2005 q2 trw auto earnings presentation

Second Quarter 2005 Financial Results Conference Call Materials

August 2, 2005

Materials Included Pages- Press Release 1-7- Financial Summaries A1-A6- Conference Call Presentation P1-P21

© TRW Automotive Holdings Corp. 2005

TRW Automotive News 12025 Tech Center Drive Livonia, MI 48150 Release

Investor Relations Contact:

Patrick R. Stobb (734) 855-3140 Media Contact:

Manley Ford (734) 855-2616

TRW Automotive Reports Second Quarter 2005 Financial Results; Provides Update on 2005 Outlook LIVONIA, MICHIGAN, August 2, 2005 — TRW Automotive Holdings Corp. (NYSE:

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

quarter 2005 sales of $3.4 billion, an increase of 6% compared to the same period a

year ago. Net earnings for the quarter were $85 million or $0.83 per diluted share,

which compares to $76 million or $0.75 per diluted share in the prior year quarter.

The Company’s earnings were above previously provided guidance primarily due to the

timing of its Burgos, Spain facility closure and related expenses, the impact of a $17

million one-time tax benefit and improved operating performance. The Company

announced in July that it received final notification from government authorities

approving the closure of its Burgos, Spain manufacturing facility, and as such,

restructuring expenses related to this action will now be recorded in the third quarter.

During the second quarter, the Company also incurred a $7 million loss on retirement of

debt related to the partial redemption of its 10-⅛% senior notes. Second quarter

earnings after excluding the one-time tax benefit and loss on retirement of debt were

$75 million or $0.73 per diluted share.

“Consistent with our performance in the previous quarter, our solid results can be

attributed to our broad diversification and the steady flow of new safety products and

systems in combination with aggressive cost performance,” said John C. Plant,

president and chief executive officer.

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“For the remainder of the year, we expect our diversification and our portfolio of safety

products to continue to bolster our results. We will also continue to execute our

operating plans with precision and take aggressive actions to counter the effects of

challenging industry conditions, which is the primary reason why we have elected to

decisively increase our restructuring efforts this year.” Mr. Plant added, “We believe the

higher level of restructuring we plan to incur this year will better position the Company

to maintain its competitive position over the long term.”

Second Quarter 2005 The Company reported second-quarter 2005 sales of $3.4 billion, an increase of $202

million or 6% compared to prior year sales of $3.2 billion. The increase resulted

primarily from higher sales of new products and foreign currency translation, partially

offset by pricing provided to customers and lower vehicle production volumes in North

America. Operating income for second-quarter 2005 was $198 million, a decrease of

$4 million compared to the prior year period total of $202 million. The decrease

resulted primarily from the continued impact of commodity inflation above prior year

levels, foreign currency losses, increased restructuring expenses and other costs,

which were partially offset by the benefits of higher sales and cost reduction programs

in excess of pricing provided to customers and non-commodity inflation. Restructuring

expenses in the second quarter of 2005 were $13 million, as compared to $8 million in

the prior year quarter.

Net interest and securitization expense for the second quarter of 2005 totaled $55

million, which compares to $60 million in the prior year period. The year-to-year

reduction in expense can be attributed to the Company’s deleveraging activities, which

include debt reduction and other capital structure improvement efforts, offset partially by

rising interest rates. As stated previously, the Company incurred $7 million for loss on

retirement of debt in the quarter related to its partial bond redemption.

Tax expense for the quarter was $51 million, which included a one-time tax benefit of

$17 million resulting from the impact of a tax law change in Poland. The Company’s

second-quarter 2005 effective tax rate excluding the tax benefit and the effect of the $7

million loss on retirement of debt was in the range of previously provided guidance.

2

The Company reported second-quarter 2005 net earnings of $85 million or $0.83 per

diluted share, which included the one-time tax benefit of $17 million and $7 million for

loss on retirement of debt. Second-quarter 2005 earnings after excluding these items

were $75 million or $0.73 per diluted share, which compares to $76 million or $0.75 per

diluted share in the prior year period.

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

depreciation and amortization (“EBITDA”) were $324 million for second-quarter 2005,

which compares to prior year EBITDA of $325 million. Excluding the year-to-year

impact of restructuring expenses, as previously mentioned, EBITDA was higher by $4

million compared to the prior year period.

First Half 2005 The Company reported first-half 2005 sales of $6.6 billion, an increase of $504 million

or 8% compared to prior year sales of $6.1 billion. The increase resulted primarily from

sales of new products, foreign currency translation and the effect of five additional

calendar days in the first half of 2005, partially offset by pricing provided to customers

and lower vehicle production volumes in North America. Operating income for first-half

2005 was $353 million, a decrease of $2 million compared to the prior year total of $355

million. The decrease resulted primarily from the continued impact of commodity

inflation above prior year levels, foreign currency losses, increased restructuring costs

and expenses directly related to customer and supplier solvency issues, partially offset

by the benefits of higher sales and cost reduction programs in excess of pricing

provided to customers and non-commodity inflation. Restructuring expenses in the first

half of 2005 were $21 million, as compared to $13 million in the prior year period.

Net interest and securitization expense for the first half of 2005 totaled $114 million,

which compares to $123 million in the prior year period. As discussed previously, the

Company incurred $7 million for loss on retirement of debt during the second quarter

related to the partial redemption of its 10-⅛% senior notes.

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Tax expense for the first half was $97 million, which included the previously mentioned

one-time tax benefit of $17 million that resulted from the impact of a tax law change in

Poland. The Company’s first-half 2005 effective tax rate after excluding the tax benefit

and the effect of the $7 million loss on retirement of debt was in the range of previously

provided guidance.

The Company reported first-half 2005 net earnings of $135 million or $1.33 per diluted

share, which included the $17 million one-time tax benefit and $7 million loss on

retirement of debt. First-half 2005 earnings after excluding these items were $125

million or $1.23 per diluted share. In comparison, first-half 2004 net earnings were $78

million or $0.78 per diluted share, which included debt retirement and refinancing

expenses of $48 million related to the Company’s initial public offering and a bank debt

refinancing transaction. Net earnings during the 2004 period after excluding debt

retirement and refinancing expenses were $126 million or $1.27 per diluted share.

First half 2005 EBITDA totaled $607 million, which compares to prior year EBITDA of

$601 million. Excluding the year-to-year impact of restructuring expenses, as

previously mentioned, EBITDA increased by $14 million compared to the prior period.

Capital Structure/Liquidity Net cash flow from operating activities during the second quarter and first half of 2005

totaled $263 million and $212 million, respectively. Capital expenditures for the quarter

were $91 million compared to $95 million in the prior year quarter. For first-half 2005,

capital expenditures totaled $174 million, which compares to $162 million in the prior

year period. As of July 1, 2005, the Company had $2,845 million of debt and $519

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

cash and marketable securities) of $2,326 million. Net debt declined by $153 million

compared to the end of first-quarter 2005 and $46 million compared to the year-end

2004 level.

4

On May 3, 2005, the Company completed the redemption of a portion of its Euro

denominated 10-⅛% senior notes due 2013, equivalent to approximately $63 million

(USD) of debt. The transaction was funded with a portion of the proceeds raised from

the private sale of 7.3 million shares of common stock issued to institutional investors in

March of this year. As mentioned previously, the Company incurred related pre-tax

expenses of $7 million for premiums and associated fees during the quarter.

2005 Outlook The Company updated its full-year 2005 outlook to include the second quarter one-time

tax benefit and to reflect current industry assumptions. Accordingly, the Company

expects revenue in the range $12.5 to $12.9 billion and earnings per diluted share in

the range of $1.60 to $1.80. Full year outlook after excluding the $17 million one-time

tax benefit and the $7 million loss on retirement of debt is expected to be in the range of

$1.50 to $1.70 per diluted share, unchanged from previous guidance.

Earnings guidance has been updated to include restructuring related expenses of

approximately $70 million and a revised effective tax rate in the range of 43% to 50%,

which now reflects the impact of the one-time tax benefit. This guidance also includes

$33 million of expenses for amortization of intangibles resulting from the February 2003

acquisition of the Company by affiliates of The Blackstone Group L.P. Lastly, the

Company expects capital expenditures to total approximately 4% of sales for the year.

For the third quarter of 2005, the Company expects revenue of approximately $2.9

billion and results ranging from a loss per share of $(0.08) to earnings per diluted share

of $0.05. Third quarter guidance includes net pre-tax restructuring costs of

approximately $30 million.

Second Quarter 2005 Conference Call The Company will host its second-quarter 2005 conference call at 9:00 a.m. (EDT)

today, Tuesday, August 2, 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.

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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 7841880.

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 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, please see the financial

schedules that accompany this release.

About TRW With 2004 sales of $12.0 billion, TRW Automotive ranks among the world's leading

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

its subsidiaries, employs approximately 60,000 people in 24 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.

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http://www.trwauto.com/results

http://www.trwauto.com/

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

are forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995. All forward-looking statements involve risks and uncertainties.

Our actual results could differ materially from those contained in forward-looking

statements made in this release. Such risks, uncertainties and other important factors

which could cause our actual results to differ materially from those contained in our

forward-looking statements are set forth in our Report on Form 10-K for the fiscal year

ended December 31, 2004 (the “10K”) and our Report on Form 10-Q for the quarter

ended April 1, 2005, and include: possible production cuts by our customers; escalating

pricing pressures from our customers; severe inflationary pressures impacting the

market for ferrous metals and other commodities; non-performance by, or insolvency of,

our suppliers and customers; our substantial leverage; interest rate risk arising from our

variable rate indebtedness; the highly competitive automotive parts industry and its

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

largest customers; loss of market share by domestic vehicle manufacturers; limitations

on flexibility in operating our business contained in our debt agreements; fluctuations in

foreign exchange rates; the possibility that our owners' interests will conflict with ours;

work stoppages or other labor issues and other risks and uncertainties set forth under

"Risk Factors" 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.

# # #

7

A1

TRW Automotive Holdings Corp.

Index of Condensed Consolidated Financial Information Page

Consolidated Statements of Operations (unaudited) for the three months ended July 1, 2005 and June 25, 2004........................................................A2 Consolidated Statements of Operations (unaudited) for the six months ended July 1, 2005 and June 25, 2004 ...........................................................A3 Consolidated Balance Sheets as of July 1, 2005 (unaudited) and December 31, 2004...............................................................A4 Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended July 1, 2005 and June 25, 2004 ...........................................................A5 Reconciliation of GAAP Net Earnings to EBITDA (unaudited) for the three and six months ended July 1, 2005 and June 25, 2004 ...........................................A6 The accompanying unaudited consolidated financial information and reconciliation of GAAP net earnings to earnings before interest, income tax, accounts receivable securitization cost, loss on retirement of debt, and depreciation and amortization (“EBITDA”) should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2004 and Form 10-Q for the quarterly period ended April 1, 2005 as filed with the United States Securities and Exchange Commission on February 23, 2005 and May 5, 2005, respectively.

A2


Consolidated Statements of Operations(Unaudited)

Three Months Ended July 1, 2005 June 25, 2004 (In millions, except per share amounts)

Sales ......................................................................................... $ 3,365 $ 3,163 Cost of sales ............................................................................. 2,959 2,783 Gross profit........................................................................ 406 380 Administrative and selling expenses........................................ 126 132 Research and development expenses ....................................... 52 42 Amortization of intangible assets............................................. 8 8 Restructuring charges............................................................... 13 8 Other (income) expense — net ................................................ 9 (12) Operating income .............................................................. 198 202 Interest expense — net............................................................. 54 60 Loss on retirement of debt ....................................................... 7 1 Accounts receivable securitization costs.................................. 1 — Earnings before income taxes .......................................... 136 141 Income tax expense.................................................................. 51 65 Net earnings...................................................................... $ 85 $ 76 Basic earnings per share: Earnings per share.................................................................. $ 0.86 $ 0.77 Weighted average shares........................................................ 99.0 98.9 Diluted earnings per share: Earnings per share.................................................................. $ 0.83 $ 0.75 Weighted average shares........................................................ 102.2 101.3

A3


Consolidated Statements of Operations(Unaudited)

Six Months Ended July 1, 2005 June 25, 2004 (In millions, except per share amounts)

Sales ......................................................................................... $ 6,590 $ 6,086 Cost of sales ............................................................................. 5,820 5,381 Gross profit........................................................................ 770 705 Administrative and selling expenses........................................ 262 257 Research and development expenses ....................................... 106 79 Amortization of intangible assets............................................. 16 17 Restructuring charges............................................................... 21 13 Other (income) expense — net ................................................ 12 (16) Operating income .............................................................. 353 355 Interest expense — net............................................................. 112 122 Loss on retirement of debt ....................................................... 7 48 Accounts receivable securitization costs.................................. 2 1 Earnings before income taxes .......................................... 232 184 Income tax expense.................................................................. 97 106 Net earnings...................................................................... $ 135 $ 78 Basic earnings per share: Earnings per share.................................................................. $ 1.36 $ 0.81 Weighted average shares........................................................ 99.0 96.6 Diluted earnings per share: Earnings per share.................................................................. $ 1.33 $ 0.78 Weighted average shares........................................................ 101.6 99.5

A4


Consolidated Balance Sheets As of

July 1, 2005 December 31, 2004 (Unaudited) (Dollars in millions)

Assets Current assets: Cash and cash equivalents......................................................................... $ 506 $ 790 Marketable securities ................................................................................ 13 19 Accounts receivable — net ....................................................................... 1,946 1,813 Inventories................................................................................................. 627 684 Prepaid expenses ....................................................................................... 77 34 Deferred income taxes .............................................................................. 168 176 Total current assets ..................................................................................... 3,337 3,516 Property, plant and equipment — net ......................................................... 2,423 2,635 Goodwill ..................................................................................................... 2,357 2,357 Intangible assets — net ............................................................................... 749 765 Prepaid pension cost ................................................................................... 204 190 Deferred income taxes ................................................................................ 115 91 Other assets ................................................................................................. 556 560

Total assets .............................................................................................. $ 9,741 $ 10,114

Liabilities, Minority Interests and Stockholders’ Equity Current liabilities: Short-term debt ......................................................................................... $ 37 $ 40 Current portion of long-term debt............................................................. 18 19 Trade accounts payable............................................................................. 1,775 1,887 Accrued compensation.............................................................................. 294 309 Income taxes payable................................................................................ 271 233 Other current liabilities ............................................................................. 1,049 992 Total current liabilities ................................................................................ 3,444 3,480 Long-term debt............................................................................................ 2,790 3,122 Post-retirement benefits other than pensions .............................................. 941 959 Pension benefits .......................................................................................... 775 843 Deferred income taxes ................................................................................ 254 268 Long-term liabilities.................................................................................... 268 272

Total liabilities......................................................................................... 8,472 8,944 Minority interests ........................................................................................ 62 65 Commitments and contingencies Stockholders’ equity: Capital stock.............................................................................................. 1 1 Treasury stock........................................................................................... — — Paid-in-capital ........................................................................................... 1,134 1,131 Retained earnings (accumulated deficit)................................................... 63 (72) Accumulated other comprehensive earnings ............................................ 9 45 Total stockholders’ equity........................................................................... 1,207 1,105

Total liabilities, minority interests, and stockholders’ equity.................. $ 9,741 $ 10,114

A5


Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended July 1, 2005 June 25, 2004

(Dollars in millions)

Operating Activities Net earnings ................................................................................................ $ 135 $ 78 Adjustments to reconcile net earnings to net cash used in operating activities:

Depreciation and amortization 254 246 Other — net ............................................................................................ (38) 55

Changes in assets and liabilities, net of effects of businesses acquired or divested................................................................................................. (139)

(351)

Net cash provided by operating activities .............................................. 212 28 Investing Activities Capital expenditures.................................................................................... (174) (162) Acquisitions, net of cash acquired .............................................................. — (5) Net proceeds from asset sales and divestitures ........................................... — 108

Net cash used in investing activities ................................................. (174) (59) Financing Activities Change in short-term debt........................................................................... (2) 4 Proceeds from issuance of long-term debt .................................................. 1,313 1,268 Redemption of long-term debt .................................................................... (1,598) (1,852) Debt issue costs........................................................................................... (4) (7) Issuance of capital stock, net of fees........................................................... 143 635 Repurchase of capital stock ........................................................................ (143) (319) Proceeds from exercise of stock options..................................................... 1 —

Net cash used in financing activities ................................................. (290) (271) Effect of exchange rate changes on cash .................................................... (32) (7) Decrease in cash and cash equivalents........................................................ (284) (309) Cash and cash equivalents at beginning of period ...................................... 790 828 Cash and cash equivalents at end of period ................................................ $ 506 $ 519


Reconciliation of GAAP Net Earnings to 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, 2004 and Form 10-Q for the quarterly period ended April 1, 2005, which contain summary historical data. The EBITDA measure calculated in the following schedule is a measure used by management to evaluate operating performance. Management believes that EBITDA is 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. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies.

Three Months Ended (Dollars in millions) July 1, 2005 June 25, 2004 GAAP net earnings .............................................................. $ 85 $ 76

Income tax expense ......................................................... 51 65 Interest expense, net of interest income .......................... 54 60 Accounts receivable securitization costs ......................... 1 — Loss on retirement of debt............................................... 7 1 Depreciation and amortization ........................................ 126 123

EBITDA ................................................................................ $ 324 $ 325

Six Months Ended (Dollars in millions) July 1, 2005 June 25, 2004 GAAP net earnings .............................................................. $ 135 $ 78

Income tax expense ......................................................... 97 106 Interest expense, net of interest income .......................... 112 122 Accounts receivable securitization costs ......................... 2 1 Loss on retirement of debt............................................... 7 48 Depreciation and amortization ........................................ 254 246

EBITDA ................................................................................ $ 607 $ 601

A6


2005 Second Quarter Financial Results Conference Call

August 2, 2005

“The Global Leader in Automotive Safety Systems”

IntroductionPatrick StobbDirector, Investor Relations

First Quarter SummaryJohn C. PlantPresident and Chief Executive Officer

P2© TRW Automotive Holdings Corp.2005

Safe Harbor StatementThis material contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those contained in forward-looking statements made in this release. Such risks, uncertainties and other important factors which could cause our actual results to differ materially from those contained in our forward-looking statements are set forth in our Report on Form 10-K for the fiscal year ended December 31, 2004 (the “10-K”), and our report on Form 10-Q for the quarter ended April 1, 2005, and include: possible production cuts from our customers; escalating pricing pressures from our customers; severe inflationary pressures impacting the market for ferrous metals and other commodities; our substantial leverage; non-performance by, or insolvency of, our suppliers and customers; interest rate risk arising from our variable rate indebtedness; the highly competitive automotive parts industry and its cyclicality; product liability and warranty and recall claims; our dependence on our largest customers; loss of market share by domestic vehicle manufacturers; limitations on flexibility in operating our business contained in our debt agreements; fluctuations in foreign exchange rates; the possibility that our owners' interests will conflict with ours; work stoppages or other labor issues and other risks and uncertainties set forth under "Risk Factors"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.


Second Quarter Summary Comments

• Solid set of financial results – Company demonstrated financial and operational resiliency in a difficult industry environment

• Results above previously provided guidance level resulting from:– Timing of restructuring expense related to Burgos, Spain closure– Impact of a one-time tax benefit– Strength of operating results

• Challenges expected to increase as European market softens – expected to negatively affect second half results

• Sustained industry pressures at this magnitude producing major long term challenges causing the Company to:– Reevaluate all aspects of business to identify and achieve offsetting cost

reduction actions– Increase level of restructuring in order to maintain market leadership

positions


• Sales of $3.4 billion dollars, an increase of 6% from the prior year period– New product sales – Currency translation– North American industry production– Customer pricing

• Net earnings of $85 million, or $0.83 per diluted share, which includes:– One-time favorable tax benefit of $17 million– Loss on retirement of debt of $7 million

• Net earnings excluding these items were $75 million or $0.73 per diluted share(1)

• Net debt of $2.3 billion at quarter end, down $153 million from the end of the first quarter(2)

Second Quarter Financial Highlights

(1) Assumes 102.2 million diluted shares(2) 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 P21 of this presentation.

++

--++

--


Second Quarter Business Developments

• Steady pace of new business awards in the quarter:– Total awards in line with business plan objectives– Awards evenly distributed among products, with no particular

emphasis in any one product or technology– Loss of Rover business a negative factor

• Received 2005 World Traffic Symposium Award in recognition of our leadership in automotive safety:– Recognizes our efforts corresponding with the design, development

and production of the widest and most comprehensive array of safety products in the industry

• Increased footprint in Asia with the expansion of Anting, China facility and new joint venture with the China South Group


Second Quarter Business Developments (Cont.)

• High level of cost reduction activities continue:– Accelerated cost reduction efforts prompted by difficult industry

conditions– Pushing forward with an elevated level of projects, workshops and

actions under our Six Sigma and Operations Excellence programs– Announced planned closures of Fremont, Ohio and Cookeville,

Tennessee plants– Closed Burgos facility in late July

• Commodity inflation update:– Higher pricing for steel, resins and textiles continue to have a

significant financial impact on the bottom line– Expect 2005 net incremental impact in excess of 2004 level– Maintain cautious view on our ability to continually offset

inflationary pressures in 2005 and beyond


2005 Operating Environment

• Anticipate second half production in North America to hold at expected levels

• Expect full year Big 3 production will be down 5% year-to-year

• Europe production weakening, especially Western Europe

• European production estimate now below 20 million units

• Foreign currency translation will likely weigh on our results as USD maintains strength

• Plan to offset a major share of weaker second half environment with new business growth and aggressive cost reduction efforts

2005 Production Assumptions(1)

(units in millions)

19.9

10.8

15.7

20.2

11.4

15.8

19.2

11.9

15.9

Europe

NorthAmerica

Big 3

NorthAmerica

‘04

‘05

‘03

‘04

‘05

‘03

‘04

‘05

‘03

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


2005 Full Year Outlook

• Sales in the range of $12.5 to $12.9 billion

• Earnings per diluted share of $1.60 to $1.80(1)

– Includes full year restructuring costs of $70 million, an increase over prior guidance level of $55 million

– Also includes one-time tax benefit of $17 million and loss on retirement of debt of $7 million

• Earnings excluding one-time tax benefit and loss on retirement of debt in the range of $1.50 to $1.70 per diluted share, unchanged from previous guidance(1)

(1) Per share amounts based on weighted average diluted shares outstanding of approximately 102.6 million diluted shares.


Financial OverviewJoseph S. CantieExecutive Vice President and Chief Financial Officer


Financial Overview

• Second quarter and first half 2005 financial summary

• Capital structure– Net debt– Cash flow and liquidity– Partial bond redemption transaction

• Initial Q3 2005 outlook

• Analyst Q&A


Adjusting AdjustedQ2 2005 Items Q2 2005 Q2 2004

Sales 3,365$ -$ 3,365$ 3,163$ Operating Income 198 - 198 202 Net Interest and Securitization 55 - 55 60 Loss on Retirement of Debt 7 (7) - 1 Income Taxes 51 17 68 65

Net Earnings 85$ (10)$ 75$ 76$ Earnings Per Diluted Share 0.83$ 0.73$ 0.75$

Effective Tax Rate 38% 48% 46%Diluted Shares 102.2 102.2 101.3

Second Quarter 2005 Results(dollars in millions)

(a)

(b)

Adjusting Items(a) $7 million for premiums and associated fees related to a bond redemption transaction(b) $17 million one-time net tax benefit from a tax law change in Poland


Second Quarter EBITDA Summary(dollars in millions)

Q2 2005 Q2 2004

Net Earnings 85$ 76$ Income Tax Expense 51 65 Net Interest and Securitization 55 60

Loss on Retirement of Debt 7 1

Operating Income 198$ 202$

Depreciation and Amortization 126 123

EBITDA(1) 324$ 325$

(1) Please refer to slide P20 for management’s rationalization in using this metric.


Adjusted AdjustedFirst Half Adjustin First Half First Half Adjustin First Half

2005 Items 2005 2004 Items 2004

Sales 6,590$ -$ 6,590$ 6,086$ -$ 6,086$

Operating Income 353 - 353 355 - 355

Net Interest and Securitization 114 - 114 123 - 123

Loss on Retirement of Debt 7 (7) - 48 (48) -

Income Taxes 97 17 114 106 - 106

Net Earnings 135$ (10)$ 125$ 78$ 48$ 126$

Earnings Per Diluted Share 1.33$ 1.23$ 0.78$ 1.27$

Effective Tax Rate 42% 48% 58% 46%Diluted Shares 101.6 101.6 99.5 99.5

First Half 2005 Results(dollars in millions)

(c)(a)

(b)

Adjusting Items(a) $7 million of premiums and associated fees related to bond redemption transaction(b) $17 million one-time tax benefit from a tax law change in Poland(c) $48 million related to the initial public offering and a bank debt refinancing transaction


First Half EBITDA Summary(dollars in millions)

First Half First Half2005 2004

Net Earnings 135$ 78$ Income Tax Expense 97 106 Net Interest and Securitization 114 123

Loss on Retirement of Debt 7 48

Operating Income 353$ 355$

Depreciation and Amortization 254 246

EBITDA(1) 607$ 601$

(1) Please refer to slide P20 for management’s rationalization in using this metric.


Capital Structure((dollars in millions)

Net Debt Summary(1)

$3,089 $2,923 $2,582 $2,456 $2,304 $2,368 $2,372 $2,479 $2,326

$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

Dec 31,2004

Apr 1,2005

July 1,2005

Net Debt Operating Co. PIK Seller Note

(1) Net debt is equal to total indebtedness (including receivables facility) minus cash, cash equivalents and marketable securities. For net debt reconciliation to closest GAAP equivalent, please refer to the reconciliation on slide P21 of this presentation.


Capital Structure

• Q2 net cash provided by operations of $263 million

• Second quarter capital expenditures of $91 million, which compares to $95 million in the prior year period

• In excess of $1 billion in available liquidity at quarter-end

• Completed partial bond redemption of Euro denominated 10-⅛%senior notes, equivalent to $63 million of debt (USD)– Good NPV positive transaction– Demonstrates focus on improving capital structure


Third Quarter 2005 Outlook

• Difficult industry conditions expected to continue through the remainder of the year

• Expect sales of $2.9 billion

• Results in the range of a loss of $(0.08) per share to earnings per diluted share of $0.05 (1)

• Earnings range includes approximately $30 million of net pre-tax restructuring costs, primarily related to Burgos, Spain plant closure

(1) Per share amounts based on weighted average diluted shares outstanding of approximately 103.5 million diluted shares.


EBITDA Measurement• The accompanying unaudited consolidated financial information and reconciliation

of GAAP net earnings to earnings before interest, income tax, accounts receivable securitization cost, loss on retirement of debt, and depreciation and amortization (“EBITDA”) should be read in conjunction with the TRW Automotive Holdings Corp. Form 10-K for the year ended December 31, 2004 and Form 10-Q for the quarterly period ended April 1, 2005 as filed with the United States Securities and Exchange Commission on February 23, 2005 and May 5, 2005, respectively.

• The EBITDA measure calculated in this presentation 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. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies.


Net Debt Reconciliation((dollars in millions)

3/1/03 9/26/03 12/31/03 3/26/04 6/25/04 9/24/04 12/31/04 4/1/05 7/1/05Cash 449$ 399$ 828$ 449$ 519$ 438$ 790$ 435$ 506$ Marketable securities 26 16 16 16 15 16 19 16 13

Total 475 415 844 465 534 454 809 451 519

Short term debt 168 54 76 66 65 27 40 38 37

Long term debt:Term loan facilities 1,510 1,469 1,480 1,263 1,211 1,209 1,512 1,298 1,296 Senior notes 1,142 1,155 1,178 1,049 1,017 1,044 1,063 1,042 981 Senior subordinated notes 435 444 458 294 294 295 306 300 293 Lucas Varity senior notes 167 175 189 190 192 189 202 198 187 Other borrowings 142 41 45 59 59 58 58 54 51 Total Short & Long Term Debt 3,564 3,338 3,426 2,921 2,838 2,822 3,181 2,930 2,845

Net debt operating company 3,089$ 2,923$ 2,582$ 2,456$ 2,304$ 2,368$ 2,372$ 2,479$ 2,326$ Seller note 348 372 382 393 405 417 - - - Net debt TRW Holdings 3,437$ 3,295$ 2,964$ 2,849$ 2,709$ 2,785$ 2,372$ 2,479$ 2,326$

Period-End Balances


2005 q2 trw auto earnings presentation

Economy & Finance