2008 q2 trw auto earnings presentation

Second Quarter 2008Financial Results Presentation

July 31, 2008

© TRW Automotive Holdings Corp. 2008

Materials Included Pages-Press Release 1-7-Financial Summaries A1-A8-Presentation P1-P24

TRW Automotive News 12001 Tech Center Drive

Livonia, MI 48150 Release

Investor Relations Contact: Eric Birge (734) 855-3115 Media Contact:

John Wilkerson (734) 855-3864

TRW Automotive Reports Second Quarter 2008 Financial Results; Provides Update on 2008 Outlook LIVONIA, MICHIGAN, July 31, 2008 — TRW Automotive Holdings Corp. (NYSE:

TRW), the global leader in active and passive safety systems, today reported second-

quarter 2008 financial results with sales of $4.4 billion, an increase of 18.4 percent

compared to the same period a year ago. The Company reported second quarter net

earnings of $127 million or $1.24 per diluted share, which compares to net earnings of

$97 million or $0.94 per diluted share in the prior year period.

During the second quarter of the previous year, the Company completed the final step

of its 2007 debt recapitalization plan with the successful refinancing of its $2.5 billion

credit facilities. The second quarter results of last year included $8 million of costs

related to this refinancing. Excluding the refinancing costs in 2007, the Company

earned $127 million or $1.24 per diluted share in the 2008 quarter compared to $105

million, or $1.02 per diluted share in the prior year. The current quarter benefited from

a higher level of operating income, despite increased restructuring and asset

impairment charges between the two periods, and also from a lower level of interest

expense.

“Our second quarter and first half results have demonstrated the strength of TRW’s

safety product portfolio, leading customer and geographical diversification and the

Company’s intense cost reduction efforts,” said John Plant, President and Chief

Executive Officer. “These strengths have allowed TRW to mitigate the increasingly

challenging industry conditions, primarily in North America, and provide the basis for

the continued advancement of the Company’s strategic and operational objectives.”

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Mr. Plant added, “The transformation of TRW is not complete as we need to

successfully react to the changing automotive landscape, while continuing to provide

leading safety technologies, whose prospects we expect will be further enhanced by

growth in emerging markets. We continue to explore strategies that will strengthen our

competitiveness and help to achieve our goal of growing the Company profitably over

the long term.”

Second Quarter 2008 The Company reported second-quarter 2008 sales of $4.4 billion, an increase of $692

million or 18.4 percent over the prior year period. The 2008 quarter benefited from the

positive effect of foreign currency translation, higher customer vehicle production in

Europe and China and continued growth of safety products in all markets, including

above-trend sales of lower margin modules. These positive factors were partially offset

by lower vehicle production levels at our major customers in North America and price

reductions provided to customers.

Operating income for second-quarter 2008 was $224 million, which compares to $205

million in the prior year period. The year-to-year increase was driven by a number of

factors, including savings generated from cost improvement and efficiency programs,

including reductions in pension and other postretirement benefit related costs, higher

product volumes, the net positive effect of an insurance recovery totaling $14 million

received in the current quarter relating to a prior year business disruption at one of the

Company’s manufacturing facilities, and the non-recurrence of certain one-off items that

netted to an expense in the prior year. These positive factors were in part offset by

price reductions provided to customers, higher commodity prices, a negative mix of

products sold and a $13 million increase in restructuring and asset impairment

expenses.

Net interest and securitization expense for the second quarter of 2008 totaled $44

million, which compares to $57 million in the prior year. The year-to-year decline can

be attributed to the benefits derived from the Company’s 2007 debt recapitalization and

lower interest rates between the two periods. As mentioned previously, the 2007

quarter also included debt retirement costs of $8 million.

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Second-quarter 2008 tax expense was $56 million, resulting in an effective tax rate of

31 percent, which compares to $45 million or 30 percent in the prior year, excluding

debt retirement expenses. The second-quarter 2008 tax rate is below the expected full

year rate primarily due to the Company’s geographic earnings profile and other factors

in the quarter.

The Company reported second-quarter 2008 net earnings of $127 million, or $1.24 per

diluted share, which compares to $97 million or $0.94 per diluted share in the 2007

period. Net earnings in the 2007 quarter excluding previously mentioned debt

retirement costs of $8 million were $105 million or $1.02 per diluted share.

Earnings before interest, securitization costs, loss on retirement of debt, taxes,

depreciation and amortization (“EBITDA”) were $380 million in the second quarter, as

compared to the prior year level of $344 million.

First Half 2008 The Company reported first-half 2008 sales of $8.6 billion, an increase of $1.3 billion or

17.3 percent compared to prior year sales of $7.3 billion. The 2008 period benefited

primarily from the positive effect of foreign currency translation, higher product volumes

related to new product growth, including above-trend sales of lower margin modules,

and robust industry sales in overseas markets. These positives were partially offset by

the continued decline in North American customer vehicle production and price

reductions provided to customers.

Operating income for the first half of 2008 was $412 million, which is an 8.4 percent

increase from the prior year result of $380 million. The year-to-year improvement was

driven by a number of factors, including savings generated from cost improvement and

efficiency programs, including reductions in pension and OPEB related costs, higher

product volumes, the net positive effect of an insurance recovery received in 2008

relating to a prior year business disruption, and the non-recurrence of certain one-off

items that netted to an expense in the prior year. These positives were partially offset

by price reductions provided to customers, negative product mix, higher commodity

prices and a higher level of restructuring and asset impairment expenses in 2008

compared to the prior year.

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Net interest and securitization expense in the first-half 2008 period was $93 million,

which represents a significant improvement from the prior year result of $121 million.

The decline in interest expense resulted primarily from the Company’s debt

recapitalization completed in the first half of 2007 and lower interest rates between the

two periods. The 2007 period also included debt retirement costs of $155 million

related to the debt recapitalization.

First-half 2008 tax expense was $103 million, resulting in an effective tax rate of 32

percent, which compares to $98 million or 37 percent excluding previously mentioned

debt retirement expenses in the prior year.

The Company reported first-half 2008 net earnings of $221 million, or $2.16 per diluted

share, which compares to $11 million or $0.11 per diluted share in the 2007 period.

The comparison of net earnings, excluding the previously mentioned debt retirement

costs from the prior year, were $221 million, or $2.16 per diluted share in 2008 as

compared to $166 million or $1.62 per diluted share in 2007.

EBITDA was $717 million in the first half of 2008, which is a 9.8 percent increase from

the prior year level of $653 million primarily due to the higher level of operating income

in the current year.

Cash Flow and Capital Structure Second quarter 2008 net cash provided by operations was $40 million, which compares

to $290 million in the prior year. Cash flow in the 2007 period included proceeds of

$127 million related to outstanding borrowings under the Company’s U.S. based

Accounts Receivable Securitization Facility (“Receivable Facility”). Absent these

proceeds, the Company’s cash flow from operations in the 2007 quarter was $163

million. Second quarter 2008 capital expenditures were $120 million compared to $109

million in 2007.

For the six month period ended June 27, 2008, the Company had a net cash usage in

operating activities of $75 million, which compares to net cash generated of $69 million

in the prior year. Excluding proceeds related to outstanding borrowings under the

Receivable Facility, cash flow from operations was a use of $58 million in the 2007

period. The year-to-year decline resulted primarily from higher working capital

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requirements, partly offset by higher operating income. First half capital expenditures

were $217 million compared to $228 million in 2007.

As mentioned previously, the Company refinanced substantially all of its debt in 2007.

The Company incurred debt retirement charges of approximately $155 million during

the 2007 year-to-date period related to these transactions.

As of June 27, 2008, the Company had $3,122 million of debt and $453 million of cash

and marketable securities, resulting in net debt (defined as debt less cash and

marketable securities) of $2,669 million. Net debt is $324 million higher than the

balance at the end of 2007.

2008 Outlook The Company increased its full year outlook to reflect the strong second quarter

outcome, partially offset by a lower outlook for the second half of 2008. Sales are now

expected to be in the range of $16.4 to $16.8 billion (including third quarter sales of

approximately $3.9 billion). Full year net earnings per share are now expected to be in

the range of $2.40 to $2.70.

This guidance range reflects pre-tax restructuring and asset impairment charges of

approximately $75 million (including approximately $25 million in the third quarter). The

effective tax rate is expected to be in the range of approximately 38 to 42 percent.

Lastly, the Company expects capital expenditures in 2008 to be approximately 3.5

percent of sales.

“In recent months, the outlook for the North American automotive industry has further

deteriorated with the decline in overall production of light vehicles, the shift of

production away from light trucks to passenger cars and severe commodity inflation

being the primary pressures in this market,” said Mr. Plant. “Our updated 2008 outlook

provided today reflects the weaker outlook for the North American market as well as our

expectations for a softening production environment in Europe.” Mr. Plant added, “The

pressures we are seeing for the second half of 2008 will undoubtedly continue into

2009.”

Second Quarter 2008 Conference Call The Company will host its second-quarter conference call at 8:30 a.m. (EDT) today,

Thursday, July 31, to discuss financial results and other related matters. To access the

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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 55410719. 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 approximately 66,300 people

worldwide. TRW Automotive products include integrated vehicle control and driver

assist systems, braking systems, steering systems, suspension systems, occupant

safety systems (seat belts and airbags), electronics, engine components, fastening

systems and aftermarket replacement parts and services. All references to "TRW

Automotive", "TRW" or the "Company" in this press release refer to TRW Automotive

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

is available on the internet at www.trw.com.

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http://www.trw.com/results

http://www.trw.com/home/main/0,,,FF.html

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, 2007, such as: loss of market share, production cuts and capacity

reductions by domestic North American vehicle manufacturers and resulting

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 perform as we expect; 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 and

economic uncertainty in some regions; any impairment of our goodwill or other

intangible assets; volatility in our annual effective tax rate resulting from a change in

earnings mix or other factors; adverse effects of environmental and safety regulations;

assertions by or against us relating to intellectual property rights; the possibility that our

largest shareholder's interests will conflict with ours; and other risks and uncertainties

set forth in our Report on Form 10-K and in our other filings with the Securities and

Exchange Commission. We do not undertake any obligation to release publicly any

revision to any of these forward-looking statements.

# # #

7

TRW Automotive Holdings Corp.

Index of Condensed Consolidated Financial Information Page Consolidated Statements of Earnings (unaudited) for the three months ended June 27, 2008 and June 29, 2007 .......................................................A2 Consolidated Statements of Earnings (unaudited) for the six months ended June 27, 2008 and June 29, 2007 ...........................................................A3 Condensed Consolidated Balance Sheets as of June 27, 2008 (unaudited) and December 31, 2007 .......................................................................A4 Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 27, 2008 and June 29, 2007 ...........................................................A5 Reconciliation of GAAP Net Earnings to EBITDA (unaudited) for the three and six months ended June 27, 2008 and June 29, 2007...........................................A6 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the three months ended June 29, 2007 ......................................................................................A7 Reconciliation of GAAP Net Earnings to Adjusted Earnings (unaudited) for the six months ended June 29, 2007..........................................................................................A8

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, 2007 and Quarterly Report on Form 10-Q for the period ended March 28, 2008, as filed with the United States Securities and Exchange Commission on February 21, 2008 and April 30, 2008, respectively.

A2


Consolidated Statements of Earnings (Unaudited)

(In millions, except per share amounts) Three Months Ended

June 27, 2008

June 29, 2007 Sales ........................................................................................... $ 4,446 $ 3,754 Cost of sales ............................................................................... 4,045 3,417 Gross profit............................................................................ 401 337 Administrative and selling expenses........................................... 136 140 Amortization of intangible assets ................................................ 9 9 Restructuring charges and asset impairments............................ 24 11 Other expense (income) — net................................................... 8 (28) Operating income.................................................................. 224 205 Interest expense — net............................................................... 43 56 Loss on retirement of debt .......................................................... — 8 Accounts receivable securitization costs .................................... 1 1 Equity in earnings of affiliates, net of tax .................................... (8) (9) Minority interest, net of tax.......................................................... 5 7 Earnings before income taxes ............................................. 183 142 Income tax expense.................................................................... 56 45 Net earnings ....................................................................... $ 127 $ 97 Basic earnings per share: Earnings per share.................................................................... $ 1.26 $ 0.97 Weighted average shares outstanding ..................................... 101.1 99.5 Diluted earnings per share: Earnings per share.................................................................... $ 1.24 $ 0.94 Weighted average shares outstanding ..................................... 102.6 103.4

A3


Consolidated Statements of Earnings (Unaudited)

(In millions, except per share amounts) Six Months Ended

June 27, 2008

June 29, 2007 Sales ........................................................................................... $ 8,590 $ 7,321 Cost of sales ............................................................................... 7,848 6,668 Gross profit............................................................................ 742 653 Administrative and selling expenses........................................... 268 268 Amortization of intangible assets ................................................ 18 18 Restructuring charges and asset impairments............................ 32 19 Other expense (income) — net................................................... 12 (32) Operating income.................................................................. 412 380 Interest expense — net............................................................... 91 119 Loss on retirement of debt .......................................................... — 155 Accounts receivable securitization costs .................................... 2 2 Equity in earnings of affiliates, net of tax .................................... (15) (15) Minority interest, net of tax.......................................................... 10 10 Earnings before income taxes ............................................. 324 109 Income tax expense.................................................................... 103 98 Net earnings ....................................................................... $ 221 $ 11 Basic earnings per share: Earnings per share.................................................................... $ 2.19 $ 0.11 Weighted average shares outstanding ..................................... 100.9 99.0 Diluted earnings per share: Earnings per share.................................................................... $ 2.16 $ 0.11 Weighted average shares outstanding ..................................... 102.3 102.5

A4


Condensed Consolidated Balance Sheets

(Dollars in millions) As of

June 27,

2008 December 31,

2007 (Unaudited)

Assets

Current assets: Cash and cash equivalents .................................................... $ 453 $ 895 Marketable securities.............................................................. — 4 Accounts receivable — net..................................................... 3,165 2,313 Inventories .............................................................................. 944 822 Prepaid expenses and other current assets ........................... 419 292

Total current assets..................................................................... 4,981 4,326

Property, plant and equipment — net ......................................... 2,987 2,910 Goodwill ...................................................................................... 2,249 2,243 Intangible assets — net............................................................... 715 710 Pension asset.............................................................................. 1,500 1,461 Other assets................................................................................ 711 640

Total assets ............................................................................. $ 13,143 $ 12,290

Liabilities, Minority Interests and Stockholders’ Equity

Current liabilities: Short-term debt ...................................................................... $ 90 $ 64 Current portion of long-term debt........................................... 16 30 Trade accounts payable......................................................... 2,710 2,406 Accrued compensation .......................................................... 329 298 Other current liabilities ........................................................... 1,133 917

Total current liabilities ................................................................. 4,278 3,715

Long-term debt............................................................................ 3,016 3,150 Postretirement benefits other than pensions............................... 580 591 Pension benefits.......................................................................... 493 497 Other long-term liabilities ............................................................ 1,055 1,011

Total liabilities.......................................................................... 9,422 8,964

Minority interests ......................................................................... 149 134

Commitments and contingencies

Stockholders’ equity: Capital stock .......................................................................... 1 1 Treasury stock........................................................................ — — Paid-in-capital ........................................................................ 1,189 1,176 Retained earnings.................................................................. 622 398 Accumulated other comprehensive earnings......................... 1,760 1,617

Total stockholders’ equity............................................................ 3,572 3,192 Total liabilities, minority interests, and stockholders’ equity .... $ 13,143 $ 12,290

A5


Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions) Six Months Ended June 27, 2008 June 29, 2007 Operating Activities Net earnings ....................................................................................... $ 221 $ 11 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Depreciation and amortization.......................................................... 300 268 Net pension and other postretirement benefits income and contributions ................................................................................... (105)

(94)

Net gains on sale of assets .............................................................. (3) (12) Loss on retirement of debt................................................................ — 155 Other — net ...................................................................................... 18 21

Changes in assets and liabilities, net of effects of businesses acquired:

Accounts receivable — net............................................................. (710) (450) Inventories...................................................................................... (59) (54) Trade accounts payable ................................................................. 176 201 Prepaid expense and other assets................................................. (107) (38) Other liabilities................................................................................ 194 61 Net cash (used in) provided by operating activities ........................ (75) 69

Investing Activities Capital expenditures, including other intangible assets ..................... (217) (228) Acquisitions of businesses, net of cash acquired............................... (40) (12) Termination of interest rate swaps ..................................................... — (12) Investment in affiliates........................................................................ (5) — Proceeds from sale/leaseback transactions....................................... 1 6 Net proceeds from asset sales........................................................... 3 17

Net cash used in investing activities............................................... (258) (229) Financing Activities Change in short-term debt.................................................................. 26 50 Net (repayments on) proceeds from revolving credit facility ............. (129) 200 Proceeds from issuance of long-term debt, net of fees...................... 4 2,582 Redemption of long-term debt............................................................ (55) (2,993) Proceeds from exercise of stock options............................................ 4 28

Net cash used in financing activities .............................................. (150) (133) Effect of exchange rate changes on cash .......................................... 41 (10) Decrease in cash and cash equivalents............................................. (442) (303) Cash and cash equivalents at beginning of period............................. 895 578 Cash and cash equivalents at end of period ...................................... $ 453 $ 275

A6


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, 2007 and Quarterly Report on Form 10-Q for the period ended March 28, 2008. The EBITDA measure calculated in the following schedules is a measure used by management to evaluate operating performance. Management believes that EBITDA is a useful measurement because it is frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings 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 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.

(Dollars in millions) Three Months Ended June 27, 2008 June 29, 2007 GAAP net earnings ....................................................... $ 127 $ 97

Income tax expense................................................ 56 45 Interest expense — net ........................................... 43 56 Loss on retirement of debt ...................................... — 8 Accounts receivable securitization costs................. 1 1 Depreciation and amortization ................................ 153 137

EBITDA......................................................................... $ 380 $ 344

(Dollars in millions) Six Months Ended June 27, 2008 June 29, 2007 GAAP net earnings ....................................................... $ 221 $ 11

Income tax expense ................................................ 103 98 Interest expense — net ........................................... 91 119 Loss on retirement of debt ...................................... — 155 Accounts receivable securitization costs................. 2 2 Depreciation and amortization ................................ 300 268

EBITDA......................................................................... $ 717 $ 653


Reconciliation of GAAP Net Earnings to Adjusted Earnings

(Unaudited) In conjunction with the Company’s tender offer and repurchases of its then outstanding 9⅜% Senior Notes and 10⅛% Senior Notes in original principal amounts of $925 million and €200 million, respectively, and 11% Senior Subordinated Notes and 11¾% Senior Subordinated Notes in original principal amounts of $300 million and €125 million, respectively (collectively, the “Old Notes”), the Company recorded a loss on retirement of debt of $1 million during the three months ended June 29, 2007 for additional redemption premiums paid. 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 second quarter of 2007. The following reconciliation excludes the impact of the loss on retirement of debt.

(In millions, except per share amounts)

Three MonthsEnded

June 29, 2007Actual Adjustments

Three Months Ended

June 29,2007 Adjusted

Sales ..................................................................... $ 3,754 $ — $ 3,754

Cost of sales ......................................................... 3,417 — 3,417

Gross profit........................................................ 337 — 337

Administrative and selling expenses..................... 140 — 140

Amortization of intangible assets .......................... 9 — 9

Restructuring charges and asset impairments...... 11 — 11

Other income — net .............................................. (28) — (28)

Operating income.............................................. 205 — 205

Interest expense, net............................................. 56 — 56

Loss on retirement of debt .................................... 8 (8) (a) —

Accounts receivable securitization costs .............. 1 — 1

Equity in earnings of affiliates, net of tax .............. (9) — (9)

Minority interest, net of tax.................................... 7 — 7

Earnings before income taxes .......................... 142 8 150

Income tax expense ............................................. 45 — 45

Net earnings ..................................................... $ 97 $ 8 $ 105

Effective tax rate ................................................... 32% 30%

Basic earnings per share:

Earnings per share.............................................. $ 0.97 $ 1.06

Weighted average shares outstanding ............... 99.5 99.5

Diluted earnings per share:

Earnings per share.............................................. $ 0.94 $ 1.02


(a) Reflects the elimination of the loss on retirement of debt.

A7


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 six months ended June 29, 2007. This loss included $112 million for redemption premiums paid, $20 million for the write-off of deferred debt issuance costs, $11 million relating to the principal amount in excess of carrying value of the 9⅜% Senior Notes and $5 million of fees. 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 second quarter of 2007. The following reconciliation excludes the impact of the loss on retirement of debt.

(In millions, except per share amounts)

Six Months Ended

June 29, 2007Actual Adjustments

Six Months Ended

June 29, 2007 Adjusted

Sales ..................................................................... $ 7,321 $ — $ 7,321

Cost of sales ......................................................... 6,668 — 6,668

Gross profit ....................................................... 653 — 653

Administrative and selling expenses..................... 268 — 268

Amortization of intangible assets .......................... 18 — 18

Restructuring charges and asset impairments ..... 19 — 19

Other income — net.............................................. (32) — (32)

Operating income.............................................. 380 — 380

Interest expense, net ............................................ 119 — 119

Loss on retirement of debt .................................... 155 (155) (a) —

Accounts receivable securitization costs .............. 2 — 2

Equity in earnings of affiliates, net of tax .............. (15) — (15)

Minority interest, net of tax.................................... 10 — 10

Earnings before income taxes .......................... 109 155 264

Income tax expense ............................................. 98 — 98

Net earnings ..................................................... $ 11 $ 155 $ 166

Effective tax rate ................................................... 90% 37%

Basic earnings per share:

Earnings per share ............................................. $ 0.11 $ 1.68


Diluted earnings per share:

Earnings per share ............................................. $ 0.11 $ 1.62


(a) Reflects the elimination of the loss on retirement of debt.

A8

Second Quarter 2008Financial Results Presentation

July 31, 2008

© TRW Automotive Holdings Corp. 2008

IntroductionEric BirgeInvestor Relations

Business SummaryJohn C. PlantPresident and Chief Executive Officer

P3© TRW Automotive Holdings Corp. 2008

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, 2007, and our Form 10-Q for the quarter ended March 28, 2008, such as: loss of market share, production cuts and capacity reductions by domestic North American vehicle manufacturers and resulting 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 perform as we expect; 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 and economic uncertainty in some regions; any impairment of our goodwill or other intangible assets; volatility in our annual effective tax rate resulting from a change in earnings mix or other factors; adverse effects of environmental and safety regulations; assertions by or against us relating to intellectual property rights; the possibility that our largest shareholder’s interests will conflict with ours; and other risks and uncertainties set forth in our Form 10-K and in other SEC filings. We do not undertake any obligation to release publicly any revision to any of these forward-looking statements.


Summary Comments

• TRW reports solid second quarter results:– Healthy growth in sales, earnings and EBITDA – Industry pressures mitigated by geographic, customer

and product diversification and demand for increased safety content

– Continue to pursue business strategies that improve long-term competitiveness

• Our vision of Cognitive Safety Systems:– Culmination of new and better technology that increasingly uses advanced

electronics and proprietary algorithms to sense, analyze, anticipate and respond to ever-changing conditions

– Examples of technology advancements:►Haptic Lane Feedback System ►Advanced Head Protection System►Automatic Emergency Braking System ►Low-Profile Knee Airbag Module

Strong Performance in the face of heightened

challenges in the Automotive Industry


$3,754

$4,446

Q2 2007 Q2 2008

Second Quarter Summary

18% Growth

Sales Summary

Q2 Vehicle Production(c)(% changes based on year-over-year comparisons)

Financial Summary(US $ in millions, except where noted)

North AmericaDetroit 3 -21.6%EU OE 1.0%Asian OE -3.3%Total Region -14.5%

East 19.3%

China 14.3%

South America 21.4%

India 16.6%Korea -4.7%Japan 4.5%

Total Region 3.8%

ROW

EuropeWest -1.7%

36.3%ROW 20.5%Europe

7.8%North America

Net Earnings Summary

(a) Excludes $8 million of debt retirement charges. For adjusted results reconciliation to GAAP, please see slide P14.(b) Per share amounts based on diluted shares.(c) Production volumes based on CSM Worldwide data.

Q2 2008

GAAP Adjusted(a) GAAP

Net Earnings 97$ 105$ 127$

Earnings Per Share(b) 0.94$ 1.02$ 1.24$

Q2 2007


$7,321$8,590

FH 2007 FH 2008

First Half Sales Summary

17% Growth

Sales Summary

First Half Vehicle Production(c)(% changes based on year-over-year comparisons)

Financial Summary(US $ in millions, except where noted)

North AmericaDetroit 3 -17.6%EU OE -0.7%Asian OE -2.0%Total Region -11.7%

East 19.0%

China 13.9%

South America 19.2%

India 16.3%Korea -0.9%Japan 5.2%

Total Region 3.4%

ROW

EuropeWest -1.9%

39.6%ROW 16.1%Europe 11.6%North America

Net Earnings Summary

(a) Excludes $155 million of debt retirement charges. For adjusted results reconciliation to GAAP, please see slide P16.(b) Per share amounts based on diluted shares.(c) Production volumes based on CSM Worldwide data.

FH 2008

GAAP Adjusted(a) GAAP

Net Earnings 11$ 166$ 221$

Earnings Per Share(b) 0.11$ 1.62$ 2.16$

FH 2007


Quarterly Developments

• Unprecedented time period for the Automotive Industry:

– Extreme spikes in commodity inflation

– Further reductions for second half vehicle production in North America

– Shift in production away from light trucks to passenger cars in North America

• Commodity Inflation has been a headwind since 2004 with a step increase in most areas over the last 3 months:

– Steel and Iron Ore prices have increased dramatically since the beginning of the year

– Full year impact of approximately $150 million anticipated

– Working to mitigate through product changes, efficiency initiatives, supply chain management, and customer recoveries

• European market showing signs of an economic slowdown.


Quarterly Developments

• Production estimates:

―Lowering North America production by 700 thousand to approximately 13.5 million units

―Detroit 3 production estimate lowered to 8.0 million units

―Lowering European production to 22.0 million units

• Mix shift in North America has been dramatic:

―In last 3 months, Detroit 3 have announced plans to permanently shutter light truck capacity and delay production launches

―Effect partially mitigated by fact that only 22% of TRW’s 2007 global sales were to the Detroit 3 in North America

―Assessing our plans to see what changes will be needed to align our operations


10.8 10.1 8.6

5.0 5.2 5.6 5.6 5.5

8.09.5

2005 2006 2007 2008EOLD

2008ENEW

Detroit 3 Transplants

15.9 15.4

4.1 4.9 5.8 6.7 6.6

15.5 15.615.8

2005 2006 2007 2008EOLD

2008ENEW

Western Eastern

10.0 10.6 10.8 10.9 11.0

4.8 5.7 6.9 7.8 7.83.6

3.8 4.0 3.9 4.03.94.0

4.6 5.5 5.4

2005 2006 2007 2008EOLD

2008ENEW

Japan China Korea South Asia

• Forecast for North American production lowered to approximately 13.5 million units –lowest production level since 1992.

• European production lowered to 22.0 million units. Steady growth forecasted in the emerging markets of China, India and Brazil.

• Revised Euro rate assumptions upward, which is reflected in the increased full year sales guidance.

• Commodity inflation pressures to continue, with significant increases expected in second half.

(1) Source: Light vehicle assumptions primarily CSM Worldwide and internal company estimates.

South America

North America

Asia

Europe21.720.419.915.115.315.8

14.222.0

2008 Operating Environment

2008 Industry Production Assumptions(1)(units in millions)

2.8 3.0 3.6 4.14.1

2005 2006 2007 2008EOLD

2008ENEW

13.522.3


2008 Full Year Outlook

(a) Per share amounts based on assumed weighted average diluted shares outstanding of approximately 102.5 million shares.

Sales $16.4 - $16.8 billionNet Earnings per Diluted Share(a) $2.40 to $2.70Restructuring Expenses (pre-tax) $75 millionCapital Spending approx. 3.5% of salesEffective Tax Rate approx. 38% - 42%

TRW is Well Positioned for the Future with Leading Customer andGeographic Diversification, Innovation and a Track Record of

Steady Performance During Difficult Conditions.

Financial OverviewJoseph S. CantieExecutive Vice Presidentand Chief Financial Officer


• Strong second quarter performance:

―Sales of $4.4 billion, up 18%

―Earnings per share of $1.24

• Second quarter completes an outstanding first half:

―Record sales of $8.6 billion, up 17% over last year

―Record earnings per share of $2.16, up 33% over last year, excluding debt retirement charges in the prior year(a)

―EBITDA in excess of $700 million for the first time in any six-month period(b)

• Raised full year guidance despite the challenges facing the industry and TRW.

Financial Summary

(a) For adjusted results comparison and reconciliation to GAAP, please see slide P16.(b) Please refer to slide P21 for management’s rationale for using this metric and slide P23 for a reconciliation to GAAP.

•Strong Q2 and First Half Performance•Significant “Headwinds”for the Second Half and into 2009


Rest of World 13.8%

North America

28.4%Europe57.8%

Rest of World 11.9%

North America

31.3%Europe56.8%

Foreign CurrencyProduct Volumes

Modules New ProductsVehicle Production

Customer Pricing

$3,754$4,446

Q2 2007 Q2 2008

Total SalesUS $ in millions

Q2 YOY Sales Comparison

Second Quarter Sales Summary

+18%

Geographic Sales Mix% of total sales

$2,042

$1,201

$511

$2,556

$1,335

$555

Q2 2007 Q2 2008

ChassisOSSAuto Comp

Q2 2007 Q2 2008

Segment SalesUS $ in millions


(a) $8 million loss on retirement of debt related to the Company’s 2007 debt recapitalization.(b) Please refer to slide P21 for management’s rationale for using this metric and slide P22 for a reconciliation to GAAP.

Second Quarter Results

(US $ in millions, except where noted)

GAAP Results

GAAP Results

Adjusting Item

Adjusted Results

Sales 4,446$ 3,754$ -$ 3,754$ Operating Income 224 205 - 205 Net Interest and Securitization 44 57 - 57 Loss on Retirement of Debt - 8 (8) (a) - Equity in Earnings of Affiliates (8) (9) - (9) Minority Interest 5 7 - 7 Income Tax Expense 56 45 - 45 Effective Tax Rate 31% 32% 30%Net Earnings 127$ 97$ 8$ 105$ Share Count 102.6 103.4 103.4 Earnings Per Share 1.24$ 0.94$ 1.02$

EBITDA(b) 380$ 344$

Q2 2008 Q2 2007


Rest of World 13.3%

North America

29.3%Europe57.4%

Rest of World 11.1%

North America

30.9%Europe58.0%

Foreign CurrencyProduct Volumes

Modules New ProductsVehicle Production

Customer Pricing

$7,321 $8,590

FH 2007 FH 2008

Total SalesUS $ in millions

FH YOY Sales Comparison

First Half Sales Summary

17%

Geographic Sales Mix% of total sales

$3,938

$2,383

$1,000

$4,898

$2,609

$1,083

FH 2007 FH 2008

ChassisOSSAuto Comp

FH 2007 FH 2008

Segment SalesUS $ in millions


(a) $155 million loss on retirement of debt related to the Company’s 2007 debt recapitalization.(b) Please refer to slide P21 for management’s rationale for using this metric and slide P23 for a reconciliation to GAAP.

First Half Results


GAAP Results

GAAP Results

Adjusting Item

Adjusted Results

Sales 8,590$ 7,321$ -$ 7,321$ Operating Income 412 380 - 380 Net Interest and Securitization 93 121 - 121 Loss on Retirement of Debt - 155 (155) (a) - Equity in Earnings of Affiliates (15) (15) - (15) Minority Interest 10 10 - 10 Income Tax Expense 103 98 - 98 Effective Tax Rate 32% 90% 37%Net Earnings 221$ 11$ (155)$ 166$ Share Count 102.3 102.5 102.5 Earnings Per Share 2.16$ 0.11$ 1.62$

EBITDA(b) 717$ 653$

First Half 2008 First Half 2007


Year End 2007 Q2 2008Memo: Q2

2007Cash 895$ 453$ 275$ Marketable Securities 4 - 9 Total Cash & Marketable Securities 899$ 453$ 284$

3,244 3,122 3,042 Total Equity 3,192 3,572 2,500 Total Capital 6,436$ 6,694$ 5,542$

Total Debt / Capital Ratio 50% 47% 55%

Net Debt(a) 2,345$ 2,669$ 2,758$ (a) Total debt less total cash & marketable securities. For net debt reconciled to the closest GAAP equivalent, please refer to slide P24.

Total Debt

Period-End Balances

Capital Structure Summary

Operating Cash Flow: 2007 2008

First Quarter (221)$ (115)$

Second Quarter 290 40

GAAP Operating Cash Flow 69$ (75)$

A/R Securitization Proceeds (127) -

Adjusted Operating Cash Flow (58)$ (75)$

$119

$97$109

$120

$228 $217

Q1 Q2 First Half

20072008

Operating Cash FlowUS $ in millions

Capital ExpendituresUS $ in millions

Capital StructureUS $ in millions


$3,437$2,964

$2,372$2,560 $2,443

$2,955 $2,758

$2,885(b)

$2,345$2,599 $2,669

Feb 28,2003

Dec 31,2003

Dec 31,2004

Dec 31,2005

Dec 31,2006

Mar 30,2007

Jun 29,2007

Dec 31,2007

Mar 28,2008

Jun 27,2008

Capital Structure Summary

(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 P24.(b) Net debt adjusted to include receivables facility proceeds.

Dalphimetal acquisition increased net debt

by $244 million

Debt transaction increased

net debt by $57 million

Debt transactions increased net debt by approximately $130

million

Net Debt (a)

US $ in millions

$127 million receivables facility proceeds


Outlook Discussion

Full Year• Raised full year sales guidance to $16.4 - $16.8 billion:

– Decline in North American volume expected to be significant with the Detroit 3 producing nearly 1.5 million fewer vehicles compared to 2007

– Module sales expected to increase in 2008 by $800 to $900 million– Currency effect will provide measurable upside to sales – no material impact to

income expected

• Full year earnings of $2.40 to $2.70 per share.Third Quarter• Sales increase to approximately $3.9 billion due primarily to currency and

modules.• Restructuring and asset impairment expenses of approximately $25 million.• Due to compressed production levels, restructuring, and higher effective tax

rate, the level of net earnings will likely be break-even to very low.

Financial Reconciliations


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 HoldingsCorp. Form 10-K for the year ended December 31, 2007, and Form 10-Q for the quarter ended March 28, 2008,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.


Second Quarter EBITDA


Q2 2008 Q2 2007GAAP Net Earnings 127$ 97$ Income Tax Expense 56 45 Net Interest 43 56 Loss on Retirement of Debt - 8 Accounts Receivable Securitization Costs 1 1 Depreciation & Amortization 153 137 EBITDA 380$ 344$

Memo:Restructuring & AssetImpairments Included in EBITDA 24$ 11$


First Half 2008 EBITDA


First Half 2008

First Half 2007

GAAP Net Earnings 221$ 11$ Income Tax Expense 103 98 Net Interest 91 119 Loss on Retirement of Debt - 155 Accounts Receivable Securitization Costs 2 2 Depreciation & Amortization 300 268 EBITDA 717$ 653$

Memo:Restructuring & AssetImpairments Included in EBITDA 32$ 19$


Net Debt Reconciliation

(US $ in millions)2/28/03 12/31/03 12/31/04 12/31/05 12/31/06 3/30/07 6/29/07 12/31/07 03/28/08 6/27/08

Cash 449$ 828$ 790$ 659$ 578$ 343$ 275$ 895$ 562$ 453$ Marketable securities 26 16 19 17 11 11 9 4 3 -

Total cash and marketable securities 475 844 809 676 589 354 284 899 565 453

Short term debt 168 76 40 98 69 125 140 64 80 90 Term loan facilities 1,510 1,480 1,512 1,593 1,582 1,579 1,100 1,098 1,098 1,096 Revolving credit facilities - - - - - - 200 429 339 300 Senior & senior subordinated notes due 2013 1,577 1,636 1,369 1,255 1,284 26 17 19 - - Senior notes due 2014 and 2017 - - - - - 1,467 1,469 1,505 1,522 1,521 Lucas Varity senior notes 167 189 202 181 - - - - - - Other borrowings 142 45 58 109 97 112 116 129 125 115 Northrop seller note 348 382 - - - - - - - -

Total debt 3,912 3,808 3,181 3,236 3,032 3,309 3,042 3,244 3,164 3,122 Net debt 3,437$ 2,964$ 2,372$ 2,560$ 2,443$ 2,955$ 2,758$ 2,345$ 2,599$ 2,669$

Memo:Receivable facility proceeds(a) - - - - - - 127$ - - -

Net debt including receivables facility proceeds 3,437$ 2,964$ 2,372$ 2,560$ 2,443$ 2,955$ 2,885$ 2,345$ 2,599$ 2,669$

Period-End Balances

(a) Proceeds related to outstanding borrowings under the Company’s U.S. based Accounts Receivables Securitization Facility.

2008 q2 trw auto earnings presentation

Economy & Finance

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csm worldwide

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