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2007 Q4 TRW Auto Earnings Presentation
 

2007 Q4 TRW Auto Earnings Presentation

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    2007 Q4 TRW Auto Earnings Presentation 2007 Q4 TRW Auto Earnings Presentation Document Transcript

    • Fourth Quarter and Full Year 2007 Conference Call Materials February 21, 2008 Materials Included Pages - Press Release 1-8 - Financial Summaries A1-A10 - Presentation P1-P34
    • 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 Reports Fourth Quarter and Full Year 2007 Financial Results; Provides 2008 Outlook Highlights of 2007 Results Include: Record sales of $14.7 billion - an increase of 11.9% • GAAP net earnings of $0.88 per diluted share • Net earnings, excluding debt retirement charges and a FAS 109 tax benefit, • increased to $2.28 per diluted share Operating cash flow totaled $737 million or $224 million after capital • expenditures Debt to capitalization ratio improved to 50% • LIVONIA, MICHIGAN, February 21, 2008 — TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported fourth- quarter 2007 financial results with sales of $3.9 billion, an increase of 18.8 percent compared to the same period a year ago. The Company reported fourth quarter net earnings of $56 million or $0.55 per diluted share, which compares to the prior year result of $33 million or $0.32 per diluted share. Net earnings, excluding tax benefits in both years related to a FAS 109 adjustment in 2007 and debt retirement in 2006, were $0.44 per diluted share in the 2007 quarter, which compares favorably to $0.16 per diluted share in the prior year. The Company’s full-year 2007 sales grew to a record $14.7 billion, an increase of 11.9 percent compared to the prior year. Net earnings for the year were $90 million or $0.88 per diluted share, which compares to 2006 earnings of $176 million or $1.71 per diluted share. Full year net earnings, excluding debt retirement charges and the previously mentioned tax items from both years, were $2.28 per diluted share in 2007, compared to $2.10 per diluted share in 2006. 1
    • “In 2007, TRW delivered solid operating results, including record sales and outstanding cash flow, that exceeded the business objectives set at the beginning of the year,” said John Plant, president and chief executive officer. “Our achievements in 2007 related to our financial performance, together with steady expansion overseas, debt refinancing and safety advancements have helped the Company grow stronger despite challenging industry conditions.” Mr. Plant added, “We have performed remarkably well since becoming an independent company, providing solid results to our stakeholders and capitalizing on our position as the world’s preeminent active and passive safety systems supplier. Now in 2008, we are a significantly larger, more diverse enterprise that is reaching further into the world’s growing markets with a portfolio of safety technology that is unrivaled in the marketplace. We continue to build for the future and are focused on moving the Company forward profitably over the long term.” Fourth Quarter 2007 The Company reported fourth-quarter 2007 sales of $3.9 billion, an increase of $614 million or 18.8 percent over the prior year period. Foreign currency translation benefited sales in the quarter by approximately $328 million. Fourth quarter sales excluding the impact of foreign currency translation increased approximately $286 million or 8.7 percent over the prior year period. This increase can be attributed to higher customer vehicle production in Europe and China and the continued growth of safety products in all markets (including a higher mix of lower margin modules). These positive factors were partially offset by pricing provided to customers and the continued decline in North American customer vehicle production. Operating income for fourth-quarter 2007 was $149 million, which compares favorably to $126 million in the prior year period. Restructuring and asset impairment expenses in the 2007 quarter were $19 million, which compares to $8 million in 2006. Operating income excluding these expenses from both periods was $168 million in 2007, which represents an increase of 25.4 percent compared to the 2006 result of $134 million. 2
    • The year-to-year increase was driven primarily by higher product volumes and savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs and a measurable improvement in the Company’s Automotive Components segment. These positive factors were in part offset by pricing provided to customers, higher commodity costs and other unfavorable business items. Net interest and securitization expense for the fourth quarter of 2007 totaled $56 million, which compares favorably to $66 million in the prior year. The year-to-year decline can be attributed to the benefits derived from the Company’s 2007 debt recapitalization which was completed during the second quarter of 2007. Tax expense in the 2007 quarter was $39 million, resulting in an effective tax rate of 41 percent, which compares to $32 million or 49 percent in the prior year period. The 2007 quarter included a FAS 109 adjustment related to pension and OPEB gains recorded through other comprehensive earnings that resulted in a non-cash tax benefit of $11 million. The prior year quarter included a $17 million tax benefit related to a bond redemption transaction that was completed during the first quarter of 2006. Excluding these items from both years, the effective tax rate was 53 percent in 2007, which compares to 75 percent in the 2006 quarter. The lower tax rate in the fourth quarter of 2007 can be attributed to a change in the Company’s geographic earnings mix. The Company reported fourth-quarter 2007 net earnings of $56 million or $0.55 per diluted share, which compares to net earnings of $33 million or $0.32 per diluted share in 2006. Net earnings excluding the previously mentioned tax items from both periods were $45 million or $0.44 per diluted share in 2007, which compares to $16 million or $0.16 per diluted share in 2006. Earnings before interest, securitization costs, loss on retirement of debt (where applicable), taxes, depreciation and amortization, or EBITDA, were $300 million in the fourth quarter, which compares to the prior year level of $267 million. 3
    • Full Year 2007 For full-year 2007, the Company reported sales of $14.7 billion, an increase of $1.6 billion or 11.9 percent compared to prior year sales of $13.1 billion. Foreign currency translation benefited sales in 2007 by approximately $856 million. Full year 2007 sales excluding the impact of foreign currency translation increased approximately $702 million or 5.3 percent over the prior year period. This increase resulted primarily from higher product volumes related to new product growth and robust industry sales in overseas markets, partially offset by the decline in North American customer vehicle production and pricing provided to customers. Operating income in 2007 was $624 million, which compares to $636 million in the prior year. Restructuring and asset impairment expenses in 2007 were $51 million, which compares to $30 million in 2006. Operating income excluding these expenses from both periods was $675 million in 2007, which represents an increase of $9 million compared to the 2006 result. This year-to-year improvement can be attributed to savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs, and higher product volumes globally. These positive factors more than offset pricing provided to customers, considerably higher commodity costs and a challenging first quarter operating environment, in which operating income declined significantly compared to the prior year due to weak industry production in North America and an unfavorable mix of products sold in the 2007 quarter. The Company posted year-to-year improvements in operating income in each of the remaining three quarters in 2007 which helped offset the first quarter decline. Net interest and securitization expense for 2007 totaled $233 million, which declined from the prior year total of $250 million primarily due to the benefits derived from the Company’s debt recapitalization completed during the second quarter of 2007. As a reminder, actions related to the debt recapitalization included a $1.5 billion Senior Note offering, the tender for substantially all of the Company’s outstanding $1.3 billion Notes and the refinancing of its $2.5 billion credit facilities. In 2007, the Company incurred charges related to these transactions of $155 million for loss on retirement of debt. In 2006, the Company incurred charges of $57 million also related to debt retirement. 4
    • Tax expense in 2007 was $155 million, resulting in a 63 percent effective tax rate, which compares to $166 million or 49 percent in 2006. The effective tax rate in 2007 excluding debt retirement charges and the FAS 109 tax benefit was 42 percent. This compares to an effective tax rate, excluding debt retirement charges and the related tax benefit, of 46 percent in 2006. Full-year 2007 net earnings were $90 million, or $0.88 per diluted share, which compares to $176 million or $1.71 per diluted share in 2006. Net earnings excluding the previously mentioned debt retirement charges and tax items from both periods were $234 million or $2.28 per diluted share in 2007, which compares to $216 million or $2.10 per diluted share in 2006. EBITDA in 2007 totaled $1,190 million, which represents a $24 million improvement over the prior year result of $1,166 million. Cash Flow and Capital Structure Net cash provided by operating activities during the fourth quarter was $826 million, which compares to $397 million in the prior year period. Fourth quarter capital expenditures were $174 million compared to $195 million in 2006. For full-year 2007, net cash flow from operating activities was $737 million, which compares to $649 million in the prior year. Capital expenditures were $513 million in 2007, which compares to $529 million in 2006. Full year 2007 operating cash flow after capital expenditures, referred to as free cash flow, was $224 million, which compares to $120 million in 2006. As mentioned previously, the Company completed its debt recapitalization plan during the second quarter of 2007, including the refinancing of its $2.5 billion credit facilities on May 9, 2007. Additionally, on March 26, 2007, the Company completed its $1.5 billion Senior Note offering and repurchased substantially all of the existing $1.3 billion Notes through a tender offer. The Company incurred debt retirement charges of approximately $155 million in 2007 related to these transactions. 5
    • On February 2, 2006, the Company’s wholly owned subsidiary, Lucas Industries Limited, completed the tender for its outstanding GBP 94.6 million 10⅞% bonds. As a result of the transaction, the Company incurred a $57 million charge for loss on retirement of debt. As of December 31, 2007, the Company had $3,244 million of debt and $899 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $2,345 million. This net debt outcome is $98 million lower than the balance at the end of 2006. 2008 Outlook For full-year 2008, sales are expected to be in the range of $15.6 to $16.0 billion (including first quarter sales of approximately $4.0 billion). Full year net earnings per diluted share are expected to be in the range of $2.15 to $2.45. This guidance range reflects pre-tax restructuring expenses of approximately $50 million (including approximately $7 million in the first quarter) and an effective tax rate in the range of approximately 38 to 42 percent. Lastly, the Company expects capital expenditures in 2008 to be slightly below 4 percent of sales. “We expect 2008 will be challenging, especially in North America where customer production volumes are anticipated to be down significantly in the first half of the year,” said Mr. Plant. “In response, the Company has initiated an aggressive business plan for 2008, which is reflected in the guidance we are providing today. We believe the stability provided by having 70 percent of our sales derived from the combined regions of Europe, Asia and South America, and a robust level of demand for our products in all markets, will help mitigate the mounting challenges ahead.” Fourth Quarter and Full Year 2007 Conference Call The Company will host its fourth quarter and full year conference call at 8:30 a.m. (EST) today, Thursday, 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. 6
    • 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 33483516. A live audio webcast and subsequent replay of the conference call will also be available on the Company’s website at www.trw.com/results. 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 2007 sales of $14.7 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 27 countries and employs more than 66,000 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 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.trw.com. 7
    • 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. 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, 2006, and our Forms 10-Q for the quarters ended March 30, June 29 and September 28, 2007, such as: loss of market share by domestic North American vehicle manufacturers and resulting production cuts and restructuring initiatives, including bankruptcy actions, of our suppliers and customers; escalating pricing pressures from our customers; commodity inflationary pressures adversely affecting our profitability and supply base, including any resulting inability of our suppliers to deliver products at the scheduled rate; our dependence on our largest customers; product liability, warranty and recall claims and efforts by customers to alter terms and conditions concerning warranty and recall participation; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers; our substantial debt and resulting vulnerability to an economic or industry downturn and to rising interest rates; cyclicality of automotive production and sales; 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; the impairment of our goodwill and other intangible assets; volatility in our annual effective tax rate resulting from a change in earnings mix and other factors; adverse affects of environmental and safety regulations; assertions by or against us relating to intellectual property rights; and the possibility that our owners’ interests will conflict with ours. We do not undertake any obligation to release publicly any revision to any of these forward- looking statements. ### 8
    • TRW Automotive Holdings Corp. Index of Condensed Consolidated Financial Information Page Consolidated Statements of Earnings (unaudited) for the three months ended December 31, 2007 and December 31, 2006................................A2 Consolidated Statements of Earnings for the years ended December 31, 2007 and December 31, 2006 ............................................................................................................A3 Consolidated Balance Sheets as of December 31, 2007 and December 31, 2006 ...................A4 Condensed Consolidated Statements of Cash Flows (unaudited) for the years ended December 31, 2007 and December 31, 2006............................................A5 Reconciliation of GAAP Net Earnings to EBITDA (unaudited) for the three months and years ended December 31, 2007 and December 31, 2006 ...............A6 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the three months ended December 31, 2007 .......................................................................A7 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the three months ended December 31, 2006 .......................................................................A8 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the year ended December 31, 2007 .....................................................................................A9 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the year ended December 31, 2006 ....................................................................................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, 2006 and Quarterly Reports on Form 10-Q for the periods ended March 30, 2007, June 29, 2007, and September 28, 2007 as filed with the United States Securities and Exchange Commission on February 23, 2007, May 2, 2007, August 1, 2007 and October 30, 2007, respectively. A1
    • TRW Automotive Holdings Corp. Consolidated Statements of Earnings (Unaudited) Three Months Ended December 31, (In millions, except per share amounts) 2007 2006 Sales ........................................................................................... $ 3,886 $ 3,272 Cost of sales ............................................................................... 3,563 3,023 Gross profit............................................................................ 323 249 Administrative and selling expenses ........................................... 146 121 Amortization of intangible assets ................................................ 9 8 Restructuring charges and asset impairments ............................ 19 8 Other income — net .................................................................... — (14) Operating income .................................................................. 149 126 Interest expense — net ............................................................... 55 65 Accounts receivable securitization costs..................................... 1 1 Equity in earnings of affiliates, net of tax..................................... (8) (7) Minority interest, net of tax .......................................................... 6 2 Earnings before income taxes ............................................. 95 65 Income tax expense .................................................................... 39 32 Net earnings ....................................................................... $ 56 $ 33 Basic earnings per share: Earnings per share.................................................................... $ 0.56 $ 0.33 Weighted average shares ......................................................... 100.6 99.4 Diluted earnings per share: Earnings per share.................................................................... $ 0.55 $ 0.32 Weighted average shares ......................................................... 102.7 101.9 A2
    • TRW Automotive Holdings Corp. Consolidated Statements of Earnings Years Ended December 31, (In millions, except per share amounts) 2007 2006 Sales ........................................................................................... $ 14,702 $ 13,144 Cost of sales ............................................................................... 13,494 11,956 Gross profit............................................................................ 1,208 1,188 Administrative and selling expenses ........................................... 537 514 Amortization of intangible assets ................................................ 36 35 Restructuring charges and asset impairments ............................ 51 30 Other income — net .................................................................... (40) (27) Operating income .................................................................. 624 636 Interest expense — net ............................................................... 228 247 Loss on retirement of debt .......................................................... 155 57 Accounts receivable securitization costs..................................... 5 3 Equity in earnings of affiliates, net of tax..................................... (28) (26) Minority interest, net of tax .......................................................... 19 13 Earnings before income taxes ............................................. 245 342 Income tax expense .................................................................... 155 166 Net earnings........................................................................ $ 90 $ 176 Basic earnings per share: Earnings per share.................................................................... $ 0.90 $ 1.76 Weighted average shares ......................................................... 99.8 100.0 Diluted earnings per share: Earnings per share.................................................................... $ 0.88 $ 1.71 Weighted average shares ......................................................... 102.8 103.1 A3
    • TRW Automotive Holdings Corp. Consolidated Balance Sheets As of December 31, (Dollars in millions) 2007 2006 Assets Current assets: Cash and cash equivalents.................................................... $ 895 $ 578 Marketable securities............................................................. 4 11 Accounts receivable — net .................................................... 2,313 2,049 Inventories ............................................................................. 822 768 Prepaid expenses .................................................................. 65 60 Deferred income taxes .......................................................... 227 210 Total current assets.................................................................... 4,326 3,676 Property, plant and equipment — net......................................... 2,910 2,714 Goodwill...................................................................................... 2,243 2,275 Intangible assets — net.............................................................. 710 738 Pension asset............................................................................. 1,461 979 Deferred income taxes ............................................................... 88 91 Other assets ............................................................................... 552 660 Total assets ............................................................................ $ 12,290 $ 11,133 Liabilities, Minority Interests and Stockholders’ Equity Current liabilities: Short-term debt ..................................................................... $ 64 $ 69 Current portion of long-term debt .......................................... 30 101 Trade accounts payable........................................................ 2,288 1,977 Accrued compensation.......................................................... 298 271 Income taxes......................................................................... 63 259 Other current liabilities .......................................................... 972 998 Total current liabilities................................................................. 3,715 3,675 Long-term debt ........................................................................... 3,150 2,862 Postretirement benefits other than pensions.............................. 591 645 Pension benefits......................................................................... 497 722 Deferred income taxes ............................................................... 552 428 Long-term liabilities .................................................................... 459 295 Total liabilities......................................................................... 8,964 8,627 Minority interests ........................................................................ 134 109 Commitments and contingencies Stockholders’ equity: Capital stock.......................................................................... 1 1 Treasury stock....................................................................... — — Paid-in-capital ....................................................................... 1,176 1,125 Retained earnings ................................................................. 398 308 Accumulated other comprehensive earnings ........................ 1,617 963 Total stockholders’ equity........................................................... 3,192 2,397 Total liabilities, minority interests and stockholders’ equity .... $ 12,290 $ 11,133 A4
    • TRW Automotive Holdings Corp. Condensed Consolidated Statements of Cash Flows (Unaudited) Years Ended December 31, (Dollars in millions) 2007 2006 Operating Activities Net earnings...................................................................................... $ 90 $ 176 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization ........................................................ 557 517 Other — net..................................................................................... (26) (91) Changes in assets and liabilities, net of effects of businesses acquired: Accounts receivable, net ................................................................ (66) 58 Inventories ...................................................................................... 22 (6) Trade accounts payable ................................................................. 133 (41) Other assets.................................................................................... 144 75 Other liabilities ................................................................................ (117) (39) Net cash provided by operating activities ..................................... 737 649 Investing Activities Capital expenditures ......................................................................... (513) (529) Proceeds from asset sales, net of acquisitions................................. 27 30 Other — net ...................................................................................... 18 40 Net cash used in investing activities ............................................. (468) (459) Financing Activities Change in short-term debt ................................................................ (27) (40) Net proceeds from revolving credit facility ........................................ 429 — Proceeds from issuance of long-term debt ....................................... 2,591 37 Redemption of long-term debt .......................................................... (3,011) (304) Issuance of capital stock, net of fees ................................................ — 153 Repurchase of capital stock.............................................................. — (209) Proceeds from exercise of stock options .......................................... 29 23 Net cash provided by (used in) financing activities....................... 11 (340) Effect of exchange rate changes on cash......................................... 37 69 Increase (decrease) in cash and cash equivalents........................... 317 (81) Cash and cash equivalents at beginning of period ........................... 578 659 Cash and cash equivalents at end of period..................................... $ 895 $ 578 A5
    • TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to EBITDA (Unaudited) The reconciliation schedule below should be read in conjunction with the TRW Automotive Holdings Corp. Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10- Q for the periods ended March 30, 2007 and June 29, 2007 and September 28, 2007 which contain summary historical data. The EBITDA measure calculated in the following schedule 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, nor 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) 2007 2006 GAAP net earnings........................................................ $ 56 $ 33 Income tax expense ................................................ 39 32 Interest expense — net ........................................... 55 65 Accounts receivable securitization costs ................. 1 1 Depreciation and amortization................................. 149 136 EBITDA ......................................................................... $ 300 $ 267 Years Ended December 31, (Dollars in millions) 2007 2006 GAAP net earnings ....................................................... $ 90 $ 176 Income tax expense ................................................ 155 166 Interest expense — net ........................................... 228 247 Loss on retirement of debt ...................................... 155 57 Accounts receivable securitization costs................. 5 3 Depreciation and amortization ................................ 557 517 EBITDA ......................................................................... $ 1,190 $ 1,166 A6
    • TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In accordance with FAS 109, the Company recorded a non-cash tax benefit of $11 million related to pension and OPEB gains recorded through other comprehensive earnings. The following reconciliation excludes the tax benefit related to the FAS 109 adjustment. Three Months Three Months Ended Ended December 31, December 31, 2007 2007 Actual Adjustment Adjusted (In millions, except per share amounts) Sales............................................................. $ 3,886 $ — $ 3,886 Cost of sales ................................................. 3,563 — 3,563 Gross profit ............................................... 323 — 323 Administrative and selling expenses ............ 146 — 146 Amortization of intangible assets.................. 9 — 9 Restructuring charges and asset impairments ................................................. 19 — 19 Other income — net ..................................... — — — Operating income ..................................... 149 — 149 Interest expense, net .................................... 55 — 55 Account receivable securitization costs........ 1 — 1 Equity in earnings of affiliates, net of tax...... (8) — (8) Minority interest, net of tax ........................... 6 — 6 Earnings before income taxes .................. 95 — 95 (a) Income tax expense .................................... 39 11 50 Net earnings ............................................ $ 56 $ (11) $ 45 Effective tax rate ........................................... 41% 53% Basic earnings per share: Earnings per share ..................................... $ 0.56 $ 0.45 Weighted average shares........................... 100.6 100.6 Diluted earnings per share: Earnings per share ..................................... $ 0.55 $ 0.44 Weighted average shares........................... 102.7 102.7 (a) Represents the elimination of the tax benefit related to the FAS 109 adjustment. A7
    • TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s February 2, 2006 repurchase of its United Kingdom subsidiary Lucas Industries Limited’s £94.6 million 10⅞% bonds due 2020 for £137 million, or approximately $243 million at that time, the Company recorded a loss on retirement of debt of £32 million, or approximately $57 million. During the fourth quarter of 2006, the Company reversed a valuation allowance for its United Kingdom operations due to the non-occurrence of certain planned restructuring actions and favorable operating results in the region. As such, tax expense for the three months ended December 31, 2006 recognizes an accounting tax benefit of $17 million related to the Lucas notes bond redemption transaction, which was completed during the first quarter of 2006. The following reconciliation excludes the tax benefit related to the loss on retirement of debt from the Company’s fourth quarter results. Three Months Three Months Ended Ended December 31, December 31, 2006 2006 Actual Adjustment Adjusted (In millions, except per share amounts) Sales............................................................. $ 3,272 $ — $ 3,272 Cost of sales ................................................. 3,023 — 3,023 Gross profit ............................................... 249 — 249 Administrative and selling expenses ............ 121 — 121 Amortization of intangible assets.................. 8 — 8 Restructuring charges and asset impairments ................................................. 8 — 8 Other income — net ..................................... (14) — (14) Operating income ..................................... 126 — 126 Interest expense, net .................................... 65 — 65 Account receivable securitization costs........ 1 — 1 Equity in earnings of affiliates, net of tax...... (7) — (7) Minority interest, net of tax ........................... 2 — 2 Earnings before income taxes .................. 65 — 65 (a) Income tax expense .................................... 32 17 49 Net earnings ............................................ $ 33 $ (17) $ 16 Effective tax rate ........................................... 49% 75% Basic earnings per share: Earnings per share ..................................... $ 0.33 $ 0.16 Weighted average shares........................... 99.4 99.4 Diluted earnings per share: Earnings per share ..................................... $ 0.32 $ 0.16 Weighted average shares........................... 101.9 101.9 (a) Represents the elimination of the tax benefit related to the loss on retirement of debt, which was recognized during the quarter ended December 31, 2006. A8
    • TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s tender offer and repurchases of its then outstanding old notes, the Company recorded a loss on retirement of debt of $148 million during the year ended December 31, 2007. This loss included $112 million for redemption premiums paid, $20 million for the write-off of deferred debt issue costs, $11 million relating to the principal amount in excess of carrying value of the 9⅜% Senior Notes and $5 million of fees. Such loss on retirement of debt carries zero tax benefit due to the Company’s tax loss position in the respective jurisdiction. The Company entered into its Fifth Amended and Restated Credit Agreement dated as of May 9, 2007, which provides for $2.5 billion in senior secured credit facilities, consisting of (i) a 5-year $1.4 billion Revolving Credit Facility, (ii) a 6-year $600 million Term Loan A-1 Facility and (iii) a 6.75-year $500 million Term Loan B-1 Facility (collectively, the “Facilities”). Proceeds from the Facilities were used to refinance $2.5 billion of existing senior secured credit facilities and pay fees and expenses related to the refinancing. The Company recorded a loss on retirement of debt related to the transaction of $7 million during the year ended December 31, 2007. Such loss on retirement of debt carries zero tax benefit due to the Company’s tax loss position in the respective jurisdiction. In addition and in accordance with FAS 109, the Company recorded a non-cash tax benefit of $11 million related to pension and OPEB gains recorded through other comprehensive earnings. The following reconciliation excludes the impact of the loss on retirement of debt and the tax benefit related to the FAS 109 adjustment. Year Ended Year Ended December 31, December 31, 2007 2007 Actual Adjustments Adjusted (In millions, except per share amounts) Sales ..................................................................... $ 14,702 $ — $ 14,702 Cost of sales ......................................................... 13,494 — 13,494 Gross profit ....................................................... 1,208 — 1,208 Administrative and selling expenses..................... 537 — 537 Amortization of intangible assets .......................... 36 — 36 Restructuring charges and asset impairments ..... 51 — 51 Other income — net.............................................. (40) — (40) Operating income.............................................. 624 — 624 Interest expense, net ............................................ 228 — 228 (a) Loss on retirement of debt .................................... 155 (155) — Account receivable securitization costs................ 5 — 5 Equity in earnings of affiliates, net of tax .............. (28) — (28) Minority interest, net of tax.................................... 19 — 19 Earnings before income taxes .......................... 245 155 400 (b) Income tax expense ............................................. 155 11 166 Net earnings ..................................................... $ 90 $ 144 $ 234 Effective tax rate ................................................... 63% 42% Basic earnings per share: Earnings per share ............................................. $ 0.90 $ 2.34 Weighted average shares................................... 99.8 99.8 Diluted earnings per share: Earnings per share ............................................. $ 0.88 $ 2.28 Weighted average shares................................... 102.8 102.8 (a) Reflects the elimination of the loss on retirement of debt. (b) Represents the elimination of the tax benefit related to the FAS 109 adjustment. A9
    • TRW Automotive Holdings Corp. Reconciliation of GAAP Net Earnings to Adjusted Earnings (Unaudited) In conjunction with the Company’s February 2, 2006 repurchase of its subsidiary Lucas Industries Limited’s £94.6 million 10⅞% bonds due 2020 for £137 million, or approximately $243 million at that time, the Company recorded a loss on retirement of debt of £32 million, or approximately $57 million. The following reconciliation excludes the loss on retirement of debt and the related tax impact. Year Ended Year Ended December 31, December 31, 2006 2006 Actual Adjustments Adjusted (In millions, except per share amounts) Sales............................................................. $ 13,144 $ — $ 13,144 Cost of sales ................................................. 11,956 — 11,956 Gross profit ............................................... 1,188 — 1,188 Administrative and selling expenses ............ 514 — 514 Amortization of intangible assets.................. 35 — 35 Restructuring charges and asset impairments ................................................. 30 — 30 Other income — net ..................................... (27) — (27) Operating income ..................................... 636 — 636 Interest expense, net .................................... 247 — 247 (a) Loss on retirement of debt............................ 57 (57) — Account receivable securitization costs........ 3 — 3 Equity in earnings of affiliates, net of tax...... (26) — (26) Minority interest, net of tax ........................... 13 — 13 Earnings before income taxes .................. 342 57 399 (b) Income tax expense .................................... 166 17 183 Net earnings ............................................ $ 176 $ 40 $ 216 Effective tax rate ........................................... 49% 46% Basic earnings per share: Earnings per share ..................................... $ 1.76 $ 2.16 Weighted average shares........................... 100.0 100.0 Diluted earnings per share: Earnings per share ..................................... $ 1.71 $ 2.10 Weighted average shares........................... 103.1 103.1 (a) Reflects the elimination of the loss on retirement of debt. (b) Represents the elimination of the tax benefit related to the loss on retirement of debt. A10
    • Fourth Quarter and Full Year 2007 Financial Results Presentation February 21, 2008
    • Introduction Patrick Stobb Director, Investor Relations Business Summary John C. Plant President and Chief Executive Officer P2 © TRW Automotive Holdings Corp. 2007
    • Safe Harbor Statement This presentation 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. 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, 2006, and our Forms 10-Q for the quarters ended March 30, June 29 and September 28, 2007, such as: loss of market share by domestic North American vehicle manufacturers and resulting production cuts and restructuring initiatives, including bankruptcy actions, of our suppliers and customers; escalating pricing pressures from our customers; commodity inflationary pressures adversely affecting our profitability and supply base, including any resulting inability of our suppliers to deliver products at the scheduled rate; our dependence on our largest customers; product liability, warranty and recall claims and efforts by customers to alter terms and conditions concerning warranty and recall participation; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers; our substantial debt and resulting vulnerability to an economic or industry downturn and to rising interest rates; cyclicality of automotive production and sales; any increase in the expense and funding requirements of our pension and other post-retirement benefits; risks associated with non-U.S. operations, including foreign exchange risks; the impairment of our goodwill and other intangible assets; volatility in our annual effective tax rate resulting from a change in earnings mix and other factors; adverse affects of environmental and safety regulations; assertions by or against us relating to intellectual property rights; and the possibility that our owners’ interests will conflict with ours. We do not undertake any obligation to release publicly any revision to any of these forward-looking statements. P3 © TRW Automotive Holdings Corp. 2007
    • “Key Attributes Drive Success” 2007 highlights include: Safety • Record sales and net earnings after adjustments. • Solid cash flow generation, with cash available after capital expenditures of $224 million.(a) Sales • Recapitalized entire debt structure. Diversification • Reduced net debt by approx. $100 million despite cash outflows of $145 million related to debt refinancing. Innovation • Cost reduction programs delivered results. • Level of new business supports growth expectation of 4% CAGR and enhances diversification. Cost & Capital • Excellent progress leveraging design capabilities to Management push the boundaries of “what is possible” in safety. (a) Cash available after capital expenditures equals cash flow from operations less capital expenditures. For a reconciliation to GAAP, please refer to slide P20. P4 © TRW Automotive Holdings Corp. 2007
    • Fourth Quarter Summary Vehicle Production(c) Financial Summary (% changes based on year-over-year comparisons) Sales Summary (mils.) 19% $3,886 North America Growth Big 3 -2.9% $3,272 EU OE 30.5% Asian OE 4.1% Total Region 0.7% Q4 2006 Q4 2007 Europe West 4.8% North America 9.4% East 18.3% Europe 18.0% Total Region 8.3% ROW 48.3% ROW 2007 GAAP Results Net Earnings $56 million China 18.9% Net Earnings Per Share(b) $0.55 India 17.2% Korea 9.0% 2007 Adjusted Results(a) Japan 5.6% (Excludes $11 million of FAS 109 tax benefit) Net Earnings $45 million South America 26.1% Net Earnings Per Share(b) $0.44 (a) For adjusted results reconciliation to GAAP, please see slide P17. (b) Based on diluted shares. (c) Production volumes based on CSM Worldwide data. P5 © TRW Automotive Holdings Corp. 2007
    • Full Year Summary Vehicle Production Vehicle Production(c) Financial Summary (% changes based on year-over-year comparisons) Sales Summary (mils.) 12% North America $14,702 Growth $13,144 Big 3 -5.4% EU OE 17.2% Asian OE 4.5% Total Region -1.5% 2006 2007 Europe West 2.7% North America 3.1% East 17.3% Europe 12.1% Total Region 6.2% ROW 38.6% ROW 2007 GAAP Results China 20.6% Net Earnings $90 million (b) Net Earnings Per Share $0.88 India 16.5% Korea 6.7% 2007 Adjusted Results(a) Japan 1.4% (Excludes $155 million of debt retirement charges and $11 million FAS 109 tax benefit) Net Earnings $234 million South America 18.2% Net Earnings Per Share(b) $2.28 (a) For adjusted results reconciliation to GAAP, please see slide P19. (b) Based on diluted shares (c) Production volumes based on CSM Worldwide data. P6 © TRW Automotive Holdings Corp. 2007
    • Achieving Our Objectives Sales Growth 14.7 US $ in billions % R 6 .8 G 7 CA 03–’0 ’ 13.1 Safety 12.6 12.0 11.3 Sales Diversification 2003 (a) 2004 2005 2006 2007 Adjusted Earnings Growth(1) Per Diluted Share 0% R 22. 2.28 Innovation CAG 2.10 07 ’03–’ 1.72 1.72 1.03 Cost & Capital Management 2003 2004 2005 2006 2007 EPS(a) GAAP (0.78) 0.29 1.99 1.71 0.88 (a) For pro forma 2003 sales and adjusted earnings reconciliations to GAAP, please see slides P19, P28-P30. P7 © TRW Automotive Holdings Corp. 2007
    • Quarterly Developments • Steady pace of new business wins in 2007 provides measure of Yokohama confidence in ability to deliver Engineering Center targeted top line growth. • Opened new facilities: – Engineering center in Yokohama that will house approximately 130 engineers, technicians and sales personnel CORNER MODULE – State-of-the-art manufacturing site in Slovakia to support electric steering systems growth – Delphi Saginaw braking module business – completed January 2nd • Formed joint venture in India with Sun to manufacture steering wheels. WHEEL STEERING LININGS ROTOR CALIPER BEARING KNUCKLE P8 © TRW Automotive Holdings Corp. 2007
    • Quarterly Developments • Electric drum-in-hat park brake extends the range of EPB to larger vehicles, which require greater clamping force for parking. • Introduced new generation of column-drive electrically powered steering system for the new Mazda global small car platform. Electric Drum-in-Hat • Automotive Components reports strong year- Park Brake over-year profit improvement. • Commodity inflation update: – Presented a significant challenge in 2007 with a gross impact of approximately $100 million – similar impact expected in 2008 – Growing concern that sharp first half decline in Big 3 production volume will increase pressure on the supply base Column-Drive Electrically Powered Steering P9 © TRW Automotive Holdings Corp. 2007
    • Quarterly Developments Successfully launched 78 programs during Q4… Citroen C5 • Citroen C5: Brake calipers, Curtain-Side- Driver-Passenger-Knee Airbags, Seat Belts, Electronically Powered Hydraulic Chevrolet Malibu Steering Powerpack, Stabilizer Links • Chevrolet Malibu: ABS, Electronic Stability Control, Driver Airbag, Steering GMC Wheel Yukon • GMC Yukon and Chevrolet Tahoe Hybrid Hybrid: Slip Control Boost • Renault Kangoo: Brake calipers, Renault Mechanical Steering Gear (for Electrically Kangoo Powered Steering) P10 © TRW Automotive Holdings Corp. 2007
    • Investing In Our Future RD&E Expenditures Active & Passive Safety Growth Drivers Driver Assist Systems Airbags to Grow Investing Adaptive Cruise Control Driver & Passenger Airbags Lane Guide Systems $893 Side & Curtain/Rollover Airbags $825 Collision Warning Knee Airbags $780 Adaptive Airbag Systems $714 Steering Wheel Systems 6.3% Touch Sensor $600 6.2% 6.1% 5.9% Seat Belt Systems Vibrating Steering Wheel Fixed-Hub Design 5.3% Active Control Retractor RD&E as % of Sales Load Limiters & Pretensioners 2003 2004 2005 2006 2007 Capital Expenditures unding CAPEX F Growth Business Steering Systems Braking Systems $529 $503 $493 $513 Hybrid Enabling & Active Steering Electronic Stability Control $416 Electrically Powered Steering Slip Control Boost Speed Proportional Steering Electric Park Brake 4.1% 4.0% 4.0% Safety Electronics 3.7% 3.5% ECU and Remote Sensors Sales of Highlighted Vision System Sales of Highlighted CAPEX as % of Sales Pedestrian Protection Technologies in Technologies in Tire Pressure Monitoring Aggregate Increased Aggregate Increased 2003 2004 2005 2006 2007 Weight Sensing System 20% in 2007 20% in 2007 P11 © TRW Automotive Holdings Corp. 2007
    • 2008 Operating Environment 2008 Industry Production Assumptions(1) (units in millions) • Forecast for North American North America Europe production of approximately 22.0 21.7 20.4 19.9 20.0 15.8 15.8 14.5 million units: 15.3 15.1 5.8 6.4 14.5 3.8 4.9 4.1 4.4 – Lowest production level 5.0 5.2 5.6 5.8 since 1993 – Big 3 expected to decline 16.2 15.9 15.8 15.6 15.5 11.4 10.8 10.1 9.5 approximately 800K units, of 8.7 which, 80% percent ’03 expected during the first half 2004 ‘04 2004 2005 2006 2007 2008E 2005 2006 2007 2008E Western Eastern ‘05 3 • Europe production expected Big Transplants to hold relatively flat. South America Asia 5.6 • Steady growth forecasted for 4.6 4.0 3.9 3.9 4.0 Asia and South America. 3.3 3.8 3.6 3.4 7.7 6.9 • Commodity inflation 5.7 4.8 4.1 4.0 3.6 3.0 pressures expected to be 2.8 2.5 11.0 10.6 10.8 10.0 9.6 significant. 2004 2005 2006 2007 2008E 2004 2005 2006 2007 2008E Japan C hina Ko rea S o uth A s ia (1) Source: Light vehicle assumptions primarily CSM Worldwide and internal company estimates. P12 © TRW Automotive Holdings Corp. 2007
    • 2008 Full Year Outlook Sales $15.6 - $16.0 billion Net Earnings per Diluted Share(a) $2.15 to $2.45 Restructuring Expenses (pre-tax) $50 million Capital Spending slightly less than 4% of sales Effective Tax Rate approx. 38% - 42% We have initiated an aggressive 2008 business plan that will help mitigate difficult industry conditions (a) Per share amounts based on weighted average diluted shares outstanding of approximately 103.0 million shares. P13 © TRW Automotive Holdings Corp. 2007
    • Financial Overview Joseph S. Cantie Executive Vice President and Chief Financial Officer P14 © TRW Automotive Holdings Corp. 2007
    • Financial Summary • Strong fourth quarter results completes impressive 2007 company scorecard: Record sales of $14.7 billion EBITDA increased to $1,190 million(a) Net earnings, excluding debt retirement charges and a FAS 109 tax benefit, increased to $2.28 per share(b) (GAAP net earnings of $0.88 per share) Operating cash flow after capital expenditures of $224 million(c) Net debt down approximately $100 million, despite $145 million cash outflow from debt refinancing. Significant improvement to Pension/OPEB funded status (a) Please refer to slide P31 for management’s rationale for using this metric and slide P33 for a reconciliation to GAAP. (b) For adjusted results comparison and reconciliation to GAAP, please see slide P19. (c) Cash available after capital expenditures equals cash flow from operations less capital expenditures. For a reconciliation to GAAP, please refer to slide P20. P15 © TRW Automotive Holdings Corp. 2007
    • Fourth Quarter Sales Summary Segment Sales Total Sales US $ in millions $2,132 US $ in millions $1,761 Chassis $3,886 OSS $1,231 $3,272 $1,076 Auto Comp $523 $435 2006 2007 +19% Geographic Sales Mix % of total sales Q4 2006 Q4 2007 2007 2006 Rest of Q4 YOY Sales Comparison Rest of World World 11.4% • Product Volumes 14.2% • New Products • Vehicle Production • Modules • Foreign Currency North Europe Europe North America 57.5% 57.8% America • Customer Pricing 30.8% 28.3% P16 © TRW Automotive Holdings Corp. 2007
    • Fourth Quarter Results (dollars in millions, except where noted) Q4 2007 Q4 2006 GAAP Adjusting Adjusted GAAP Adjusting Adjusted Results Item Results Results Item Results Sales $ 3,886 $ - $ 3,886 $ 3,272 $ - $ 3,272 Operating Income 149 - 149 126 - 126 Net Interest and Securitization 56 - 56 66 66 Equity in Earnings of Affiliates (8) - (8) (7) - (7) Minority Interest 6 - 6 2 - 2 (a) (b) Income Tax Expense 39 11 50 32 17 49 Effective Tax Rate 41% 53% 49% 75% Net Earnings $ 56 $ (11) $ 45 $ 33 $ (17) $ 16 Share Count 102.7 102.7 101.9 101.9 Earnings Per Share $ 0.55 $ 0.44 $ 0.32 $ 0.16 EBITDA(c) $ 300 $ 267 (a) $11 million tax benefit associated with FAS 109 adjustment related to pension and OPEB gains recorded through other comprehensive earnings. (b) $17 million tax benefit associated with Lucas bond tender transaction. (c) Please refer to slide P31 for management’s rationale for using this metric and slide P32 for a reconciliation to GAAP. P17 © TRW Automotive Holdings Corp. 2007
    • Full Year Sales Summary Segment Sales Total Sales US $ in millions US $ in millions $7,997 $7,096 $14,702 $13,144 Chassis $4,714 OSS $4,326 Auto Comp $1,991 $1,722 +12% 2006 2007 2006 2007 Geographic Sales Mix % of total sales Full Year YOY Sales Comparison Rest of Rest of 2006 2007 World World • Product Volumes 10.2% 12.6% • New Product Growth • Europe & ROW Europe 57.1% • NA Industry Production • Modules North North Europe • Foreign Currency America America 57.2% 32.7% • Customer Pricing 30.2% P18 © TRW Automotive Holdings Corp. 2007
    • Full Year Results (dollars in millions, except where noted) 2007 2006 GAAP Adjusting Adjusted GAAP Adjusting Adjusted Results Items Results Results Items Results Sales $ 14,702 $ - $ 14,702 $ 13,144 $ - $ 13,144 Operating Income 624 - 624 636 - 636 Net Interest and Securitization 233 - 233 250 250 (a) (c) Loss on Retirement of Debt 155 (155) - 57 (57) - Equity in Earnings of Affiliates (28) - (28) (26) - (26) Minority Interest 19 - 19 13 - 13 (b) (d) Income Tax Expense 155 11 166 166 17 183 Effective Tax Rate 63% 42% 49% 46% Net Earnings $ 90 $ 144 $ 234 $ 176 $ 40 $ 216 Share Count 102.8 102.8 103.1 103.1 Earnings Per Share $ 0.88 $ 2.28 $ 1.71 $ 2.10 EBITDA(e) $ 1,190 $ 1,166 (a) $155 million loss on retirement of debt related to the Company’s 2007 debt recapitalization. (b) $11 million tax benefit associated with FAS 109 adjustment related to pension and OPEB gains recorded through other comprehensive earnings. (c) $57 million loss on retirement of debt related to Lucas bond tender transaction. (d) $17 million tax benefit associated with Lucas bond tender transaction. (e) Please refer to slide P31 for management’s rationale for using this metric and slide P33 for a reconciliation to GAAP. P19 © TRW Automotive Holdings Corp. 2007
    • Capital Structure Summary Capex Operating Cash Flow $529 $513 US $ in millions US $ in millions 2006 Operating Cash Flow: 2006 2007 2007 First 9 Months $ 252 $ (89) Fourth Quarter $ 397 $ 826 $195 $174 Full Year $ 649 $ 737 $132 $109 $119 $111 $119 Memo: $83 Capital Expenditures (529) (513) Cash Available after Capital Expenditures $ 120 $ 224 Q1 Q2 Q3 Q4 Full Year Capital Structure Period-End Balances US $ in millions First 9 12/31/03 Months Full Year 84% 2006 2007 2007 Cash $ 578 $ 473 $ 895 Marketable Securities 11 13 4 Total Cash & Marketable Securities 589 486 899 Total Debt $ 3,032 $ 3,515 $ 3,244 Total Equity 2,397 2,588 3,192 Total Capital 12/31/07 5,429 6,103 6,436 Net Debt(a) 50% 2,443 3,029 2,345 Debt / Capital 56% 58% 50% (a) Total debt less total cash & marketable securities. P20 © TRW Automotive Holdings Corp. 2007
    • Capital Structure Summary (dollars in millions) Net Debt(a) $1.5 billion Senior Note offering and $1.3 billion tender transaction increased net debt by approximately $145 million Lucas notes tender transaction increased net debt by $57 million Dalphimetal acquisition increased net debt by $244 million $3,437 $2,964 $2,560 $2,443 $2,372 $2,345 Feb 28, 2003 Dec 31, 2003 Dec 31, 2004 Dec 31, 2005 Dec 31, 2006 Dec 31, 2007 (a) Net debt is equal to total debt less cash and marketable securities. For net debt reconciled to the closest GAAP equivalent, please refer to slide P34. P21 © TRW Automotive Holdings Corp. 2007
    • 2007 Debt Recapitalization • TRW has methodically improved its capital structure by leveraging strong operating results and advantageous capital markets. (Debt Maturities) • Completed debt recapitalization plan during the first half of 2007: – Refinanced $1.3 billion of bond debt No Significant Debt Maturities – Lowered fixed/variable position, which was Before 2012 approximately 50% fixed at year-end – Refinanced $2.5 billion credit facilities 2008 2009 2010 2011 2012 – Combined transactions lower borrowing costs, increase covenant flexibility and extend maturities • In excess of $1.5 billion in available liquidity. New debt structure efficient, low cost, and supports future New debt structure efficient, low cost, and supports future growth expectations growth expectations P22 © TRW Automotive Holdings Corp. 2007
    • Pension and OPEB Plans • Excellent progress made in 2007 (b) Funded Status improving funded status of 2005 2006 2007 pension and OPEB plans. Pension Plans • U.S. Plans $ (430) $ (203) $ (26) • Since going public, TRW has significantly improved its • UK Plans 502 952 1,442 Pension/OPEB total funded • Rest of World (516) (520) (485) status, despite inflation, through: Sub-Total (444) 229 931 – Plan amendments OPEB Plans – Selective “buy-out” programs • U.S. Plans (646) (576) (492) – Favorable asset performance • Rest of World (181) (138) (160) – Currency movements Sub-Total (827) (714) (652) • SFAS No. 158(a) adjustment Total Funded Status $ (1,271) $ (485) $ 279 increased equity $603 million in 2007. (a) SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Post Retirement Plans. (b) As of the measurement date. P23 © TRW Automotive Holdings Corp. 2007
    • Framing 2008 Full Year Sales Sales Year-Over-Year Sales Impact (units in billions) Industry Production • North America $15.6- Impact of sharp decline $16.0 in Big 3 NA production • Western Europe will be significant, • South America especially in 1H ‘07. • Asia (China) $14.7 Customer Pricing to 9% ≈ 6% Module sales expected New Business to increase approx. $800 • Modules million (low margin). Euro benefit to sales forecasted to be significant, Foreign Currency with no material benefit 2007 2008E expected at the operating line. P24 © TRW Automotive Holdings Corp. 2007
    • First Quarter 2008 Summary • Production environment in North America proving difficult (Big 3 and class 8 production). • Expect sales of approximately $4 billion: – Based on vehicle production of 3.6 million units in North America and 5.6 million units in Europe – Significant portion of year-to-year sales increase attributed to foreign currency and module sales, with minimal benefit expected at the operating line • Restructuring related costs forecasted at $7 million. Despite a challenging industry environment, looking to move the Despite a challenging industry environment, looking to move the Company forward positively in 2008 Company forward positively in 2008 P25 © TRW Automotive Holdings Corp. 2007
    • “Driving Automotive Safety” P26 © TRW Automotive Holdings Corp. 2007
    • Financial Reconciliation Section P27 © TRW Automotive Holdings Corp. 2007
    • 2005 & 2006 Full Year Reconciliations (dollars in millions, except where noted) Full Year Ended December 31, 2005 Full Year Ended December 31, 2006 GAAP Adjusting Adjusted GAAP Adjusting Adjusted Results Items Results Results Items Results Sales $ 12,643 $ - $ 12,643 $ 13,144 $ - $ 13,144 Operating Income (18)(b) 553 535 636 - 636 Net Interest and Securitization 231 - 231 250 250 (57)(a) Loss on Retirement of Debt (7) (c) 7 - 57 - Equity in Earnings of Affiliates (20) - (20) (26) - (26) Minority Interest 7 - 7 13 - 13 Income Taxes 17 (d) 17(a) 124 141 166 183 Effective Tax Rate 38% 44% 49% 46% 40 (a) Net Earnings (Losses) $ 204 $ (28) $ 176 $ 176 $ $ 216 Share Count 102.3 102.3 103.1 103.1 Earnings Per Share $ 1.99 $ 1.72 $ 1.71 $ 2.10 (a) $57 million ($40 million after-tax) loss on retirement of debt associated with the Lucas bond tender transaction. (b) $18 million one-time reduction in litigation reserves. (c) $7 million premiums and fees related to a bond redemption transaction. (d) $17 million one-time tax benefit for a tax law change in Poland. P28 © TRW Automotive Holdings Corp. 2007
    • Full Year 2004 Reconciliation (dollars in millions) Full Year Ended December 31, 2004 GAAP Adjusting Adjusted Items(a) Results Results Sales $ 12,011 $ - $ 12,011 Operating Income 580 - 580 Net Interest and Securitization 252 (6) 246 Loss on Retirement of Debt 167 (167) - Equity in affiliates (15) - (15) Minority Interest 12 - 12 Income Taxes 29 164 135 Net Earnings $ 29 $ 144 $ 173 Share Count 100.5 100.5 Earnings Per Diluted Share $ 0.29 $ 1.72 Effective Tax Rate 82% 49% (a) 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. P29 © TRW Automotive Holdings Corp. 2007
    • Full Year 2003 Reconciliation Historical Sucessor Predecessor Pro Forma (dollars in millions) Ten months ended Two months Year Ended December 31, ended February Pro Forma December 31, 2003 28, 2003 Adjustments 2003 Sales $ 9,435 $ 1,916 $ (43) (a) $ 11,308 Cost of sales 8,577 1,711 (100) (b) 10,188 Gross profit 858 205 57 1,120 Administrative and selling expenses 433 99 (2) (c) 530 Purchased in-process research and development 85 - (85) (d) - Amortization of intangible assets 27 2 3 (e) 32 Restructuring and asset impairments 29 4 - 33 Other (income) expense — net (59) - (1) (f) (60) Operating income 343 100 142 585 Interest expense, net 284 47 (15) (g) 316 Loss on retirement of debt 31 - (31) (g) - Securitization cost 28 - (17) (g) 11 Net affiliate earnings & minority interest 3 3 - 6 (Losses) earnings before income taxes (3) 50 205 252 Income tax expense 98 19 42 (h) 159 Net (losses) earnings $ (101) $ 31 $ 163 $ 93 Net earnings per share (90.4 million diluted shares) => $ 1.03 (a) Reflects the elimination of the sales of TRW Koyo Steering Systems Company (“TKS”), which was not transferred as part of the acquisition of the Company by The Blackstone Group L.P. in February 2003 (“Acquisition”). (b) Reflects the elimination of $40 million of cost of sales of TKS, $12 million in pension and OPEB adjustments as a result of purchase accounting, the elimination of the effects of a $43 million inventory write-up recorded as a result of the Acquisition and $5 million net decrease in depreciation and amortization expense resulting from fair value adjustments to fixed assets and certain intangibles. (c) Reflects the elimination of $1 million administrative and selling expense of TKS, the addition of $1 million in the annual monitoring fee payable to an affiliate of Blackstone and $2 million decrease in depreciation and amortization expense resulting from fair value adjustments to fixed assets and capitalized software. (d) Reflects the elimination of the fair value of purchase in-process research and development expensed as a result of purchase accounting. (e) Reflects the incremental increase in amortization resulting from assignment of fair value to certain intangibles. (f) Reflects elimination of $1 million other expense related to TKS. (g) Reflects adjustments to show pro forma net financing costs based upon the post-Acquisition capital structure and the initiation of our receivables securitization program. (h) Reflects the tax effect of the above adjustments at the applicable tax rates. P30 © TRW Automotive Holdings Corp. 2007
    • 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, 2006, and quarterly reports on Form 10-Q for the quarters ended March 30, June 29 and September 28, 2007, 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. P31 © TRW Automotive Holdings Corp. 2007
    • Fourth Quarter EBITDA (dollars in millions, except where noted) Q4 2007 Q4 2006 Net Earnings $ 56 $ 33 Income Tax Expense 39 32 Net Interest & Securitization 56 66 Depreciation & Amortization 149 136 EBITDA $ 300 $ 267 Memo: Restructuring & Asset Impairments Included in EBITDA $ 19 $ 8 P32 © TRW Automotive Holdings Corp. 2007
    • Full Year EBITDA (dollars in millions, except where noted) Full Year Full Year 2007 2006 Net Earnings $ 90 $ 176 Income Tax Expense 155 166 Net Interest & Securitization 233 250 Loss on Retirement of Debt 155 57 Depreciation & Amortization 557 517 EBITDA $ 1,190 $ 1,166 Memo: Restructuring & Asset Impairments Included in EBITDA $ 51 $ 30 P33 © TRW Automotive Holdings Corp. 2007
    • Net Debt Reconciliation Period-End Balances (dollars in millions) 2/28/03 12/31/03 12/31/04 12/31/05 12/31/06 9/28/07 12/31/07 Cash $ 449 $ 828 $ 790 $ 659 $ 578 $ 473 $ 895 Marketable securities 26 16 19 17 11 13 4 Total cash and marketable securities 475 844 809 676 589 486 899 Short term debt 168 76 40 98 69 161 64 Term loan facilities 1,510 1,480 1,512 1,593 1,582 1,100 1,098 Revolving credit facilities - - - - - 638 429 Senior & senior subordinated notes due 2013 1,577 1,636 1,369 1,255 1,284 18 19 Senior notes due 2014 and 2017 - - - - - 1,489 1,505 Lucas Varity senior notes 167 189 202 181 - Other borrowings 142 45 58 109 97 109 129 Northrop seller note 348 382 - - - Total debt 3,912 3,808 3,181 3,236 3,032 3,515 3,244 Net debt $ 3,437 $ 2,964 $ 2,372 $ 2,560 $ 2,443 $ 3,029 $ 2,345 P34 © TRW Automotive Holdings Corp. 2007