2004 q3 trw auto earnings presentation

TRW Automotive News 12025 Tech Center Drive Livonia, Mich. 48150 USA Release

Investor Relations Contact:

Patrick R. Stobb (734) 853-6966 Media Contact:

Manley Ford (734) 855-2616

TRW Automotive Reports Third-Quarter 2004 Financial Results In Line with Guidance LIVONIA, MICHIGAN, November 4, 2004 — TRW Automotive Holdings Corp.

(NYSE: TRW), today reported third-quarter 2004 results with sales of $2.7 billion, an

increase of 8% over the prior year quarter, and net earnings of $13 million, or $0.13

per diluted share, compared to net losses of $34 million or ($0.39) per share during

the same period a year ago. During the year-to-date period ending with the third

quarter of 2004, the Company has reduced its gross debt by $569 million.

“We posted another quarter of strong earnings growth despite facing an unrelenting

automotive operating environment,” said John C. Plant, president and chief executive

officer. “Our solid operating performance, together with the Company’s diversification

by customer, region and product base has helped us mitigate the pressures within

our industry.” Mr. Plant added, “Specifically, the rapid rise in inflationary pressures

impacting ferrous metals, and more recently, other commodities, has placed a

significant operational and financial burden on the Company this year and will do so

again in 2005. Excluding the one-time charge relating to our recently announced

debt refinancing transaction, we believe the momentum of our year-to-date cost

performance programs along with our customer diversity and other positives are

sufficient offsets at this time for us to maintain our full-year earnings within the lower

end of our previously announced guidance range.”

For the nine-month period ended September 24, 2004, the Company reported sales

of $8.8 billion and net earnings of $91 million or $0.91 per diluted share, which

included pre-tax expenses of $48 million or $0.48 per diluted share primarily for

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prepayment premiums on high yield notes redeemed with proceeds from the

Company’s February 2004 initial public offering and other expenses related to a

January 2004 bank debt refinancing. Year-to-date earnings excluding these charges

were $139 million, or $1.39 per diluted share.

In comparison, the Company reported sales of $6.5 billion and net losses of $100

million for the seven-month period ended September 26, 2003. This seven-month

period represents the reporting period following the February 28, 2003, acquisition of

the former TRW Inc.’s automotive business by affiliates of The Blackstone Group L.P.

(“Blackstone”) from Northrop Grumman Corporation (the “Acquisition”). Prior to the

Acquisition, the predecessor company reported sales of $1.9 billion and net earnings

of $31 million for the two-month period ended February 28, 2003.

As a result of the Acquisition, certain consolidated and combined financial information

relating to the three and nine month periods ended September 26, 2003, contained

within this release (labeled as pro forma) has been adjusted to illustrate the estimated

pro forma effects of the Acquisition, and the Company’s July 2003 debt refinancing,

which included pre-tax charges of $31 million, as if these transactions had occurred

on January 1, 2003.

Third-Quarter 2004 Compared to Pro Forma Third-Quarter 2003 The Company reported third-quarter 2004 sales of $2.7 billion, an increase of $203

million, or about 8%, compared to prior year sales of $2.5 billion. The increase

resulted primarily from a higher level of sales from new product areas and foreign

currency translation, partially offset by pricing provided to customers and a reduction

in sales due to a first-quarter 2004 divestiture. Operating income for third-quarter

2004 was $95 million, an increase of $22 million, compared to the prior year pro

forma operating income. Third-quarter 2004 included pre-tax restructuring costs of

approximately $5 million, while the prior year quarter included $13 million of similar

charges. Excluding the effect of these charges, operating income improved by $14

million, or 16% compared to the prior year. This increase resulted primarily from an

increased level of sales and a higher level of cost savings, partially offset by pricing

provided to customers, inflation (primarily in the area of ferrous metals) and the net

negative impact of several isolated business issues, most notably, a net increase in

reserves for litigation.

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Compared to the prior year pro forma level of $83 million, net interest expense of $60

million for third-quarter 2004 was significantly lower, primarily as a result of the

Company’s debt reduction efforts. The effective tax rate in the third quarter increased

compared to the prior year quarter due primarily to certain U.S. based charges, and

as a result of the Company’s tax loss position in this jurisdiction, carried no tax benefit

in the period. Finally, the Company reported third-quarter 2004 net earnings of $13

million, or $0.13 per diluted share, compared to pro forma net losses of $5 million, or

$(0.06) per diluted share in the prior year.

During the quarter, the Company adopted provisions of FASB Staff Position 106-2

with respect to the retroactive accounting treatment for Medicare Part D subsidies

provided under the Medicare Prescription Drug, Improvement and Modernization Act

of 2003. Recognition of the subsidies did not have a material impact on the

Company’s results for the affected periods.

The Company reported earnings before interest, loss on sales of receivables, taxes,

depreciation and amortization, and gain (loss) on retirement of debt (“EBITDA”) of

$215 million for third-quarter 2004, which is an increase of $25 million or 13% when

compared to the prior year pro forma EBITDA of $190 million. Please see the

accompanying schedules for a reconciliation of EBITDA and pro forma EBITDA to the

closest GAAP equivalent.

First Nine-Months 2004 Compared to Pro Forma First Nine-Months 2003 The Company reported sales of $8.8 billion for the first nine months of 2004, an

increase of $499 million or 6% compared to prior year pro forma sales of $8.3 billion.

Operating income during this period was $450 million, an increase of $10 million

compared to the prior year pro forma operating income. Although operating income

improved in 2004, the year-to-year comparison was negatively impacted by a $39

million first-quarter 2004 decline in net pension and OPEB income, which was

primarily due to the application of purchase accounting in 2003 and the non-

recurrence of second-quarter 2003 non-cash unrealized foreign currency exchange

gains of $15 million. The negative impact of these items was more than offset by the

Company’s new business growth, currency translation, and cost performance.

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For the nine-month period ended September 24, 2004, the Company reported net

earnings of $91 million or $0.91 per diluted share, which included the previously

mentioned expenses of $48 million or $0.48 per diluted share for charges associated

with debt repayment transactions. Earnings excluding these charges for the first nine

months of 2004 were $139 million or $1.39 per diluted share, an increase of $42

million or 43% from the prior year period pro forma earnings of $97 million.

For the first nine months of 2004, the Company incurred pre-tax restructuring costs of

$18 million and amortization of intangibles, principally customer relationships, of $25

million. In comparison, pro forma results for the prior year period included pre-tax

restructuring and other unusual costs of $25 million and amortization of intangibles of

$24 million.

The Company reported EBITDA of $816 million for first nine months of 2004

compared to pro forma EBITDA of $797 million in the prior year. When compared to

the prior year period, 2004 EBITDA was negatively impacted by the previously

mentioned $39 million first quarter decline in net pension and OPEB income and $15

million for non-cash unrealized foreign currency exchange gains in 2003, which did

not recur in 2004. Excluding these two items, EBITDA increased by approximately

9% in the first nine months of 2004 compared to pro forma EBITDA in the prior year.

Please see the accompanying schedules for a reconciliation of EBITDA and pro

forma EBITDA to the closest GAAP equivalent.

Capital/Liquidity For the first nine months of 2004, net cash provided by operating activities totaled

$36 million, which included $5 million of cash used in operating activities during the

third quarter resulting mainly from the impact of seasonal factors. The Company

expects these seasonal factors to reverse in the fourth quarter.

Capital expenditures during the third quarter totaled $86 million, compared to $87

million in the prior year. Capital expenditures for the first nine months of 2004 were

$248 million, an increase of $30 million compared to the prior year pro forma.

As of September 24, 2004, the Company had $3,239 million of debt and $454 million

of cash and marketable securities, providing for net debt (defined as debt less cash

and marketable securities) of $2,785 million, an increase of $76 million from the

June 25, 2004, level.

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Seasonal factors impacting net operating cash flow contributed to this increase.

When compared to year-end 2003, net debt at the end of third-quarter 2004 declined

by $179 million.

Subsequent Event On October 10, 2004, the Company reached an agreement with Northrop to

purchase its $600 million subordinated 8% pay-in-kind seller note (“Seller Note”) and

to settle various contractual issues stemming from the Acquisition for the net amount

of $493.5 million. The Company plans to utilize proceeds from its recently-closed

$300 million new bank term loan together with available cash, and to the extent

needed, existing liquidity arrangements to fund the transaction, which is expected to

be completed prior to November 22, 2004.

At the time of the Acquisition, the Company valued the Seller Note based on a 15-

year life and 8% pay-in-kind interest, and determined that the fair value of the Seller

Note, and corresponding book value at March 1, 2003, was $348 million using a 12%

discount rate. As of September 24, 2004, the accreted book value of the Seller Note

was $417 million.

As a result of the transaction, the Company expects to record a fourth quarter pre-tax

charge of approximately $115 million, or $1.14 per share, for loss on retirement of

debt resulting primarily from the difference between the purchase price of the Seller

Note and the expected book value of the Seller Note on the Company’s balance

sheet at the time the transaction is completed. The loss associated with the

transaction will be U.S. based and therefore carries zero tax benefit due to the

Company’s tax loss position in this jurisdiction.

2004 Outlook The Company is revising its full-year guidance to include its third quarter results, the

expected $115 million fourth quarter charge related to the Seller Note transaction and

other matters.

The revised guidance calls for sales of approximately $11.8 billion and diluted

earnings per share in the range of $0.08 to $0.13. The earnings per share range

includes charges of $48 million in the first quarter and expected charges of $115

million in the fourth quarter, or a combined $1.62 per diluted share, for expenses

related to the previously mentioned debt repayment and refinancing transactions.

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Excluding these charges, diluted earnings per share are expected to be in the range

of $1.70 to $1.75. This guidance includes pre-tax expenses of approximately $33

million for amortization of intangibles, principally customer relationships, and

approximately $35 million of expenses relating to restructuring initiatives.

The Company’s expected full year EBITDA is revised to be in the range of $1,060 to

$1,075 million, which is based on expected operating income in the range of $572 to

$582 million, adding back expected full year depreciation and amortization of

approximately $490 million.

For fourth-quarter 2004, the Company expects revenue of approximately $3.0 billion

and losses per diluted share in the range of $(0.83) to $(0.78). This per share

guidance range includes a charge of $115 million, or $1.14 per diluted share, for loss

on retirement of debt related to the Seller Note refinancing transaction. Excluding

this charge, diluted earnings per share are expected to be in the range of $0.31 to

$0.36. Also included in this guidance, the Company expects to incur pre-tax

restructuring costs of approximately $17 million and amortization of intangibles,

principally customer relationships, of approximately $8 million during the quarter.

Third Quarter Conference Call The Company will host its third quarter conference call at 9:00 a.m. (EST) today,

Thursday, November 4, 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 1265695.

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.

Reconciliation to GAAP For a reconciliation of the pro forma and non-GAAP historical numbers appearing in

this release to GAAP, please see financial schedules that accompany this release.

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About TRW With 2003 sales of $11.3 billion, TRW Automotive ranks among the world's top 10

automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company,

through its subsidiaries, employs approximately 61,000 people in 22 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 "TRW Automotive",

“TRW” or the "Company" in this press release refer to TRW Automotive Holdings

Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is

available on the internet at www.trwauto.com.

Forward-Looking Statements This release contains statements that are not statements of historical fact, but instead

are forward-looking statements. 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 the TRW Automotive

Holdings Corp. final prospectus dated as of February 2, 2004 (the "Prospectus") filed

with the Securities and Exchange Commission (the "SEC") pursuant to Rule

424(b)(4), our Report on Form 10-K for the fiscal year ended December 31, 2003 (the

“10K”), and our Reports on Form 10-Q for the quarters ended March 26 and June 25,

2004, and include: our substantial leverage; the highly competitive automotive parts

industry and its cyclicality; pricing pressures from our customers; increasing costs for

purchased components and raw materials; non-performance by, or insolvency of, our

suppliers; product liability and warranty and recall claims; our dependence on our

largest customers; limitations on flexibility in operating our business contained in our

debt agreements; increases in interest rates; fluctuations in foreign exchange rates;

the possibility that our owners' interests will conflict with ours; work stoppages or

other labor issues and other risks and uncertainties set forth under "Risk Factors" in

the Prospectus, 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.

# # #

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http://www.trwauto.com/

TRW Automotive Holdings Corp.

Index of Historical and Pro Forma Consolidated and Combined Financial Information

Page Periods Ended September 24, 2004, September 26, 2003, and February 28, 2003

Consolidated Interim Statements of Operations for the three months ended September 24, 2004 and September 26, 2003 ..........................................................................................A2 Consolidated and Combined Interim Statements of Operations for the nine months ended September 24, 2004, the seven months ended September 26, 2003 and the two months ended February 28, 2003 ..........................................................................................................................A3 Consolidated Balance Sheets – September 24, 2004 and December 31, 2003.........................................A4 Reconciliation of Historical to Pro Forma Combined Statements of Operations for the three months ended September 26, 2003 ......................................................................................A5 Reconciliation of Historical to Pro Forma Consolidated and Combined Statements of Operations for the seven months ended September 26, 2003 and the two months ended February 28, 2003 ..........................................................................................................................A6 Historical and Pro Forma Consolidated Statements of Operations for the three months ended September 24, 2004 and September 26, 2003................................................................................A7 Historical and Pro Forma Consolidated and Combined Statements of Operations for the nine months ended September 24, 2004 and September 26, 2003................................................A8 Reconciliation of GAAP Net Earnings (Losses) to Historical and Pro Forma EBITDA for the three months ended September 24, 2004 and September 26, 2003...............................................A9 Reconciliation of GAAP Net Earnings (Losses) to Historical and Pro Forma EBITDA for the nine months ended September 24, 2004 and September 26, 2003................................................A10

The accompanying historical and pro forma consolidated and combined financial information and reconciliation of GAAP net income to historical and pro forma EBITDA should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2003, which contains historical consolidated and combined financial statements and the accompanying notes to consolidated and combined financial statements and unaudited pro forma consolidated and combined financial information and accompanying notes to unaudited pro forma consolidated and combined financial information. The accompanying unaudited pro forma consolidated and combined financial information is intended to give effect to the February 28, 2003 acquisition of the former TRW Inc.’s automotive business by affiliates of The Blackstone Group L.P. from Northrop Grumman Corporation and the July 22, 2003 refinancing of a portion of debt entered into in connection with the acquisition, as if these transactions had occurred on January 1, 2003. The unaudited pro forma consolidated and combined financial information is based upon available information and certain assumptions we believe are reasonable. However, these statements are for informational purposes only and are not intended to represent or be indicative of the consolidated results of operations or financial position that would have been reported had the acquisition been completed as of January 1, 2003, and should not be taken as representative of future consolidated results of operations or financial position.

A2


Consolidated Interim Statements of Operations(Unaudited)

Three months ended

(In millions, except per share amounts) September 24,

2004 September 26,

2003

Sales ....................................................................................... $ 2,739 $ 2,536 Cost of sales ........................................................................... 2,462 2,294 Gross profit......................................................................... 277 242 Administrative and selling expenses ...................................... 131 127 Research and development expenses...................................... 36 38 Amortization of intangible assets ........................................... 8 9 Other (income) expense — net............................................... 7 (4) Operating income ............................................................... 95 72 Interest expense, net ............................................................... 60 84 Loss on retirement of debt...................................................... — 31 Earnings (losses) before income taxes................................ 35 (43) Income tax expense (benefit) ................................................. 22 (9) Net earnings (losses) ......................................................... $ 13 $ (34) Basic earnings (losses) per share: Earnings (losses) per share ................................................... $ 0.13 $ (0.39) Weighted average shares ...................................................... 98.9 86.8 Diluted earnings (losses) per share: Earnings (losses) per share ................................................... $ 0.13 $ (0.39) Weighted average shares ...................................................... 101.2 86.8

A3


Consolidated and Combined Interim Statements of Operations

Successor Predecessor

(In millions, except per share amounts)

Nine months

ended September 24,

2004

Seven months ended

September 26, 2003

Two months

ended February 28,

2003

(unaudited) (unaudited)

Sales........................................................................................ $ 8,825 $ 6,453 $ 1,916 Cost of sales............................................................................ 7,855 5,782 1,686 Gross profit ......................................................................... 970 671 230 Administrative and selling expenses....................................... 389 302 100 Research and development expenses...................................... 115 92 27 Purchased in-process research and development .................... — 85 — Amortization of intangible assets ........................................... 25 19 2 Other (income) expense — net ............................................... (9) (28) 4 Operating income ............................................................... 450 201 97 Interest expense, net ............................................................... 183 204 47 Loss on retirement of debt ...................................................... 48 31 — Loss on sales of receivables.................................................... — 25 — Earnings (losses) before income taxes................................ 219 (59) 50 Income tax expense ............................................................... 128 41 19 Net earnings (losses) ......................................................... $ 91 $ (100) $ 31 Basic earnings (losses) per share: Earnings (losses) per share ................................................... $ 0.93 $ (1.15) Weighted average shares ...................................................... 97.4 86.8 Diluted earnings (losses) per share: Earnings (losses) per share ................................................... $ 0.91 $ (1.15) Weighted average shares ...................................................... 100.2 86.8

A4


Consolidated Balance Sheets

As of

(Dollars in millions) September 24,

2004 December 31,

2003 (unaudited)

ASSETS

Current assets: Cash and cash equivalents ............................................................................. $ 438 $ 828 Marketable securities ..................................................................................... 16 16 Accounts receivable, net ............................................................................... 2,192 1,643 Inventories ..................................................................................................... 617 635 Prepaid expenses............................................................................................ 102 65 Deferred income taxes ................................................................................... 118 120Total current assets ............................................................................................ 3,483 3,307 Property, plant and equipment ........................................................................... 3,064 2,911 Less accumulated depreciation and amortization........................................... 702 388Total property, plant and equipment — net ....................................................... 2,362 2,523 Goodwill ............................................................................................................ 2,359 2,503 Intangible assets — net ...................................................................................... 772 795 Prepaid pension cost .......................................................................................... 163 120 Deferred income taxes ....................................................................................... 121 129 Other assets........................................................................................................ 522 530 $ 9,782 $ 9,907 LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term debt .............................................................................................. $ 27 $ 76 Current portion of long-term debt .................................................................. 23 24 Trade accounts payable.................................................................................. 1,651 1,626 Accrued compensation................................................................................... 319 282 Income taxes .................................................................................................. 237 187 Other current liabilities .................................................................................. 913 931Total current liabilities....................................................................................... 3,170 3,126 Long-term debt .................................................................................................. 3,189 3,708 Post-retirement benefits other than pensions ..................................................... 937 935 Pension benefits ................................................................................................. 823 838 Deferred income taxes ....................................................................................... 223 222 Long-term liabilities .......................................................................................... 293 300Total liabilities ................................................................................................... 8,635 9,129 Minority interests............................................................................................... 62 50 Stockholders’ equity: Capital stock .................................................................................................... 1 1 Paid-in-capital.................................................................................................. 1,131 868 Accumulated deficit......................................................................................... (10) (101) Accumulated other comprehensive losses........................................................ (37) (40)Total stockholders’ equity ................................................................................. 1,085 728 $ 9,782 $ 9,907


Reconciliation of Historical to Pro Forma Combined Statements of Operations

(Unaudited)

Historical Pro Forma

(Dollars in millions)

Three monthsended

September 26,2003

Pro Forma Adjustments

Three months ended

September 26, 2003

Sales........................................................................ $ 2,536 $ — $ 2,536 Cost of sales............................................................ 2,294 (1) (a) 2,293 Gross profit ......................................................... 242 1 243 Administrative and selling expenses....................... 127 — 127 Research and development expenses ...................... 38 — 38 Amortization of intangible assets ........................... 9 — 9 Other income — net................................................ (4) — (4) Operating income................................................ 72 1 73 Interest expense, net................................................ 84 (1) (b) 83 Loss on retirement of debt ...................................... 31 (31) (b) — Losses before income taxes ................................ (43) 33 (10) Income tax benefit .................................................. (9) 4 (c) (5) Net losses ........................................................... $ (34) $ 29 $ (5)

(a) Reflects the elimination of a $1 million inventory write-up recorded as a result of the Acquisition. The related inventory was sold

in the third quarter of 2003.

(b) Reflects adjustments to show pro forma net financing costs based upon our new capital structure and the initiation of our receivable securitization program.

(c) Reflects the tax effect of the above adjustment at the applicable tax rate.

A5


Reconciliation of Historical to Pro Forma Consolidated and Combined Statements of Operations

(Unaudited) Historical Pro Forma Successor Predecessor

(Dollars in millions)

Seven months ended

September 26,2003

Two months ended

February 28,2003

Pro Forma Adjustments

Nine months ended

September 26,2003

Sales ...................................................................... $ 6,453 $ 1,916 $ (43) (a) $ 8,326 Cost of sales .......................................................... 5,782 1,686 (100) (b) 7,368 Gross profit........................................................ 671 230 57 958 Administrative and selling expenses ..................... 302 100 (2) (c) 400 Research and development expenses..................... 92 27 — 119 Purchased in-process research and development... 85 — (85) (d) — Amortization of intangible assets .......................... 19 2 3 (e) 24 Other (income) expense — net.............................. (28) 4 (1) (f) (25) Operating income .............................................. 201 97 142 440 Interest expense, net .............................................. 204 47 (18) (g) 233 Loss on retirement of debt..................................... 31 — (31) (g) — Loss on sales of receivables .................................. 25 — (17) (g) 8 (Losses) earnings before income taxes.............. (59) 50 208 199 Income tax expense ............................................... 41 19 42 (h) 102 Net (losses) earnings ................................. $ (100) $ 31 $ 166 $ 97

(a) Reflects the elimination of the sales of TRW Koyo Steering Systems Company (“TKS”), which was not transferred to us as

part of the 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 purchased 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 our new capital structure and the initiation of our

receivable securitization program. (h) Reflects the tax effect of the above adjustments at the applicable tax rate.

A6

A7


Historical and Pro Forma Consolidated Statements of Operations

(Unaudited)

Historical Pro Forma Three months ended (Dollars in millions) September 24, 2004 September 26, 2003 Sales ............................................................................................. $ 2,739 $ 2,536 Cost of sales.................................................................................. 2,462 2,293 Gross profit............................................................................... 277 243 Administrative and selling expenses ............................................ 131 127 Research and development expenses............................................ 36 38 Amortization of intangible assets ................................................. 8 9 Other (income) expense — net ..................................................... 7 (4) Operating income ..................................................................... 95 73 Interest expense, net ..................................................................... 60 83 Earnings (losses) before income taxes...................................... 35 (10) Income tax expense (benefit)........................................................ 22 (5) Net earnings (losses) ............................................................... $ 13 $ (5) Basic earnings (losses) per share: Earnings (losses) per share ......................................................... $ 0.13 $ (0.06) Weighted average shares ............................................................ 98.9 86.8 Diluted earnings (losses) per share: Earnings (losses) per share ......................................................... $ 0.13 $ (0.06) Weighted average shares ............................................................ 101.2 86.8

A8


Historical and Pro Forma Consolidated and Combined Statements of Operations

(Unaudited)

Historical Pro Forma Nine months ended (Dollars in millions) September 24, 2004 September 26, 2003 Sales ............................................................................................. $ 8,825 $ 8,326 Cost of sales.................................................................................. 7,855 7,368 Gross profit............................................................................... 970 958 Administrative and selling expenses ............................................ 389 400 Research and development expenses............................................ 115 119 Amortization of intangible assets ................................................. 25 24 Other (income) — net................................................................... (9) (25) Operating income ..................................................................... 450 440 Interest expense, net ..................................................................... 183 233 Loss on retirement of debt ............................................................ 48 — Losses on sales of receivables ...................................................... — 8 Earnings before income taxes................................................... 219 199 Income tax expense ...................................................................... 128 102 Net earnings ........................................................................... $ 91 $ 97 Basic earnings per share: Earnings per share ...................................................................... $ 0.93 $ 1.12 Weighted average shares ............................................................ 97.4 86.8 Diluted earnings per share: Earnings per share ...................................................................... $ 0.91 $ 1.08 Weighted average shares ............................................................ 100.2 89.5


Reconciliation of GAAP Net Earnings (Losses) to Historical and Pro Forma EBITDA

(unaudited) The reconciliation schedule below should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2003, which contains summary historical and pro forma financial data. The accompanying unaudited pro forma financial information is intended to give effect to the February 28, 2003 acquisition of the former TRW Inc.’s automotive business by affiliates of The Blackstone Group L.P. from Northrop Grumman Corporation and the July 22, 2003 refinancing of a portion of debt entered into in connection with the acquisition, as if these transactions had occurred on January 1, 2003. The EBITDA measure calculated in the following schedule is a measure used by management to evaluate operating performance. Management believes that EBITDA is useful to investors 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. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. 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.

Historical Pro Forma Three months ended (Dollars in millions) September 24, 2004 September 26, 2003GAAP net (losses) earnings .......................................................... $ 13 $ (34) Income tax expense (benefit)..................................................... 22 (9) Interest expense, net of interest income..................................... 60 84 Loss on retirement of debt......................................................... — 31 GAAP operating income ............................................................... 95 72 Pro forma adjustments:

Inventory fair value adjustment................................................ — 1 Operating income .......................................................................... 95 73

Depreciation and amortization ........................................................ 120 117 EBITDA ......................................................................................... $ 215 $ 190

A9


Reconciliation of GAAP Net Earnings (Losses) to Historical and Pro Forma EBITDA

(unaudited)

The reconciliation schedule below should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2003, which contains summary historical and pro forma financial data. The accompanying unaudited pro forma financial information is intended to give effect to the February 28, 2003 acquisition of the former TRW Inc.’s automotive business by affiliates of The Blackstone Group L.P. from Northrop Grumman Corporation and the July 22, 2003 refinancing of a portion of debt entered into in connection with the acquisition, as if these transactions had occurred on January 1, 2003. The EBITDA measure calculated in the following schedule is a measure used by management to evaluate operating performance. Management believes that EBITDA is useful to investors 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. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. 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.

Historical Pro Forma Nine months ended (Dollars in millions) September 24, 2004 September 26, 2003GAAP net (losses) earnings .......................................................... $ 91 $ (69) Income tax expense ................................................................... 128 60 Interest expense, net of interest income..................................... 183 251 Loss on retirement of debt......................................................... 48 31 Loss on sales of receivables ...................................................... — 25 GAAP operating income ............................................................... 450 298 Pro forma adjustments:

Inventory fair value adjustment................................................ — 43 Depreciation and amortization.................................................. — 4 Purchased in-process research and development...................... — 85 Other......................................................................................... — 10

Operating income .......................................................................... 450 440

Depreciation and amortization, net of a $5 million pro forma adjustment ....................................................................................... 366 357 EBITDA ......................................................................................... $ 816 $ 797

.

A10


Third Quarter Financial Results Conference Call

November 4, 2004

“Driving Automotive Safety”

2© TRW Automotive Holdings Corp. 2004

IntroductionPatrick StobbDirector, Investor Relations

Third Quarter SummaryJohn C. PlantPresident and Chief Executive Officer


Safe Harbor Statement

This material contains statements that are not statements of historical fact, but instead are forward-looking statements. 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 the TRW Automotive Holdings Corp. final prospectus dated as of February 2, 2004 (the "Prospectus") filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(4), our Report on Form 10-K for the fiscal year ended December 31, 2003 (the “10-K”), and our Reports on Form 10-Q for the quarters ended March 26 and June 25, 2004, and include: our substantial leverage; the highly competitive automotive parts industry and its cyclicality; pricing pressures from our customers; increasing costs for purchased components and raw materials; non-performance by, or insolvency of, our suppliers; product liability and warranty and recall claims; our dependence on our largest customers; limitations on flexibility in operating our business contained in our debt agreements; increases in interest rates; fluctuations in foreign exchange rates; the possibility that our owners' interests will conflict with ours; work stoppages or other labor issues and other risks and uncertainties set forth under "Risk Factors" in the Prospectus, 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.


Third Quarter Highlights

• Solid results in line with guidance, despite a tough macro-economic environment, which can be attributed to:– Steady flow of innovative products driving top-line growth– Strong performance of business units in managing their cost

structures and product launches– Success of cost reduction and productivity programs (Six Sigma,

Value Engineering)

• Sales of $2.7 billion, up 8% compared to 2003

• Net Earnings of $13 million or $0.13 per diluted share, an increase of $18 million over the prior year pro forma loss

• Cash flow and net debt negatively impacted by seasonal and other factors; expect net debt to be considerably lower by year-end


Business Trends – Safety Momentum Continues

• Safety features increasingly more influential in consumer purchase decisions

• NHTSA issued Tire Pressure Monitoring (TPM) proposal late September– Requires Direct TPM system to comply with proposed standard– Direct TPM capable of detecting when one or more tires are under-

inflated– Phase in period begins September 2005 requiring: 50% installation

first year; 90% second year; 100% thereafter– TRW well-positioned in the marketplace with EnTire joint venture

• Results from NHTSA study of electronic stability control indicates dramatic reduction in single-vehicle crashes for equipped vehicles

• Acceptance of products in the marketplace continues – 2004 YTD new business wins supports growth objectives


Business Trends – Metal-Based Inflation

• Metal-based inflationary pressures, pressuring bottom-lines in the auto sector, including TRW

• Efforts to offset cost increases placing a substantial operatingburden on the company in 2004; much of the same expected in 2005

• Working to offset increased ferrous metal pricing through cost performance programs, supply chain management and positive benefits from other areas of our business

• Organization’s quick response at the onset of the problem allowed for early implementation of cost reduction actions

• 2005 impact difficult to estimate due to uncertainty on future pricing levels and viability of the company’s supply base

• Must continuously attack cost base to eliminate waste and to manage growth profitably

Production Environment

• Lowering North American production to 15.8 million units to reflect weaker fourth quarter production

• Full-year North American production down 2.5% from 2004 base assumptions

• Full-year Big 3 production expected to be down about 4% compared to the prior year

• Fourth quarter Big 3 production especially weak, down about 6% year-over-year

• Europe production volumes provide level of stability

(1) Source: Primarily CSM Worldwide and internal company estimates.

2004 Production Assumptions(1)

(units in millions)

19.2

11.4

15.8

18.8

11.9

15.9

Europe

Big 3

NorthAmerica

20032004



Full Year Outlook

• Sales of $11.8 billion

• Earnings per share of $0.08 to $0.13:(1)

– Includes charges related to debt repayment transactions of $48 million and $115 million, or $1.62 per diluted share, for first and fourth quarter, respectively

• Earnings per share of $1.70 to $1.75 excluding these charges(1)

• Earnings per share guidance also includes pre-tax expenses of:– $33 million for amortization of intangibles (principally customer

relationships)– $35 million for restructuring charges

• EBITDA of $1,060 to $1,075 million(2)

SOUND OPERATING PRINCIPLES HELP DRIVE FIRST-YEAR PERFORMANCESOUND OPERATING PRINCIPLES HELP DRIVE FIRST-YEAR PERFORMANCE

(1) Per share amounts based on weighted average diluted shares outstanding of approximately 100.6 million shares.(2) Based on expected operating income in the range of $572 to $582 million, adding back expected depreciation and amortization of approximately $490 million.


Financial OverviewJoseph S. CantieExecutive Vice President and Chief Financial Officer


Q3 2003 2004Q3 2004 Pro Forma B/(W) 2003

Sales 2,739$ 2,536$ 203$ Operating Income 95 73 22 Interest Expense, Net(2) 60 83 23 Income Taxes (Benefit) 22 (5) (27)

Net Earnings (Losses) 13$ (5)$ 18$

Earnings (Losses) Per Share 0.13$ (0.06)$

Effective Tax Rate 63% 50%Weighted Average Shares 101.2 86.8

Third Quarter 2004 Results(dollars in millions)

(1)

(1) Pro forma for the acquisition and July 2003 debt refinancing. Please refer to pages A5-A8 of the press release schedules that accompany this presentation for a reconciliation of pro forma to actual consolidated and combined financials.

(2) Includes interest expense and income.


Third Quarter 2004 Results(dollars in millions)

Q3 2003Q3 2004 Pro Forma

Net Earnings 13$ (5)$ Income Tax Expense (Benefit) 22 (5) Interest Expense, Net(2)

60 83

Operating Income 95$ 73$ Depreciation and amortization 120 117

EBITDA(3) 215$ 190$

(1)

(1) Q2 2003 is pro forma for the acquisition and July 2003 debt refinancing. For a reconciliation of pro forma to actual consolidated and combined financials please refer to pages A5-A8 of the press release schedules that accompany this presentation.

(2) Includes interest expense and income.(3) Please see page A9 of the press release schedules that accompany this presentation for a reconciliation of EBITDA to net earnings and our rationalization for using this metric.


F9M 2004Less Debt F9M 2003

F9M 2004 Charges Pro FormaSales 8,825$ 8,825$ 8,326$ Operating Income 450 450 440 Interest Expense, Net(2) 183 183 241 Loss On Retirement of Debt 48 - - Income Taxes (Benefit) 128 128 102

Net Earnings 91$ 139$ 97$

Earnings Per Share 0.91$ 1.39$ 1.08$

Effective Tax Rate 58% 48% 51%Weighted Average Shares 100.2 100.2 89.5

Excludes $48 million debt repayment

charges

First Nine Months (F9M) 2004 Results(dollars in millions)

(1)


(2) Includes interest expense and income for both years; 2003 period also includes loss on sales of receivables of $8 million.


F9M 2003F9M 2004 Pro Forma

Net Earnings 91$ 97$ Income Tax Expense 128 102 Interest Expense, Net(2) 183 241 Loss on Retirement of Debt 48 - Operating Income 450$ 440$ Depreciation and Amortization 366 357 EBITDA(3) 816$ 797$

First Nine Months (F9M) 2004 Results(dollars in millions)


(2) Includes interest expense and income for both years; 2003 period also includes loss on sales of receivables of $8 million.(3) Please see page A10 of the press release schedules that accompany this presentation for a reconciliation of EBITDA to net earnings and our rationalization for using this metric.

Memo: 2004 EBITDA negatively impacted by $39 million decline in net pension and OPEB income and $15 million non-recurrence of unrealized currency exchange gains when compared to 2003

(1)


Capital/Liquidity((dollars in millions)

Net Debt Summary(1)

$3,089 $2,923 $2,582 $2,456 $2,304 $2,368

$2,709$2,849$2,964$3,295$3,437

$2,785

Feb 28, 2003 Sep 26, 2003 Dec 31, 2003 Mar 26, 2004 Jun 25, 2004 Sep 24, 2004

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 19 of this presentation.


Capital/Liquidity

• Available liquidity at quarter-end in excess of a billion dollars

• Reported better than expected operating cash results during the quarter; expect substantial inflow by year-end

• 2004 Capital expenditures totaled $86 million for third quarter and $248 for the first nine months

• Reached agreement with Northrop in October to repurchase acquisition-related seller note and to resolve various contractual issues– Plan to repurchase the $600 million face-value note with proceeds

from recently completed bank term loan and available liquidity– Expect to record a fourth quarter charge of approximately $115

million due to difference between settlement value and book value of the note

– Transaction improves cost of capital and is accretive to forward-earnings


Fourth Quarter Outlook

• Sales of $3.0 billion

• GAAP losses per share of $(0.83) to $(0.78):(1)

– Includes $115 million, or $1.14 per share for loss on retirement of debt related to the seller note refinancing transaction

• Earnings per share of $0.31 to $0.36 excluding debt charges(1)

• Earnings per share guidance also includes pre-tax expenses of:– $8 million for amortization of intangibles (principally customer

relationships)– $17 million for restructuring charges

(1) Per share amounts based on weighted average diluted shares outstanding of approximately 101.5 million shares.


Defining Success in 2004Defining Success in 2004Defining Success in 2004• IPO completed on February 6, 2004

• New business wins at planned rates

• Achieve financial commitments, including– Sales and earnings– Implement cost savings at targeted levels– Complete restructuring actions– Reduction in effective tax rate

• Strengthen balance sheet by lowering debt

OPERATING OBJECTIVES ENHANCE LONG-TERM SHAREHOLDER VALUEOPERATING OBJECTIVES ENHANCE LONG-TERM SHAREHOLDER VALUE


Net Debt Reconciliation((dollars in millions)

3/1/03 9/26/03 12/31/03 3/26/04 6/25/04 9/24/04Cash 449$ 399$ 828$ 449$ 519$ 438$ Marketable securities 26 16 16 16 15 16

Total 475 415 844 465 534 454

Short term debt 168 54 76 66 65 27

Long term debt:Term loan facilities 1,510 1,469 1,480 1,263 1,211 1,209 Senior notes 1,142 1,155 1,178 1,049 1,017 1,044 Senior subordinated notes 435 444 458 294 294 295 Lucas Varity senior notes 167 175 189 190 192 189 Other borrowings 142 41 45 59 59 58 Total Short & Long Term Debt 3,564 3,338 3,426 2,921 2,838 2,822

Net debt operating company 3,089$ 2,923$ 2,582$ 2,456$ 2,304$ 2,368$ Seller note 348 372 382 393 405 417 Net debt TRW Holdings 3,437$ 3,295$ 2,964$ 2,849$ 2,709$ 2,785$

Period-End Balances

2004 q3 trw auto earnings presentation

Economy & Finance

prior year quarter

prior year sales

year earnings

net earnings

net increase

net losses

diluted share

yeartodate period