##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549-1004





FORM 10-Q


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended March 31, 2006                                               
|  
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to           .                                 

Commission File No. 001-31970





TRW Automotive Holdings Corp.


(Exact name of registrant as specified in its charter)


|                                                                           |  |                                                      
|-------------------------------------------------------------------------- |  | -----------------------------------------------------
|Delaware(State or other jurisdiction of
    Incorporation or Organization) |  | 81-0597059(I.R.S. Employer
    Identification Number)

12001 Tech Center Drive


Livonia, Michigan 48150


(734) 855-2600


(Address, Including Zip Code, and Telephone Number, Including
Area Code, of


Registrants Principal Executive Offices)


þ o


12b-2


þ o o


12b-2 o þ












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##### 










TRW AUTOMOTIVE HOLDINGS CORP.


INDEX


|                                                                                                      |  |      |    | 
|----------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                      |  | Page |   
|                                                                                                      |  |      |   
|PART I  FINANCIAL
    INFORMATION                                                                   
|                                                                                                     
|Item 1. CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                   |  |      | 2  | 
|                                                                                                     
|Item 2. MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS |  |      | 21 | 
|                                                                                                     
|Item 3. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                |  |      | 35 | 
|                                                                                                     
|Item 4. CONTROLS AND
    PROCEDURES                                                                   |  |      | 36 | 
|PART II  OTHER
    INFORMATION                                                                      
|                                                                                                     
|Item 1. LEGAL
    PROCEEDINGS                                                                         |  |      | 37 | 
|                                                                                                     
|Item 1A. RISK FACTORS                                                                                 |  |      | 37 | 
|                                                                                                     
|Item 2. UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                               |  |      | 37 | 
|                                                                                                     
|Item 6. EXHIBITS                                                                                      |  |      | 37 | 
|                                                                                                     
|SIGNATURES                                                                                            |  |      | 38 | 
|Certification Pursuant to Rule 13a-14(a) Section 302                                                 
|Certification Pursuant to Rule 13a-14(a) Section 302                                                 
|Certification Pursuant to 18 U.S.C. Section 1350                                                     
|Certification Pursuant to 18 U.S.C. Section 1350                                                     



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##### Table of Contents






PART I  FINANCIAL INFORMATION







|        |                                            
|------- | -------------------------------------------
|Item 1. | Condensed Consolidated Financial Statements

TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                             |                              |                          |       |       |          |   |       |       | 
|-------------------------------------------- | ---------------------------- | ------------------------ | ----- | ----- | -------- | - | ----- | ----- | 
|                                             |                              | Three Months Ended       |      
|                                             |                              |                          |      
|                                             |                              | March 31,                |       |       | April 1, |  
|                                             |                              | 2006                     |       |       | 2005     |  
|                                             |                              |                          |       |       |          |  
|                                             |                              | (Unaudited)              |      
|                                             |                              | (In millions, except per |      
|                                             |                              | share amounts)           |      
|Sales                                        |                              | $                        | 3,396 |       |          | $ | 3,225 |      
|Cost of sales                                |                              |                          | 3,039 |       |          |   | 2,915 |      
|                                             |                              |                          |       |       |          |  
|                                             | Gross profit                 |                          |       | 357   |          |   |       | 310   | 
|Administrative and selling expenses          |                              |                          | 129   |       |          |   | 136   |      
|Amortization of intangible assets            |                              |                          | 9     |       |          |   | 8     |      
|Restructuring charges and asset impairments  |                              |                          | 8     |       |          |   | 8     |      
|Other (income) expense  net                 |                              |                          | (16   | )     |          |   | 6     |      
|                                             |                              |                          |       |       |          |  
|                                             | Operating income             |                          |       | 227   |          |   |       | 152   | 
|Interest expense  net                       |                              |                          | 60    |       |          |   | 58    |      
|Loss on retirement of debt                   |                              |                          | 57    |       |          |   |      |      
|Accounts receivable securitization costs     |                              |                          | 1     |       |          |   | 1     |      
|Equity in earnings of affiliates, net of tax |                              |                          | (4    | )     |          |   | (5    | )    
|Minority interest, net of tax                |                              |                          | 3     |       |          |   | 2     |      
|                                             |                              |                          |       |       |          |  
|                                             | Earnings before income taxes |                          |       | 110   |          |   |       | 96    | 
|Income tax expense                           |                              |                          | 63    |       |          |   | 46    |      
|                                             |                              |                          |       |       |          |  
|                                             | Net earnings                 |                          | $     | 47    |          |   | $     | 50    | 
|                                             |                              |                          |       |       |          |  
|Basic earnings per share:                    |                              |                          |       |       |          |   |       |      
|                                             | Earnings per share           |                          | $     | 0.47  |          |   | $     | 0.51  | 
|                                             |                              |                          |       |       |          |  
|                                             | Weighted average shares      |                          |       | 99.5  |          |   |       | 99.0  | 
|                                             |                              |                          |       |       |          |  
|Diluted earnings per share:                  |                              |                          |       |       |          |   |       |      
|                                             | Earnings per share           |                          | $     | 0.46  |          |   | $     | 0.50  | 
|                                             |                              |                          |       |       |          |  
|                                             | Weighted average shares      |                          |       | 103.0 |          |   |       | 101.0 | 
|                                             |                              |                          |       |       |          |  



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TRW AUTOMOTIVE HOLDINGS CORP.


CONDENSED CONSOLIDATED BALANCE SHEETS


|                                                                                                                           |                                                                     |                       |       |        |              |  |       |        |  
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | --------------------- | ----- | ------ | ------------ |  | ----- | ------ | -
|                                                                                                                           |                                                                     | As of                 |      
|                                                                                                                           |                                                                     |                       |      
|                                                                                                                           |                                                                     | March 31,             |       |        | December 31, | 
|                                                                                                                           |                                                                     | 2006                  |       |        | 2005         | 
|                                                                                                                           |                                                                     |                       |       |        |              | 
|                                                                                                                           |                                                                     | (Unaudited)           |       |        |             
|                                                                                                                           |                                                                     | (Dollars in millions) |      
|Assets                                                                                                                    
|Current assets:                                                                                                            |                                                                     |                       |       |        |              |  |       |       
|                                                                                                                           | Cash and cash equivalents                                           |                       | $     | 373    |              |  | $     | 659    |  
|                                                                                                                           | Marketable securities                                               |                       |       | 17     |              |  |       | 17     |  
|                                                                                                                           | Accounts receivable  net                                           |                       |       | 2,203  |              |  |       | 1,948  |  
|                                                                                                                           | Inventories                                                         |                       |       | 709    |              |  |       | 702    |  
|                                                                                                                           | Prepaid expenses and other current assets                           |                       |       | 278    |              |  |       | 273    |  
|                                                                                                                           |                                                                     |                       |       |        |              | 
|Total current assets                                                                                                       |                                                                     |                       | 3,580 |        |              |  | 3,599 |       
|                                                                                                                          
|Property, plant and equipment  net of accumulated
    depreciation of $1,302 million and $1,147 million,
    respectively |                                                                     |                       | 2,532 |        |              |  | 2,538 |       
|Goodwill                                                                                                                   |                                                                     |                       | 2,297 |        |              |  | 2,293 |       
|Intangible assets  net                                                                                                    |                                                                     |                       | 761   |        |              |  | 769   |       
|Prepaid pension cost                                                                                                       |                                                                     |                       | 235   |        |              |  | 222   |       
|Other assets                                                                                                               |                                                                     |                       | 834   |        |              |  | 809   |       
|                                                                                                                           |                                                                     |                       |       |        |              | 
|                                                                                                                           | Total assets                                                        |                       | $     | 10,239 |              |  | $     | 10,230 |  
|                                                                                                                           |                                                                     |                       |       |        |              | 
|                                                                                                                          
|Liabilities, Minority Interests and Stockholders
    Equity                                                              
|Current liabilities:                                                                                                       |                                                                     |                       |       |        |              |  |       |       
|                                                                                                                           | Short-term debt                                                     |                       | $     | 98     |              |  | $     | 98     |  
|                                                                                                                           | Current portion of long-term debt                                   |                       |       | 49     |              |  |       | 37     |  
|                                                                                                                           | Trade accounts payable                                              |                       |       | 1,952  |              |  |       | 1,865  |  
|                                                                                                                           | Accrued compensation                                                |                       |       | 254    |              |  |       | 280    |  
|                                                                                                                           | Other current liabilities                                           |                       |       | 1,358  |              |  |       | 1,310  |  
|                                                                                                                           |                                                                     |                       |       |        |              | 
|Total current liabilities                                                                                                  |                                                                     |                       | 3,711 |        |              |  | 3,590 |       
|                                                                                                                          
|Long-term debt                                                                                                             |                                                                     |                       | 2,899 |        |              |  | 3,101 |       
|Post-retirement benefits other than pensions                                                                               |                                                                     |                       | 909   |        |              |  | 917   |       
|Pension benefits                                                                                                           |                                                                     |                       | 795   |        |              |  | 795   |       
|Other long-term liabilities                                                                                                |                                                                     |                       | 530   |        |              |  | 513   |       
|                                                                                                                           |                                                                     |                       |       |        |              | 
|                                                                                                                           | Total liabilities                                                   |                       |       | 8,844  |              |  |       | 8,916  |  
|Minority interests                                                                                                         |                                                                     |                       | 107   |        |              |  | 106   |       
|Commitments and contingencies                                                                                              |                                                                     |                       |       |        |              |  |       |       
|Stockholders equity:                                                                                                      |                                                                     |                       |       |        |              |  |       |       
|                                                                                                                           | Capital stock                                                       |                       |       | 1      |              |  |       | 1      |  
|                                                                                                                           | Treasury stock                                                      |                       |       |       |              |  |       |       |  
|                                                                                                                           | Paid-in-capital                                                     |                       |       | 1,151  |              |  |       | 1,142  |  
|                                                                                                                           | Retained earnings                                                   |                       |       | 179    |              |  |       | 132    |  
|                                                                                                                           | Accumulated other comprehensive losses                              |                       |       | (43    | )            |  |       | (67    | )
|                                                                                                                           |                                                                     |                       |       |        |              | 
|Total stockholders equity                                                                                                 |                                                                     |                       | 1,288 |        |              |  | 1,208 |       
|                                                                                                                           |                                                                     |                       |       |        |              | 
|                                                                                                                           | Total liabilities, minority interests, and stockholders
    equity |                       | $     | 10,239 |              |  | $     | 10,230 |  
|                                                                                                                           |                                                                     |                       |       |        |              | 



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TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                  |                                                                  |                                                     |      |      |          |   |        |      |      |  
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------------------------------------- | ---- | ---- | -------- | - | ------ | ---- | ---- | -
|                                                                                                  |                                                                  | Three Months Ended                                  |     
|                                                                                                  |                                                                  |                                                     |     
|                                                                                                  |                                                                  | March 31,                                           |      |      | April 1, |  
|                                                                                                  |                                                                  | 2006                                                |      |      | 2005     |  
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|                                                                                                  |                                                                  | (Unaudited)                                         |     
|                                                                                                  |                                                                  | (Dollars in millions)                               |     
|Operating Activities                                                                              |                                                                  |                                                     |      |      |          |   |        |     
|Net earnings                                                                                      |                                                                  | $                                                   | 47   |      |          | $ | 50     |     
|Adjustments to reconcile net earnings to net cash provided by
    (used in) operating activities: |                                                                  |                                                     |      |      |          |   |        |     
|                                                                                                  | Depreciation and amortization                                    |                                                     |      | 132  |          |   |        | 128  |     
|                                                                                                  | Pension and other post-retirement benefits, net of contributions |                                                     |      | (33  | )        |   |        | (29  | )   
|                                                                                                  | Net gain on sale of assets                                       |                                                     |      | (2   | )        |   |        |     |     
|                                                                                                  | Amortization of deferred financing fees                          |                                                     |      | 2    |          |   |        | 5    |     
|                                                                                                  | Loss on retirement of debt                                       |                                                     |      | 57   |          |   |        |     |     
|                                                                                                  | Asset impairment charges                                         |                                                     |      | 1    |          |   |        |     |     
|                                                                                                  | Deferred income taxes                                            |                                                     |      | 2    |          |   |        | (2   | )   
|                                                                                                  | Other  net                                                      |                                                     |      | (16  | )        |   |        | 6    |     
|Changes in assets and liabilities, net of effects of businesses
    acquired:                     |                                                                  |                                                     |      |      |          |   |        |     
|                                                                                                  | Accounts receivable, net                                         |                                                     |      | (213 | )        |   |        | (163 | )   
|                                                                                                  | Inventories                                                      |                                                     |      | 8    |          |   |        | (2   | )   
|                                                                                                  | Trade accounts payable                                           |                                                     |      | 49   |          |   |        | (45  | )   
|                                                                                                  | Prepaid expense and other assets                                 |                                                     |      | (8   | )        |   |        | (19  | )   
|                                                                                                  | Other liabilities                                                |                                                     |      | (8   | )        |   |        | 20   |     
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|                                                                                                  |                                                                  | Net cash provided by (used in) operating activities |      |      | 18       |   |        |      | (51  | )
|Investing Activities                                                                              |                                                                  |                                                     |      |      |          |   |        |     
|Capital expenditures                                                                              |                                                                  |                                                     | (83  | )    |          |   | (83    | )   
|Net proceeds from asset sales and divestitures                                                    |                                                                  |                                                     | 8    |      |          |   |       |     
|Other  net                                                                                       |                                                                  |                                                     | (1   | )    |          |   |       |     
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|                                                                                                  |                                                                  | Net cash used in investing activities               |      |      | (76      | ) |        |      | (83  | )
|Financing Activities                                                                              |                                                                  |                                                     |      |      |          |   |        |     
|Change in short-term debt                                                                         |                                                                  |                                                     | (3   | )    |          |   | (1     | )   
|Proceeds from issuance of long-term debt                                                          |                                                                  |                                                     | 3    |      |          |   | 1,293  |     
|Redemption of long-term debt                                                                      |                                                                  |                                                     | (250 | )    |          |   | (1,506 | )   
|Debt issue costs                                                                                  |                                                                  |                                                     |     |      |          |   | (4     | )   
|Issuance of capital stock, net of fees                                                            |                                                                  |                                                     |     |      |          |   | 143    |     
|Repurchase of capital stock                                                                       |                                                                  |                                                     |     |      |          |   | (143   | )   
|Proceeds from exercise of stock options                                                           |                                                                  |                                                     | 7    |      |          |   |       |     
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|                                                                                                  |                                                                  | Net cash used in financing activities               |      |      | (243     | ) |        |      | (218 | )
|Effect of exchange rate changes on cash                                                           |                                                                  |                                                     | 15   |      |          |   | (3     | )   
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|Decrease in cash and cash equivalents                                                             |                                                                  |                                                     | (286 | )    |          |   | (355   | )   
|Cash and cash equivalents at beginning of period                                                  |                                                                  |                                                     | 659  |      |          |   | 790    |     
|                                                                                                  |                                                                  |                                                     |      |      |          |  
|Cash and cash equivalents at end of period                                                        |                                                                  | $                                                   | 373  |      |          | $ | 435    |     
|                                                                                                  |                                                                  |                                                     |      |      |          |  



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TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




|   |                        
|-- | -----------------------
|1. | Description of Business





|   |                      
|-- | ---------------------
|2. | Basis of Presentation

10-K








Earnings per Share.


|                                    |  |                    |       |  |          |  |       | 
|----------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | 
|                                    |  | Three Months Ended |      
|                                    |  |                    |      
|                                    |  | March 31,          |       |  | April 1, | 
|                                    |  | 2006               |       |  | 2005     | 
|                                    |  |                    |       |  |          | 
|                                    |  | (In millions)      |      
|Weighted average shares outstanding |  |                    | 99.5  |  |          |  | 99.0  | 
|Effect of dilutive securities       |  |                    | 3.5   |  |          |  | 2.0   | 
|                                    |  |                    |       |  |          | 
|Diluted shares outstanding          |  |                    | 103.0 |  |          |  | 101.0 | 
|                                    |  |                    |       |  |          | 

Warranties.


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TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |  |                       |     |         |          |   |          |               |  |            |                  |   |  |         |    |   |  |   |     | 
|--------------------------------- |  | --------------------- | --- | ------- | -------- | - | -------- | ------------- |  | ---------- | ---------------- | - |  | ------- | -- | - |  | - | --- | 
|                                  |  |                       |     |         |          |   |          | Changes in    |  |            |                 
|                                  |  |                       |     |         |          |   |          | Estimates and |  |            |                 
|                                  |  |                       |     | Current |          |   | Used for |               |  | Effects of |                  |   | 
|                                  |  | Beginning             |     |         | Period   |   |          | Purposes      |  |            | Foreign Currency |   |  | Ending  |   
|                                  |  | Balance               |     |         | Accruals |   |          | Intended      |  |            | Translation      |   |  | Balance |   
|                                  |  |                       |     |         |          |   |          |               |  |            |                  |   |  |         |   
|                                  |  | (Dollars in millions) |    
|Three months ended March 31, 2006 |  | $                     | 101 |         |          | $ | 13       |               |  | $          | (6               | ) |  | $       | 3  |   |  | $ | 111 | 
|Three months ended April 1, 2005  |  |                       | 110 |         |          |   | 17       |               |  |            | (9               | ) |  |         | (7 | ) |  |   | 111 | 

Share-based Compensation.






|                                                                                                                |             |                      |    |      |          |   |    |      | 
|--------------------------------------------------------------------------------------------------------------- | ----------- | -------------------- | -- | ---- | -------- | - | -- | ---- | 
|                                                                                                                |             | Three Months Ended   |   
|                                                                                                                |             |                      |   
|                                                                                                                |             | March 31,            |    |      | April 1, |  
|                                                                                                                |             | 2006                 |    |      | 2005     |  
|                                                                                                                |             |                      |    |      |          |  
|                                                                                                                |             | (In millions, except |   
|                                                                                                                |             | per share amounts)   |   
|Net earnings, as reported                                                                                       |             | $                    | 47 |      |          | $ | 50 |     
|Deduct: Stock-based compensation under SFAS No. 123
    fair value
    method, net of related tax effects of $0 |             |                      |   |      |          |   | (2 | )   
|                                                                                                                |             |                      |    |      |          |  
|Adjusted net earnings, fair value method                                                                        |             | $                    | 47 |      |          | $ | 48 |     
|                                                                                                                |             |                      |    |      |          |  
|Basic earnings per share:                                                                                       |             |                      |    |      |          |   |    |     
|                                                                                                                | As reported |                      | $  | 0.47 |          |   | $  | 0.51 | 
|                                                                                                                |             |                      |    |      |          |  
|                                                                                                                | Pro forma   |                      | $  | 0.47 |          |   | $  | 0.49 | 
|                                                                                                                |             |                      |    |      |          |  
|Diluted earnings per share:                                                                                     |             |                      |    |      |          |   |    |     
|                                                                                                                | As reported |                      | $  | 0.46 |          |   | $  | 0.50 | 
|                                                                                                                |             |                      |    |      |          |  
|                                                                                                                | Pro forma   |                      | $  | 0.46 |          |   | $  | 0.48 | 
|                                                                                                                |             |                      |    |      |          |  



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TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Comprehensive Earnings.


|                                                    |  |                       |    |   |          |   |     |  
|--------------------------------------------------- |  | --------------------- | -- | - | -------- | - | --- | -
|                                                    |  | Three Months Ended    |   
|                                                    |  |                       |   
|                                                    |  | March 31,             |    |   | April 1, |  
|                                                    |  | 2006                  |    |   | 2005     |  
|                                                    |  |                       |    |   |          |  
|                                                    |  | (Dollars in millions) |   
|Net earnings                                        |  | $                     | 47 |   |          | $ | 50  |  
|Foreign currency translation earnings (losses), net |  |                       | 33 |   |          |   | (31 | )
|Realized net (losses) gains on cash flow hedges     |  |                       | (9 | ) |          |   | 13  |  
|                                                    |  |                       |    |   |          |  
|Comprehensive earnings                              |  | $                     | 71 |   |          | $ | 32  |  
|                                                    |  |                       |    |   |          |  

Recent Accounting Pronouncements.




05-5). 05-5 05-5




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TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | Restructuring Charges and Asset Impairments



|                                                      |                                                   |                       |   |   |          |   |   |   | 
|----------------------------------------------------- | ------------------------------------------------- | --------------------- | - | - | -------- | - | - | - | 
|                                                      |                                                   | Three Months Ended    |  
|                                                      |                                                   |                       |  
|                                                      |                                                   | March 31,             |   |   | April 1, |  
|                                                      |                                                   | 2006                  |   |   | 2005     |  
|                                                      |                                                   |                       |   |   |          |  
|                                                      |                                                   | (Dollars in millions) |  
|Severance and other charges                           |                                                   | $                     | 7 |   |          | $ | 8 |  
|Asset impairments related to restructuring activities |                                                   |                       | 1 |   |          |   |  |  
|                                                      |                                                   |                       |   |   |          |  
|                                                      | Total restructuring charges and asset impairments |                       | $ | 8 |          |   | $ | 8 | 
|                                                      |                                                   |                       |   |   |          |  



| |                      
| | ---------------------
| | Restructuring charges



|                        |                             |                       |   |   |          |   |   |   | 
|----------------------- | --------------------------- | --------------------- | - | - | -------- | - | - | - | 
|                        |                             | Three Months Ended    |  
|                        |                             |                       |  
|                        |                             | March 31,             |   |   | April 1, |  
|                        |                             | 2006                  |   |   | 2005     |  
|                        |                             |                       |   |   |          |  
|                        |                             | (Dollars in millions) |  
|Chassis Systems         |                             | $                     | 6 |   |          | $ | 4 |  
|Occupant Safety Systems |                             |                       | 2 |   |          |   | 2 |  
|Automotive Components   |                             |                       |  |   |          |   | 2 |  
|                        |                             |                       |   |   |          |  
|                        | Total restructuring charges |                       | $ | 8 |          |   | $ | 8 | 
|                        |                             |                       |   |   |          |  



| |                            
| | ---------------------------
| | Severance and other charges



|                        |                                   |                       |   |   |          |   |   |   | 
|----------------------- | --------------------------------- | --------------------- | - | - | -------- | - | - | - | 
|                        |                                   | Three Months Ended    |  
|                        |                                   |                       |  
|                        |                                   | March 31,             |   |   | April 1, |  
|                        |                                   | 2006                  |   |   | 2005     |  
|                        |                                   |                       |   |   |          |  
|                        |                                   | (Dollars in millions) |  
|Chassis Systems         |                                   | $                     | 6 |   |          | $ | 4 |  
|Occupant Safety Systems |                                   |                       | 1 |   |          |   | 2 |  
|Automotive Components   |                                   |                       |  |   |          |   | 2 |  
|                        |                                   |                       |   |   |          |  
|                        | Total severance and other charges |                       | $ | 7 |          |   | $ | 8 | 
|                        |                                   |                       |   |   |          |  

Chassis Systems.


Occupant Safety Systems.


8



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                       
| | ----------------------
| | Restructuring reserves



|                                  |  |                       |    |         |          |   |          |            |  |            |          |   |          |               |     |   |         |   |    |   |  |   |    | 
|--------------------------------- |  | --------------------- | -- | ------- | -------- | - | -------- | ---------- |  | ---------- | -------- | - | -------- | ------------- | --- | - | ------- | - | -- | - |  | - | -- | 
|                                  |  |                       |    |         |          |   |          |            |  | Effects of |          |   |         
|                                  |  |                       |    |         |          |   |          |            |  | Foreign    |          |   |         
|                                  |  |                       |    | Current |          |   | Purchase |            |  | Used for   |          |   | Currency |               |     |  
|                                  |  | Beginning             |    |         | Period   |   |          | Price      |  |            | Purposes |   |          | Translation   |     |   | Ending  |  
|                                  |  | Balance               |    |         | Accruals |   |          | Allocation |  |            | Intended |   |          | and Transfers |     |   | Balance |  
|                                  |  |                       |    |         |          |   |          |            |  |            |          |   |          |               |     |   |         |  
|                                  |  | (Dollars in millions) |   
|Three months ended March 31, 2006 |  | $                     | 69 |         |          | $ | 7        |            |  | $          | (5       | ) |          | $             | (12 | ) |         | $ | 1  |   |  | $ | 60 | 
|Three months ended April 1, 2005  |  |                       | 49 |         |          |   | 8        |            |  |            |         |   |          |               | (12 | ) |         |   | (4 | ) |  |   | 41 | 







| |                                                          
| | ---------------------------------------------------------
| | Asset impairments related to restructuring
    activities

Occupant Safety Systems.




|   |            
|-- | -----------
|4. | Inventories



|                                      |                   |                       |     |     |              |   |     |     | 
|------------------------------------- | ----------------- | --------------------- | --- | --- | ------------ | - | --- | --- | 
|                                      |                   | As of                 |    
|                                      |                   |                       |    
|                                      |                   | March 31,             |     |     | December 31, |  
|                                      |                   | 2006                  |     |     | 2005         |  
|                                      |                   |                       |     |     |              |  
|                                      |                   | (Dollars in millions) |    
|Finished products and work in process |                   | $                     | 380 |     |              | $ | 374 |    
|Raw materials and supplies            |                   |                       | 329 |     |              |   | 328 |    
|                                      |                   |                       |     |     |              |  
|                                      | Total inventories |                       | $   | 709 |              |   | $   | 702 | 
|                                      |                   |                       |     |     |              |  

9



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                               
|-- | ------------------------------
|5. | Goodwill and Intangible Assets



| |         
| | --------
| | Goodwill



|                                            |  |                       |     |          |         |   |     |            |  |   |       |  |  |   |       | 
|------------------------------------------- |  | --------------------- | --- | -------- | ------- | - | --- | ---------- |  | - | ----- |  |  | - | ----- | 
|                                            |  |                       |     | Occupant |         |   |     |            | 
|                                            |  | Chassis               |     |          | Safety  |   |     | Automotive |  |   |      
|                                            |  | Systems               |     |          | Systems |   |     | Components |  |   |      
|                                            |  | Segment               |     |          | Segment |   |     | Segment    |  |   | Total | 
|                                            |  |                       |     |          |         |   |     |            |  |   |       | 
|                                            |  | (Dollars in millions) |    
|Balance as of December 31, 2005             |  | $                     | 892 |          |         | $ | 928 |            |  | $ | 473   |  |  | $ | 2,293 | 
|Acquisitions and purchase price adjustments |  |                       | 1   |          |         |   | 1   |            |  |   |      |  |  |   | 2     | 
|Effects of foreign currency translation     |  |                       |    |          |         |   | 2   |            |  |   |      |  |  |   | 2     | 
|                                            |  |                       |     |          |         |   |     |            |  |   |       | 
|Balance as of March 31, 2006                |  | $                     | 893 |          |         | $ | 931 |            |  | $ | 473   |  |  | $ | 2,297 | 
|                                            |  |                       |     |          |         |   |     |            |  |   |       | 





| |                  
| | -----------------
| | Intangible assets



|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |   |     |     |   |   |     |     | 
|----------------------------------- | ---------------------- | --------------------- | --- | --- | ----------------------- | - | ---- | -------- | - | ----- | -------- | --- |  | ------------ | --- | --- | -------- | - | --- | --- | - | - | --- | --- | 
|                                    |                        | As of March 31, 2006  |     |     | As of December 31, 2005 |  
|                                    |                        |                       |     |     |                         |  
|                                    |                        | Gross                 |     |     |                         |   | Net  |          |   | Gross |          |     |  |              | Net |    
|                                    |                        | Carrying              |     |     | Accumulated             |   |      | Carrying |   |       | Carrying |     |  | Accumulated  |     |     | Carrying |  
|                                    |                        | Amount                |     |     | Amortization            |   |      | Amount   |   |       | Amount   |     |  | Amortization |     |     | Amount   |  
|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |  
|                                    |                        | (Dollars in millions) |    
|Definite-lived intangible assets:   |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |   |     |     |   |   |     |    
|                                    | Customer relationships |                       | $   | 488 |                         |   | $    | (70      | ) |       | $        | 418 |  |              | $   | 488 |          |   | $   | (64 | ) |   | $   | 424 | 
|                                    | Developed technology   |                       |     | 81  |                         |   |      | (31      | ) |       |          | 50  |  |              |     | 80  |          |   |     | (28 | ) |   |     | 52  | 
|                                    | Non-compete agreements |                       |     | 1   |                         |   |      |         |   |       |          | 1   |  |              |     | 1   |          |   |     |    |   |   |     | 1   | 
|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |  
|Total                               |                        |                       | 570 |     |                         | $ | (101 | )        |   |       | 469      |     |  |              | 569 |     |          | $ | (92 | )   |   |   | 477 |    
|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |  
|Indefinite-lived intangible assets: |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |   |     |     |   |   |     |    
|                                    | Trademarks             |                       |     | 292 |                         |   |      |          |   |       |          | 292 |  |              |     | 292 |          |   |     |     |   |   |     | 292 | 
|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |  
|Total                               |                        | $                     | 862 |     |                         |   |      |          |   | $     | 761      |     |  | $            | 861 |     |          |   |     |     |   | $ | 769 |    
|                                    |                        |                       |     |     |                         |   |      |          |   |       |          |     |  |              |     |     |          |  





|                       |  |                  |          | 
|---------------------- |  | ---------------- | -------- | 
|                       |  | Weighted Average |         
|                       |  | Amortization     |         
|                       |  | Period           |         
|                       |  |                  |         
|Customer relationships |  |                  | 20 years | 
|Developed technology   |  |                  | 8 years  | 
|Non-compete agreements |  |                  | 5 years  | 

10



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |  |                       |    | 
|------------------------ |  | --------------------- | -- | 
|                         |  | Amortization          |   
|Years Ended December 31, |  | Expense               |   
|                         |  |                       |   
|                         |  | (Dollars in millions) |   
|2006                     |  | $                     | 35 | 
|2007                     |  |                       | 35 | 
|2008                     |  |                       | 34 | 
|2009                     |  |                       | 34 | 
|2010                     |  |                       | 34 | 



|   |                             
|-- | ----------------------------
|6. | Other (Income) Expense  Net



|                                         |                              |                       |    |     |          |   |    |   | 
|---------------------------------------- | ---------------------------- | --------------------- | -- | --- | -------- | - | -- | - | 
|                                         |                              | Three Months Ended    |   
|                                         |                              |                       |   
|                                         |                              | March 31,             |    |     | April 1, |  
|                                         |                              | 2006                  |    |     | 2005     |  
|                                         |                              |                       |    |     |          |  
|                                         |                              | (Dollars in millions) |   
|Provision for bad debts                  |                              | $                     | 3  |     |          | $ | 13 |  
|Net gains on sales of assets             |                              |                       | (2 | )   |          |   |   |  
|Foreign currency exchange (gains) losses |                              |                       | (3 | )   |          |   | 5  |  
|Royalty and grant income                 |                              |                       | (6 | )   |          |   | (5 | )
|Miscellaneous other income               |                              |                       | (8 | )   |          |   | (7 | )
|                                         |                              |                       |    |     |          |  
|                                         | Other (income) expense  net |                       | $  | (16 | )        |   | $  | 6 | 
|                                         |                              |                       |    |     |          |  





|   |                                   
|-- | ----------------------------------
|7. | Accounts Receivable Securitization







11



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















|   |             
|-- | ------------
|8. | Income Taxes





12



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                                                   
|-- | ------------------------------------------------------------------
|9. | Pension Plans and Post-Retirement Benefits Other Than
    Pensions



| |               
| | --------------
| | Pensions Plans



|                                               |  |                       |     |         |               |   |     |       |         |   |      |   |  |      |     |   |       |   |     |   |  |   |    |  
|---------------------------------------------- |  | --------------------- | --- | ------- | ------------- | - | --- | ----- | ------- | - | ---- | - |  | ---- | --- | - | ----- | - | --- | - |  | - | -- | -
|                                               |  | Three Months Ended    |    
|                                               |  |                       |    
|                                               |  | March 31, 2006        |     |         | April 1, 2005 |  
|                                               |  |                       |     |         |               |  
|                                               |  |                       |     | Rest of |               |   |     |       | Rest of |  
|                                               |  | U.S.                  |     |         | U.K.          |   |     | World |         |   | U.S. |   |  | U.K. |     |   | World |  
|                                               |  |                       |     |         |               |   |     |       |         |   |      |   |  |      |     |   |       |  
|                                               |  | (Dollars in millions) |    
|Service cost                                   |  | $                     | 6   |         |               | $ | 10  |       |         | $ | 6    |   |  | $    | 7   |   |       | $ | 9   |   |  | $ | 5  |  
|Interest cost on projected benefit obligations |  |                       | 16  |         |               |   | 60  |       |         |   | 9    |   |  |      | 17  |   |       |   | 66  |   |  |   | 8  |  
|Expected return on plan assets                 |  |                       | (16 | )       |               |   | (79 | )     |         |   | (3   | ) |  |      | (14 | ) |       |   | (89 | ) |  |   | (3 | )
|                                               |  |                       |     |         |               |   |     |       |         |   |      |   |  |      |     |   |       |  
|Net pension cost (income)                      |  | $                     | 6   |         |               | $ | (9  | )     |         | $ | 12   |   |  | $    | 10  |   |       | $ | (14 | ) |  | $ | 10 |  
|                                               |  |                       |     |         |               |   |     |       |         |   |      |   |  |      |     |   |       |  



| |                                                          
| | ---------------------------------------------------------
| | Post-Retirement Benefits Other Than Pensions
    (OPEB)



|                                               |  |                       |    |   |          |   |    |  
|---------------------------------------------- |  | --------------------- | -- | - | -------- | - | -- | -
|                                               |  | Three Months Ended    |   
|                                               |  |                       |   
|                                               |  | March 31,             |    |   | April 1, |  
|                                               |  | 2006                  |    |   | 2005     |  
|                                               |  |                       |    |   |          |  
|                                               |  | (Dollars in millions) |   
|Service cost                                   |  | $                     | 2  |   |          | $ | 2  |  
|Interest cost on projected benefit obligations |  |                       | 11 |   |          |   | 12 |  
|Settlements                                    |  |                       | (1 | ) |          |   |   |  
|Amortization of unrecognized income            |  |                       | (4 | ) |          |   | (2 | )
|                                               |  |                       |    |   |          |  
|Net post-retirement benefit cost               |  | $                     | 8  |   |          | $ | 12 |  
|                                               |  |                       |    |   |          |  

13



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |     
|--- | ----
|10. | Debt



|                                             |                                        |                       |       |       |              |   |       |       | 
|-------------------------------------------- | -------------------------------------- | --------------------- | ----- | ----- | ------------ | - | ----- | ----- | 
|                                             |                                        | As of                 |      
|                                             |                                        |                       |      
|                                             |                                        | March 31,             |       |       | December 31, |  
|                                             |                                        | 2006                  |       |       | 2005         |  
|                                             |                                        |                       |       |       |              |  
|                                             |                                        | (Dollars in millions) |      
|Short-term debt                              |                                        | $                     | 98    |       |              | $ | 98    |      
|                                             |                                        |                       |       |       |              |  
|Long-term debt:                              |                                        |                       |       |       |              |   |       |      
|Senior Notes                                 |                                        | $                     | 960   |       |              | $ | 964   |      
|Senior Subordinated Notes                    |                                        |                       | 294   |       |              |   | 291   |      
|Term Loan facilities                         |                                        |                       | 1,588 |       |              |   | 1,593 |      
|Revolving credit facility                    |                                        |                       |      |       |              |   |      |      
|Lucas Industries Limited debentures due 2020 |                                        |                       |      |       |              |   | 181   |      
|Capitalized leases                           |                                        |                       | 47    |       |              |   | 47    |      
|Other borrowings                             |                                        |                       | 59    |       |              |   | 62    |      
|                                             |                                        |                       |       |       |              |  
|                                             | Total long-term debt                   |                       |       | 2,948 |              |   |       | 3,138 | 
|Less current portion                         |                                        |                       | 49    |       |              |   | 37    |      
|                                             |                                        |                       |       |       |              |  
|                                             | Long-term debt, net of current portion |                       | $     | 2,899 |              |   | $     | 3,101 | 
|                                             |                                        |                       |       |       |              |  



| |                                           
| | ------------------------------------------
| | Senior Notes and Senior Subordinated Notes

3 8 1 8  3 4


 1 8 1 8




| |                  
| | -----------------
| | Credit Facilities

Senior Secured Credit Facilities. 5-year 5-year 7.5-year


14



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




B-2. B-2


1 2 B-2,


B-2






| |               
| | --------------
| | Debt Covenants



15



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                 
| | ----------------
| | Other Borrowings

7 8










|    |              
|--- | -------------
|11. | Capital Stock

Capital Stock Issuances.


Repurchase of Northrop Shares.


Issuance and Registration of Shares.


16



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






 1 8


S-3




|    |                         
|--- | ------------------------
|12. | Share-based Compensation



8-year


8-year


10-year




17



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                           
|--- | --------------------------
|13. | Related Party Transactions

Blackstone.




18



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                   
|--- | ------------------
|14. | Operating Segments



|                              |                         |                              |       |       |          |   |       |       |    | 
|----------------------------- | ----------------------- | ---------------------------- | ----- | ----- | -------- | - | ----- | ----- | -- | 
|                              |                         | Three Months Ended           |      
|                              |                         |                              |      
|                              |                         | March 31,                    |       |       | April 1, |  
|                              |                         | 2006                         |       |       | 2005     |  
|                              |                         |                              |       |       |          |  
|                              |                         | (Dollars in millions)        |      
|Sales to external customers:  |                         |                              |       |       |          |   |       |      
|                              | Chassis Systems         |                              | $     | 1,815 |          |   | $     | 1,847 |   
|                              | Occupant Safety Systems |                              |       | 1,144 |          |   |       | 938   |   
|                              | Automotive Components   |                              |       | 437   |          |   |       | 440   |   
|                              |                         |                              |       |       |          |  
|Total sales                   |                         | $                            | 3,396 |       |          | $ | 3,225 |      
|                              |                         |                              |       |       |          |  
|Earnings before taxes:        |                         |                              |       |       |          |   |       |      
|                              | Chassis Systems         |                              | $     | 94    |          |   | $     | 59    |   
|                              | Occupant Safety Systems |                              |       | 133   |          |   |       | 96    |   
|                              | Automotive Components   |                              |       | 35    |          |   |       | 33    |   
|                              |                         |                              |       |       |          |  
|Segment earnings before taxes |                         |                              | 262   |       |          |   | 188   |      
|Corporate expense and other   |                         |                              | (34   | )     |          |   | (33   | )    
|Financing costs               |                         |                              | (61   | )     |          |   | (59   | )    
|Loss on retirement of debt    |                         |                              | (57   | )     |          |   |      |      
|                              |                         |                              |       |       |          |  
|                              |                         | Earnings before income taxes |       | $     | 110      |   |       | $     | 96 | 
|                              |                         |                              |       |       |          |  
|Intersegment sales:           |                         |                              |       |       |          |   |       |      
|                              | Chassis Systems         |                              | $     | 7     |          |   | $     | 3     |   
|                              | Occupant Safety Systems |                              |       | 27    |          |   |       | 14    |   
|                              | Automotive Components   |                              |       | 12    |          |   |       | 12    |   
|                              |                         |                              |       |       |          |  
|                              |                         | $                            | 46    |       |          | $ | 29    |      
|                              |                         |                              |       |       |          |  



|    |              
|--- | -------------
|15. | Contingencies





19



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##### Table of Contents



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












20



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##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

10-K




| |                   
| | ------------------
| | Executive Overview

Our Business.




The Unfavorable Automotive Climate.




| |   |                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a decline in market share for vehicle sales among some of our
    largest customers, including Ford Motor Company, General Motors
    Corporation and, to a lesser extent, the Chrysler unit of
    DaimlerChrysler AG ( the Big Three);                                                     
|
| |  | the deteriorating financial condition of certain of our
    customers and the resulting uncertainty as they undergo (or
    contemplate undergoing) restructuring initiatives, including in
    certain cases, significant capacity reductions and/or
    reorganization under bankruptcy laws;
|
| |  | the continued rise in inflationary pressures impacting certain
    commodities such as aluminum, resins, chemicals, yarns and
    ferrous metals;                                                                                                                                              
|
| |  | the growing concerns over the economic viability of our
    Tier 2 and Tier 3 supply base as they face
    inflationary pressures and financial instability in certain of
    their customers;                                                                                                 
|
| |  | reduced customer funding of engineering, research and
    development projects;                                                                                                                                                                                                                
|
| |  | continuing pricing pressure from OEMs; and                                                                                                                                                                                                                                                     
|
| |  | volatility of the U.S. dollar against other currencies,
    mainly the Euro.                                                                                                                                                                                                                   



21



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22



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##### Table of Contents





Our Debt and Capital Structure.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On February 2, 2006, we repurchased all of our subsidiary
    Lucas Industries Limiteds £94.6 million
    107/8% bonds due 2020, for £137 million, or
    approximately $243 million. We funded the repurchase from
    cash on hand. The repayment of debt resulted in a pretax charge
    of £32 million, or approximately $57 million, for
    loss on retirement of debt, which has been recognized in our
    first quarter 2006 results.
|
| |  | On January 24, 2006, we reduced the committed amount of our
    U.S. receivables facility from $400 million to
    $250 million due to decreased availability under the
    facility as a result of certain customer credit rating
    downgrades below investment grade. This reduction in the funding
    amount reduces the fees on the unused portion of the facility.                                                                     





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##### Table of Contents



RESULTS OF OPERATIONS




Total Company Results of Operations


CONSOLIDATED STATEMENTS OF OPERATIONS


For the Three Months Ended March 31, 2006 and
April 1, 2005


(Unaudited)


|                                             |                              |                    |       |     |          |   |       |            |  |   |     |    |  
|-------------------------------------------- | ---------------------------- | ------------------ | ----- | --- | -------- | - | ----- | ---------- |  | - | --- | -- | -
|                                             |                              | Three Months Ended |       |     |         
|                                             |                              |                    |       |     | Variance |  
|                                             |                              | March 31,          |       |     | April 1, |   |       | Increase   | 
|                                             |                              | 2006               |       |     | 2005     |   |       | (Decrease) | 
|                                             |                              |                    |       |     |          |   |       |            | 
|Sales                                        |                              | $                  | 3,396 |     |          | $ | 3,225 |            |  | $ | 171 |   
|Cost of sales                                |                              |                    | 3,039 |     |          |   | 2,915 |            |  |   | 124 |   
|                                             |                              |                    |       |     |          |   |       |            | 
|                                             | Gross profit                 |                    |       | 357 |          |   |       | 310        |  |   |     | 47 |  
|Administrative and selling expenses          |                              |                    | 129   |     |          |   | 136   |            |  |   | (7  | ) 
|Amortization of intangible assets            |                              |                    | 9     |     |          |   | 8     |            |  |   | 1   |   
|Restructuring charges and asset impairments  |                              |                    | 8     |     |          |   | 8     |            |  |   |    |   
|Other (income) expense  net                 |                              |                    | (16   | )   |          |   | 6     |            |  |   | (22 | ) 
|                                             |                              |                    |       |     |          |   |       |            | 
|                                             | Operating income             |                    |       | 227 |          |   |       | 152        |  |   |     | 75 |  
|Interest expense  net                       |                              |                    | 60    |     |          |   | 58    |            |  |   | 2   |   
|Loss on retirement of debt                   |                              |                    | 57    |     |          |   |      |            |  |   | 57  |   
|Accounts receivable securitization costs     |                              |                    | 1     |     |          |   | 1     |            |  |   |    |   
|Equity in earnings of affiliates, net of tax |                              |                    | (4    | )   |          |   | (5    | )          |  |   | 1   |   
|Minority interest, net of tax                |                              |                    | 3     |     |          |   | 2     |            |  |   | 1   |   
|                                             |                              |                    |       |     |          |   |       |            | 
|                                             | Earnings before income taxes |                    |       | 110 |          |   |       | 96         |  |   |     | 14 |  
|Income tax expense                           |                              |                    | 63    |     |          |   | 46    |            |  |   | 17  |   
|                                             |                              |                    |       |     |          |   |       |            | 
|                                             | Net earnings                 |                    | $     | 47  |          |   | $     | 50         |  |   | $   | (3 | )
|                                             |                              |                    |       |     |          |   |       |            | 



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2006 Compared to Three
    Months Ended April 1, 2005

Sales


Gross profit


Administrative and selling expenses


24



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Amortization of intangible assets


Restructuring charges and asset impairments


Other (income) expense  net


Interest expense  net


Loss on retirement of debt 7 8


Accounts receivable securitization costs


Equity in earnings of affiliates


Minority interest


Income tax expense


25



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SEGMENT RESULTS OF OPERATIONS




|                            |                         |                               |       |     |          |   |       |    |     | 
|--------------------------- | ----------------------- | ----------------------------- | ----- | --- | -------- | - | ----- | -- | --- | 
|                            |                         | Three Months Ended            |      
|                            |                         |                               |      
|                            |                         | March 31,                     |       |     | April 1, |  
|                            |                         | 2006                          |       |     | 2005     |  
|                            |                         |                               |       |     |          |  
|                            |                         | (Dollars in millions)         |      
|Sales:                      |                         |                               |       |     |          |   |       |   
|Chassis Systems             |                         | $                             | 1,815 |     |          | $ | 1,847 |   
|Occupant Safety Systems     |                         |                               | 1,144 |     |          |   | 938   |   
|Automotive Components       |                         |                               | 437   |     |          |   | 440   |   
|                            |                         |                               |       |     |          |  
|                            |                         | $                             | 3,396 |     |          | $ | 3,225 |   
|                            |                         |                               |       |     |          |  
|Earnings before taxes:      |                         |                               |       |     |          |   |       |   
|                            | Chassis Systems         |                               | $     | 94  |          |   | $     | 59 |    
|                            | Occupant Safety Systems |                               |       | 133 |          |   |       | 96 |    
|                            | Automotive Components   |                               |       | 35  |          |   |       | 33 |    
|                            |                         |                               |       |     |          |  
|                            |                         | Segment earnings before taxes |       |     | 262      |   |       |    | 188 | 
|Corporate expense and other |                         |                               | (34   | )   |          |   | (33   | ) 
|Financing costs             |                         |                               | (61   | )   |          |   | (59   | ) 
|Loss on retirement of debt  |                         |                               | (57   | )   |          |   |      |   
|                            |                         |                               |       |     |          |  
|                            |                         | Earnings before taxes         |       | $   | 110      |   |       | $  | 96  | 
|                            |                         |                               |       |     |          |  

Chassis Systems




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2006 Compared to Three
    Months Ended April 1, 2005

|                                                        |  |                       |       |  |          |   |       |            |  |   |     |  
|------------------------------------------------------- |  | --------------------- | ----- |  | -------- | - | ----- | ---------- |  | - | --- | -
|                                                        |  | Three Months Ended    |       |  |         
|                                                        |  |                       |       |  | Variance |  
|                                                        |  | March 31,             |       |  | April 1, |   |       | Increase   | 
|                                                        |  | 2006                  |       |  | 2005     |   |       | (Decrease) | 
|                                                        |  |                       |       |  |          |   |       |            | 
|                                                        |  | (Dollars in millions) |      
|Sales                                                   |  | $                     | 1,815 |  |          | $ | 1,847 |            |  | $ | (32 | )
|Earnings before taxes                                   |  |                       | 94    |  |          |   | 59    |            |  |   | 35  |  
|Restructuring charges included in earnings before taxes |  |                       | 6     |  |          |   | 4     |            |  |   | 2   |  

Sales


Earnings before taxes


26



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Occupant Safety Systems




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2006 Compared to Three
    Months Ended April 1, 2005

|                                                        |  |                       |       |  |          |   |     |            |  |   |     | 
|------------------------------------------------------- |  | --------------------- | ----- |  | -------- | - | --- | ---------- |  | - | --- | 
|                                                        |  | Three Months Ended    |       |  |         
|                                                        |  |                       |       |  | Variance |  
|                                                        |  | March 31,             |       |  | April 1, |   |     | Increase   | 
|                                                        |  | 2006                  |       |  | 2005     |   |     | (Decrease) | 
|                                                        |  |                       |       |  |          |   |     |            | 
|                                                        |  | (Dollars in millions) |      
|Sales                                                   |  | $                     | 1,144 |  |          | $ | 938 |            |  | $ | 206 | 
|Earnings before taxes                                   |  |                       | 133   |  |          |   | 96  |            |  |   | 37  | 
|Restructuring charges included in earnings before taxes |  |                       | 2     |  |          |   | 2   |            |  |   |    | 

Sales


Earnings before taxes


Automotive Components




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2006 Compared to Three
    Months Ended April 1, 2005

|                                                        |  |                       |     |  |          |   |     |            |  |   |    |  
|------------------------------------------------------- |  | --------------------- | --- |  | -------- | - | --- | ---------- |  | - | -- | -
|                                                        |  | Three Months Ended    |     |  |         
|                                                        |  |                       |     |  | Variance |  
|                                                        |  | March 31,             |     |  | April 1, |   |     | Increase   | 
|                                                        |  | 2006                  |     |  | 2005     |   |     | (Decrease) | 
|                                                        |  |                       |     |  |          |   |     |            | 
|                                                        |  | (Dollars in millions) |    
|Sales                                                   |  | $                     | 437 |  |          | $ | 440 |            |  | $ | (3 | )
|Earnings before taxes                                   |  |                       | 35  |  |          |   | 33  |            |  |   | 2  |  
|Restructuring charges included in earnings before taxes |  |                       |    |  |          |   | 2   |            |  |   | (2 | )

Sales


Earnings before taxes


27



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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES


Cash Flows


Operating Activities.


Investing Activities.




Financing Activities.


Debt and Commitments


Sources of Liquidity.









28



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##### Table of Contents



Debt Repurchases. 7 8




Funding Our Requirements.


Credit Ratings.


|                                |  |     |     |  |         |  |     |       |  |  |     | 
|------------------------------- |  | --- | --- |  | ------- |  | --- | ----- |  |  | --- | 
|                                |  | S&P |     |  | Moodys |  |     | Fitch | 
|                                |  |     |     |  |         |  |     |       | 
|Corporate & Bank Debt Rating    |  |     | BB+ |  |         |  | Ba2 |       |  |  | BB+ | 
|Senior Note Rating              |  |     | BB- |  |         |  | Ba3 |       |  |  | BB- | 
|Senior Subordinated Note Rating |  |     | BB- |  |         |  | B1  |       |  |  | B+  | 



Senior Secured Credit Facilities.




Guarantees and Security of Term Loan Facilities.


29



---



##### Table of Contents





Interest Payments. 1 2


3 8 3 4


Debt Restrictions.




Interest Rate Swap Agreements.




30



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##### Table of Contents





Contractual Obligations and Commitments


7 8 10-K




Other Commitments.




Off-Balance Sheet Arrangements










31



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Other Receivables Facilities




Research, Development and Engineering






32



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##### Table of Contents



Environmental Matters








Contingencies








33



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##### Table of Contents







Recent Accounting Pronouncements




Outlook














34



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##### Table of Contents





Forward-Looking Statements




10-K 10-Q 10-K









|        |                                                                
|------- | ---------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures about Market
    Risks



Foreign Currency Exchange Rate Risk.


35



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##### Table of Contents





Interest Rate Risk.


Sensitivity Analysis.


|                                   |                                |                       |   |     |                   |           |   |               |   |  |  |            | 
|---------------------------------- | ------------------------------ | --------------------- | - | --- | ----------------- | --------- | - | ------------- | - |  |  | ---------- | 
|                                   |                                |                       |   |     |                   | Favorable |  
|                                   |                                | Assuming a 10%        |   |     | Assuming a 10%    |           |   | (unfavorable) |  
|Market Risk                        |                                | increase in rates     |   |     | decrease in rates |           |   | change in     |  
|                                   |                                |                       |   |     |                   |           |   |               |  
|                                   |                                | (Dollars in millions) |  
|Foreign Currency Rate Sensitivity: |                                |                       |   |     |                   |           |   |               |   |  |  |           
|Forwards *                         |                                |                       |   |     |                   |           |   |               |   |  |  |           
|                                   |  Long US$                     |                       | $ | (46 | )                 |           | $ | 49            |   |  |  | Fair value | 
|                                   |  Short US$                    |                       | $ | 17  |                   |           | $ | (18           | ) |  |  | Fair value | 
|Debt                               |                                |                       |   |     |                   |           |   |               |   |  |  |           
|                                   |  Foreign currency denominated |                       | $ | (44 | )                 |           | $ | 44            |   |  |  | Fair value | 
|Interest Rate Sensitivity:         |                                |                       |   |     |                   |           |   |               |   |  |  |           
|Debt                               |                                |                       |   |     |                   |           |   |               |   |  |  |           
|                                   |  Fixed rate                   |                       | $ | 9   |                   |           | $ | (10           | ) |  |  | Fair value | 
|                                   |  Variable rate                |                       | $ | (11 | )                 |           | $ | 11            |   |  |  | Cash flow  | 
|Swaps                              |                                |                       |   |     |                   |           |   |               |   |  |  |           
|                                   |  Pay variable/ receive fixed  |                       | $ | (14 | )                 |           | $ | 13            |   |  |  | Fair value | 
|                                   |  Pay fixed/ receive variable  |                       | $ | 2   |                   |           | $ | (2            | ) |  |  | Fair value | 






|  |                                                                                                                                                                                                                                                                                                                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Includes only the risk related to the derivative instruments
    that serve as hedges and does not include the related underlying
    hedged item or any other operating transactions. The analyses
    also do not factor in a potential change in the level of
    variable rate borrowings or derivative instruments outstanding
    that could take place if these hypothetical conditions prevailed.






|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures.


10-K


36



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##### Table of Contents



Changes in Internal Control Over Financial Reporting.





PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

10-K







|         |             
|-------- | ------------
|Item 1A. | Risk Factors

10-K




| |                                                
| | -----------------------------------------------
| | World health issues may interrupt our business.








|        |                                                                
|------- | ---------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds



|    |                   
|--- | ------------------
|(c) | Issuer repurchases

10-Q.







|        |         
|------- | --------
|Item 6. | Exhibits

|        |    |              |  |                                                                                                                                                          
|------- | -- | ------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             
|Number  |    | Exhibit Name
|        |    |             
|        | 31 | (a)          |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002
|        | 31 | (b)          |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002
|        | 32 | (a)          |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002                                             
|        | 32 | (b)          |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002                                             

37



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SIGNATURES






| |                              
| | -----------------------------
| | TRW Automotive Holdings Corp.
| | (Registrant)                 



| |     |                     
| | --- | --------------------
| | By: | /s/ JOSEPH S. CANTIE

| |                                                                 
| | ----------------------------------------------------------------
| |                                                                 
| | Joseph S. Cantie                                                
| | Executive Vice President and Chief Financial Officer            
| | (On behalf of the Registrant and as Principal Financial Officer)



38



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EXHIBIT INDEX


|        |    |              |  |                                                                                                                                                          
|------- | -- | ------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             
|Number  |    | Exhibit Name
|        |    |             
|        | 31 | (a)          |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002
|        | 31 | (b)          |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002
|        | 32 | (a)          |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002                                             
|        | 32 | (b)          |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002