News Releases

TRW Reports Third Quarter 2009 Financial Results

PRNewswire
LIVONIA, Mich.
(NYSE:TRW)
Nov 4, 2009

LIVONIA, Mich., Nov. 4 /PRNewswire-FirstCall/ -- TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported third-quarter 2009 financial results with sales of $3.1 billion, a decrease of 13.5 percent compared to the prior year period. The Company reported GAAP net earnings of $56 million or $0.50 per diluted share, which compares to a net loss of $54 million or $0.53 per diluted share in the prior year period.

The third quarter 2009 GAAP net earnings includes restructuring and fixed asset impairment charges of $24 million ($19 million after related tax benefits) and a loss on retirement of debt totaling $1 million. The prior year third quarter included restructuring charges and asset impairments totaling $32 million. Excluding these special items from both periods, the Company reported net earnings of $76 million, or $0.68 per diluted share, which compares to a net loss of $22 million or $0.22 per diluted share in the prior year period.

During the quarter, the Company strengthened its capital structure by completing a public offering of 16.1 million shares of common stock. The offering provided $269 million of net proceeds to the Company, which was used to reduce debt.

"The benefits achieved from our restructuring and cost containment actions combined with increasing vehicle production schedules had a significant positive impact on our third quarter results," said John C. Plant, President and Chief Executive Officer. "Completing the equity offering further positions the Company for future success as it strengthens the balance sheet and provides greater flexibility to our capital structure."

Third Quarter 2009

The Company reported third-quarter 2009 sales of $3.1 billion, a decrease of $484 million or 13.5 percent from the prior year period. The 2009 quarter was adversely impacted compared to the prior year by lower sales in most geographic regions resulting from reduced vehicle production volumes. Currency movements during the quarter also had a negative impact on sales compared to the same period a year ago.

The Company's third quarter 2009 operating income was $141 million compared with $12 million in the 2008 period. Both the 2009 and 2008 periods included restructuring and fixed asset impairment charges totaling $24 million and $32 million, respectively. Excluding these charges from both periods, operating income for the third quarter of 2009 was $165 million, which compares to $44 million in the prior year period. The year-to-year increase was driven primarily by the positive impact of restructuring and cost containment actions implemented over the past year, lower raw material prices and, to a lesser extent, favorable non-recurring supplier and customer settlements in the current quarter. Together, these positives more than offset the negative impact of the lower sales volume between the two quarters.

Net interest and securitization expense for the third quarter of 2009 totaled $55 million, which compares to $43 million in the prior year. Higher interest costs associated with the bank amendment achieved in late June 2009 contributed to the year-over-year increase. In addition, a loss on retirement of debt of $1 million was recognized in the third quarter of 2009.

Tax expense for the third quarter of 2009 was $28 million, which increased from $23 million of expense in the prior year, resulting from the higher pre-tax earnings in certain geographic locations. The 2009 period included tax benefits related to the restructuring actions previously mentioned totaling $5 million.

The Company reported 2009 third-quarter GAAP earnings of $56 million, or $0.50 per diluted share, which compares to a GAAP net loss of $54 million, or $0.53 per diluted share in the 2008 period.

Excluding the special items referred to above, the Company reported third-quarter 2009 net earnings of $76 million, or $0.68 per diluted share, which compares to a net loss of $22 million or $0.22 per diluted share in the 2008 period.

Earnings before interest, securitization costs, taxes, depreciation and amortization and special items ("adjusted EBITDA") were $292 million in the third quarter of 2009, as compared to the prior year level of $189 million. See page A6 for a description of the special items excluded in calculating adjusted EBITDA.

Year-to-Date 2009

For the nine month period ended October 2, 2009, the Company reported sales of $8.2 billion, a decrease of $4.0 billion or 32.4 percent compared to prior year sales. The decrease in sales resulted from the sharply reduced global production volumes between the two periods and the negative effects of foreign currency movements compared to 2008.

For the 2009 year-to-date period, the Company reported operating income of $60 million compared with $424 million in the comparable prior year period. The 2009 period included restructuring and fixed asset impairment charges totaling $74 million, as well as a one-time trademark impairment charge of $30 million, compared to restructuring charges and asset impairments of $64 million for the 2008 period. Excluding these charges from both periods, the Company reported an operating profit of $164 million in the 2009 period which compares to $488 million of operating income in the prior year period. The year-to-year decrease was driven primarily by the profit impact of the $4.0 billion in lower sales, partially offset by the positive impact of the previously mentioned restructuring and cost containment actions.

Net interest and securitization expense in the first nine months of the 2009 period totaled $139 million, which compares to $136 million in the prior year period. The increase in interest expense resulted primarily from the higher costs associated with the bank amendment achieved in June 2009, partially offset by lower market interest rates during the period. In addition, a net gain on the retirement of debt of $34 million was recognized in the current year-to-date period.

Year-to-date 2009 tax expense was $37 million, which compares to $126 million in the prior year. The 2009 and 2008 periods included tax benefits primarily related to the restructuring actions previously mentioned totaling $15 million and $3 million, respectively. Excluding these tax benefits in both periods, tax expense was $52 million in the 2009 period compared to $129 million in the prior year period.

The Company reported a year-to-date 2009 GAAP net loss of $86 million, or $0.82 per diluted share, which compares to GAAP net earnings of $167 million, or $1.63 per diluted share in the 2008 period.

Excluding special items, the Company reported a year-to-date 2009 net loss of $31 million, or $0.30 per diluted share, which compares to net earnings of $228 million or $2.23 per diluted share in the prior year period.

Adjusted EBITDA totaled $527 million for the first nine months of 2009, compared to $938 million in the 2008 period. See page A6 for a description of the special items excluded in calculating adjusted EBITDA.

Cash Flow and Capital Structure

Third quarter 2009 net cash flow provided by operating activities was $174 million, which compares to $79 million in the prior year. Capital expenditures were $49 million compared to $121 million in 2008. Third quarter free cash flow (cash flow from operating activities less capital expenditures) was $125 million, which compares favorably to the $42 million outflow in the prior year quarter.

For the nine month period ended October 2, 2009, the Company had a net cash usage in operating activities of $57 million, which compares to cash provided by operations of $4 million in the prior year period. The year-to-year decline resulted primarily from lower operating income partially offset by lower working capital requirements. Year-to-date 2009 capital expenditures were $121 million compared to $338 million in 2008. Free cash flow (cash flow from operating activities less capital expenditures) was an outflow of $178 million in the first nine months of 2009 compared to an outflow of $334 million for the same period last year.

As of October 2, 2009, the Company had $2,547 million of debt and $474 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $2,073 million. This net debt outcome is $659 million lower than the balance at the end of the prior year third quarter and $83 million lower than the balance at the end of 2008. In addition to cash generated from operations, the decline in net debt compared to the prior year quarter and year-end periods reflects the $269 million of net proceeds from the Company's issuance of 16.1 million common shares in August 2009. Committed liquidity facilities and cash on hand provided the Company with available liquidity in excess of $1.6 billion as of October 2, 2009.

2009 Outlook

TRW currently expects full year production to total 8.6 million units in North America and 16.3 million units in Europe. Based on these revised production levels and the Company's expectations for foreign currency exchange rates, full-year sales are expected to be approximately $11.4 billion (including fourth quarter sales of approximately $3.2 billion). Restructuring and fixed asset impairment charges are forecasted at $100 million for the full year.

"The cautious optimism that has emerged for the industry is supported by the increasing vehicle production forecasts. Although it appears the bottom of the financial crisis has been reached, full recovery will be a long and gradual process," said Mr. Plant. "TRW is well-positioned to take full advantage of the industry rebound given its diversification, technology portfolio and improved cost and capital structure."

Third Quarter 2009 Conference Call

The Company will host its third-quarter conference call at 8:30 a.m. (Eastern time) today, Wednesday, November 4(th), to discuss financial results and other related matters. To participate in the conference call, please dial (877) 852-7898 for U.S. locations, or (706) 634-1095 for international locations.

An audio replay of the conference call will be available approximately two hours after the conclusion of the call and will be accessible afterward for approximately one week. To access the replay, U.S. locations should dial (800) 642-1687, and locations outside the U.S. should dial (706) 645-9291. The replay code is 34903511. A live audio webcast and replay of the conference call will also be available on the Company's website at www.trw.com.

Reconciliation to GAAP

In addition to GAAP results included within this press release, the Company has provided certain information which is not calculated according to GAAP ("non-GAAP"), such as net earnings (losses), operating income (losses) and diluted earnings per share each excluding special items, adjusted EBITDA and free cash flow. Management uses these non-GAAP measures to evaluate the operating performance of the Company and its business segments, including use in connection with forecasting future periods. Management believes that investors will likewise find these non-GAAP measures useful in evaluating such performance. Such measures are frequently used by security analysts, institutional investors and other interested parties in the evaluation of companies in our industry.

Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies. For a reconciliation of non-GAAP measures to the closest GAAP financial measure and for share amounts used to derive earnings per share, please see the financial schedules that accompany this release.

About TRW

With 2008 sales of $15.0 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 26 countries and employs approximately 64,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. All references to "TRW Automotive", "TRW" or the "Company" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is available on the internet at www.trw.com.

Forward-Looking Statements

This release contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We caution readers not to place undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements are subject to numerous assumptions, risks and uncertainties which can cause our actual results to differ materially from those suggested by the forward-looking statements, including those set forth in our Report on Form 10-K for the fiscal year ended December 31, 2008 (our "Form 10-K") , and in our Reports on Form 10-Q for the quarters ended April 3 and July 3, 2009, such as: any prolonged contraction in automotive sales and production adversely affecting our results, liquidity or the viability of our supply base; the financial condition of OEMs, particularly the Detroit Three, adversely affecting us or the viability of our supply base; disruptions in the financial markets adversely impacting the availability and cost of credit negatively affecting our business; our substantial debt and resulting vulnerability to economic or industry downturns and to rising interest rates; escalating pricing pressures from our customers; commodity inflationary pressures adversely affecting our profitability and supply base; our dependence on our largest customers; any impairment of a significant amount of our goodwill or other intangible assets; costs of product liability, warranty and recall claims and efforts by customers to adversely alter contract terms and conditions concerning warranty and recall participation; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations impacting our results; any increase in the expense and funding requirements of our pension and other postretirement benefits; risks associated with non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers; volatility in our annual effective tax rate resulting from a change in earnings mix or other factors; costs or liabilities relating to environmental and safety regulations; assertions by or against us relating to intellectual property rights; the possibility that our largest stockholder's interests will conflict with our or our other stockholders' interests; and other risks and uncertainties set forth in our Form 10-K and in our other filings with the Securities and Exchange Commission. We do not undertake any obligation to release publicly any update or revision to any of the forward-looking statements.

                            TRW Automotive Holdings Corp.

                 Index of Condensed Consolidated Financial Information

                                                                          Page
    Consolidated Statements of Operations (unaudited)
     for the three months ended October 2, 2009 and September 26, 2008......A2

    Consolidated Statements of Operations (unaudited)
     for the nine months ended October 2, 2009 and September 26, 2008.......A3

    Condensed Consolidated Balance Sheets as of October 2, 2009
     (unaudited) and December 31, 2008.................................... .A4

    Condensed Consolidated Statements of Cash Flows (unaudited)
     for the nine months ended October 2, 2009 and September 26, 2008.......A5

    Reconciliation of Non-GAAP Financial Measures (unaudited)
     for the three and nine months ended October 2, 2009 and
     September 26, 2008.....................................................A6

    Reconciliation of GAAP Net Earnings to Adjusted Net Earnings
     (unaudited) for the three months ended October 2, 2009.................A7

    Reconciliation of GAAP Net Losses to Adjusted Net Losses
     (unaudited) for the nine months ended October 2, 2009..................A8

    Reconciliation of GAAP Net Losses to Adjusted Net Losses
     (unaudited) for the three months ended September 26, 2008..............A9

    Reconciliation of GAAP Net Earnings to Adjusted Net Earnings
     (unaudited) for the nine months ended September 26, 2008..............A10

    The accompanying unaudited condensed consolidated financial information
    and reconciliation schedules should be read in conjunction with the TRW
    Automotive Holdings Corp. Annual Report on Form 10-K for the year ended
    December 31, 2008, Quarterly Reports on Form 10-Q for the periods ended
    April 3, 2009 and July 3, 2009, and Current Report on Form 8-K as filed
    with the United States Securities and Exchange Commission on February 20,
    2009, May 6, 2009, August 4, 2009, and July 29, 2009, respectively.



                                       A2

                            TRW Automotive Holdings Corp.

                       Consolidated Statements of Operations
                                    (Unaudited)



    (In millions, except per share amounts)            Three Months Ended
                                                       ------------------
                                                    October 2,   September 26,
                                                         2009            2008
                                                         ----            ----
    Sales                                              $3,108          $3,592
    Cost of sales                                       2,807           3,411
                                                        -----           -----
       Gross profit                                       301             181
    Administrative and selling expenses                   131             139
    Amortization of intangible assets                       5               9
    Restructuring charges and fixed asset
     impairments                                           24              32
    Other expense - net                                     -             (11)
                                                        -----           -----
       Operating income                                   141              12
    Interest expense - net                                 54              43
    Loss on retirement of debt - net                        1               -
    Accounts receivable securitization
     costs                                                  1               -
    Equity in earnings of affiliates, net
     of tax                                                (5)             (2)
                                                        -----           -----
        Earnings (losses) before income taxes              90             (29)
    Income tax expense                                     28              23
                                                           --              --
         Net earnings (losses)                             62             (52)
    Less:  Net earnings attributable to
      noncontrolling interest, net of tax                   6               2
                                                        -----           -----
         Net earnings (losses) attributable to TRW        $56            $(54)
                                                          ===            ====

    Basic earnings (losses) per share:
      Earnings (losses) per share                       $0.51          $(0.53)
                                                        =====          ======
      Weighted average shares outstanding               110.7           101.2
                                                        =====           =====

    Diluted earnings (losses) per share:
      Earnings (losses) per share                       $0.50          $(0.53)
                                                        =====          ======
      Weighted average shares outstanding               111.9           101.2
                                                        =====           =====



                                         A3

                              TRW Automotive Holdings Corp.

                          Consolidated Statements of Operations
                                       (Unaudited)

    (In millions, except per share amounts)             Nine Months Ended
                                                      -----------------
                                                    October 2,   September 26,
                                                         2009            2008
                                                         ----            ----
    Sales                                              $8,230         $12,182
    Cost of sales                                       7,699          11,259
                                                        -----          ------
       Gross profit                                       531             923
    Administrative and selling expenses                   355             407
    Amortization of intangible assets                      16              27
    Restructuring charges and fixed asset
     impairments                                           74              64
    Intangible asset impairments                           30               -
    Other (income) expense - net                           (4)              1
                                                        -----          ------
       Operating income                                    60             424
    Interest expense - net                                136             134
    Gain on retirement of debt - net                      (34)              -
    Accounts receivable securitization costs                3               2
    Equity in earnings of affiliates, net of tax           (9)            (17)
                                                        -----          ------
        (Losses) earnings before income taxes             (36)            305
    Income tax expense                                     37             126
                                                        -----          ------
         Net (losses) earnings                            (73)            179
    Less:  Net earnings attributable to
      noncontrolling interest, net of tax                  13              12
                                                        -----          ------
         Net (losses) earnings attributable to TRW       $(86)           $167
                                                         ====            ====

    Basic (losses) earnings per share:
      (Losses) earnings per share                      $(0.82)          $1.65
                                                       ======           =====
      Weighted average shares outstanding               104.4           101.0
                                                        =====           =====

    Diluted (losses) earnings per share:
      (Losses) earnings per share                      $(0.82)          $1.63
                                                       ======           =====
      Weighted average shares outstanding               104.4           102.2
                                                        =====           =====



                                         A4

                              TRW Automotive Holdings Corp.

                         Condensed Consolidated Balance Sheets

    (Dollars in millions)                                      As of
                                                               -----
                                                      October 2, December 31,
                                                           2009         2008
                                                           ----         ----
                                                     (Unaudited)

                        Assets
    Current assets:
       Cash and cash equivalents                           $474         $756
       Marketable securities                                  -           10
       Accounts receivable - net                          2,149        1,570
       Inventories                                          698          694
       Prepaid expenses and other current assets            214          209
                                                            ---          ---
    Total current assets                                  3,535        3,239

    Property, plant and equipment - net                   2,405        2,518
    Goodwill                                              1,770        1,765
    Intangible assets - net                                 330          373
    Pension asset                                           935          801
    Other assets                                            521          576
                                                            ---          ---
       Total assets                                      $9,496       $9,272
                                                         ======       ======

                Liabilities and Equity
    Current liabilities:
       Short-term debt                                      $25          $66
       Current portion of long-term debt                     43           53
       Trade accounts payable                             1,932        1,793
       Accrued compensation                                 278          219
       Other current liabilities                          1,009        1,033
                                                          -----        -----
    Total current liabilities                             3,287        3,164

    Long-term debt                                        2,479        2,803
    Postretirement benefits other than pensions             480          486
    Pension benefits                                        746          778
    Other long-term liabilities                             809          773
                                                            ---          ---
       Total liabilities                                  7,801        8,004

    Commitments and contingencies

    Stockholders' equity:
       Preferred stock                                        -            -
       Capital stock                                          1            1
       Treasury stock                                         -            -
       Paid-in-capital                                    1,480        1,199
       Accumulated deficit                                 (464)        (378)
       Accumulated other comprehensive income               532          309
                                                            ---          ---
    Total TRW stockholders' equity                        1,549        1,131
    Noncontrolling interest                                 146          137
                                                            ---          ---
       Total equity                                       1,695        1,268
                                                          -----        -----
       Total liabilities and equity                      $9,496       $9,272
                                                         ======       ======



                                         A5

                           TRW Automotive Holdings Corp.

                  Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)

    (Dollars in millions)                              Nine Months Ended
                                                       -----------------
                                                   October 2,   September 26,
                                                        2009            2008
                                                        ----            ----

    Operating Activities
    Net (losses) earnings                               $(73)           $179
    Adjustments to reconcile net (losses)
     earnings to net cash (used in) provided by
     operating activities:
     Depreciation and amortization                       367             445
     Net pension and other postretirement
      benefits income and contributions                 (172)           (140)
     Net gain on retirement of debt                      (34)              -
     Intangible asset impairment charges                  30               -
     Fixed asset impairment charges                        8              20
     Net gains on sales of assets                         (3)             (4)
     Other - net                                          14              (9)
    Changes in assets and liabilities, net of
     effects of businesses acquired:
      Accounts receivable - net                         (491)           (518)
     Inventories                                          29             (45)
     Trade accounts payable                               53             (94)
     Prepaid expense and other assets                    118             (29)
     Other liabilities                                    97             199
                                                          --             ---
       Net cash (used in) provided by operating
        activities                                       (57)              4

    Investing Activities
    Capital expenditures, including other
     intangible assets                                  (121)           (338)
    Acquisitions of businesses, net of cash
     acquired                                              -             (41)
    Investment in affiliates                               -              (5)
    Proceeds from sale/leaseback transactions              -               1
    Net proceeds from asset sales                          3               6
                                                         ---             ---
      Net cash used in investing activities             (118)           (377)

    Financing Activities
    Change in short-term debt                            (41)             10
    Net (repayments on) proceeds from revolving
     credit facility                                    (203)             50
    Proceeds from issuance of long-term debt,
     net of fees                                       1,075               4
    Proceeds from issuance of capital stock,
     net of fees                                         269               -
    Redemption of long-term debt                      (1,223)            (61)
    Proceeds from exercise of stock options                1               4
     Other - net                                          (8)              -
                                                          --              --
      Net cash (used in) provided by financing
       activities                                       (130)              7
    Effect of exchange rate changes on cash               23             (18)
                                                          --             ---
    Decrease in cash and cash equivalents               (282)           (384)
    Cash and cash equivalents at beginning of
     period                                              756             895
                                                         ---             ---
    Cash and cash equivalents at end of period          $474            $511
                                                        ====            ====



                                         A6

                              TRW Automotive Holdings Corp.

                      Reconciliation of Non-GAAP Financial Measures
                                    (Unaudited)

The reconciliation schedules below should be read in conjunction with the TRW Automotive Holdings Corp. Annual Report on Form 10-K for the year ended December 31, 2008, Quarterly Reports on Form 10-Q for the periods ended April 3, 2009 and July 3, 2009, and Current Report on Form 8-K as filed with the U.S. Securities and Exchange Commission on February 20, 2009, May 6, 2009, August 4, 2009, and July 29, 2009, respectively, which contain summary historical data. EBITDA, Adjusted EBITDA and free cash flow are not recognized terms under GAAP and do not purport to be alternatives to the comparable GAAP amounts. Further, since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies.

EBITDA and Adjusted EBITDA

EBITDA as calculated below is a measure used by management to evaluate the operating performance of the Company and its business segments and to forecast future periods. Adjusted EBITDA is defined as EBITDA excluding restructuring charges, asset impairments and other significant special items. Management uses Adjusted EBITDA to evaluate the performance of on-going operations separate from items that may have a disproportionate impact in any particular period. EBITDA and Adjusted EBITDA are frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry.

EBITDA and Adjusted EBITDA do not purport to be alternatives to net earnings (losses) as an indicator of operating performance, nor to cash flows from operating activities as a measure of liquidity. Additionally, neither is intended to be a measure of free cash flow for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.

    (Dollars in millions)       Three Months               Nine Months
                                    Ended                     Ended
                               ------------------       -----------------
                          October 2,  September 26,  October 2,  September 26,
                                2009          2008        2009           2008
                               ----           ----        ----           ----
    GAAP net earnings
     (losses) attributable
     to TRW                     $56           $(54)       $(86)          $167
       Income tax expense        28             23          37            126
       Interest expense - net    54             43         136            134
       Accounts receivable
        securitization costs      1              -           3              2
       Depreciation and
        amortization            128            145         367            445
                                ---            ---         ---            ---
    EBITDA                      267            157         457            874
        Restructuring charges
         and fixed asset
         impairments             24             32          74             64
        Intangible asset
         impairments              -              -          30              -
        Net loss (gain) on
         retirement of debt       1              -         (34)             -
                                ---            ---         ---            ---
    Adjusted EBITDA            $292           $189        $527           $938
                               ====           ====        ====           ====


Free Cash Flow

Free cash flow represents net cash provided by (used in) operating activities less capital expenditures, and is used by management in analyzing the Company's ability to service and repay its debt and to forecast future periods. However, this measure should not be used as a substitute for net cash provided by (used in) operating activities since it does not reflect cash used to service debt and, therefore, does not reflect funds available for investment or other discretionary uses.

    (Dollars in millions)       Three Months              Nine Months
                                    Ended                    Ended
                             ------------------        -----------------
                         October 2,  September 26,  October 2,  September 26,
                               2009          2008        2009           2008
                               ----          ----        ----           ----
    Cash flow provided by
     (used in) operating
     activities                $174           $79       $(57)             $4
    Capital expenditures        (49)         (121)      (121)           (338)
                                ---          ----       ----            ----
    Free cash flow             $125          $(42)     $(178)          $(334)
                               ====          ====      =====           =====

                                         A7

                              TRW Automotive Holdings Corp.

              Reconciliation of GAAP Net Earnings to Adjusted Net Earnings
                                    (Unaudited)

During the three months ended October 2, 2009, the Company recorded restructuring charges of $22 million related primarily to severance, retention and outplacement services. Additionally, in accordance with ASC 360 (formerly, SFAS 144), the Company recorded fixed asset impairment charges of $2 million. The Company also recorded a net loss on retirement of debt of $1 million.

    (In millions,          Three Months                    Three Months
     except per               Ended                           Ended
     share amounts)      October 2, 2009                  October 2, 2009
                              Actual      Adjustments        Adjusted
                              ------      -----------        --------

    Sales                       $3,108          $-            $3,108
    Cost of sales                2,807           -             2,807
                                   ---         ---               ---
        Gross profit               301           -               301
    Administrative
     and selling expenses          131           -               131
    Amortization of intangible
     assets                          5           -                 5
    Restructuring charges and
     fixed asset impairments        24         (24) (a)            -
    Other expense - net              -           -                 -
                                   ---         ---               ---
        Operating income           141          24               165
    Interest expense - net          54           -                54
    Loss on retirement of
     debt - net                      1          (1) (b)            -
    Account receivable
     securitization costs            1           -                 1
    Equity in earnings of
     affiliates, net of tax         (5)          -               (5)
                                   ---         ---               ---
        Earnings before
         income taxes               90          25               115
    Income tax expense              28           5 (c)            33
                                   ---         ---               ---
        Net earnings                62          20                82
    Less:  Net earnings
     attributable to
     noncontrolling
     interest, net of tax            6           -                 6
                                   ---         ---               ---
        Net earnings attributable
         to TRW                    $56         $20               $76
                                   ===         ===               ===

    Basic earnings per share:
      Earnings per share         $0.51                         $0.69
                                 =====                         =====
      Weighted average shares
       outstanding               110.7                         110.7
                                 =====                         =====

    Diluted earnings per share:
      Earnings per share         $0.50                         $0.68
                                 =====                         =====
      Weighted average shares
       outstanding               111.9                         111.9
                                 =====                         =====

    -----------------
    (a) Represents the elimination of restructuring charges and fixed asset
        impairments.
    (b) Represents the elimination of the loss on retirement of debt.
    (c) Represents the elimination of the income tax impact of the above
        adjustments.



                                         A8

                              TRW Automotive Holdings Corp.

                 Reconciliation of GAAP Net Losses to Adjusted Net Losses
                                    (Unaudited)


During the nine months ended October 2, 2009, the Company recorded restructuring charges of $66 million related primarily to severance, retention and outplacement services. Additionally, in accordance with ASC 350 (formerly, SFAS 142) and ASC 360, the Company recorded intangible asset impairment charges of $30 million and fixed asset impairment charges of $8 million. The Company also recorded a net gain on retirement of debt of $34 million.

    (In millions,            Nine Months                  Nine Months
     except per share           Ended                        Ended
     amounts)              October 2, 2009              October 2, 2009
                                Actual      Adjustments    Adjusted
                                ------      -----------    --------

    Sales                       $8,230           $-          $8,230
    Cost of sales                7,699            -           7,699
                                 -----         ----           -----
        Gross profit               531            -             531
    Administrative and
     selling expenses              355            -             355
    Amortization of
     intangible assets              16            -              16
    Restructuring charges and
     fixed asset impairments        74          (74) (a)          -
    Intangible asset
     impairments                    30          (30) (b)          -
    Other income - net              (4)           -              (4)
                                 -----         ----           -----
        Operating income            60          104             164
    Interest expense - net         136            -             136
    Gain on retirement
     of debt - net                 (34)          34  (c)          -
    Account receivable
     securitization costs            3            -               3
    Equity in earnings of
     affiliates, net of tax         (9)           -              (9)
                                 -----         ----           -----
        (Losses) earnings
         before income taxes       (36)          70              34
    Income tax expense              37           15  (d)         52
                                    --           --              --
        Net (losses) earnings      (73)          55             (18)
    Less: Net earnings
     attributable to
     noncontrolling interest,
     net of tax                     13            -              13
                                 -----         ----           -----
        Net losses attributable
         to TRW                   $(86)         $55            $(31)
                                 =====          ===           =====

    Basic losses per share:
      Losses per share          $(0.82)                      $(0.30)
                                ======                       ======
      Weighted average
       shares outstanding        104.4                        104.4
                                 =====                        =====

    Diluted losses per share:
      Losses per share          $(0.82)                      $(0.30)
                                ======                       ======
      Weighted average
       shares outstanding        104.4                        104.4
                                 =====                        =====

    ------------------
    (a) Represents the elimination of restructuring charges and fixed asset
        impairments.
    (b) Represents the elimination of intangible asset impairments.
    (c) Represents the elimination of the gain on retirement of debt.
    (d) Represents the elimination of the income tax impact of the above
        adjustments.



                                         A9

                              TRW Automotive Holdings Corp.

                 Reconciliation of GAAP Net Losses to Adjusted Net Losses
                                    (Unaudited)

During the three months ended September 26, 2008, the Company recorded restructuring charges of $30 million related primarily to severance, retention and outplacement services. Additionally, in accordance with ASC 360, the Company recorded fixed asset impairment charges of $2 million.

    (In millions,          Three Months Ended           Three Months Ended
     except per share      September 26, 2008           September 26, 2008
     amounts)                    Actual      Adjustments    Adjusted
                                --------     -----------    --------

    Sales                         $3,592         $-         $3,592
    Cost of sales                  3,411          -          3,411
                                   -----      -----          -----
        Gross profit                 181          -            181
    Administrative and
     selling expenses                139          -            139
    Amortization of
     intangible assets                 9          -              9
    Restructuring charges and
     fixed asset impairments          32        (32) (a)         -
    Other expense - net              (11)         -            (11)
                                   -----      -----          -----
        Operating income              12         32             44
    Interest expense - net            43          -             43
    Equity in earnings
     of affiliates, net of tax       (2)          -             (2)
                                   -----      -----          -----
       (Losses) earnings before
        income taxes                 (29)        32              3
    Income tax expense                23          -             23
                                   -----      -----          -----
        Net losses                   (52)        32            (20)
    Less:  Net earnings
     attributable to noncontrolling
     interest, net of tax              2          -              2
                                     ---        ---            ---
        Net losses attributable
         to TRW                     $(54)       $32           $(22)
                                   =====        ===          =====

    Basic losses per share:
      Losses per share            $(0.53)                   $(0.22)
                                  ======                    ======
      Weighted average shares
       outstanding                 101.2                     101.2
                                   =====                     =====

    Diluted losses per share:
      Losses per share            $(0.53)                   $(0.22)
                                  ======                    ======
      Weighted average shares
       outstanding                 101.2                     101.2
                                   =====                     =====

    -------------------
    (a) Represents the elimination of restructuring charges and fixed asset
        impairments.



                                         A10

                              TRW Automotive Holdings Corp.

               Reconciliation of GAAP Net Earnings to Adjusted Net Earnings
                                    (Unaudited)


During the nine months ended September 26, 2008, the Company recorded restructuring charges of $44 million related primarily to severance, retention and outplacement services. Additionally, in accordance with ASC 360, the Company recorded fixed asset impairment charges of $20 million.

    (In millions, except     Nine Months Ended               Nine Months Ended
     per share amounts)     September 26, 2008              September 26, 2008
                                   Actual      Adjustments       Adjusted
                                   ------      -----------       --------

    Sales                          $12,182           $-          $12,182
    Cost of sales                   11,259            -           11,259
                                    ------        -----           ------
        Gross profit                   923            -              923
    Administrative and
     selling expenses                  407            -              407
    Amortization of
     intangible assets                  27            -               27
    Restructuring charges and
     fixed asset impairments            64          (64) (a)           -
    Other income - net                   1            -                1
                                    ------        -----           ------
        Operating income               424           64              488
    Interest expense - net             134            -              134
    Account receivable
     securitization costs                2            -                2
    Equity in earnings of
     affiliates, net of tax            (17)           -              (17)
                                    ------        -----           ------
        Earnings before income
         taxes                         305           64              369
    Income tax expense                 126            3  (b)         129
                                    ------        -----           ------
        Net earnings                   179           61              240
    Less: Net earnings
     attributable to
     noncontrolling
     interest, net of tax               12            -               12
                                    ------        -----           ------
        Net earnings
         attributable to TRW          $167          $61             $228
                                      ====          ===             ====

    Basic earnings per share:
      Earnings per share             $1.65                         $2.26
                                     =====                         =====
      Weighted average
       shares outstanding            101.0                         101.0
                                     =====                         =====

    Diluted earnings per share:
      Earnings per share             $1.63                         $2.23
                                     =====                         =====
      Weighted average
       shares outstanding            102.2                         102.2
                                     =====                         =====

    ------------------
    (a) Represents the elimination of restructuring charges and fixed asset
        impairments.
    (b) Represents the elimination of the income tax impact of the above
        adjustment.

SOURCE: TRW Automotive Holdings Corp.

Web site: http://www.trw.com/

Company News On-Call: http://www.prnewswire.com/comp/853755.html


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