##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549-1004
      FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 29, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to          .   Commission File
    No. 001-31970
   
  TRW
    Automotive Holdings Corp.
 (Exact name of registrant as
    specified in its charter)
  Delaware

81-0597059(State or other jurisdiction
    of
    Incorporation or Organization)

(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
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ




---



##### 



TRW
    AUTOMOTIVE HOLDINGS CORP.
  INDEX
  
  PagePART I 
    FINANCIAL INFORMATIONItem 1.

CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


2Item 2.

MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS


24Item 3.

QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK


42Item 4.

CONTROLS AND
    PROCEDURES


43PART II 
    OTHER INFORMATIONItem 1.

LEGAL
    PROCEEDINGS


43Item 1A.

RISK
    FACTORS


44Item 2.

UNREGISTERED SALES
    OF EQUITY SECURITIES AND USE OF PROCEEDS


44Item 5.

OTHER
    INFORMATION


44Item 6.

EXHIBITS


44SIGNATURES


45Certification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906   i




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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 EndedSeptember 29,


September 30,2006


2005(Unaudited)(In millions, except pershare amounts)Sales

$
3,015


$
2,917Cost of sales


2,785



2,664Gross profit


230



253Administrative and selling expenses


134



135Amortization of intangible assets


9



8Restructuring charges and asset
    impairments


3



35Other expense  net


2



2Operating income


82



73Interest expense  net


62



59Equity in earnings of affiliates,
    net of tax


(6
)


(2
)Minority interest, net of tax


3



1Earnings before income taxes


23



15Income tax expense


18



5Net earnings

$
5


$
10Basic earnings per share:Earnings per share

$
0.05


$
0.10Weighted average shares


100.8



99.1Diluted earnings per share:Earnings per share

$
0.05


$
0.10Weighted average shares


104.0



103.1    2




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Nine Months EndedSeptember 29,


September 30,2006


2005(Unaudited)(In millions, except pershare amounts)Sales

$
9,872


$
9,507Cost of sales


8,923



8,588Gross profit


949



919Administrative and selling expenses


403



397Amortization of intangible assets


27



24Restructuring charges and asset
    impairments


22



58Other (income) expense 
    net


(13
)


20Operating income


510



420Interest expense  net


182



171Loss on retirement of debt


57



7Accounts receivable securitization
    costs


2



2Equity in earnings of affiliates,
    net of tax


(19
)


(12
)Minority interest, net of tax


11



5Earnings before income taxes


277



247Income tax expense


134



102Net earnings

$
143


$
145Basic earnings per share:Earnings per share

$
1.43


$
1.46Weighted average shares


100.2



99.0Diluted earnings per share:Earnings per share

$
1.38


$
1.42Weighted average shares


103.6



102.0    3




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  As ofSeptember 29,


December 31,2006


2005(Unaudited)(Dollars in millions)AssetsCurrent assets:Cash and cash equivalents

$
358


$
659Marketable securities


11



17Accounts receivable  net


2,143



1,948Inventories


780



702Prepaid expenses and other current
    assets


256



273Total current assets


3,548



3,599Property, plant and
    equipment  net of accumulated depreciation of
    $1,555 million and $1,147 million, respectively


2,607



2,538Goodwill


2,317



2,293Intangible assets  net


746



769Prepaid pension cost


271



222Other assets


810



809Total assets

$
10,299


$
10,230Liabilities, Minority Interests
    and Stockholders EquityCurrent liabilities:Short-term debt

$
81


$
98Current portion of long-term debt


64



37Trade accounts payable


1,847



1,865Accrued compensation


273



280Other current liabilities


1,371



1,310Total current liabilities


3,636



3,590Long-term debt


2,893



3,101Post-retirement benefits other
    than pensions


879



917Pension benefits


771



795Other long-term liabilities


541



513Total liabilities


8,720



8,916Minority interests


107



106Commitments and contingenciesStockholders equity:Capital stock


1



1Treasury stock






Paid-in-capital


1,175



1,142Retained earnings


275



132Accumulated other comprehensive
    income (losses)


21



(67
)Total stockholders equity


1,472



1,208Total liabilities, minority
    interests, and stockholders equity

$
10,299


$
10,230    4




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Nine Months EndedSeptember 29,


September 30,2006


2005(Unaudited)(Dollars in millions)Operating
    ActivitiesNet earnings

$
143


$
145Adjustments to reconcile net
    earnings to net cash provided by operating activities:Depreciation and amortization


381



380Pension and other post-retirement
    benefits, net of contributions


(139
)


(130
)Net (gains) losses on sale of assets


(1
)


1Amortization of deferred financing
    fees


6



10Loss on retirement of debt


57



7Asset impairment charges


9



18Deferred income taxes


55



(19
)Other  net


6



29Changes in assets and liabilities,
    net of effects of businesses acquired:Accounts receivable, net


(94
)


(291
)Inventories


(38
)


(8
)Trade accounts payable


(112
)


(62
)Prepaid expense and other assets


13



(39
)Other liabilities


(34
)


81Net cash provided by operating
    activities


252



122Investing
    ActivitiesCapital expenditures


(334
)


(281
)Acquisitions, net of cash acquired


(12
)


(3
)Investment in affiliates


(1
)


(8
)Purchase price adjustments


(12
)


Net proceeds from asset sales and
    divestitures


33



4Net cash used in investing
    activities


(326
)


(288
)Financing
    ActivitiesChange in short-term debt


(25
)


(1
)Proceeds from issuance of long-term
    debt


28



1,313Redemption of long-term debt


(291
)


(1,601
)Debt issue costs






(4
)Issuance of capital stock, net of
    fees






143Repurchase of capital stock






(143
)Proceeds from exercise of stock
    options


21



2Net cash used in financing
    activities


(267
)


(291
)Effect of exchange rate changes on
    cash


40



(33
)Decrease in cash and cash
    equivalents


(301
)


(490
)Cash and cash equivalents at
    beginning of period


659



790Cash and cash equivalents at end of
    period

$
358


$
300    5




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Description
    of Business    2.
    Basis of
    Presentation  Form 10-K
        Earnings per Share.
  Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(In millions)Weighted average shares outstanding


100.8



99.1



100.2



99.0Effect of dilutive securities


3.2



4.0



3.4



3.0Diluted shares outstanding


104.0



103.1



103.6



102.0   Warranties.
 6




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    CurrentPeriodAccruals,





Effects ofNet of


Used for


ForeignBeginning


Changes in


Purposes


Currency


EndingBalance


Estimates


Intended


Translation


Balance(Dollars in millions)Three months ended
    September 29, 2006

$
126


$
10


$
(10
)

$
3


$
129Nine months ended
    September 29, 2006


101



44



(25
)


9



129Three months ended
    September 30, 2005


110



10



(10
)






110Nine months ended
    September 30, 2005


110



37



(27
)


(10
)


110   Share-based Compensation.
      Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(In millions, except per share amounts)Net earnings, as reported

$
5


$
10


$
143


$
145Deduct: Stock-based compensation
    under SFAS No. 123 fair value method, net of related
    tax effects of $0














(4
)Adjusted net earnings, fair value
    method

$
5


$
10


$
143


$
141Basic earnings per share:As reported

$
0.05


$
0.10


$
1.43


$
1.46Pro forma

$
0.05


$
0.10


$
1.43


$
1.42Diluted earnings per share:As reported

$
0.05


$
0.10


$
1.38


$
1.42Pro forma

$
0.05


$
0.10


$
1.38


$
1.38    7




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Comprehensive Earnings.
  Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Net earnings

$
5


$
10


$
143


$
145Foreign currency translation
    earnings (losses), net


27



15



94



(51
)Realized net gains (losses) on
    cash flow hedges


2



10



(6
)


40Comprehensive earnings

$
34


$
35


$
231


$
134   Recent Accounting Pronouncements.
       8




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. 05-5, (EITF 05-5). EITF 05-5 EITF 05-5
   9




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Restructuring
    Charges and Asset Impairments    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Severance and other charges

$
10


$
32


$
24


$
52Asset impairments related to
    restructuring activities


2



1



3



4Curtailment gains


(10
)


(10
)


(10
)


(12
)Total restructuring charges


2



23



17



44Other asset impairments


1



12



5



14Total restructuring charges and
    asset impairments

$
3


$
35


$
22


$
58   Restructuring
    Charges
    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Chassis Systems

$
(1
)

$
(7
)

$
9


$
2Occupant Safety Systems


1



31



5



36Automotive Components


2



(1
)


3



6Total restructuring charges

$
2


$
23


$
17


$
44   Severance
    and Other Charges
    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Chassis Systems

$
7


$



$
17


$
11Occupant Safety Systems


1



31



4



33Automotive Components


2



1



3



8Total severance and other charges

$
10


$
32


$
24


$
52   Chassis Systems.
  Occupant Safety Systems.
 10




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Automotive Components.
  Restructuring
    Reserves
    Effects ofForeignCurrent


Purchase


Used for


CurrencyBeginning


Period


Price


Purposes


Translation


EndingBalance


Accruals


Allocation


Intended


and Transfers


Balance(Dollars in millions)Three months ended
    September 29, 2006

$
60


$
10


$
12


$
(11
)

$
(1
)

$
70Nine months ended
    September 29, 2006


69



24



7



(32
)


2



70Three months ended
    September 30, 2005


36



22







(36
)


12



34Nine months ended
    September 30, 2005


49



43







(64
)


6



34   No. 95-3,
    Curtailment
    Gains
  Chassis Systems.
    Automotive Components.
   11




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Asset
    Impairments Related to Restructuring Activities
  Chassis Systems.
  Occupant Safety Systems.
    Automotive Components.
  Other
    Asset Impairments
  Chassis Systems.
  Occupant Safety Systems.
    Automotive Components.
  4.
    Inventories    As ofSeptember 29,


December 31,2006


2005(Dollars in millions)Finished products and work in
    process

$
408


$
374Raw materials and supplies


372



328Total inventories

$
780


$
702  12




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Goodwill
    and Intangible Assets  Goodwill
    OccupantChassis


Safety


AutomotiveSystems


Systems


ComponentsSegment


Segment


Segment


Total(Dollars in millions)Balance as of December 31,
    2005

$
892


$
928


$
473


$
2,293Acquisitions and purchase price
    adjustments


1



18







19Effects of foreign currency
    translation






5







5Balance as of
    September 29, 2006

$
893


$
951


$
473


$
2,317     Intangible
    assets
    As of September 29, 2006


As of December 31, 2005Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


Amount(Dollars in millions)Definite-lived intangible
    assets:Customer relationships

$
491


$
(83
)

$
408


$
488


$
(64
)

$
424Developed technology


81



(36
)


45



80



(28
)


52Non-compete agreements


1







1



1







1Total


573


$
(119
)


454



569


$
(92
)


477Indefinite-lived intangible
    assets:Trademarks


292







292



292







292Total

$
865






$
746


$
861






$
769    13




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted AverageAmortizationPeriodCustomer relationships


20 yearsDeveloped technology


8 yearsNon-compete agreements


5 years     AmortizationYears Ended December 31,

Expense(Dollars in millions)2006

$
362007


352008


342009


342010


34   6.
    Other
    (Income) Expense  Net    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Provision for bad debts

$
2


$
2


$
5


$
17Net (gains) losses on sales of
    assets


(1
)






(3
)


1Foreign currency exchange losses


5



4



3



23Royalty and grant income


(5
)


(5
)


(17
)


(16
)Miscellaneous other expense
    (income)


1



1



(1
)


(5
)Other expense (income) 
    net

$
2


$
2


$
(13
)

$
20     7.
    Accounts
    Receivable Securitization     14




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             15




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Income
    Taxes         16




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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 EndedSeptember 29, 2006


September 30, 2005Rest of








Rest ofU.S.


U.K.


World


U.S.


U.K.


World(Dollars in millions)Service cost

$
6


$
11


$
6


$
7


$
9


$
5Interest cost on projected benefit
    obligations


16



64



10



17



62



8Expected return on plan assets


(16
)


(84
)


(4
)


(15
)


(84
)


(3
)Net pension cost (income)

$
6


$
(9
)

$
12


$
9


$
(13
)

$
10   Nine Months EndedSeptember 29, 2006


September 30, 2005Rest of








Rest ofU.S.


U.K.


World


U.S.


U.K.


World(Dollars in millions)Service cost

$
18


$
31


$
18


$
21


$
27


$
15Interest cost on projected benefit
    obligations


48



187



29



51



192



24Expected return on plan assets


(48
)


(245
)


(11
)


(43
)


(260
)


(9
)Net pension cost (income)

$
18


$
(27
)

$
36


$
29


$
(41
)

$
30   Post-Retirement
    Benefits Other Than Pensions (OPEB)
    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Service cost

$
1


$
2


$
4


$
6Interest cost on projected benefit
    obligations


10



12



32



36Settlements


(3
)






(7
)


(3
)Amortization


(4
)


(2
)


(12
)


(6
)Net post-retirement benefit cost

$
4


$
12


$
17


$
33      17




---



##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restructuring
    Curtailments
    Pension
    Protection Act of 2006
    10.
    Debt    As ofSeptember 29,


December 31,2006


2005(Dollars in millions)Short-term debt

$
81


$
98Long-term debt:Senior Notes

$
975


$
964Senior Subordinated Notes


298



291Term Loan facilities


1,585



1,593Revolving credit facility






Lucas Industries Limited
    debentures due 2020






181Capitalized leases


44



47Other borrowings


55



62Total long-term debt


2,957



3,138Less current portion


64



37Long-term debt, net of current
    portion

$
2,893


$
3,101   Senior
    Notes and Senior Subordinated Notes
  3 8 1 8 3 4
 18




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##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1 8 1 8
  Credit
    Facilities
  Senior Secured Credit Facilities. 5-year 5-year 7.5-year
    Debt
    Covenants
    Other
    Borrowings
  7 8
 19




---



##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        11.
    Capital
    Stock  Capital Stock Issuances.
  Repurchase of Northrop Shares.
  Issuance and Registration of
    Shares.
    and/or 1 8
 20




---



##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Form S-3
  12.
    Share-Based
    Compensation    8-year
  8-year
  10-year
    13.
    Related
    Party Transactions     21




---



##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    14.
    Operating
    Segments    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Sales to external customers:Chassis Systems

$
1,632


$
1,672


$
5,335


$
5,475Occupant Safety Systems


983



857



3,250



2,750Automotive Components


400



388



1,287



1,282Total sales

$
3,015


$
2,917


$
9,872


$
9,507Earnings before taxes:Chassis Systems

$
56


$
57


$
235


$
230Occupant Safety Systems


76



34



322



219Automotive Components


(5
)


17



65



81Segment earnings before taxes


127



108



622



530Corporate expense and other


(42
)


(34
)


(104
)


(103
)Finance costs


(62
)


(59
)


(184
)


(173
)Loss on retirement of debt










(57
)


(7
)Earnings before income taxes

$
23


$
15


$
277


$
247Intersegment sales:Chassis Systems

$
7


$
2


$
21


$
6Occupant Safety Systems


24



24



78



62Automotive Components


9



10



31



32$
40


$
36


$
130


$
100   15.
    Contingencies   22




---



##### Table of Contents



TRW
    AUTOMOTIVE HOLDINGS CORP.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or
  2002-2006
       23




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
  EXECUTIVE
    OVERVIEW
  Our Business.
      The Unfavorable Automotive Climate.
  
    a decline in market share and significant announced production
    cuts among some of our largest customers, including Ford Motor
    Company, General Motors Corporation and the Chrysler group 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 petroleum-based products, resins, yarns,
    ferrous metals, aluminum, base metals, and other chemicals;
    a consumer shift in the North American market away from sport
    utility vehicles and light trucks to more fuel efficient
    passenger cars;
    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; 24




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##### Table of Contents




    continuing pricing pressure from OEMs; and
    volatility of the U.S. dollar against other currencies,
    mainly the Euro.             25




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##### Table of Contents



Company Efforts in Response to the Automotive
    Climate.
      Our Debt and Capital Structure. 7 8
    Effective Tax Rate.
   26




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##### Table of Contents



RESULTS
    OF OPERATIONS
    Total
    Company Results of Operations
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
    For the Three Months Ended September 29, 2006 and
    September 30, 2005
    (Unaudited)
  Three Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
3,015


$
2,917


$
98Cost of sales


2,785



2,664



121Gross profit


230



253



(23
)Administrative and selling expenses


134



135



(1
)Amortization of intangible assets


9



8



1Restructuring charges and asset
    impairments


3



35



(32
)Other expense  net


2



2



Operating income


82



73



9Interest expense  net


62



59



3Equity in earnings of affiliates,
    net of tax


(6
)


(2
)


(4
)Minority interest, net of tax


3



1



2Earnings before income taxes


23



15



8Income tax expense


18



5



13Net earnings

$
5


$
10


$
(5
)   Three
    Months Ended September 29, 2006 Compared to Three Months
    Ended September 30, 2005
  Sales
  Gross profit
 27




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##### Table of Contents



Administrative and selling expenses
  Amortization of intangible assets
  Restructuring charges and asset impairments
  Other expense  net
  Interest expense  net
  Equity in earnings of affiliates
  Minority interest
  Income tax expense
 28




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##### Table of Contents



CONSOLIDATED
    STATEMENTS OF OPERATIONS
    For the Nine Months Ended September 29, 2006 and
    September 30, 2005
    (Unaudited)
  Nine Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
9,872


$
9,507


$
365Cost of sales


8,923



8,588



335Gross profit


949



919



30Administrative and selling expenses


403



397



6Amortization of intangible assets


27



24



3Restructuring charges and asset
    impairments


22



58



(36
)Other (income) expense 
    net


(13
)


20



(33
)Operating income


510



420



90Interest expense  net


182



171



11Loss on retirement of debt


57



7



50Accounts receivable securitization
    costs


2



2



Equity in earnings of affiliates,
    net of tax


(19
)


(12
)


(7
)Minority interest, net of tax


11



5



6Earnings before income taxes


277



247



30Income tax expense


134



102



32Net earnings

$
143


$
145


$
(2
)   Nine
    Months Ended September 29, 2006 Compared to Nine Months
    Ended September 30, 2005
  Sales
  Gross profit
  Administrative and selling expenses
 29




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##### Table of Contents



Amortization of intangible assets
  Restructuring charges and asset impairments
   Other (income) expense  net
  Interest expense  net
  Loss on retirement of debt 7 8 1 8 1 8
  Accounts receivable securitization costs
  Equity in earnings of affiliates
  Minority interest
  Income tax expense
 30




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##### Table of Contents



SEGMENT
    RESULTS OF OPERATIONS
    Three Months Ended


Nine Months EndedSeptember 29,


September 30,


September 29,


September 30,2006


2005


2006


2005(Dollars in millions)Sales to external customers:Chassis Systems

$
1,632


$
1,672


$
5,335


$
5,475Occupant Safety Systems


983



857



3,250



2,750Automotive Components


400



388



1,287



1,282Total sales

$
3,015


$
2,917


$
9,872


$
9,507Earnings before taxesChassis Systems

$
56


$
57


$
235


$
230Occupant Safety Systems


76



34



322



219Automotive Components


(5
)


17



65



81Segment earnings before taxes


127



108



622



530Corporate expense and other


(42
)


(34
)


(104
)


(103
)Financing costs


(62
)


(59
)


(184
)


(173
)Loss on retirement of debt










(57
)


(7
)Earnings before taxes

$
23


$
15


$
277


$
247   Chassis
    Systems
  Three
    Months Ended September 29, 2006 Compared to Three Months
    Ended September 30, 2005
  Three Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
1,632


$
1,672


$
(40
)Earnings before taxes


56



57



(1
)Restructuring charges and asset
    impairments included in earnings before taxes


1



7



(6
)   Sales
  Earnings before taxes
 31




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##### Table of Contents



Nine
    Months Ended September 29, 2006 Compared to Nine Months
    Ended September 30, 2005
  Nine Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
5,335


$
5,475


$
(140
)Earnings before taxes


235



230



5Restructuring charges and asset
    impairments included in earnings before taxes


(12
)


(2
)


(10
)   Sales
  Earnings before taxes
  Occupant
    Safety Systems
  Three
    Months Ended September 29, 2006 Compared to Three Months
    Ended September 30, 2005
  Three Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
983


$
857


$
126Earnings before taxes


76



34



42Restructuring charges and asset
    impairments included in earnings before taxes


(2
)


(32
)


30   Sales
 32




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##### Table of Contents



Earnings before taxes
  Nine
    Months Ended September 29, 2006 Compared to Nine Months
    Ended September 30, 2005
  Nine Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
3,250


$
2,750


$
500Earnings before taxes


322



219



103Restructuring charges and asset
    impairments included in earnings before taxes


(7
)


(39
)


32   Sales
  Earnings before taxes
  Automotive Components
  Three
    Months Ended September 29, 2006 Compared to Three Months
    Ended September 30, 2005
  Three Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
400


$
388


$
12(Losses) earnings before taxes


(5
)


17



(22
)Restructuring charges and asset
    impairments included in earnings before taxes


(2
)


(10
)


8   Sales
 33




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##### Table of Contents



Earnings before taxes
  Nine
    Months Ended September 29, 2006 Compared to Nine Months
    Ended September 30, 2005
  Nine Months Ended


VarianceSeptember 29,


September 30,


Increase2006


2005


(Decrease)(Dollars in millions)Sales

$
1,287


$
1,282


$
5Earnings before taxes


65



81



(16
)Restructuring charges and asset
    impairments included in earnings before taxes


(3
)


(17
)


14   Sales
  Earnings before taxes
  LIQUIDITY
    AND CAPITAL RESOURCES
  Cash
    Flows
  Operating Activities.
  Investing Activities.
   34




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##### Table of Contents



Financing Activities. 7 8
    Debt and
    Commitments
  Sources of Liquidity.
        Debt Repurchases. 7 8
 35




---



##### Table of Contents



Funding Our Requirements.
  Credit Ratings.
  S & P

Moodys

FitchCorporate Rating

BB+

Ba2

BBBank Debt Rating

BB+

Ba1

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.
  Interest Payments.
 36




---



##### Table of Contents



1 2
  3 8 3 4
  Debt Restrictions.
    Interest Rate Swap Agreements.
   37




---



##### Table of Contents



Contractual
    Obligations and Commitments
  7 8 Form 10-K
    Other Commitments.
    Off-Balance
    Sheet Arrangements
         38




---



##### Table of Contents



Other
    Receivables Facilities
    ENVIRONMENTAL
    MATTERS
     39




---



##### Table of Contents



CONTINGENCIES
  and/or
  2002-2006
        RECENT
    ACCOUNTING PRONOUNCEMENTS
   40




---



##### Table of Contents



OUTLOOK
          FORWARD-LOOKING
    STATEMENTS
    Form 10-K
 41




---



##### Table of Contents



Form 10-Q Form 10-K
    Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk    Foreign Currency Exchange Rate Risk.
  Interest Rate Risk.
  Sensitivity Analysis.
 42




---



##### Table of Contents



Assuming a 10%


Assuming a 10%


FavorableIncrease in


Decrease in


(Unfavorable)Rates


Rates


Change inMarket Risk

(Dollars in millions)Foreign Currency Rate
    Sensitivity:Forwards * Long US $

$
(66
)

$
59



Fair value Short US $

$
14


$
(11
)


Fair valueDebt ** Foreign currency
    denominated

$
(44
)

$
44



Fair valueInterest Rate
    Sensitivity:Debt Fixed rate

$
9


$
(10
)


Fair value Variable rate

$
(12
)

$
12



Cash flowSwaps Pay variable / receive
    fixed

$
(13
)

$
8



Fair value Pay fixed / receive
    variable

$
1


$
(1
)


Fair value     *
    
    Change in fair value of forward contracts hedging the identified
    underlying positions assuming a 10% change in the value of the
    U.S. Dollar vs. foreign currencies.**
    
    Change in fair value of foreign currency denominated debt
    assuming a 10% change in the value of the foreign currency.  Item 4.
    Controls
    and Procedures  Evaluation of Disclosure Controls and
    Procedures. rule 13a-15(e)
  Form 10-K
  Changes in Internal Control Over Financial
    Reporting.
 PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings   43




---



##### Table of Contents



Form 10-K Form 10-Q Form 10-Q
  Item 1A.
    Risk
    Factors  Form 10-K Form 10-Q
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  (c)
    Issuer
    repurchases  Form 10-Q.
  Item 5.
    Other
    Information    Item 6.
    Exhibits  ExhibitNumber

Exhibit Name31(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 200231(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 200232(a)


Certification Pursuant to
    18 U.S.C. §1350, As Adopted Pursuant to §906 of
    the Sarbanes-Oxley Act of 200232(b)


Certification Pursuant to
    18 U.S.C. §1350, As Adopted Pursuant to §906 of
    the Sarbanes-Oxley Act of 2002  44




---



##### Table of Contents



SIGNATURES    
  By:
    /s/  JOSEPH S. CANTIE        45




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Exhibit Name31(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 200231(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 200232(a)


Certification Pursuant to
    18 U.S.C. §1350, As Adopted Pursuant to §906 of
    the Sarbanes-Oxley Act of 200232(b)


Certification Pursuant to
    18 U.S.C. §1350, As Adopted Pursuant to §906 of
    the Sarbanes-Oxley Act of 2002