Your SlideShare is downloading. ×

2005 Q4 TRW Auto Earnings Presentation

163

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
163
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. TRW Automotive Holdings Corp. 2005 Fourth Quarter and Full Year Financial Results Conference Call Materials February 21, 2006 Materials Included Pages - Press Release 1-9 February 21, 2006 - Financial Summaries A1-A10 - Conference Call Presentation P1-P24 © TRW Automotive Holdings Corp. 2006
  • 2. News Release TRW Automotive 12001 Tech Center Drive Livonia, MI 48150 Investor Relations Contact: Patrick R. Stobb (734) 855-3140 Media Contact: Manley Ford (734) 855-2616 TRW Automotive Reports Fourth Quarter and Full Year 2005 Financial Results; Provides 2006 Outlook LIVONIA, MICHIGAN, February 21, 2006 — TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported fourth- quarter 2005 financial results with sales of $3.1 billion, a decrease of 1.6 percent compared to the same period a year ago. Net earnings for the quarter were $59 million, or $0.57 per diluted share, which compares to net losses of $62 million or $(0.63) per share in the prior year quarter. Fourth-quarter 2005 earnings included a reduction in reserves for litigation that increased earnings by $18 million. In comparison, prior year results included pre-tax expenses of $125 million, primarily for loss on retirement of debt associated with the repurchase of an acquisition related seller note. Net earnings excluding the effect of these items in both periods, net of the assumed tax impacts, were $41 million or $0.40 per diluted share in the current year compared to $34 million or $0.34 per diluted share in the prior year quarter. Net earnings, excluding the $18 million reduction in reserves for litigation, were above previously provided guidance primarily due to a lower amount of tax expense and better than expected operating performance that in the aggregate offset a higher level of restructuring costs in the quarter. 1
  • 3. During the fourth quarter, the Company completed its acquisition of a 68.4% controlling stake in Dalphi Metal Espana, S.A. (“Dalphimetal”) for cash of approximately $134 million, subject to post closing adjustment, plus the assumption of debt totaling approximately $91 million. The Company reported full-year 2005 sales of $12.6 billion, an increase of 5.3 percent, compared to the prior year. Net earnings for the year were $204 million, or $1.99 per diluted share, which compares to 2004 earnings of $29 million or $0.29 per diluted share. Full-year 2005 net earnings included positive impacts from the reduction in reserves for litigation of $18 million and a one-time benefit of $17 million from a tax law change in Poland. The year also included expenses of $7 million for loss on retirement of debt relating to a financing transaction completed in the first half of the year. In comparison, 2004 net earnings included pre-tax expenses of $173 million primarily for loss on retirement of debt associated with various financing transactions completed in the year. Full year net earnings excluding the effect of these items from both periods, net of the assumed tax impacts, were $176 million or $1.72 per diluted share in 2005 compared to $173 million or $1.72 per diluted share in the prior year. “We are pleased to report solid fourth quarter and full year financial results in-line with the business objectives we set at the beginning of the year,” said John Plant, president and chief executive officer. “This is quite an achievement considering the steady decline in industry fundamentals throughout the year, including lower than expected vehicle production and significant cost pressures related to higher commodity inflation, together with our decision to increase the magnitude of cost cutting actions.” Mr. Plant added, “The automotive industry, at all levels, is evolving at a remarkable pace as global competition intensifies and economic pressures continue to pose significant risks to bottom line performance. With this backdrop, TRW has accelerated its cost reduction efforts, while at the same time increasing its investment in technology in support of safety development initiatives. We believe the investments and sacrifices that are being made today will improve the Company’s long term competitiveness and best position us to support the growing global demands of our customers.” 2
  • 4. Fourth Quarter 2005 The Company reported fourth-quarter 2005 sales of $3.1 billion, a decrease of $50 million or 1.6 percent compared to prior year sales of $3.2 billion. Excluding the impact of foreign currency translation, sales improved 3.0 percent compared to last year. This increase resulted primarily from higher product volumes and incremental revenue resulting from the acquisition of Dalphimetal, partially offset by the effect of six fewer calendar days in the current quarter and price reductions provided to customers. Operating income for fourth-quarter 2005 was $133 million, essentially flat compared to the prior year level of $131 million. The 2005 quarter included the positive impact from the reduction in reserves for litigation of $18 million and the negative effect of a higher level of restructuring and asset impairment charges of $31 million between the two quarters. Excluding the impact of these items, operating income in the current year was higher due primarily to the benefit of cost reduction programs, including a lower level of net pension and OPEB expense resulting from actions to contain these costs, in excess of price reductions provided to customers. Additionally, commodity inflation and the effects of currency movements negatively impacted the current quarter as compared to last year. Net interest and securitization expense for fourth-quarter 2005 totaled $58 million, compared to $69 million in the prior year. The prior year amount included $6 million of expenses related to a refinancing of the Company’s bank debt facilities. Excluding this amount, net interest and securitization expense declined by $5 million due to the benefit of the Company’s past deleveraging activities and a favorable level of interest income in the current quarter, partially offset by the impact of rising interest rates on the Company’s floating rate debt. The prior year period included $119 million for loss on retirement of debt related to the repurchase of its $600 million seller note payable to Northrop Grumman Corporation. Tax expense in the 2005 quarter was $22 million, which is the amount of expense required to reflect the actual tax burden for the 2005 year. 3
  • 5. Net earnings in fourth-quarter 2005 were $59 million, or $0.57 per diluted share, compared to net losses of $62 million or $(0.63) per share in the 2004 period. Net earnings excluding the $18 million benefit for the reduction in reserves for litigation in the 2005 quarter and the $125 million for expenses related to financing transactions in the prior year period, net of the assumed tax impact in each case, were $41 million or $0.40 per diluted share in the current year, compared to $34 million or $0.34 per diluted share in the prior year quarter. Earnings before interest, securitization costs, loss on retirement of debt, taxes, depreciation and amortization (“EBITDA”) were $268 million for fourth-quarter 2005, which compares to prior year EBITDA of $264 million. Full Year 2005 The Company reported 2005 sales of $12.6 billion, an increase of $632 million or 5.3 percent compared to prior year sales of $12.0 billion. The increase resulted primarily from higher product volumes despite lower vehicle production at some of our major customers, foreign currency translation and the addition of sales resulting from the acquisition of Dalphimetal, partially offset by price reductions provided to customers. Operating income for the 2005 year was $553 million, a decrease of $27 million compared to the prior year total of $580 million. The decrease resulted primarily from commodity inflation, increased restructuring and asset impairment costs, a higher level of research and development expenses and the impact of customer solvency issues. These negative factors were partially offset by the benefits of higher sales and cost reduction programs in excess of price reductions provided to customers and non- commodity inflation, lower pension and OPEB expenses and the reduction in reserves for litigation. Restructuring and asset impairment expenses for full-year 2005 were $107 million, compared to $38 million in the prior year period. 4
  • 6. Net interest and securitization expense for 2005 totaled $231 million, which compares to $252 million in 2004. The reduction in interest related expenses is attributed to the benefits derived from past deleveraging efforts and the non-recurrence of debt retirement charges, partially offset by the impact of rising interest rates associated with the Company’s floating rate debt. In 2005, the Company incurred $7 million for loss on retirement of debt related to the partial redemption of its Euro denominated 10-⅛% senior notes. Similarly, in the 2004 period, loss on retirement of debt totaled $167 million, which consisted of the previously discussed seller note repurchase transaction and $48 million related to the Company’s initial public offering and a bank debt refinancing transaction. Tax expense for 2005 was $124 million, which included the one-time tax benefit of $17 million resulting from a tax law change in Poland. Excluding the favorable tax law change and both the $18 million reduction in litigation reserves and the $7 million for loss on retirement of debt, the effective tax rate was 44% for the year. Full-year 2005 net earnings were $204 million or $1.99 per diluted share, which compares to net earnings of $29 million or $0.29 per diluted share in the prior year period. Net earnings in 2005 included the previously discussed one-time items related to the reduction to reserves for litigation, the tax law change in Poland and expenses for loss on retirement of debt. In comparison 2004 net earnings included previously mentioned expenses for loss on retirement of debt associated with various debt financing transactions. Full year net earnings excluding the effect of these items from both periods, net of the assumed tax impacts, were $176 million, or $1.72 per diluted share in 2005 compared to $173 million or $1.72 per diluted share in the prior year. EBITDA for the 2005 year totaled $1,075 million, which compares to $1,080 million in the prior year period. The decline in EBITDA includes an increased level of restructuring charges and asset impairments that negatively impacted the year-to-year comparison by $69 million. 5
  • 7. Capital Structure/Liquidity Fourth quarter net cash provided by operating activities was $380 million compared to $751 million in the prior year quarter. The difference between the two periods resulted primarily from a higher level of working capital and the impact of the prior year having six additional calendar days, which positively impacted the cash provided by operating activities in the 2004 period. Capital expenditures for the quarter were $222 million compared to $245 million in the prior year period. Full year net cash provided by operating activities was $502 million compared to $787 million in the prior year. The decrease of $285 million was primarily driven by an increase in working capital and an increased level of pension funding. Capital expenditures for the 2005 year were $503 million compared to $493 million in the prior year. As of December 31, 2005, the Company had $3,236 million of debt and $676 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $2,560 million, which includes $244 million of net debt associated with the Dalphimetal acquisition. When compared to the prior year level, net debt at year-end increased by $188 million and declined by $56 million after excluding the impact of the Dalphimetal acquisition. Subsequent Event On February 2, 2006, the Company’s wholly owned subsidiary, Lucas Industries Limited, completed the tender for its outstanding GBP 94.6 million 10.875% bonds (“Lucas Bonds”). The transaction was funded with cash on hand. Additionally, as a result of the transaction, the Company will incur a $57 million charge for loss on retirement of debt during the first quarter of 2006, which reflects the difference between the tender amount and the book value of debt at the time of the transaction. 2006 Outlook For full-year 2006, the Company expects revenue in the range of $12.8 to $13.2 billion and earnings per diluted share in the range of $1.05 to $1.30, which includes the $57 million charge related to the retirement of the Lucas Bonds. Earnings per diluted share excluding this charge are expected to be in the range of $1.60 to $1.85. 6
  • 8. This guidance range reflects restructuring expenses of approximately $50 million, includes the annualized effect for the adoption of FASB Statement No. 123 Revised (recognition of expenses related to stock based compensation) and assumes an effective tax rate approximately consistent with the 2005 rate of 44%, which excludes the previously discussed one-time adjustments. Lastly, the Company estimates capital expenditures will total approximately 4% of sales for the year. Mr. Plant commented, “The level of uncertainty surrounding the 2006 environment is daunting as severe economic strain continues to take its toll on bottom lines and is reshaping the vehicle and component industry as we know it today. With that said, we have set expectations for the 2006 year that will again pose a significant test to our highly disciplined operational programs and will require significant effort to achieve.” For the first quarter of 2006, the Company expects revenue of approximately $3.3 billion and earnings per diluted share ranging from breakeven to $0.15. This guidance includes the previously discussed $57 million loss on retirement of debt. Earnings excluding this amount are expected to be in the range $0.55 to $0.70 per diluted share. Also included in earnings guidance are expected pre-tax restructuring costs of approximately $9 million. Fourth Quarter and Full Year 2005 Conference Call The Company will host its fourth-quarter 2005 conference call at 9:00 a.m. (EST) today, Tuesday, February 21, to discuss financial results and other related matters. To access the conference call, U.S. locations should dial (877) 852-7898, and locations outside the U.S. should dial (706) 634-1095. A replay of the conference call will be available approximately two hours after the conclusion of the call and accessible 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 4565403. A live audio web cast and subsequent replay of the conference call will also be available on the Company’s website at www.trwauto.com/results. 7
  • 9. 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”). Management believes these non-GAAP measures are useful to evaluate operating performance and/or regularly used by security analysts, institutional investors and other interested parties in the evaluation of the Company. Non-GAAP measures are not purported to be a substitute for any GAAP measure 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 measure and for share amounts used to derive earnings per share, please see the financial schedules that accompany this release. About TRW With 2005 sales of $12.6 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, employs approximately 63,000 people in 25 countries. 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 quot;TRW Automotivequot;, “TRW” or the quot;Companyquot; 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.trwauto.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 Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those contained in forward-looking statements made in this release. Such risks, uncertainties and other important factors which could cause our actual results to differ materially from those contained in our forward-looking statements are set forth in our Report on Form 10-K for the fiscal year ended December 31, 2004 (the “10-K”) and our Reports on Form 10-Q for the quarters 8
  • 10. ended April 1, July 1 and September 30, 2005, and include: our ability to successfully integrate Dalphimetal’s operations into the Company, which includes the retention of their customer base; possible production cuts or restructuring by our customers; efforts by our customers to consolidate their supply base; escalating pricing pressures from our customers; severe inflationary pressures impacting the market for commodities; non-performance by, or insolvency of, our suppliers and customers, which may be exacerbated by recent bankruptcies; our substantial leverage; interest rate risk arising from our variable rate indebtedness; product liability and warranty and recall claims; our dependence on our largest customers; loss of market share by domestic vehicle manufacturers; limitations on flexibility in operating our business contained in our debt agreements; fluctuations in foreign exchange rates; the possibility that our owners' interests will conflict with ours; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers and other risks and uncertainties set forth under quot;Risk Factorsquot; in the 10-K and in our other SEC filings. We do not intend or assume any obligation to update any of these forward-looking statements. ### 9
  • 11. TRW Automotive Holdings Corp. Index of Condensed Consolidated Financial Information Page Consolidated Statements of Operations (unaudited) for the three months ended December 31, 2005 and December 31, 2004 ......................................... A2 Consolidated Statements of Operations for the years ended December 31, 2005 (unaudited) and December 31, 2004 ........................................................................................................................ A3 Consolidated Balance Sheets as of December 31, 2005 (unaudited) and December 31, 2004............. A4 Condensed Consolidated Statements of Cash Flows for the years ended December 31, 2005 (unaudited) and December 31, 2004..................................................................... A5 Reconciliation of GAAP Net Earnings (Losses) to EBITDA (unaudited) for the three months and years ended December 31, 2005 and December 31, 2004 ............................ A6 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the three months ended December 31, 2005 ................................................................................... A7 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the year ended December 31, 2005 ................................................................................................. A8 Reconciliation of Impact of Debt Retirement and Income Tax Items (unaudited) for the three months ended December 31, 2004 ................................................................................... A9 Reconciliation of Impact of Debt Retirement and Income Tax Items (unaudited) for the year ended December 31, 2004 ................................................................................................. A10 The accompanying unaudited consolidated financial information and reconciliation schedules should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2004 and Forms 10-Q for the quarterly periods ended April 1, 2005, July 1, 2005 and September 30, 2005 as filed with the United States Securities and Exchange Commission on February 23, 2005, May 5, 2005, August 2, 2005, and November 1, 2005, respectively. A1
  • 12. TRW Automotive Holdings Corp. Consolidated Statements of Operations (Unaudited) Three Months Ended December 31, (In millions, except per share amounts) 2005 2004 Sales............................................................................................. $ 3,136 $ 3,186 Cost of sales................................................................................. 2,806 2,841 Gross profit............................................................................ 330 345 Administrative and selling expenses............................................ 93 127 Research and development expenses ........................................... 54 59 Amortization of intangible assets ................................................ 9 8 Restructuring charges and asset impairments .............................. 51 20 Other income — net..................................................................... (10) — Operating income .................................................................. 133 131 Interest expense — net................................................................. 57 69 Loss on retirement of debt ........................................................... — 119 — Accounts receivable securitization costs ..................................... 1 Equity in earnings of affiliates, net of tax.................................... (8) (4) Minority interest, net of tax ......................................................... 2 2 Earnings (losses) before income taxes................................. 81 (55) Income tax expense...................................................................... 22 7 Net earnings (losses) ............................................................ $ 59 $ (62) Basic earnings (losses) per share: Earnings (losses) per share ........................................................ $ 0.59 $ (0.63) Weighted average shares ........................................................... 99.2 99.0 Diluted earnings per share: Earnings per share...................................................................... $ 0.57 N/A Weighted average shares ........................................................... 102.9 N/A A2
  • 13. TRW Automotive Holdings Corp. Consolidated Statements of Operations Years Ended December 31, (In millions, except per share amounts) 2005 2004 (Unaudited) Sales ..................................................................................... $ 12,643 $ 12,011 Cost of sales ......................................................................... 11,249 10,681 Gross profit.................................................................... 1,394 1,330 Administrative and selling expenses.................................... 490 513 Research and development expenses ................................... 203 174 Amortization of intangible assets......................................... 33 33 Restructuring charges and asset impairments ...................... 107 38 Other expense (income) — net ............................................ 8 (8) Operating income .......................................................... 553 580 Interest expense — net......................................................... 228 250 Loss on retirement of debt ................................................... 7 167 Accounts receivable securitization costs.............................. 3 2 Equity in earnings of affiliates, net of tax ............................ (20) (15) Minority interest, net of tax.................................................. 7 12 Earnings before income taxes ...................................... 328 164 Income tax expense.............................................................. 124 135 Net earnings ................................................................ $ 204 $ 29 Basic earnings per share: Earnings per share.............................................................. $ 2.06 $ 0.30 Weighted average shares.................................................... 99.1 97.8 Diluted earnings per share: Earnings per share.............................................................. $ 1.99 $ 0.29 Weighted average shares.................................................... 102.3 100.5 A3
  • 14. TRW Automotive Holdings Corp. Consolidated Balance Sheets As of December 31, (Dollars in millions) 2005 2004 (Unaudited) Assets Current assets: Cash and cash equivalents .......................................................................... $ 659 $ 790 Marketable securities .................................................................................. 17 19 Accounts receivable — net ......................................................................... 1,948 1,813 Inventories .................................................................................................. 702 684 Prepaid expenses......................................................................................... 73 34 Deferred income taxes ................................................................................ 200 176 Total current assets .......................................................................................... 3,599 3,516 Property, plant and equipment — net .............................................................. 2,538 2,635 Goodwill .......................................................................................................... 2,293 2,357 Intangible assets — net .................................................................................... 769 763 Prepaid pension cost ........................................................................................ 222 190 Deferred income taxes ..................................................................................... 100 91 Other assets ...................................................................................................... 709 562 Total assets .................................................................................................. $ 10,230 $ 10,114 Liabilities, Minority Interests and Stockholders’ Equity Current liabilities: Short-term debt .......................................................................................... $ 98 $ 40 Current portion of long-term debt .............................................................. 37 19 Trade accounts payable .............................................................................. 1,865 1,887 Accrued compensation ............................................................................... 280 309 Income taxes .............................................................................................. 271 233 Other current liabilities .............................................................................. 1,039 992 Total current liabilities..................................................................................... 3,590 3,480 Long-term debt................................................................................................. 3,101 3,122 Post-retirement benefits other than pensions ................................................... 917 959 Pension benefits ............................................................................................... 795 843 Deferred income taxes ..................................................................................... 230 268 Long-term liabilities......................................................................................... 283 272 Total liabilities............................................................................................. 8,916 8,944 Minority interests ............................................................................................. 106 65 Commitments and contingencies Stockholders’ equity: Capital stock............................................................................................... 1 1 Treasury stock ............................................................................................ — — Paid-in-capital ............................................................................................ 1,142 1,131 Retained earnings (accumulated deficit) .................................................... 132 (72) Accumulated other comprehensive (losses) earnings ................................ (67) 45 Total stockholders’ equity................................................................................ 1,208 1,105 Total liabilities, minority interests, and stockholders’ equity...................... $ 10,230 $ 10,114 A4
  • 15. TRW Automotive Holdings Corp. Condensed Consolidated Statements of Cash Flows Years Ended December 31, (Dollars in millions) 2005 2004 (Unaudited) Operating Activities Net earnings ............................................................................................ $ 204 $ 29 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization .............................................................. 509 497 Pension and other post-retirement benefits, net of contributions .......... (157) (73) Loss on retirement of debt..................................................................... 7 167 Other — net........................................................................................... 34 92 Changes in assets and liabilities, net of effects of businesses acquired or divested............................................................................... (95) 75 Net cash provided by operating activities ........................................... 502 787 Investing Activities Capital expenditures including other intangibles .................................... (503) (493) Acquisitions, net of cash acquired and transaction fees .......................... (134) (5) Purchase price adjustments and related settlements................................ 2 40 Investment in affiliates ............................................................................ (8) — Net proceeds from asset sales and divestitures........................................ 4 89 Other — net............................................................................................. — (1) Net cash used in investing activities ................................................... (639) (370) Financing Activities Increase in short-term debt ...................................................................... 9 18 Redemption of long-term debt ................................................................ (1,603) (1,867) Repurchase of Seller Note....................................................................... — (534) Proceeds from issuance of long-term debt .............................................. 1,635 1,593 Debt issue costs ....................................................................................... (6) (15) Issuance of capital stock (net of fees) ..................................................... 143 635 Repurchase of capital stock..................................................................... (143) (319) Proceeds from exercise of stock options ................................................. 3 — Net cash provided by (used in) financing activities ........................... 38 (489) Effect of exchange rate changes on cash................................................. (32) 34 Decrease in cash and cash equivalents .................................................... (131) (38) Cash and cash equivalents at beginning of period................................... 790 828 Cash and cash equivalents at end of period............................................. $ 659 $ 790 A5
  • 16. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings (Losses) to EBITDA (Unaudited) The reconciliation schedules below should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2004 and Forms 10-Q for the quarterly periods ended April 1, 2005, July 1, 2005, and September 30, 2005, which contain summary historical data. The EBITDA measure calculated in the following schedules is a measure used by management to evaluate operating performance. Management believes that EBITDA is a useful measurement because it is frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings (losses) as an indicator of operating performance, or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. Three Months Ended December 31, (Dollars in millions) 2005 2004 GAAP net earnings (losses) ................................................. $ 59 $ (62) Income tax expense ......................................................... 22 7 Interest expense, net of interest income........................... 57 69 Loss on retirement of debt ............................................... — 119 Accounts receivable securitization costs ......................... 1 — Depreciation and amortization......................................... 129 131 EBITDA ................................................................................ $ 268 $ 264 Years Ended December 31, (Dollars in millions) 2005 2004 GAAP net earnings .............................................................. $ 204 $ 29 Income tax expense ......................................................... 124 135 Interest expense, net of interest income........................... 228 250 Loss on retirement of debt ............................................... 7 167 Accounts receivable securitization costs ......................... 3 2 Depreciation and amortization......................................... 509 497 EBITDA ................................................................................ $ 1,075 $ 1,080 A6
  • 17. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) Administrative and selling expenses for the three months ended December 31, 2005 included an adjustment for a reduction in litigation-related reserves of approximately $18 million. Such adjustment carries zero tax expense due to the Company’s tax loss position. The following adjustment excludes the litigation reserve adjustment to show the impact as if this adjustment had not occurred. Three Months Three Months Ended Ended December 31, 2005 December 31, 2005 Actual Adjustments Adjusted (In millions, except per share amounts) Sales ......................................................................... $ 3,136 $ — $ 3,136 Cost of sales ............................................................. 2,806 — 2,806 Gross profit .......................................................... 330 — 330 (a) Administrative and selling expenses ........................ 93 18 111 Research and development expenses ....................... 54 — 54 Amortization of intangible assets............................. 9 — 9 Restructuring charges and asset impairments .......... 51 — 51 Other income — net................................................. (10) — (10) Operating income ................................................. 133 (18) 115 Interest expense, net................................................. 57 — 57 Account receivable securitization costs ................... 1 — 1 Equity in earnings of affiliates, net of tax ................ (8) — (8) Minority interest, net of tax...................................... 2 — 2 Earnings before income taxes .............................. 81 (18) 63 Income tax expense ................................................. 22 — 22 Net earnings ......................................................... $ 59 $ (18) $ 41 Effective tax rate ...................................................... 27% 35% Basic earnings per share: Earnings per share.................................................. $ 0.59 $ 0.41 Weighted average shares........................................ 99.2 99.2 Diluted earnings per share: Earnings per share.................................................. $ 0.57 $ 0.40 Weighted average shares........................................ 102.9 102.9 (a) Reflects the elimination of the litigation reserve adjustment. A7
  • 18. TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s May 3, 2005 repurchase of approximately €48 million principal amount of its 10⅛% Senior Notes, the Company incurred $7 million of losses on retirement of debt consisting of $6 million of related redemption premium and $1 million for write-off of deferred debt issuance costs. Such debt retirement expenses carry zero tax benefit due to the Company’s tax loss position. Income tax expense for the year ended December 31, 2005 includes a one-time benefit of $17 million resulting from a tax law change in Poland related to investment tax credits for companies operating in certain special economic zones within the country. The investment tax credits replace the tax holiday that was previously in effect for the Company. Administrative and selling expenses for the year ended December 31, 2005 included an adjustment for a reduction in litigation-related reserves of approximately $18 million. Such adjustment carries zero tax expense due to the Company’s tax loss position. The following adjustments exclude the litigation reserve adjustment and the loss on retirement of debt, as well as the one- time income tax benefit, to show the impact as if these transactions had not occurred. Year Ended Year Ended December 31, 2005 December 31, 2005 Actual Adjustments Adjusted (In millions, except per share amounts) Sales ......................................................................... $ 12,643 $ — $ 12,643 Cost of sales ............................................................. 11,249 — 11,249 Gross profit .......................................................... 1,394 — 1,394 (a) Administrative and selling expenses ........................ 490 18 508 Research and development expenses ....................... 203 — 203 Amortization of intangible assets............................. 33 — 33 Restructuring charges and asset impairments .......... 107 — 107 Other expense — net................................................ 8 — 8 Operating income ................................................. 553 (18) 535 Interest expense, net................................................. 228 — 228 (b) Loss on retirement of debt........................................ 7 (7) — Account receivable securitization costs ................... 3 — 3 Equity in earnings of affiliates, net of tax ................ (20) — (20) Minority interest, net of tax...................................... 7 — 7 Earnings before income taxes .............................. 328 (11) 317 (c) Income tax expense ................................................. 124 17 141 Net earnings ......................................................... $ 204 $ (28) $ 176 Effective tax rate ...................................................... 38% 44% Basic earnings per share: Earnings per share.................................................. $ 2.06 $ 1.78 Weighted average shares........................................ 99.1 99.1 Diluted earnings per share: Earnings per share.................................................. $ 1.99 $ 1.72 Weighted average shares........................................ 102.3 102.3 (a) Reflects the elimination of the litigation reserve adjustment. (b) Reflects the elimination of the loss on retirement of debt incurred in conjunction with repurchase of a portion of the Company’s 10⅛% Senior Notes. (c) Reflects the elimination of one-time income tax benefit related to a tax law change in Poland. A8
  • 19. TRW Automotive Holdings Corp. Reconciliation of Impact of Debt Retirement and Refinancing Transactions (Unaudited) In conjunction with the Company’s November 2, and December 17, 2004 refinancings of its senior secured credit facilities and repurchase of a $600 million seller note issued in conjunction with the Acquisition (the “Seller Note”), the Company incurred $119 million of losses on retirement of debt, as well as $6 million in other debt retirement expenses, primarily write- off of debt issuance fees and refinancing related fees. Such debt retirement expenses were U.S.-based, and therefore carry zero tax benefit due to the Company’s tax loss position in this jurisdiction. The following adjustments exclude the loss on retirement of debt and other debt retirement expenses, as well as the related income tax effects of such adjustments, to show the impact as if the refinancing transactions had not occurred. Three Months Three Months Debt Three Months Ended December 31, Ended Retirement Ended December 31, And December 31, 2004 2004 Refinancing 2004 NOL Adjusted for NOL Actual Adjustments Adjusted Adjustments (In millions, except per share amounts) Operating income........................................... $ 131 $ — $ 131 $ — $ 131 Interest expense, net ....................................... 69 (6) 63 — 63 (a) Loss on retirement of debt.............................. 119 (119) — — — (b) Equity in earnings of affiliates, net of tax ...... (4) — (4) — (4) Minority interest, net of tax............................ 2 — 2 — 2 Earnings (losses) before income taxes ....... (55) 125 70 — 70 Income tax expense ....................................... 7 — 7 29 36 (c) (d) Net earnings (losses) .................................. $ (62) $ 125 $ 63 $ (29) $ 34 Effective tax rate ............................................ NM 10% 51% Basic earnings (losses) per share: Earnings (losses) per share........................... $ (0.63) $ 0.34 Weighted average shares.............................. 99.0 99.0 Diluted earnings (losses) per share: Earnings (losses) per share........................... $ (0.63) $ 0.34 Weighted average shares.............................. 99.0 101.3 (a) Consists of $3 million of refinancing related fees and $3 million of accelerated amortization of deferred debt issuance costs associated with the refinancing transactions which are included in interest expense. (b) Represents $119 million loss on retirement of debt associated with the refinancing transactions. (c) Reflects no income tax impact for the adjustment that eliminates the current year losses in the applicable tax jurisdiction because the resulting tax expense would be offset by the assumed utilization of prior year NOL carryforwards. There is no certainty as to when or if these NOL’s will be utilized, however, they are continually evaluated as part of our tax planning strategy. (d) Reflects the elimination of an assumed one-time impact related to utilizing the NOL carryforwards. NM = not meaningful A9
  • 20. TRW Automotive Holdings Corp. Reconciliation of Impact of Debt Retirement and Refinancing Transactions (Unaudited) In conjunction with the Company’s January 9, November 2, and December 17, 2004 refinancings of its senior secured credit facilities, the repurchase of senior notes and senior subordinated notes with the proceeds of its initial public offering and repurchase of a $600 million seller note issued in conjunction with the Acquisition (the “Seller Note”), the Company incurred $167 million of losses on retirement of debt, as well as $6 million in other debt retirement expenses, primarily write-off of debt issuance fees and refinancing related fees. Such debt retirement expenses were U.S.-based, and therefore carry zero tax benefit due to the Company’s tax loss position in this jurisdiction. The following adjustments exclude the loss on retirement of debt and other debt retirement expenses, as well as the related income tax effects of such adjustments, to show the impact as if the refinancing transactions had not occurred. Debt Year Ended Year Ended Retirement Year Ended December 31, December 31, and December 31, 2004 Refinancing NOL Adjusted for 2004 2004 Actual Adjustments Adjusted Adjustments NOL (In millions, except per share amounts) Operating income ........................................ $ 580 $ — $ 580 $ — $ 580 (a) Interest expense, net .................................... 250 (6) 244 — 244 (b) Loss on retirement of debt ........................... 167 (167) — — — Accounts receivable securitization costs ..... 2 — 2 — 2 Equity in earnings of affiliates, net of tax.... (15) — (15) — (15) Minority interest, net of tax ......................... 12 — 12 — 12 Earnings before income taxes.................. 164 173 337 — 337 (c) (d) Income tax expense .................................... 135 — 135 29 164 Net earnings............................................. $ 29 $ 173 $ 202 $ (29) $ 173 Effective tax rate ......................................... 82% 40% 49% Basic earnings per share: Earnings per share ..................................... $ 0.30 $ 1.77 Weighted average shares ........................... 97.8 97.8 Diluted earnings per share: Earnings per share ..................................... $ 0.29 $ 1.72 Weighted average shares ........................... 100.5 100.5 (a) Consists of $3 million of refinancing related fees and $3 million of accelerated amortization of deferred debt issuance costs associated with the refinancing transactions which are included in interest expense. (b) Represents $167 million loss on retirement of debt associated with the refinancing transactions. (c) Reflects no income tax impact for the adjustment that eliminates the current year losses in the applicable tax jurisdiction because the resulting tax expense would be offset by the assumed utilization of prior year NOL carryforwards. There is no certainty as to when or if these NOL’s will be utilized, however, they are continually evaluated as part of our tax planning strategy. (d) Reflects the elimination of an assumed one-time impact related to utilizing the NOL carryforwards. A10
  • 21. TRW Automotive Holdings Corp. 2005 Fourth Quarter and Full Year Financial Results Conference Call February 21, 2006
  • 22. Introduction Patrick Stobb Director, Investor Relations Business Summary John C. Plant President and Chief Executive Officer P2 © TRW Automotive Holdings Corp. 2006
  • 23. Safe Harbor Statement This material contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those contained in forward-looking statements made during this presentation. Such risks, uncertainties and other important factors which could cause our actual results to differ materially from those contained in our forward-looking statements are set forth in our Report on Form 10-K for the fiscal year ended December 31, 2004 (the “10-K”), and our Reports on Form 10-Q for the quarters ended April 1, July 1 and September 30, 2005, and include: our ability to successfully integrate Dalphimetal’s operations into the Company, which includes the retention of their customer base; possible production cuts or restructuring by our customers; efforts by our customers to consolidate their supply base; escalating pricing pressures from our customers; severe inflationary pressures impacting the market for commodities; our substantial leverage; non- performance by, or insolvency of, our suppliers and customers, which may be exacerbated by recent bankruptcies; interest rate risk arising from our variable rate indebtedness; the highly competitive automotive parts industry and its cyclicality; product liability and warranty and recall claims; our dependence on our largest customers; loss of market share by domestic vehicle manufacturers; limitations on flexibility in operating our business contained in our debt agreements; fluctuations in foreign exchange rates; the possibility that our owners' interests will conflict with ours; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers and other risks and uncertainties set forth under quot;Risk Factorsquot; in the 10-K and in our other SEC filings. We do not intend or assume any obligation to update any of these forward-looking statements. P3 © TRW Automotive Holdings Corp. 2006
  • 24. 2005 Summary Comments • Strong finish to the year with 2005 financial results in-line with guidance provided at the beginning of the year • Healthy financial performance driven by: – Growth of new safety products – Strength of diverse customer base – Industry leading geographic balance – Highly disciplined and well executed cost reduction programs • 2005 operating environment extremely challenging, with margin pressure from: – Customer pricing demands – Commodity inflation – Further market share losses by our largest North American customers – Rising interest rates – Customer solvency issues (Rover) • Severe conditions prompted acceleration of cost reduction efforts, including the announcement of 10 plant closures P4 © TRW Automotive Holdings Corp. 2006
  • 25. 2005 Summary Comments • Tremendous sense of urgency (as demonstrated by our actions) to continue our improvement and growth as a profitable organization over the long term • Level of urgency applies with equal weight to product development efforts, in 2005: – Engineering and R&D spending at approximately $780 million or 6.2% of sales – Invested in technical expertise increasing engineering headcount up to 5,000 employees worldwide – Investing capital to support growth in all regions – Added technical and test facilities in China, Poland and Michigan with another planned for Japan – Showcased leading edge integrated safety and hybrid-enabling technology at Frankfurt Auto Show generating high customer interest – numerous development projects underway P5 © TRW Automotive Holdings Corp. 2006
  • 26. Fourth Quarter Financial Highlights • Reported sales of $3.1 billion dollars, a decrease of 1.6% from the prior year period: + New product volumes – + Dalphimetal acquisition – - – Currency translation - – Six fewer calendar days - – Customer pricing • Underlying sales growth (excluding impact of currency translation, calendar days and the Dalphimetal acquisition) was above 5% • GAAP Net earnings of $59 million, or $0.57 per diluted share, which includes: – $18 million benefit for reduction in reserves for litigation • Net earnings excluding the one-time items were $41 million or $0.40 per diluted share P6 © TRW Automotive Holdings Corp. 2006
  • 27. Full Year Financial Highlights • 2005 full year sales of $12.6 billion, an increase of 5% from 2004 • GAAP net earnings of $204 million or $1.99 per diluted share, which includes: – One-time favorable items for $18 million reduction in litigation reserves and tax benefit of $17 million – Loss on retirement of debt of $7 million • Net earnings excluding these items were $176 million or $1.72 per diluted share • Net debt at year-end was $2.6 billion(1) • Achieved 2005 financial and operational commitments • Made significant progress toward advancing our four Strategic Priorities – Best Quality, Lowest Cost, Global Reach and Innovative Technology (1) Net debt is equal to total indebtedness (including receivables facility) minus cash, cash equivalents and marketable securities. For net debt reconciliation to closest GAAP equivalent, please refer to the reconciliation on slide P24 of this presentation. P7 © TRW Automotive Holdings Corp. 2006
  • 28. Business Developments • Steady pace of new business awards in the quarter: – Wins for the year in-line with business planning objectives, supports long term growth expectations – Distribution of awards strengthens diversification • Various vehicle manufacturers have announced revised purchasing strategies, which are expected to: – Substantially reduce the number of suppliers – Create more collaborative supply relationships – Improve supply of high quality and competitively priced products, especially in high-growth regions • Ford and GM announced restructuring actions aimed at trimming capacity in North America P8 © TRW Automotive Holdings Corp. 2006
  • 29. Business Developments • Focus on advanced safety technology remains very strong – High customer interest in electronic stability control, tire pressure monitoring, electric steering and side impact airbags – NHTSA considering legislation to mandate stability control – Heightened safety in China • Completed Dalphimetal acquisition – European acquisition better positions company to meet growing demand for passive safety – Further broadens diversification in Europe – Presently integrating Dalphimetal into our operations – Rapidly developing plans to capitalize on each other’s strengths • TRW’s competitive position in safety together with a high level of diversification presents a solid platform for stability and growth for the Company P9 © TRW Automotive Holdings Corp. 2006
  • 30. 2006 Operating Environment • Many challenges from 2005 are (1) 2006 Production Assumptions again center stage in 2006 (units in millions) • Based on current estimates, industry production expected to negatively impact the year-to-year 15.9 ’03 sales variance North 15.8 ‘04 America 15.8 ‘05 • Sales generated from newly 15.9 ‘06 launched products expected to help alleviate negative industry 11.9 volumes ’03 North 11.4 ‘04 America • Other factors impacting sales, 10.9 ‘05 Big 3 include: 10.7 ‘06 - ‘06 – Foreign currency translation - 19.2 ’03 – Pricing pressures from 20.2 ‘04 customers Europe 19.9 ‘05 + Dalphimetal consolidation – 20.0 ‘06 ‘06 (1) Source: Primarily CSM Worldwide and internal company estimates. P10 © TRW Automotive Holdings Corp. 2006
  • 31. 2006 Full Year Outlook • Expect sales in the range of $12.8 to $13.2 billion • GAAP Net earnings per diluted share of $1.05 to $1.30(1) – Includes $57 million for loss on retirement of debt related to Lucas bond tender transaction • Net earnings excluding loss on retirement of debt in the range of $1.60 to $1.85 per diluted share(1) • Includes restructuring expenses of $50 million • Capital spending expected to run at approximately 4% of sales • Guidance level consistent with the forward assessment provided last November (1) Per share amounts based on weighted average diluted shares outstanding of approximately 103.5 million shares. P11 © TRW Automotive Holdings Corp. 2006
  • 32. Financial Overview Joseph S. Cantie Executive Vice President and Chief Financial Officer P12 © TRW Automotive Holdings Corp. 2006
  • 33. Financial Overview • Detailed review of fourth quarter and full year 2005 financial results • Capital structure – Net debt – Cash flow and liquidity – Dalphimetal Acquisition – Incremental term loan B2 – Lucas bond tender transaction • Initial Q1 2006 outlook • Closing comments • Analyst Q&A P13 © TRW Automotive Holdings Corp. 2006
  • 34. Fourth Quarter 2005 Results (dollars in millions) Adjusting Adjusted Adjusting Adjusted (b) 2005 Q4 Items 2005 Q4 2004 Q4 Items 2004 Q4 Sales $ 3,136 $ - $ 3,136 $ 3,186 $ - $ 3,186 (18)(a) 133 115 131 - 131 Operating Income Net Interest and Securitization 58 - 58 69 (6) 63 Loss on Retirement of Debt - - - 119 (119) - (8) - (8) (4) - (4) Equity in earnings of affiliates Minority Interest 2 - 2 2 - 2 22 - 22 7 29 36 Income Taxes Net Earnings (Losses) $ 59 $ (18) $ 41 $ (62) $ 96 $ 34 102.9 102.9 99.0 101.3 Share Count $ 0.57 $ 0.40 $ (0.63) $ 0.34 Earnings Per Share Effective Tax Rate 27% 35% 51% Adjusting Items (a) Represents one-time adjustment to reserves for litigation of $18 million. (b) Represents $119 million loss on retirement of debt and $6 million of refinancing related expenses associated with capital transactions completed during Q4 2004 and $29 million for the assumed tax impact. P14 © TRW Automotive Holdings Corp. 2006
  • 35. Fourth Quarter EBITDA Summary (dollars in millions) 2005 Q4 2004 Q4 Net Earnings (Losses) $ 59 $ (62) Income Tax Expense 22 7 Net Interest and Securitization 58 69 Loss on Retirement of Debt - 119 Depreciation and Amortization 131 129 EBITDA(1) $ 268 $ 264 Memo: Restructuring & Asset Impairments Included Above $ 51 $ 20 (1) Please refer to slide P23 for management’s rationale for using this metric. P15 © TRW Automotive Holdings Corp. 2006
  • 36. 2005 Full Year Results (dollars in millions) Adjusted Adjusted 2005 Adjusting 2005 2004 Adjusting 2004 (d) Full Year Items Full Year Full Year Items Full Year $ 12,643 $ - $ 12,643 $ 12,011 $ - $ 12,011 Sales (a) Operating Income 553 (18) 535 580 - 580 231 - 231 252 (6) 246 Net Interest and Securitization (b) 7 (7) - 167 (167) - Loss on Retirement of Debt Equity in affiliates (20) - (20) (15) - (15) 7 - 7 12 - 12 Minority Interest (c) 17 141 135 29 164 124 Income Taxes $ 204 $ (28) $ 176 $ 29 $ 144 $ 173 Net Earnings 102.3 102.3 100.5 100.5 Share Count $ 1.99 $ 1.72 $ 0.29 $ 1.72 Earnings Per Diluted Share 38% 44% 82% 49% Effective Tax Rate Adjusting Items (a) $18 million for one-time adjustment to reserves for litigation. (b) $7 million of premiums and associated fees related to bond redemption transaction. (c) $17 million one-time tax benefit from a tax law change in Poland. (d) Represents $167 million loss on retirement of debt and $6 million of refinancing related expenses associated with capital transactions completed during 2004 and $29 million for the assumed tax impact. P16 © TRW Automotive Holdings Corp. 2006
  • 37. 2005 Full Year EBITDA Summary (dollars in millions) 2005 2004 Net Earnings $ 204 $ 29 Income Tax Expense 124 135 Net Interest and Securitization 231 252 Loss on Retirement of Debt 7 167 Depreciation and Amortization 497 509 EBITDA(1) $ 1,075 $ 1,080 Memo: Restructuring & Asset Impairments Included Above $ 107 $ 38 (1) Please refer to slide P23 for management’s rationale for using this metric. P17 © TRW Automotive Holdings Corp. 2006
  • 38. Capital Structure – Net Debt (dollars in millions) Net Debt Summary (1) Dalphimetal acquisition Q4 $3,437 increased net debt by $3,295 $244 million Q4 $2,964 $2,849 $2,785 $2,709 $2,560 Q4 $3,089 $2,923 $2,582 $2,514 $2,479 $2,456 $2,368 $2,372 $2,326 $2,316 $2,304 Mar 1, Sep 26, Dec 31, Mar 26, Jun 25, Sep 24, Dec 31, Apr 1, July 1, Sep 30, Dec 31, 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 Net Debt Operating Co. PIK Seller Note (1) Net debt is equal to total indebtedness (including receivables facility) minus cash, cash equivalents and marketable securities. For net debt reconciliation to closest GAAP equivalent, please refer to the reconciliation on slide P24 of this presentation. P18 © TRW Automotive Holdings Corp. 2006
  • 39. Capital Structure Summary • Net cash provided by operations was $380 million in the fourth quarter and $502 million for the full year • Capital expenditures totaled $222 million and $503 million for the fourth quarter and full year, respectively • In excess of $1 billion in available liquidity at year-end • In November, secured a $300 million incremental term loan B2 • Lucas bond transaction completed February 2, 2006 – Tendered outstanding 10.875% Lucas bonds – Transaction value of $254 million paid with cash on hand – As a result of the transaction, will occur $57 million first quarter charge for loss on retirement of debt P19 © TRW Automotive Holdings Corp. 2006
  • 40. First Quarter 2006 Outlook • Expect sales of $3.3 billion • GAAP net earnings per diluted share ranging from breakeven to $0.15(1) – Includes $57 million for loss on retirement of debt from the Lucas tender transaction • Net earnings excluding loss on retirement of debt expected to be (1) in the range of $0.55 to $0.70 per diluted share • Company prepared to meet the challenges of a tough 2006 operating environment “head on” (1) Diluted share counts based on approximately 103 million shares. P20 © TRW Automotive Holdings Corp. 2006
  • 41. TRW Automotive Holdings Corp. Fourth Quarter and Full Year 2005 Financial Results Conference Call “Driving Automotive Safety”
  • 42. Financial Reconciliations P22 © TRW Automotive Holdings Corp. 2006
  • 43. EBITDA Measurement • The accompanying unaudited consolidated financial information and reconciliation of GAAP net earnings to earnings before interest, income tax, accounts receivable securitization cost, loss on retirement of debt, and depreciation and amortization (“EBITDA”) should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2004 and Form 10-Q for the quarterly periods ended April 1, July 1 and September 30, 2005, as filed with the United States Securities and Exchange Commission. • The EBITDA measure calculated in this presentation is a measure used by management to evaluate operating performance. Management believes that EBITDA is a useful measurement because it is frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry. • EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings (losses) as an indicator of operating performance, or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to other similarly titled measures of other companies. P23 © TRW Automotive Holdings Corp. 2006
  • 44. Net Debt Reconciliation (dollars in millions) Period-End Balances 3/1/03 9/26/03 12/31/03 3/26/04 6/25/04 9/24/04 12/31/04 4/1/05 7/1/05 9/30/05 12/31/05 Cash $ 449 $ 399 $ 828 $ 449 $ 519 $ 438 $ 790 $ 435 $ 506 $ 300 $ 659 Marketable securities 26 16 16 16 15 16 19 16 13 17 17 Total 475 415 844 465 534 454 809 451 519 317 676 Short term debt 168 54 76 66 65 27 40 38 37 38 98 Long term debt: Term loan facilities 1,510 1,469 1,480 1,263 1,211 1,209 1,512 1,298 1,296 1,293 1,593 Senior notes 1,142 1,155 1,178 1,049 1,017 1,044 1,063 1,042 981 972 964 Senior subordinated notes 435 444 458 294 294 295 306 300 293 293 291 Lucas Varity senior notes 167 175 189 190 192 189 202 198 187 186 181 Other borrowings 142 41 45 59 59 58 58 54 51 49 109 Total Short & Long Term Debt 3,564 3,338 3,426 2,921 2,838 2,822 3,181 2,930 2,845 2,831 3,236 Net debt operating company $ 3,089 $ 2,923 $ 2,582 $ 2,456 $ 2,304 $ 2,368 $ 2,372 $ 2,479 $ 2,326 $ 2,514 $ 2,560 Seller note 348 372 382 393 405 417 - - - - - Net debt TRW Holdings $ 3,437 $ 3,295 $ 2,964 $ 2,849 $ 2,709 $ 2,785 $ 2,372 $ 2,479 $ 2,326 $ 2,514 $ 2,560 P24 © TRW Automotive Holdings Corp. 2006

×