of 11,000 m². Knorr-Bremse and many of its subsidiaries were
among the exhibitors.
Alstom Tech-Day, Paris, September 2011
Alstom invited Knorr-Bremse, as one of its top suppliers, to the Alstom Tech-Day at the company‘s
headquarters in Paris. Knorr-Bremse took advantage of the day to refresh contacts with the French rail
vehicle producer and made a number of technical presentations. The “Little Oktoberfest” organized by
Knorr-Bremse rounded off the event in convivial Bavarian style.

R e p o R t
APTA, New Orleans, October 2011
Some 17,000 rail vehicle industry decision-makers met in New Orleans in 2011 at the exhibition held
to coincide with the Annual Meeting of the American Public Transportation Association (APTA). Together
with a large number of other suppliers, Knorr-Bremse showcased its latest developments in the
rail sector.
Nordic Rail, Jönköping, October 2011
Nordic Rail focused on special requirements for rail solutions in the Nordic countries. Demand for
speedy and efficient rail transport in the Far North has been at a high level for many years.
TRAKO, Gdansk, October 2011
The “Trade Fair Trako 2011,” which took place over four days in 2011, is the second-largest European rail
vehicle showcase after Innotrans. As one of more than 400 exhibitors, Knorr-Bremse Poland presented
a wide variety of products relevant to the Polish market.
Metro China, Beijing, November 2011
The largest metro event of the year in China covered all aspects from planning and design through to
operation and maintenance and attracted considerable attention from Chinese metro operators. They
were not only interested in Knorr-Bremse braking systems but also in IFE doors, Westinghouse platform
screen doors and Microelettrica switchgear.
AusRAIL PLUS, Brisbane, November 2011
The largest annual specialist event for rail traffic in the Asia-Pacific region offered decision-makers a
first-class platform for the discussion of technological developments and investment opportunities.
More than 300 exhibitors made use of this forum to present their latest products and services.
Knorr-Bremse also took part in the 5th Public Transport Innovation Congress in Freiburg, as well as
presenting its products at Public Transport/Interiors in Berlin; Suissetraffic in Geneva; Czech Raildays in
Ostrava; Railway Interchange in Indianapolis; and the 13th International Conference on Rail Transportation
in Saragossa.
1 4 7

1 4 8 R e p o R t | K n o R R - B R e M S e G R o U p
Commercial Vehicle Systems
Safety and efficiency combined with tailor-made solutions for highly diverse markets are essential requirements
in today’s commercial vehicle sector. Knorr-Bremse Commercial Vehicle Systems presented
its solutions in this field to a wide specialist audience in 2011.
Comtrans, Moscow, September 2011
Russia is a huge country posing a whole host of transport challenges. International commercial vehicle
manufacturers continue to be highly interested in the Russian market. At this trade fair, which is to
be held in alternating years with the commercial vehicle IAA in Hanover in the future and has thereby
anchored its position as the leading commercial vehicle showcase in Eastern Europe, Knorr-Bremse
presented a selection of products geared to the special requirements of the Russian market.
Equip Auto, Paris, October 2011
The biennial trade fair for car and commercial vehicle equipment held at the Villepinte Exhibition
Center in the north of Paris has become one of the key venues for manufacturers, dealers and suppliers
to present new products and services. In 2011, 1,800 exhibitors from 50 countries took part in the
event, including Knorr-Bremse.
TATA Motors Technology Day, Pune, October 2011
At the technology day held by Indian automaker TATA, Knorr-Bremse not only presented a wide variety
of products developed for the Indian market but also gave live demonstrations of some systems including
the Anti-Roll-Back System (ARB), the Autonomous Emergency Brake System AEBS and the
electronic stability program ESP.
Presence at aftermarket fairs
Ensuring optimum long-term safety and efficiency levels in safety-critical commercial vehicle systems
demands outstanding levels of after-sales service. Knorr-Bremse presented its wide range of services
at the Trost-Schau in the new Stuttgart exhibition center, at the tenth Carat-Leistungsmesse in Kassel,
at PV Automotive in Hanover and at Wessels und Müller in Osnabrück.

R e p o R t
1 4 9

Notes to the
Consolidated
Financial Statements

1 5 2
1
Principles and methods
The consolidated financial statements have been drawn up in accordance with generally accepted
accounting principles, complying with the accounting requirements of the German Commercial Code
(HGB) and additional statutory provisions. Figures in the consolidated financial statements are shown
in thousands of euros (TEUR). Certain items on the balance sheet and in the statement of income are
combined for the sake of greater clarity. These items are explained separately in the Notes to the Consolidated
Financial Statements.
Accounting and valuation
The financial statements of the companies included in the consolidated financial statements are prepared
according to uniform principles of accounting and valuation applied to the Group. For the purposes
of consolidation according to the equity method, any valuations in the financial statements of
the associated companies that deviate from the uniform principles applied to the Group are retained.
Purchased intangible assets are valued at acquisition cost less scheduled depreciation; additional depreciation
is taken where necessary.
Fixed assets are recorded at acquisition or production cost, less scheduled depreciation in the case of
items subject to wear and tear; additional depreciation is taken where necessary. Depreciation on
fixed assets is generally applied using the linear method, based on useful life. In the case of German
companies included in consolidation, additions prior to January 2008 and after January 2009 are for
the most part depreciated using the declining balance method, switching over to the linear method
as soon as the latter results in higher depreciation. Minor fixed assets are depreciated to the maximum
extent permissible under the respective countries’ tax provisions.
Interests in affiliated, associated and related companies and miscellaneous investments are stated at
cost or, in the event of a probable sustained diminution in value, at fair value (where the latter is lower).
Materials and supplies are carried in inventories at the lower of average acquisition cost or replacement
cost. Provision against realization risks is made where necessary.
Work in process and finished products are stated at production cost, but in no case higher than the
projected sales revenues less any costs accruing prior to sale. Production cost includes direct cost of
materials and labor, as well as production overhead. A reasonable allowance is made where there is a
risk of a decline in inventory values. Receivables are stated at their nominal value, less any necessary
provisions against specific debts. Receivables bearing no or low interest are stated at their net present
value. General charges have been made to cover the general credit risk.
Other assets are stated at the lower of average acquisition cost, net present value or fair value.

N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 3
Earnings or disbursements prior to the balance sheet date are shown as prepaid income or prepaid
expenses where they represent revenues or expenses for a certain period after the balance sheet date.
Foreign currency items are valued at the rate existing at the transaction date or – if less favorable – at
the rate at the balance sheet date. Where foreign currency items have been hedged, they are valued
at the corresponding hedging rate. Where the remaining term is one year or less, foreign currency
items are valued at the mean spot rate at the final balance sheet date.
Rate-hedging and option transactions are performed selectively and exclusively for hedging purposes.
Wherever possible, financial derivatives covering assets, borrowings, open contracts or transactions
with a high probability of closure are bundled together as single items for valuation purposes (“macro
hedges”).
Accrued liabilities include reasonable and sufficient allowance for all perceivable risks and any contingent
liabilities. Accruals are valued in accordance with § 253 (1) and (2) of the German Commercial
Code (HGB), whereby use has been made of the options for retention of control laid out in Article 67
(1) clause 2 and (3) clause 1 of the Act Introducing the German Commercial Code (EGHGB). Transfers
to accrued liabilities are made using the net method.
In Germany, pension plan accruals and similar commitments are set up according to actuarial principles
based on realistic assumptions. Assumptions included in the calculations include future salary
increases and future pension adjustments, as defined in § 16 of the German Law on Occupational Pensions
(BetrAVG), as well as assumptions relating to staff turnover. The calculations are based on the
biometric reference values devised by Klaus Heubeck (mortality tables RT 2005 G). The following parameters
were applied:
Interest rate: 5.13% p.a.
Salary increases: 3.00% p.a.
Annuity trend: 1.50% p.a.
Pension plan accruals are determined using the modified discount value method. Our foreign subsidiaries
cover pension plans and similar commitments by accruals that are calculated according to principles
similar to those used in Germany. Only in the United States of America are pension plans and
similar commitments of major significance to the net worth, financial position and results of the
Group. Here the projected unit credit method has been used, based on the following parameters:
Interest rate: 6.12% p.a.
Salary increases: 3.50% p.a.
Annuity trend: up to 2.50% p.a.
Liabilities are stated at their settlement value.

1 5 4
Consolidated companies
In addition to Knorr-Bremse AG, 19 German and 99 foreign subsidiaries over which Knorr-Bremse AG
can exert a direct or indirect controlling influence are included in the consolidated financial statements.
Investments in one German and two foreign companies are shown in the consolidated financial statements
as investments in associated companies. One German and eight foreign subsidiaries have not
been included in consolidation because of their minor significance in relation to the net worth, financial
position and results of the Group. Two German companies are not shown as associated companies,
but instead are stated at acquisition cost.
During fiscal year 2011 the Group acquired the following companies, which are included in consolidation:
Comet Fans S.r.l., Solaro, Milan/Italy
Kalmar Tågkompetens AB, Kalmar/Sweden
Knorr Brake Corporation Canada Holdings Ltd., Montreal/Canada
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey
Technologies Lanka Inc., La Pocatière/Canada
The following companies are also newly established or included in consolidation for the first time:
Knorr-Bremse CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,
Barueri, São Paulo/Brazil
Knorr Brake Realty LLC, Westminster, Maryland/USA
The following companies have been renamed:
Knorr-Bremse Brasil (Holding) Administração e Participação Ltda., São Paulo/Brazil
(formerly Indústria Freios Knorr Ltda., São Paulo/Brazil)
Knorr-Bremse Rail Systems (Burton) Ltd., Stretton, Burton upon Trent/Great Britain
(formerly Sigma Coachair (UK) Ltd., Newhall/Great Britain)
Sigma Air Conditioning Pty. Ltd., Wetherill Park, Sydney/Australia
(formerly Sigma Coachair Group Pty. Ltd., Wetherill Park, Sydney/Australia)
The following companies have been merged or wound up:
EMC Traction S.r.l., Milan/Italy
Officine de Zan S.r.l., Rozzano, Milan/Italy
MicroEner S.A.S., Noisy le Grand/France

N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 5
This means that compared to the previous year, the number of companies included in consolidation
has increased by six foreign companies. On the following pages, a detailed list of affiliated and associated
companies appears in a separate breakdown of the Group’s shareholdings.
The above-mentioned changes in the scope of consolidation had no significant impact on the Group’s
net assets, financial position and operating results. The newly consolidated companies caused the
balance sheet total to increase by EUR 17.9 million.
Principles of consolidation
Until December 31, 2009, the book value method was used to consolidate investments in subsidiaries.
This entailed offsetting book values against the value of our interests in the shareholders’ equity of the
subsidiaries at the time of the initial consolidation. Companies were included in consolidation at the
date of acquisition or at the balance sheet date. Since fiscal year 2010, investments in subsidiaries have
been consolidated using the revaluation method. This entails reporting shareholders’ equity at the
value corresponding to the market value of the assets and borrowings to be included in the consolidated
financial statements. Companies are included in consolidation at the date of acquisition. Since
2002, any resulting goodwill has been capitalized in compliance with GAS standards. Scheduled depreciation
is applied on the basis of operational considerations relating to useful life; within the Group,
this may not exceed 20 years. The useful life of goodwill is determined using the subsidiaries’ longerterm,
strategic business models.
Wherever possible, a negative goodwill resulting from the consolidation in investments is released for
the year in which it arises, as permitted by German commercial law and accounting standards.
Associated companies are consolidated using the equity method, with goodwill generally included as
part of the cost of acquiring interests in associated and related companies. Associated companies acquired
prior to January 2010 were consolidated at the date of acquisition or the balance sheet date. As
from fiscal year 2010, companies are included in consolidation at the date of acquisition.
Our share in the annual results of companies consolidated in accordance with this method, including
amortization on goodwill, is shown in the statement of income under Financial results. Receivables
and liabilities between consolidated companies are netted. Unrealized intercompany profits resulting
from intercompany trade in goods and services are eliminated in the consolidated statements. In the
consolidated statement of income, revenues from intercompany sales and other intercompany income
are offset against the corresponding expenses.

1 5 6
Foreign currency translation
The individual financial statements of the foreign companies included in consolidation are translated
into euros at the mean spot rate at the balance sheet date, with the exception of shareholders’ equity,
which is translated into euros at the historic rate. Income statement items are translated into euros at
the mean rate. Any resulting translation difference is reported under Group equity and noted in the
statement of changes in group equity.
Deferred taxes
Deferred taxes as defined under §§ 274 and 306 of the German Commercial Code (HGB), resulting from
temporary differences between the amount stated in the tax accounts of individual group companies
and the amount stated in the consolidated balance sheet (including differences arising as a result of
accounting and valuation adjustments or during the consolidation process), are netted wherever possible,
in accordance with legal requirements. In the individual balance sheets prepared according to the
uniform principles of accounting and valuation applied to the Group (“Financial statements II”), the option
to capitalize assets to the amount of probable tax relief in the following years is used in individual
cases. The calculation of deferred taxes is based on the tax rates that are expected to be valid at the time
of their realization.
Deferred taxes on losses carried forward are capitalized in individual cases, where there is sufficient
probability that the tax benefits can be realized. At each balance sheet date, the book value of deferred
tax assets is reviewed and, if necessary, adjusted as appropriate.

N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 7

1 5 8
2
In EUR thousands (TEUR) Carried forward
Jan. 1, 2011 *)
Additions *) Reclassifications *) Disposals *)
Industrial property rights/trademarks 261,714 14,102 21 (4,493)
Goodwill 256,750 32,137 (593)
Purchased intangibles 518,464 46,239 21 (5,086)
Land, equivalent rights to real property, and buildings,
including buildings on land not owned
303,391 19,845 1,515 (8,520)
Technical equipment and machinery 476,149 41,399 19,845 (23,820)
Other equipment, plant and office equipment 403,646 37,268 14,658 (16,286)
Advances to suppliers and construction in
progress
Changes in intangibles, fixed assets and investments
Acquisition or production cost
Additions to purchased fixed and intangible assets amounted to TEUR 205,579 in fiscal year 2011. This
figure includes investments in the amount of TEUR 158,864.
54,856 60,828 (36,039) (1,481)
Fixed assets 1,238,042 159,340 (21) (50,107)
Investments in affiliated companies 6,610 94 0 0
Investments in associated companies 4,570 0 (44) (200)
Miscellaneous investments 73,254 6,855 44 (263)
Investments 84,434 6,949 0 (463)
Intangibles, fixed assets and investments 1,840,940 212,528 0 (55,656)
*) valued at acquisition or production cost

Currency
differences *)
Balance
Dec. 31, 2011 *)
Accrued
depreciation/
amortization
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 9
Net value
Dec. 31, 2011
Net value
Dec. 31, 2010
Depreciation/
amortization during
the fiscal year
3,851 275,195 (199,313) 75,882 82,133 (20,850)
5,816 294,110 (180,654) 113,456 135,144 (54,534)
9,667 569,305 (379,967) 189,338 217,277 (75,384)
(5,357) 310,874 (124,958) 185,916 181,487 (7,162)
(2,963) 510,610 (313,432) 197,178 174,314 (43,195)
(1,980) 437,306 (323,129) 114,177 112,282 (38,724)
(1,420) 76,744 (5,847) 70,897 48,918 (154)
(11,720) 1,335,534 (767,366) 568,168 517,001 (89,235)
130 6,834 (2,793) 4,041 3,822 0
0 4,326 0 4,326 4,570 0
(1,358) 78,532 (16,083) 62,449 57,177 (6)
(1,228) 89,692 (18,876) 70,816 65,569 (6)
(3,281) 1,994,531 (1,166,209) 828,322 799,847 (164,625)

1 6 0
3
4
5
Intangibles
This heading includes primarily the acquisition of goodwill, patents, rights to the use of names and
trademarks, and IT software. IT software and goodwill account for the majority of additions. Any resulting
goodwill is subject to scheduled depreciation over a period of not more than 20 years. Other intangibles
are subject to scheduled depreciation over periods of between three and 10 years.
In fiscal year 2011 an additional provision in the amount of EUR 28.8 million was made against Sigma
Group goodwill. All intangible assets have a limited useful life.
Fixed assets
Movements of fixed assets are presented in the compilation on the preceding pages. To take technical
and economic factors into account, scheduled depreciation was applied to acquisition costs.
During the fiscal year, additional depreciation amounting to TEUR 264 was applied to a plot of land.
Investments
Investment movements are set out in the compilation above. Miscellaneous investments consist of
miscellaneous loans (TEUR 18,931), loans to affiliated companies (TEUR 41,546), long-term investments
(TEUR 1,823), and investments in other companies (TEUR 149).
The Group’s shareholding in OLB Oberlandbahn Fahrzeugbereitstellungs GmbH, Munich/Germany
was sold during the fiscal year under review.
List of shareholdings
1 Consolidated affiliated companies Share in
capital in %
Albatros GmbH, Munich/Germany 100.0
Anchor Brake Shoe Company LLC, West Chicago, Illinois/USA 100.0
BCVS Canadian Holdings LLC, Anjou, Quebec/Canada 100.0
BCVS Mexican Holdings LLC, Cd Acuña, Coah/Mexico 100.0
Bendix Commercial Vehicle Systems LLC, Elyria, Ohio/USA 100.0
Bendix CVS Canada Inc., Anjou, Quebec/Canada 100.0
Bendix CVS de Mexico SA de CV, Cd Acuña, Coah/Mexico 100.0
Bendix Spicer Foundation Brake Canada, Inc., Kingston, Ontario/Canada 100.0
Bendix Spicer Foundation Brake LLC, Elyria, Ohio/USA 80.0
Bost Ibérica S.L., Madrid/Spain 100.0
BSFB Holdings, Inc., Elyria, Ohio/USA 100.0
Comet Fans S.r.l., Solaro, Milan/Italy 100.0
Dr. techn. Josef Zelisko Ges.m.b.H., Mödling/Austria 100.0
Freinrail Systèmes Ferroviaires S.A., Reims/France 100.0
Hasse & Wrede CVS Dalian, China Ltd., Dalian/China 70.0

1 Consolidated affiliated companies
(continued)
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 1
Share in
capital in %
Hasse & Wrede GmbH, Berlin/Germany 100.0
Heine Resistors GmbH, Dresden/Germany 51.0
Heine Resistors (Suzhou) Co. Ltd., Suzhou/China 100.0
IFE CR a.s., Brno/Czech Republic 100.0
IFE North America LLC, Westminster, Maryland/USA 100.0
IFE-Tebel Australia Pty. Ltd., Granville/Australia 100.0
IFE-Tebel Technologies B.V., Leeuwarden/The Netherlands 100.0
IFE-VICTALL Railway Vehicle Door Systems (Qingdao) Co., Ltd., Qingdao/China 59.0
IGE-CZ s.r.o., Brno/Czech Republic 100.0
Kalmar Tågkompetens AB, Kalmar/Sweden 70.0
KB Gamma Beteiligungs GmbH, Munich/Germany 100.0
KB Lambda Beteiligungs GmbH, Munich/Germany 100.0
KB Media GmbH Marketing und Werbung, Munich/Germany 100.0
KB Sigma Beteiligungs GmbH, Munich/Germany 100.0
KB Omikron Beteiligungs GmbH, Munich/Germany 100.0
Knorr-Amabhiliki (Pty.) Ltd., Kempton Park/South Africa 74.0
Knorr Brake Corporation Canada Holdings Ltd., Montreal, Quebec/Canada 100.0
Knorr Brake Corporation, Westminster, Maryland/USA 100.0
Knorr Brake Holding Corporation, Watertown, New York/USA 89.3
Knorr Brake Ltd., Kingston, Ontario/Canada 100.0
Knorr Brake Realty LLC, Westminster, Maryland/USA 100.0
Knorr Brake Truck Systems Company, Watertown, New York/USA 100.0
Knorr-Bremse / Nankou Air Supply Unit (Beijing) Co., Ltd., Nankou/China 55.0
Knorr-Bremse Asia Pacific (Holding) Ltd., Hong Kong/China 100.0
Knorr-Bremse Australia Pty. Ltd., Granville/Australia 100.0
Knorr-Bremse Benelux B.V.B.A., Heist-op-den-Berg/Belgium 100.0
Knorr-Bremse Beteiligungsgesellschaft mbH, Munich/Germany 100.0
Knorr-Bremse Brake Equipment (Shanghai) Co., Ltd., Shanghai/China 100.0
Knorr-Bremse Braking Systems for Commercial Vehicles (Dalian) Co., Ltd., Dalian/China 100.0
Knorr-Bremse Brasil (Holding) Administração e Participação Ltda., São Paulo/Brazil 100.0
Knorr-Bremse CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China 66.0
Knorr-Bremse CARS LD Vehicle Brake Disc Manufacturing (Beijing) Co., Ltd., Daxing/China 50.0
Knorr-Bremse Commercial Vehicle Systems Japan Ltd., Tokyo/Japan 80.0
Knorr-Bremse Fékrendszerek Kft., Kecskemét/Hungary 100.0
Knorr-Bremse Ges.m.b.H., Mödling/Austria 100.0
Knorr-Bremse India Pvt. Ltd., Faridabad/India 100.0
Knorr-Bremse KAMA Systems for Commercial Vehicles OOO, Naberezhnye Chelny/Russia 50.0
Knorr-Bremse Investment GmbH, Munich/Germany 100.0
Knorr-Bremse IT-Services GmbH, Munich/Germany 100.0
Knorr-Bremse Nordic Rail Services AB, Lund/Sweden 100.0
Knorr-Bremse Polska SfN Sp. z o.o., Warsaw/Poland 100.0
Knorr-Bremse Rail Systems Italia S.r.l., Campi Bisenzio/Italy 100.0
Knorr-Bremse Rail Systems Japan Ltd., Tokyo/Japan 94.0
Knorr-Bremse Rail Systems Korea Ltd., Seoul/South Korea 100.0
Knorr-Bremse Rail Systems OOO, Moscow/Russia 100.0
Knorr-Bremse Rail Systems (Burton) Ltd., Stretton, Burton upon Trent/Great Britain 100.0

1 6 2
1 Consolidated affiliated companies
(continued)
Share in
capital in %
Knorr-Bremse Rail Systems (Machining) Ltd., Melksham, Wiltshire/Great Britain 100.0
Knorr-Bremse Rail Systems (UK) Ltd., Melksham, Wiltshire/Great Britain 100.0
Knorr-Bremse SA Holding Company (UK) Ltd., Melksham, Wiltshire/Great Britain 100.0
Knorr-Bremse S.A. (Pty.) Ltd., Kempton Park/South Africa 75.0
Knorr-Bremse S.R.L., Bucharest/Romania 70.0
Knorr-Bremse Sistemas para Veículos Comerciais Brasil Ltda., São Paulo/Brazil 100.0
Knorr-Bremse Sistemas para Veículos Ferroviários Ltda., São Paulo/Brazil 100.0
Knorr-Bremse Sistemi per Autoveicoli Commerciali S.p.A., Arcore/Italy 100.0
Knorr-Bremse System för Tunga Forden AB, Malmö/Sweden 100.0
Knorr-Bremse Systeme für Nutzfahrzeuge GmbH, Munich/Germany 80.0
Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, Munich/Germany 100.0
Knorr-Bremse Systeme für Schienenfahrzeuge Ibero Holding GmbH, Munich/Germany 100.0
Knorr-Bremse Systèmes pour Véhicules Utilitaires France S.A., Lisieux/France 100.0
Knorr-Bremse Systems for Commercial Vehicles India Pvt. Ltd., Pune/India 100.0
Knorr-Bremse Systems for Commercial Vehicles OOO, Moscow/Russia 100.0
Knorr-Bremse Systems for Commercial Vehicles Ltd., Bristol/Great Britain 100.0
Knorr-Bremse Systems for Rail Vehicles (Suzhou) Co., Ltd., Suzhou/China 100.0
Knorr-Bremse Systemy dla Kolejowych Srodków Lokomocji PL Sp. z o.o., Cracow/Poland 100.0
Knorr-Bremse Systémy pro uzitková vozidla CR s.r.o., Hejnice/Czech Republic 100.0
Knorr-Bremse Ticari Arac Fren Sistemieri Limited Şirketi, Istanbul/Turkey 100.0
Knorr-Bremse US Beteiligungs GmbH, Munich/Germany 100.0
Knorr-Bremse US Investment GmbH, Munich/Germany 100.0
Knorr-Bremse Vasúti Jármü Rendszerek Hungária Kft., Budapest/Hungary 100.0
Knorr-Bremse Verwaltungsgesellschaft mbH, Munich/Germany 100.0
Maquiladora de Acuña SA de CV, Cd Acuña, Coah/Mexico 100.0
Merak Jinxin Air Conditioning Systems (Wuxi) Co., Ltd., Wuxi/China 51.0
Merak Knorr Climatización S.A., Buenos Aires/Argentina 100.0
Merak North America LLC, Westminster, Maryland/USA 100.0
Merak Railway Technologies (Shanghai) Co., Ltd., Shanghai/China 100.0
Merak Sistemas Integrados de Climatización S.A., Getafe/Spain 100.0
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,
Barueri, São Paulo/Brazil
90.0
Microelettrica Power Devices (Pty) Ltd., Johannesburg/South Africa 100.0
Microelettrica Power (Pty) Ltd., Johannesburg/South Africa 74.0
Microelettrica Scientifica (Pty) Ltd., Johannesburg/South Africa 100.0
Microelettrica Scientifica S.p.A., Rozzano/Italy 100.0
Microelettrica USA LLC, Randolph, New Jersey/USA 100.0
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey 51.0
M.S. Resistances S.A.S., Saint Chamond/France 51.0
New York Air Brake Corporation, Watertown, New York/USA 100.0
Oerlikon-Knorr Eisenbahntechnik AG, Niederhasli/Switzerland 100.0
Sigma Air Conditioning Pty. Ltd., Wetherill Park, Sydney/Australia 100.0
Sigma Coachair Group (China) Co. Ltd., Changzhou/China 100.0
Sigma Coachair Systems (US) Inc., Chicago, Illinois/USA 100.0
Sigma Transit Systems Pty. Ltd., Wetherill Park, Sydney/Australia 100.0

1 Consolidated affiliated companies
(continued)
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 3
Share in
capital in %
Skach Ges.m.b.H., Mödling/Austria 100.0
Sociedad Española de Frenos, Calefacción y Señales S.A., Getafe/Spain 100.0
Stahlwerk Volmarstein GmbH, Wetter (Ruhr)/Germany 100.0
STE Schwingungs-Technik GmbH, Klieken/Germany 100.0
Sydac Pty. Ltd., Adelaide/Australia 100.0
Sydac Ltd., Manchester/Great Britain 100.0
Technologies Lanka Inc., La Pocatière, Quebec/Canada 75.0
Techtrain Associates Limited, Doncaster/Great Britain 100.0
Unicupler GmbH, Niederurnen/Switzerland 100.0
Westinghouse Brakes Australia Pty. Ltd., Concord West/Australia 100.0
Westinghouse Platform Screen Doors (Guangzhou) Ltd., Guangzhou/China 65.0
Westinghouse Platform Screen Doors Ltd., Walsall/Great Britain 100.0
2 Associated companies valued using the equity method Share in
capital in %
Gorilla Brake & Components, Inc., Brantfort, Ontario/Canada 20.0
Icer Rail S.L., Pamplona/Spain 25.0
Webasto Kiekert Bustüren GmbH, Karlsfeld/Germany 50.0
3 Affiliated companies not included in consolidation Share in
capital in %
Black River Air Logistics Corp., Watertown, New York/USA 100.0
Di-Pro LLC., Fresno, California/USA 100.0
Freios Knorr Argentina S.A., Buenos Aires/Argentina 100.0
KB Investment UK Ltd., Chippenham/Great Britain 100.0
Knorr-Bremse RUS OOO, Nizhny Novgorod/Russia 100.0
Metco Technical Consulting AG, Zug/Switzerland 100.0
Sigma Coachair (UK) Holdings Ltd., Newhall, Swadlincote/Great Britain 100.0
Sigma Transit Systems (Taiwan) Co. Ltd. Taipei/Taiwan 100.0
ITERIS Europe GmbH, Bietigheim-Bissingen/Germany 100.0
4 Associated companies valued without using the equity method Share in
capital in %
Megalith Grundstücksverwaltungsgesellschaft mbH & Co. Vermietungs KG, Mainz/Germany –
Deutsche-Anlagen-Leasing GmbH holds majority voting rights
Sanctor Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Marzahn KG, Düsseldorf/Germany
– Deutsche-Immobilien-Leasing GmbH holds majority voting rights
100.0
99.0

1 6 4
6
7
8
9
10
Inventories
Receivables and other assets
Cash and cash equivalents
This item includes cash at bank, checks and cash on hand.
Prepaid expenses
Group prepaid expenses amounted to TEUR 12,337 (2010: TEUR 12,182).
2011 TEUR 2011 TEUR 2010 TEUR
Remaining term
more than 1 year
2011 TEUR 2010 TEUR
Materials and supplies 244,436 184,402
Work in process 58,010 60,164
Finished products, merchandise 214,838 195,916
less advances received on orders (227,500) (221,145)
Total 289,784 219,337
in total in total
Accounts receivable, trade 413 695,183 689,066
Other assets 8,955 109,341 92,133
Total 9,368 804,524 781,199
Deferred taxes
At the balance sheet date deferred tax assets amounted to TEUR 63,030 (2010: TEUR 68,713), while deferred
tax liabilities totaled TEUR 0 (2010: TEUR 1,636).
In compliance with the legal requirements, deferred tax assets and liabilities are stated at the netted
amount. Of the deferred tax assets, TEUR 32,728 (2010: TEUR 39,169) relate to deferred taxes on individual
balance sheets of group companies and TEUR 30,302 (2010: TEUR 29,544) relate to consolidation
entries affecting net income. Deferred tax assets on individual balance sheets result primarily from temporary
differences in accrued liabilities, receivables and other assets. Deferred tax assets relating to
consolidation adjustments are primarily the result of eliminating unrealized intercompany profits. Deferred
tax liabilities relate solely to deferred taxes on individual balance sheets of group companies.
At individual company level and at Group level, deferred taxes are stated at the projected tax rate in the
respective countries at the time of realization. Tax rates range from 0% to 40%, while the rate on consolidation
activities is ca. 35%.

11
12
13
14
15
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 5
Capital stock
The capital stock of Knorr-Bremse AG is divided up into 2,600,000 bearer shares, each with a nominal
value of EUR 26. Stella Vermögensverwaltungs-GmbH and KB Holding GmbH, both based in Grünwald/
Germany, have informed Knorr-Bremse AG that directly or indirectly, they hold a majority interest in
Knorr-Bremse AG.
Capital reserves
Capital reserves are unchanged from the previous year. Like the legal reserve, they are subject to the
restrictions of § 150 of the German Corporation Law (AktG).
Retained earnings
In addition to the legal reserve, Retained earnings include the accumulated earnings of the companies
included in consolidation, where these have not been distributed. Furthermore this heading reflects all
Group items that exert an influence on shareholders’ equity. The legal reserves amounted to TEUR 8,883
(2010: 8,680). The statutory reserves (TEUR 6,869) rose by TEUR 748 compared to the previous year
(TEUR 6,121). Miscellaneous retained earnings amounted to TEUR 415,978 (2010: TEUR 298,207) at the
balance sheet date. The capitalization of deferred tax assets meant that an amount of TEUR 63,030
(2010: 67,077) was subject to the payout restriction laid down in § 268 (8) clause 2 of the German Commercial
Code (HGB).
Pension plan accruals
Pension plan accruals are valued according to the provisions of the German Accounting Law Modernization
Act.
The shortfall in cover for pension funds in Great Britain amounted to TEUR 17,479 as at year-end 2011.
Other accrued liabilities
2011 TEUR 2010 TEUR
Pension plan accruals 199,667 192,257
2011 TEUR 2010 TEUR
Provisions for taxes 78,940 59,109
Miscellaneous accruals 564,351 469,412
Total 643,291 528,521
The taxation provisions include projected income tax payments for the year under review or, where the
fiscal year diverges from the financial year, an income tax charge allocated on an accrual basis. Tax charges
are also shown for preceding assessment periods. Miscellaneous accruals relate primarily to warranty
and product liability commitments, personnel costs, restructuring activities, anticipated losses on contracts
and other risks in connection with current operations, as well as invoices outstanding.

1 6 6
16
17
Liabilities
2011 TEUR 2011 TEUR 2010 TEUR
Remaining term
less than 1 year
Contingencies and miscellaneous financial commitments
in total in total
Accounts payable, banks 33,188 135,394 110,615
Accounts payable, trade 513,263 514,410 492,782
Other liabilities:
Liabilities from accepted bills 6,063 6,063 114
Miscellaneous liabilities 124,697 126,319 111,353
(thereof for taxes) (51,513) (51,513) (37,281)
(thereof for social security) (11,443) (11,443) (11,530)
130,760 132,382 111,467
Total liabilities 677,211 782,186 714,864
(thereof with a remaining term of more than
5 years)
(2,075) (101,758)
2011 TEUR 2010 TEUR
Warranties 8,262 8,601
Guarantees 14,332 8,474
Land charge 0 11,000
Leasing commitments 190,669 195,697
As required by § 314 (1) no. 2a of the German Commercial Code (HGB), it should be noted that the
Group has retained options to purchase the remaining shares in three companies acquired in 2011, including:
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,
Barueri, São Paulo/Brazil,
Kalmar Tågkompetens AB, Kalmar/Sweden and
Technologies Lanka Inc., La Pocatière/Canada.
The options are not included in the book values of the affiliated companies because it is not possible to
provide a meaningful estimate of their value at the present time. The Knorr-Bremse Group has entered
into leasing contracts primarily for office buildings and production facilities in which the leased asset is
assignable to the lessor. These off-balance-sheet leasing transactions represent an alternative form of
finance to borrowing. Commitments associated with these leasing agreements are carried under Miscellaneous
financial commitments and amount to TEUR 190,669; maturities range from one year or less
(TEUR 31,291), to between one and five years (TEUR 86,517), to over five years (TEUR 72,861). The agreements
do not include any unusual termination or renewal options. A long-term purchase agreement
exists between Group company Bendix Spicer Foundation LLC, Elyria, Ohio/USA and Gorilla Brake &
Components, Inc., Brantford, Ontario/Canada. Under the terms of this agreement, Bendix Spicer Foundation
LLC undertakes to purchase from Gorilla Brake & Components, Inc. 85% of the spare part deliveries
made within the latter company’s regional sphere of influence.
Thanks to the risk management system in place, the risk of a claim arising on contingent liabilities is
rated as minimal.

18
19
20
21
22
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 7
Other operating income
Other operating income consists primarily of gains on currency exchange, income from the reversal of
reserves, income from disposals of fixed assets and rental income. The heading also carries gains on
currency differences amounting to TEUR 65,237 (2010: TEUR 70,799), as well as income relating to other
accounting periods in the amount of TEUR 42,531 (2010: 16,016), primarily from the reversal of reserves.
Cost of materials
Personnel expenses/staff
Depreciation
2011 TEUR 2010 TEUR
Expenditure on materials, supplies and merchandise 2,123,014 1,836,789
Expenditure on services purchased 88,709 75,956
Total 2,211,723 1,912,745
2011 TEUR 2010 TEUR
Wages and salaries 649,496 580,733
Statutory social welfare contributions and expenses relating to
pensions and employee benefits
155,320 140,131
Personnel costs 804,816 720,864
(thereof for retirement benefits) (39,788) (33,225)
Average number of employees during the fiscal year Number Number
Wage earners 8,634 7,211
Salary earners 8,669 7,851
Apprentices 205 201
Total 17,508 15,263
Depreciation and amortization on purchased intangibles and on
fixed assets
2011 TEUR 2010 TEUR
164,619 146,863
In addition, rental and leasing expenses totaling TEUR 51,079 (2010: TEUR 47,499) were incurred during
the reporting period.
Other operating expenses
Other operating expenses consist primarily of maintenance costs, direct sales costs, legal and consulting
fees, commissions, travel expenses and miscellaneous administrative expenses. Other taxes for the
Group amount to TEUR 15,420 (2010: TEUR 12,078). Expenses resulting from foreign exchange fluctua-

1 6 8
23
24
25
26
27
tions during the fiscal year amounted to TEUR 62,346 (2010: TEUR 72,354). The fee paid to the independent
auditors, KPMG AG Wirtschaftsprüfungsgesellschaft and their affiliates, amounted to TEUR 632 for
fiscal year 2011. Of this TEUR 502 was paid out for audit services and TEUR 130 for other services.
Financial results
2011 TEUR 2010 TEUR
Miscellaneous interest and similar income 14,065 6,163
Depreciation on investments (6) (2,078)
Interest and similar expenses (18,005) (14,818)
(thereof for discounts on accruals) (9,932) (8,044)
Income from associated, affiliated and other companies (181) (239)
Total (4,127) (10,972)
Extraordinary result
Extraordinary expenses reflected the one-off effect of adjustments in the previous year required to
comply with the German Accounting Law Modernization Act.
Taxes on income
Taxes on income and earnings amounted to TEUR 168,794 (2010: TEUR 130,295), and included deferred
taxes in the amount of TEUR 9,340 (2010: TEUR 8,842).
Net income
Financial derivatives
Financial instruments are not held for trading purposes.
2011 TEUR 2010 TEUR
Net income 329,296 239,381
Minority interests in earnings of consolidated subsidiaries (38,198) (30,690)
Retained earnings brought forward from the previous year (after
distribution of dividends)
106,556 180,670
Withdrawals from retained earnings (133,730) (126,805)
Unappropriated consolidated net income (Knorr-Bremse
AG unappropriated retained earnings)
263,924 262,556
Underlying transactions and their derivatives are bundled together as single items for valuation purposes
(“macro hedges”). These bundled derivatives are netted out without affecting net income wherever
the respective impact on income of the underlying transaction (hedged item) and the related
hedge offset each other (net hedge presentation method).

N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 9
Forward exchange and option transactions are performed purely and exclusively in order to hedge current
and future foreign currency payables and receivables from the sale and purchase of goods and
services and the elimination of exchange rate risk for selected assets. The aim of hedging operations at
Knorr-Bremse is to reduce the risks posed by foreign exchange fluctuations to the ordinary course of
business. Currency hedging is based on the volume of open commitments arising or expected to arise
from core business activities. Maturities are based on the lifespans of the underlying business transactions,
whereby highly probable transactions are hedged over a rolling three-year planning period. Because
the conditions and parameters of the hedges match those of the hedged items, any payment
flows or changes in value are offset in full. The Knorr-Bremse Group uses forward exchange contracts,
currency options, interest rate swaps and cross currency swaps as hedging instruments. Not included
in the hedging report are forward exchange derivatives with a nominal value of EUR 34.6 million.
Financial instruments amounting to EUR 907.1 million in total (representing hedged risks) are included
in macro hedges. Of this amount, EUR 258.5 million is attributable to the hedging of assets (micro
hedges), EUR 128.6 million to the hedging of open contracts (micro hedges) and EUR 520.0 million to
the hedging of high-probability transactions (portfolio hedges). Commodity futures contracts are used
exclusively to hedge price risks arising on fluctuations in the purchase prices of raw materials used in
Knorr-Bremse Group products (portfolio hedges). The volume of underlying transactions (hedged
items) is calculated on the basis of high-probability requirements for raw materials over a rolling twoyear
planning period. The derivatives are based on reference indices traded on commodity futures exchanges.
The effectiveness of the hedging relationship is retrospectively analyzed using statistical correlation
techniques, showing a correlation in excess of 80%. Concluded contracts totaling EUR 7.4
million are carried in full in macro hedges.
The nominal and market values of financial instruments as at December 31, 2011 break down as follows:
Total
Dec. 31, 2011
Total
Dec. 31, 2011
Total
Dec. 31, 2010
Total
Dec. 31, 2010
in EUR millions Nominal value Market value Nominal value Market value
Foreign exchange contracts
Forward exchange transactions 611 (26) 652 (8)
Currency options 170 (3) 113 1
Interest rate contracts
Cross currency swaps 125 (30) 140 (26)
Interest rate swaps 36 (4) 0 0
Commodity-related contracts
Swaps 7 (1) 14 1
Negative market values correspond to the risks associated with financial derivatives; of these, EUR 0.7
million are recorded under accrued liabilities. Positive market values are offset by risks associated with
the underlying transactions (hedged items) in the respective macro hedges.
While cross currency swaps generally come under the heading of interest rate instruments, in terms of
content they are used exclusively to hedge foreign currency risks, because the interest rates in the underlying
currencies are exchanged at fixed rates. The market value of financial derivatives is best defined
as the price one party is prepared to pay in order to assume the rights and/or obligations of another
party. Market values are calculated on the basis of market information available at the balance sheet
date and by applying standard market valuation methods as follows:
• Currency hedging contracts are valued on the basis of reference rates, taking account of
forward premiums and discounts.

1 7 0
28
29
30
Munich, March 2, 2012
Knorr-Bremse AG
Executive Board
• Cross currency swaps are valued analogously to pure interest rate contracts or currency
hedging contracts, on the basis of discounted, projected cash-flows using market interest
rates and reference rates for the remaining lifespans of the instruments.
• The lease payments for one real estate leasing contract were hedged by an interest rate
swap.
• Commodity contracts are used to hedge risks associated with steel and aluminum price
fluctuations. The contracts are valued at market price.
• Options are valued using recognized models for calculating option prices (e.g. Black-Scholes).
Paid option premiums are carried under Other assets. As at the balance sheet date, the book value of call
option premiums paid out amounted to EUR 2.5 million.
Research and development expenditure
In fiscal year 2011, Group expenditure on research and development amounted to TEUR 208,823 (2010:
TEUR 175,284).
Miscellaneous
The Group financial statements are published in the official electronic Federal Gazette and in the Commercial
Register at the local first-instance court in Munich, Germany. Under the terms of § 264 (3) of the
German Commercial Code (HGB), the subsidiary companies Knorr-Bremse Systeme für Schienenfahrzeuge
GmbH, Munich/Germany, and Hasse & Wrede GmbH, Berlin/Germany, are exempt from the obligation
to publish their figures pursuant to § 325 of the German Commercial Code.
Total remuneration of the Supervisory Board and Executive Board
The total remuneration of members of the Supervisory Board amounted to TEUR 345 and the total remuneration
of the Executive Board to TEUR 5,916. Pension commitments to former members of the
Executive Board and their surviving dependents are covered by an accrual of TEUR 24,766; payments in
the fiscal year amounted to TEUR 2,823.
Klaus Deller Dr. Dieter Wilhelm Dr. Lorenz Zwingmann

C O N S O L I D A T E D C A S H F L O W S T A T E M E N T
Consolidated Cash Flow Statement in Compliance with GAS 2
(German Accounting Standard)
Cash funds are comprised of the Group’s cash and cash equivalents, and marketable securities.
2011 TEUR 2010 TEUR
Result for the period (including minority interests in consolidated
results)
329,296 239,381
Depreciation and amortization on/Additions to intangibles and
fixed assets
164,625 148,941
Increase in accruals 110,699 134,927
Income from disposals of intangibles, fixed assets and investments (25,542) 1,908
Increase in inventories, receivables and other assets not related to
investing or financing activities
(70,092) (208,489)
Increase in payables and other liabilities not related to investing or
financing activities
33,315 139,716
Cash flows from operating activities 542,301 456,384
Disbursements for investments in intangible assets (10,472) (8,344)
Proceeds from disposals of intangible assets 854 1,294
Disbursements for investments in fixed assets (148,391) (105,025)
Proceeds from disposals of fixed assets 36,669 2,313
Disbursements for investments in financial assets (6,855) (27,347)
Proceeds from disposals of financial assets 592 0
Disbursements for the acquisition of consolidated companies and
other business units
(52,423) (42,672)
Cash flows from investing activities (180,026) (179,781)
Proceeds from additions to shareholders’ equity 114 956
Disbursements to company owners and minority shareholders (177,415) (64,737)
Proceeds from borrowings 59,463 43,557
Disbursements for the redemption of borrowings (36,938) (118,491)
Cash flows from financing activities (154,776) (138,715)
Change in cash funds resulting from exchange rate movements
and changes in group structure
12,018 20,335
Changes in cash funds resulting from cash-relevant
transactions
219,517 158,223
Cash funds at the beginning of the period 312,879 154,656
Cash funds at the end of the period 532,396 312,879
Interest paid out in fiscal year 2011 amounted to TEUR 7,588, interest received to TEUR 11,759.
Income tax paid out in 2011 amounted to TEUR 111,577, tax refunds received to TEUR 12,760.
1 7 1

1 7 2 S E G M E N T R E P O R T
Segment Report in Compliance with GAS 3
(German Accounting Standard)
In order to comply with GAS 3, Knorr-Bremse AG has compiled the following report on three segments
that are subject to reporting requirements. The breakdown by segment is based on the Group’s activities
in the three major geographical regions that provide the geographical framework for the Group’s
internal organizational and reporting structures. The operating segments cover three regions: Europe,
the Americas and Asia/Australia, each of which is characterized by different market and customer demands.
The Knorr-Bremse Group’s main product lines – braking systems for rail and commercial vehicles
– are represented in all three regions.
Fiscal Year 2011 Europe America Asia/
Australia
in EUR thousands (TEUR)
Knorr-Bremse
Group
Sales by region 2,582,660 1,064,929 1,078,656 4,726,245
thereof net sales with third parties 2,169,485 1,020,007 1,051,305 4,240,797
thereof net sales with other segments 413,175 44,922 27,351 485,448
Net income 173,881 76,043 79,372 329,296
Income tax charge 89,130 38,979 40,685 168,794
Investments (excluding financial investments) 85,307 38,086 35,471 158,864
Depreciation (excluding financial investments) 76,145 33,269 55,205 164,619
Result for associated companies (200) 0 0 (200)
Result for affiliated and other companies 19 0 0 19
Assets 1,235,951 602,726 691,716 2,530,393
Fiscal Year 2010 Europe America Asia/
Australia
in EUR thousands (TEUR)
Knorr-Bremse
Group
Sales by region 2,288,048 891,346 1,041,295 4,220,689
thereof net sales with third parties 1,886,009 826,977 999,177 3,712,163
thereof net sales with other segments 402,039 64,369 42,118 508,526
Net income 109,783 47,320 82,278 239,381
Income tax charge 59,754 25,758 44,783 130,295
Investments (excluding financial investments) 74,751 21,337 17,281 113,369
Depreciation (excluding financial investments) 72,350 33,134 41,379 146,863
Result for associated companies 0 (252) 0 (252)
Result for affiliated and other companies 13 0 0 13
Assets 998,130 523,777 672,250 2,194,157

Fiscal Year 2011 Net sales Investments
(excluding
financial
investments)
in EUR thousands (TEUR)
S E G M E N T R E P O R T
The analysis does not show borrowings or interest payable by region, because these items are controlled
centrally across the Group by the parent company, thus are not dependent on regional decisions
associated with day-to-day business operations.
The usual prices apply as agreed between counterparties.
Depreciation
(excluding
financial
investments)
Assets
Rail vehicle systems 2,186,898 65,932 97,738 1,476,974
Commercial vehicle systems 2,068,223 74,686 60,776 1,136,804
Miscellaneous/consolidations (14,324) 18,246 6,105 (83,385)
Knorr-Bremse Group 4,240,797 158,864 164,619 2,530,393
Fiscal Year 2010 Net sales Investments
(excluding
financial
investments)
in EUR thousands (TEUR)
Depreciation
(excluding
financial
investments)
Assets
Rail vehicle systems 2,024,389 61,236 82,941 1,435,022
Commercial vehicle systems 1,700,682 50,361 61,043 967,908
Miscellaneous/consolidations (12,908) 1,772 2,879 (208,773)
Knorr-Bremse Group 3,712,163 113,369 146,863 2,194,157
1 7 3

1 7 4 S T A T E M E N T O F C H A N G E S I N G R O U P E Q U I T Y
Statement of Changes in Group Equity in Compliance with GAS 7
(German Accounting Standard)
Changes in group equity 2011 Capital stock Capital
reserves
in EUR thousands (TEUR)
Retained
earnings
Group equity includes capital differences arising on foreign currency translation in the amount of
TEUR -443, of which TEUR -16 relates to minority interests.
Other changes in minority interests result primarily from the purchase of former minority interests in
Knorr-Bremse Nordic Rail Services AB, Lund/Sweden. Following the purchase, the Group holds a 100%
interest as at the balance sheet date.
Minority interests also reflect the first-time inclusion in consolidation of
Net income Minority
interests
Knorr-Bremse
Group
As at Dec. 31, 2010 67,600 153 313,008 262,556 110,544 753,861
Dividend payments (156,000) (21,415) (177,415)
Net income 2011 291,098 38,198 329,296
Transfers to retained earnings 133,730 (133,730) 0
Currency fluctuations (1,371) 1,031 (340)
Other fluctuations (13,637) 10,610 (3,027)
As at Dec. 31, 2011 67,600 153 431,730 263,924 138,968 902,375
Changes in group equity 2010 Capital stock Capital
reserves
in EUR thousands (TEUR)
Retained
earnings
Net income Minority
interests
Knorr-Bremse
Group
As at Dec. 31, 2009 67,600 153 153,717 232,670 78,639 532,779
Dividend payments (52,000) (9,882) (61,882)
Net income 2010 208,691 30,690 239,381
Transfers to retained earnings 126,805 (126,805) 0
Currency fluctuations 37,319 4,565 41,884
Other fluctuations (4,833) 6,532 1,699
As at Dec. 31, 2010 67,600 153 313,008 262,556 110,544 753,861
Kalmar Tågkompetens AB, Kalmar/Sweden
Knorr-Bremse CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,
Barueri, São Paulo/Brazil
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey
Technologies Lanka Inc., La Pocatière/Canada.

I N D E P E N D E N T A U D I T O R ’ S R E P O R T
Independent Auditor’s Report
We have audited the consolidated financial statements prepared by Knorr-Bremse Aktiengesellschaft,
Munich – comprising the balance sheet, income statement, notes to the financial statements, cash flow
statement, statement of changes in equity and segment report – as well as the group management
report for the business year from January 1 to December 31, 2011. The preparation of the consolidated
financial statements and the group management report in accordance with German commercial law is
the responsibility of the parent company’s management. Our responsibility is to express an opinion on
the consolidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB
[German Commercial Code] and German generally accepted standards for the audit of financial statements
promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan
and perform the audit such that misstatements materially affecting the presentation of the net assets,
financial position and results of operations in the consolidated financial statements in accordance with
German principles of proper accounting and in the group management report are detected with reasonable
assurance. Knowledge of the business activities and the economic and legal environment of
the Group and expectations as to possible misstatements are taken into account in the determination
of audit procedures. The effectiveness of the accounting-related internal control system and the evidence
supporting the disclosures in the consolidated financial statements and the group management
report are examined primarily on a test basis within the framework of the audit.
The audit includes assessing the annual financial statements of those entities included in consolidation,
the determination of entities to be included in consolidation, the accounting and consolidation principles
used and significant estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements and group management report. We believe that our audit
provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with
the legal requirements and give a true and fair view of the net assets, financial position and results of
operations of the Group in accordance with these requirements. The group management report is
consistent with the consolidated financial statements and as a whole provides a suitable view of the
Group’s position and suitably presents the opportunities and risks of future development.
Munich, March 2, 2012
KPMG AG
Wirtschaftsprüfungsgesellschaft
signed Rupprecht
Independent auditor
signed Peth
Independent auditor
1 7 5

1 7 6 C O N S O L I D A T E D B A L A N C E S H E E T
Consolidated Balance Sheet as at December 31, 2011
Assets Notes Dec. 31, 2011 TEUR Dec. 31, 2010 TEUR
Purchased intangibles (3) 189,338 217,277
Fixed assets (4) 568,168 517,001
Investments (5) 70,816 65,569
Intangibles, fixed assets and
investments
828,322 799,847
Inventories (6) 289,784 219,337
Accounts receivable, trade (7) 695,183 689,066
Other assets (7) 109,341 92,133
Other marketable securities 18 12
Cash and cash equivalents (8) 532,378 312,867
Current assets 1,626,704 1,313,415
Prepaid expenses (9) 12,337 12,182
Deferred tax assets (10) 63,030 68,713
Balance sheet total 2,530,393 2,194,157
Equity and Liabilities Notes Dec. 31, 2011 TEUR Dec. 31, 2010 TEUR
Capital stock (11) 67,600 67,600
Capital reserves (12) 153 153
Retained earnings (13) 431,730 313,008
Unappropriated consolidated net income (26) 263,924 262,556
Minority interests 138,968 110,544
Group equity 902,375 753,861
Pension plan accruals (14) 199,667 192,257
Other accrued liabilities (15) 643,291 528,521
Accruals 842,958 720,778
Accounts payable, banks 135,394 110,615
Accounts payable, trade 514,410 492,782
Other liabilities 132,382 111,467
Liabilities (16) 782,186 714,864
Deferred income 2,874 3,018
Deferred tax liabilities (10) 0 1,636
Balance sheet total 2,530,393 2,194,157

C O N S O L I D A T E D S T A T E M E N T O F I N C O M E
Consolidated Statement of Income for the Fiscal Year from January 1
to December 31, 2011
Notes 2011 TEUR 2010 TEUR
Net sales 4,240,797 3,712,163
Changes in inventories 11,756 2,832
Own work capitalized 395 272
Total operating performance 4,252,948 3,715,267
Other operating income (18) 191,467 154,943
Cost of materials (19) (2,211,723) (1,912,745)
Personnel expenses (20) (804,816) (720,864)
Depreciation and amortization on purchased
intangibles and fixed assets
(21) (164,619) (146,863)
Other operating expenses (22) (761,040) (677,250)
Financial results (23) (4,127) (10,972)
Income before taxes 498,090 401,516
Extraordinary expenses (25) 0 (31,840)
Taxes on income (168,794) (130,295)
Net income (26) 329,296 239,381
Minority interests in results of consolidated
subsidiaries
38,198 30,690
1 7 7

Contact
Knorr-Bremse AG
Moosacher Straße 80
80809 Munich
Germany
www.knorr-bremse.com
Corporate Communications
Christoph Günter
Tel: +49 89 3547-1402
Fax: +49 89 3547-1403
E-Mail: public.relations@knorr-bremse.com