30th October 2007 - TRW Reports Third Quarter 2007 Financial Results

TRW Automotive Holdings, the global leader in active and passive safety systems, today reported third-quarter 2007 financial results with sales of $3.5 billion, an increase of 16 percent compared to the same period a year ago. The Company reported third quarter net earnings of $23 million or $0.22 per diluted share, which compares to net earnings of $5 million or $0.05 per diluted share in the prior year period.

"The growing market demand for our advanced active and passive safety products is helping to drive our solid 2007 financial performance," said John Plant, president and chief executive officer. "We have seen a 16 percent increase in total sales related to electronic stability control, electric park brake, electrically powered steering, tire pressure monitoring and side and curtain airbag systems during the first nine months of the year. In addition to the success of these products, we continue to derive significant benefits from the diversity of having nearly 70 percent of sales outside the challenging North American market, aggressive cost reduction efforts and interest savings attributable to our 2007 debt recapitalization."

Mr. Plant added, "Safety continues to be a major focus of manufacturers and governments seeking to reduce driving related injuries and fatalities, and of consumers who want their vehicles equipped with technology that can help protect their families. As the global leader in safety with the most comprehensive portfolio of products on the market, we are at the forefront of development and are recognized as a solution provider, especially when it comes to integrated products that encompass both active and passive safety technologies."

Third Quarter 2007

The Company reported third-quarter 2007 sales of $3.5 billion, an increase of $480 million or 16 percent over the prior year period. The 2007 quarter benefited from higher customer vehicle production in Europe and China, continued growth of safety products in all markets (including a higher mix of lower margin modules) and the positive effect of foreign currency translation. These positive factors were partially offset by price reductions provided to customers.

Operating income for third-quarter 2007 was $95 million, which compares favorably to $82 million in the prior year period. Restructuring and asset impairment expenses in the 2007 period were $13 million, which compares to $3 million in 2006. Excluding these expenses from both periods, operating income was $108 million in 2007, which represents an increase of 27 percent compared to the 2006 adjusted result. The year-to-year increase was driven primarily by higher product volumes and savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs. These positive factors were in part offset by pricing provided to customers and higher commodity costs.

Net interest and securitization expense for the third quarter of 2007 totaled $56 million, which compares to $62 million in the prior year. The year-to-year decline can be attributed to the benefits derived from the Company's 2007 debt recapitalization, which was completed during the second quarter of this year.

Tax expense was $18 million in both 2007 and 2006. The effective tax rate in the 2007 quarter was 44 percent, which compares favorably to 78 percent in the prior year primarily due to a change in the Company's geographical earnings mix.

The Company reported third-quarter 2007 net earnings of $23 million, or $0.22 per diluted share, which compares to $5 million or $0.05 per diluted share in the 2006 period.

Earnings before interest, securitization costs, loss on retirement of debt (where applicable), taxes, depreciation and amortization, or EBITDA, were $237 million in the third quarter, which compares to the prior year level of $213 million.

Year-to-Date 2007

For the nine-month period ended September 28, 2007, the Company reported sales of $10.8 billion, an increase of $944 million or approximately 10 percent compared to prior year sales of $9.9 billion. The 2007 period benefited primarily from higher product volumes related to new product growth, robust industry sales in overseas markets and the positive effect of foreign currency translation. These positive factors were partially offset by the decline in North American customer vehicle production and price reductions provided to customers.

Operating income for the 2007 year-to-date period was $475 million, which compares to $510 million in the prior year. The lower level of income can be attributed primarily to the first quarter, in which operating income declined $52 million. The significant decline in the first quarter resulted primarily from a weak industry production environment and an adverse mix of products sold, together with other issues, including underperformance in the Automotive Components segment. Helping to offset the first quarter decline, the Company reported year-to-year improvements in operating income in both the second and third quarters primarily due to savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs, higher product volumes and other positive items. These factors more than offset pricing provided to customers and higher commodity costs. Restructuring and asset impairment expenses in the nine-month year-to-date 2007 period were $32 million, which compares to $22 million in 2006.

Net interest and securitization expense for the first nine months of 2007 was $177 million, which represents a decrease from the prior year result of $184 million. Benefits derived from the Company's 2007 debt recapitalization more than offset the unfavorable impact of higher interest rates between the two periods.

As a reminder, actions related to the debt recapitalization included a $1.5 billion Senior Note offering, the tender for substantially all of the Company's outstanding $1.3 billion Notes and the refinancing of its $2.5 billion credit facilities. The Company incurred expenses of $155 million in the 2007 period related to these transactions. In the 2006 period, the Company incurred charges of $57 million also related to debt retirement.

Tax expense in the first nine months of 2007 was $116 million, resulting in an effective tax rate of 77 percent, which compares to $134 million or 48 percent in the prior year. The effective tax rate excluding previously mentioned debt retirement expenses from both periods was 38 percent in 2007, which compares to 40 percent in 2006.

Year-to-date 2007 net earnings were $34 million, or $0.33 per diluted share, which compares to $143 million or $1.38 per diluted share in the 2006 period. Net earnings excluding the previously mentioned debt retirement costs from both periods were $189 million or $1.84 per diluted share in 2007, which compares to $200 million or $1.93 per diluted share in 2006.

EBITDA for the first nine months of 2007 was $890 million, which is lower than the prior year level of $899 million, primarily due to the lower level of operating income in the current year.

Cash Flow and Capital Structure

Third quarter net cash flow from operating activities was a use of $(158) million, which included the pay down of $127 million of outstanding borrowings under the Company's U.S. based Accounts Receivable Securitization Facility ("Receivable Facility"). As previously reported, the Company's second quarter 2007 cash flow benefited from proceeds related to borrowings under the Receivable Facility in the same amount. Third quarter net cash flow excluding the pay down of the Receivable Facility was a use of $(31) million, which compares to a source of $1 million in the prior year. Third quarter capital expenditures were $111 million compared to $132 million in 2006.

For the nine-month period ended September 28, 2007, net cash flow from operating activities was a use of $(89) million, which compares to a source of $252 million in the prior year. The year-to-year comparison was negatively impacted by higher working capital needs in the 2007 period and a higher level of business in Europe and Asia where net payment terms are presently less favorable than in North America. Year-to-date capital expenditures were $339 million compared to $334 million in 2006.

As mentioned previously, the Company completed its debt recapitalization plan during the second quarter of 2007. Transactions related to the plan included the refinancing of the Company's $2.5 billion credit facilities on May 9, 2007. Prior to this transaction, on March 26, 2007, the Company completed its $1.5 billion Senior Note offering and repurchased substantially all of the existing $1.3 billion Notes through a tender offer. The Company incurred debt retirement charges of approximately $155 million during the year-to-date period related to these transactions.

On February 2, 2006, the Company's wholly owned subsidiary, Lucas Industries Limited, completed the tender for its outstanding GBP 94.6 million 10 7/8% bonds. As a result of the transaction, the Company incurred a $57 million charge for loss on retirement of debt.

As of September 28, 2007, the Company had $3,515 million of debt and $486 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $3,029 million. This net debt outcome, excluding the previously mentioned Receivable Facility repayment, is $144 million higher than the balance at the end of the second quarter primarily due to the seasonal cash outflow in the third quarter.

2007 Outlook

With nine months of results reported, the Company refined its full year 2007 outlook, which now calls for sales of approximately $14.5 billion (including fourth quarter sales of $3.7 billion). The Company narrowed its estimates for net earnings per diluted share to be in the range of $0.60 to $0.80. Net earnings excluding debt retirement expenses of $155 million are expected to be in the range of $2.10 to $2.30.

This guidance range reflects pre-tax restructuring expenses of approximately $45 million (including approximately $13 million in the fourth quarter). The effective tax rate after excluding debt retirement costs is expected to be in the range of approximately 40 to 42 percent. Lastly, the Company expects capital expenditures in 2007 to be slightly below 4 percent of sales.

About TRW

With 2006 sales of $13.1 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 28 countries and employs approximately 63,800 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.

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, 2006 (the "10-K") and on Form 10-Q for the quarters ended March 30 and June 29, 2007, and include: production cuts or restructuring by our major customers; work stoppages or other labor issues at the facilities of our customers or suppliers; non-performance by, or insolvency of, our suppliers and customers, which may be exacerbated by bankruptcies and other pressures within the automotive industry; the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; interest rate risk arising from our variable rate indebtedness; loss of market share by domestic vehicle manufacturers; efforts by our customers to consolidate their supply base; severe inflationary pressures impacting the market for commodities; escalating pricing pressures from our customers; our dependence on our largest customers; fluctuations in foreign exchange rates; our substantial leverage; product liability and warranty and recall claims and efforts by customers to alter terms and conditions concerning warranty and recall participation; limitations on flexibility in operating our business contained in our debt agreements; the possibility that our owners' interests will conflict with ours 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.