##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





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 September 30, 2005                                           
|  
|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                                                           |  | 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


o þ


o þ












---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


INDEX


|                                                                                                     |  |      |    | 
|---------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                     |  | Page |   
|                                                                                                     |  |      |   
|PART I  FINANCIAL
    INFORMATION                                                                  
|                                                                                                    
|Item 1 CONSOLIDATED
    FINANCIAL STATEMENTS (UNAUDITED)                                             |  |      | 2  | 
|                                                                                                    
|Item 2 MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS |  |      | 25 | 
|                                                                                                    
|Item 3 QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                               |  |      | 41 | 
|                                                                                                    
|Item 4 CONTROLS AND
    PROCEDURES                                                                   |  |      | 42 | 
|PART II  OTHER
    INFORMATION                                                                     
|                                                                                                    
|Item 1 LEGAL
    PROCEEDINGS                                                                         |  |      | 42 | 
|                                                                                                    
|Item 2 UNREGISTERED SALES
    OF EQUITY SECURITIES AND USE OF PROCEEDS                               |  |      | 42 | 
|                                                                                                    
|Item 5 OTHER
    INFORMATION                                                                         |  |      | 43 | 
|                                                                                                    
|Item 6 EXHIBITS                                                                                      |  |      | 45 | 

i



---



##### 






PART I







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

TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                            |                              |                                |       |       |               |   |       |       | 
|------------------------------------------- | ---------------------------- | ------------------------------ | ----- | ----- | ------------- | - | ----- | ----- | 
|                                            |                              | Three Months Ended             |      
|                                            |                              |                                |      
|                                            |                              | September 30,                  |       |       | September 24, |  
|                                            |                              | 2005                           |       |       | 2004          |  
|                                            |                              |                                |       |       |               |  
|                                            |                              | (Unaudited)                    |      
|                                            |                              | (In millions, except per share |      
|                                            |                              | amounts)                       |      
|Sales                                       |                              | $                              | 2,917 |       |               | $ | 2,739 |      
|Cost of sales                               |                              |                                | 2,623 |       |               |   | 2,458 |      
|                                            |                              |                                |       |       |               |  
|                                            | Gross profit                 |                                |       | 294   |               |   |       | 281   | 
|Administrative and selling expenses         |                              |                                | 135   |       |               |   | 130   |      
|Research and development expenses           |                              |                                | 43    |       |               |   | 36    |      
|Amortization of intangible assets           |                              |                                | 8     |       |               |   | 8     |      
|Restructuring charges and asset impairments |                              |                                | 35    |       |               |   | 5     |      
|Other (income) expense  net                |                              |                                | (1    | )     |               |   | 7     |      
|                                            |                              |                                |       |       |               |  
|                                            | Operating income             |                                |       | 74    |               |   |       | 95    | 
|Interest expense  net                      |                              |                                | 59    |       |               |   | 59    |      
|Accounts receivable securitization costs    |                              |                                |      |       |               |   | 1     |      
|                                            |                              |                                |       |       |               |  
|                                            | Earnings before income taxes |                                |       | 15    |               |   |       | 35    | 
|Income tax expense                          |                              |                                | 5     |       |               |   | 22    |      
|                                            |                              |                                |       |       |               |  
|                                            | Net earnings                 |                                | $     | 10    |               |   | $     | 13    | 
|                                            |                              |                                |       |       |               |  
|Basic earnings per share:                   |                              |                                |       |       |               |   |       |      
|                                            | Earnings per share           |                                | $     | 0.10  |               |   | $     | 0.13  | 
|                                            |                              |                                |       |       |               |  
|                                            | Weighted average shares      |                                |       | 99.1  |               |   |       | 98.9  | 
|                                            |                              |                                |       |       |               |  
|Diluted earnings per share:                 |                              |                                |       |       |               |   |       |      
|                                            | Earnings per share           |                                | $     | 0.10  |               |   | $     | 0.13  | 
|                                            |                              |                                |       |       |               |  
|                                            | Weighted average shares      |                                |       | 103.1 |               |   |       | 101.2 | 
|                                            |                              |                                |       |       |               |  



2



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                            |                              |                                |       |       |               |   |       |       | 
|------------------------------------------- | ---------------------------- | ------------------------------ | ----- | ----- | ------------- | - | ----- | ----- | 
|                                            |                              | Nine Months Ended              |      
|                                            |                              |                                |      
|                                            |                              | September 30,                  |       |       | September 24, |  
|                                            |                              | 2005                           |       |       | 2004          |  
|                                            |                              |                                |       |       |               |  
|                                            |                              | (Unaudited)                    |      
|                                            |                              | (In millions, except per share |      
|                                            |                              | amounts)                       |      
|Sales                                       |                              | $                              | 9,507 |       |               | $ | 8,825 |      
|Cost of sales                               |                              |                                | 8,443 |       |               |   | 7,840 |      
|                                            |                              |                                |       |       |               |  
|                                            | Gross profit                 |                                |       | 1,064 |               |   |       | 985   | 
|Administrative and selling expenses         |                              |                                | 397   |       |               |   | 386   |      
|Research and development expenses           |                              |                                | 149   |       |               |   | 115   |      
|Amortization of intangible assets           |                              |                                | 24    |       |               |   | 25    |      
|Restructuring charges and asset impairments |                              |                                | 56    |       |               |   | 18    |      
|Other (income) expense  net                |                              |                                | 11    |       |               |   | (9    | )    
|                                            |                              |                                |       |       |               |  
|                                            | Operating income             |                                |       | 427   |               |   |       | 450   | 
|Interest expense  net                      |                              |                                | 171   |       |               |   | 181   |      
|Loss on retirement of debt                  |                              |                                | 7     |       |               |   | 48    |      
|Accounts receivable securitization costs    |                              |                                | 2     |       |               |   | 2     |      
|                                            |                              |                                |       |       |               |  
|                                            | Earnings before income taxes |                                |       | 247   |               |   |       | 219   | 
|Income tax expense                          |                              |                                | 102   |       |               |   | 128   |      
|                                            |                              |                                |       |       |               |  
|                                            | Net earnings                 |                                | $     | 145   |               |   | $     | 91    | 
|                                            |                              |                                |       |       |               |  
|Basic earnings per share:                   |                              |                                |       |       |               |   |       |      
|                                            | Earnings per share           |                                | $     | 1.46  |               |   | $     | 0.93  | 
|                                            |                              |                                |       |       |               |  
|                                            | Weighted average shares      |                                |       | 99.0  |               |   |       | 97.4  | 
|                                            |                              |                                |       |       |               |  
|Diluted earnings per share:                 |                              |                                |       |       |               |   |       |      
|                                            | Earnings per share           |                                | $     | 1.42  |               |   | $     | 0.91  | 
|                                            |                              |                                |       |       |               |  
|                                            | Weighted average shares      |                                |       | 102.0 |               |   |       | 100.2 | 
|                                            |                              |                                |       |       |               |  



3



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED BALANCE SHEETS


|                                                                                                                         |                                                                     |                       |       |       |              |  |       |        |  
|------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------- | --------------------- | ----- | ----- | ------------ |  | ----- | ------ | -
|                                                                                                                         |                                                                     | As of                 |      
|                                                                                                                         |                                                                     |                       |      
|                                                                                                                         |                                                                     | September 30,         |       |       | December 31, | 
|                                                                                                                         |                                                                     | 2005                  |       |       | 2004         | 
|                                                                                                                         |                                                                     |                       |       |       |              | 
|                                                                                                                         |                                                                     | (Unaudited)           |       |       |             
|                                                                                                                         |                                                                     | (Dollars in millions) |      
|Assets                                                                                                                  
|Current assets:                                                                                                          |                                                                     |                       |       |       |              |  |       |       
|                                                                                                                         | Cash and cash equivalents                                           |                       | $     | 300   |              |  | $     | 790    |  
|                                                                                                                         | Marketable securities                                               |                       |       | 17    |              |  |       | 19     |  
|                                                                                                                         | Accounts receivable  net                                           |                       |       | 1,959 |              |  |       | 1,813  |  
|                                                                                                                         | Inventories                                                         |                       |       | 656   |              |  |       | 684    |  
|                                                                                                                         | Prepaid expenses                                                    |                       |       | 83    |              |  |       | 34     |  
|                                                                                                                         | Deferred income taxes                                               |                       |       | 162   |              |  |       | 176    |  
|                                                                                                                         |                                                                     |                       |       |       |              | 
|Total current assets                                                                                                     |                                                                     |                       | 3,177 |       |              |  | 3,516 |       
|Property, plant and equipment  net of accumulated
    depreciation of $1,147 million and $890 million,
    respectively |                                                                     |                       | 2,405 |       |              |  | 2,635 |       
|Goodwill                                                                                                                 |                                                                     |                       | 2,357 |       |              |  | 2,357 |       
|Intangible assets  net                                                                                                  |                                                                     |                       | 740   |       |              |  | 765   |       
|Prepaid pension cost                                                                                                     |                                                                     |                       | 214   |       |              |  | 190   |       
|Deferred income taxes                                                                                                    |                                                                     |                       | 120   |       |              |  | 91    |       
|Other assets                                                                                                             |                                                                     |                       | 577   |       |              |  | 560   |       
|                                                                                                                         |                                                                     |                       |       |       |              | 
|                                                                                                                         | Total assets                                                        |                       | $     | 9,590 |              |  | $     | 10,114 |  
|                                                                                                                         |                                                                     |                       |       |       |              | 
|Liabilities, Minority Interests and Stockholders
    Equity                                                            
|Current liabilities:                                                                                                     |                                                                     |                       |       |       |              |  |       |       
|                                                                                                                         | Short-term debt                                                     |                       | $     | 38    |              |  | $     | 40     |  
|                                                                                                                         | Current portion of long-term debt                                   |                       |       | 17    |              |  |       | 19     |  
|                                                                                                                         | Trade accounts payable                                              |                       |       | 1,721 |              |  |       | 1,887  |  
|                                                                                                                         | Accrued compensation                                                |                       |       | 285   |              |  |       | 309    |  
|                                                                                                                         | Income taxes payable                                                |                       |       | 242   |              |  |       | 233    |  
|                                                                                                                         | Other current liabilities                                           |                       |       | 995   |              |  |       | 992    |  
|                                                                                                                         |                                                                     |                       |       |       |              | 
|Total current liabilities                                                                                                |                                                                     |                       | 3,298 |       |              |  | 3,480 |       
|Long-term debt                                                                                                           |                                                                     |                       | 2,776 |       |              |  | 3,122 |       
|Post-retirement benefits other than pensions                                                                             |                                                                     |                       | 930   |       |              |  | 959   |       
|Pension benefits                                                                                                         |                                                                     |                       | 715   |       |              |  | 843   |       
|Deferred income taxes                                                                                                    |                                                                     |                       | 261   |       |              |  | 268   |       
|Long-term liabilities                                                                                                    |                                                                     |                       | 307   |       |              |  | 272   |       
|                                                                                                                         |                                                                     |                       |       |       |              | 
|                                                                                                                         | Total liabilities                                                   |                       |       | 8,287 |              |  |       | 8,944  |  
|Minority interests                                                                                                       |                                                                     |                       | 56    |       |              |  | 65    |       
|Commitments and contingencies                                                                                            |                                                                     |                       |       |       |              |  |       |       
|Stockholders equity:                                                                                                    |                                                                     |                       |       |       |              |  |       |       
|                                                                                                                         | Capital stock                                                       |                       |       | 1     |              |  |       | 1      |  
|                                                                                                                         | Treasury stock                                                      |                       |       |      |              |  |       |       |  
|                                                                                                                         | Paid-in-capital                                                     |                       |       | 1,139 |              |  |       | 1,131  |  
|                                                                                                                         | Retained earnings (accumulated deficit)                             |                       |       | 73    |              |  |       | (72    | )
|                                                                                                                         | Accumulated other comprehensive earnings                            |                       |       | 34    |              |  |       | 45     |  
|                                                                                                                         |                                                                     |                       |       |       |              | 
|Total stockholders equity                                                                                               |                                                                     |                       | 1,247 |       |              |  | 1,105 |       
|                                                                                                                         |                                                                     |                       |       |       |              | 
|                                                                                                                         | Total liabilities, minority interests, and stockholders
    equity |                       | $     | 9,590 |              |  | $     | 10,114 |  
|                                                                                                                         |                                                                     |                       |       |       |              | 



4



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                          |                                                                              |                                           |        |      |               |   |        |      |      |  
|----------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ----------------------------------------- | ------ | ---- | ------------- | - | ------ | ---- | ---- | -
|                                                                                          |                                                                              | Nine Months Ended                         |       
|                                                                                          |                                                                              |                                           |       
|                                                                                          |                                                                              | September 30,                             |        |      | September 24, |  
|                                                                                          |                                                                              | 2005                                      |        |      | 2004          |  
|                                                                                          |                                                                              |                                           |        |      |               |  
|                                                                                          |                                                                              | (Unaudited)                               |       
|                                                                                          |                                                                              | (Dollars in millions)                     |       
|Operating Activities                                                                      |                                                                              |                                           |        |      |               |   |        |     
|Net earnings                                                                              |                                                                              | $                                         | 145    |      |               | $ | 91     |     
|Adjustments to reconcile net earnings to net cash provided by
    operating activities:   |                                                                              |                                           |        |      |               |   |        |     
|                                                                                          | Depreciation and amortization                                                |                                           |        | 380  |               |   |        | 366  |     
|                                                                                          | Pension and other post-retirement benefits contributions, net of
    expense |                                           |        | (130 | )             |   |        | (35  | )   
|                                                                                          | Amortization of deferred financing fees                                      |                                           |        | 10   |               |   |        | 7    |     
|                                                                                          | Asset impairment charges                                                     |                                           |        | 15   |               |   |        | 1    |     
|                                                                                          | Loss on retirement of debt                                                   |                                           |        | 7    |               |   |        | 48   |     
|                                                                                          | Deferred income taxes                                                        |                                           |        | (19  | )             |   |        | 5    |     
|                                                                                          | Other  net                                                                  |                                           |        | 33   |               |   |        | 38   |     
|Changes in assets and liabilities, net of effects of businesses
    acquired or divested: |                                                                              |                                           |        |      |               |   |        |     
|                                                                                          | Accounts receivable, net                                                     |                                           |        | (291 | )             |   |        | (582 | )   
|                                                                                          | Inventories                                                                  |                                           |        | (8   | )             |   |        | (31  | )   
|                                                                                          | Trade accounts payable                                                       |                                           |        | (62  | )             |   |        | 25   |     
|                                                                                          | Prepaid expense and other assets                                             |                                           |        | (39  | )             |   |        | (13  | )   
|                                                                                          | Other liabilities                                                            |                                           |        | 81   |               |   |        | 116  |     
|                                                                                          |                                                                              |                                           |        |      |               |  
|                                                                                          |                                                                              | Net cash provided by operating activities |        |      | 122           |   |        |      | 36   |  
|Investing Activities                                                                      |                                                                              |                                           |        |      |               |   |        |     
|Capital expenditures                                                                      |                                                                              |                                           | (281   | )    |               |   | (248   | )   
|Acquisitions, net of cash acquired                                                        |                                                                              |                                           | (3     | )    |               |   | (5     | )   
|Investment in affiliates                                                                  |                                                                              |                                           | (8     | )    |               |   |       |     
|Net proceeds from asset sales and divestitures                                            |                                                                              |                                           | 4      |      |               |   | 79     |     
|                                                                                          |                                                                              |                                           |        |      |               |  
|                                                                                          |                                                                              | Net cash used in investing activities     |        |      | (288          | ) |        |      | (174 | )
|Financing Activities                                                                      |                                                                              |                                           |        |      |               |   |        |     
|Change in short-term debt                                                                 |                                                                              |                                           | (1     | )    |               |   | 6      |     
|Proceeds from issuance of long-term debt                                                  |                                                                              |                                           | 1,313  |      |               |   | 1,290  |     
|Redemption of long-term debt                                                              |                                                                              |                                           | (1,601 | )    |               |   | (1,855 | )   
|Debt issue costs                                                                          |                                                                              |                                           | (4     | )    |               |   | (7     | )   
|Issuance of capital stock, net of fees                                                    |                                                                              |                                           | 143    |      |               |   | 635    |     
|Repurchase of capital stock                                                               |                                                                              |                                           | (143   | )    |               |   | (319   | )   
|Proceeds from exercise of stock options                                                   |                                                                              |                                           | 2      |      |               |   |       |     
|                                                                                          |                                                                              |                                           |        |      |               |  
|                                                                                          |                                                                              | Net cash used in financing activities     |        |      | (291          | ) |        |      | (250 | )
|Effect of exchange rate changes on cash                                                   |                                                                              |                                           | (33    | )    |               |   | (2     | )   
|                                                                                          |                                                                              |                                           |        |      |               |  
|Decrease in cash and cash equivalents                                                     |                                                                              |                                           | (490   | )    |               |   | (390   | )   
|Cash and cash equivalents at beginning of period                                          |                                                                              |                                           | 790    |      |               |   | 828    |     
|                                                                                          |                                                                              |                                           |        |      |               |  
|Cash and cash equivalents at end of period                                                |                                                                              | $                                         | 300    |      |               | $ | 438    |     
|                                                                                          |                                                                              |                                           |        |      |               |  



5



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




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





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







Earnings per share.


|                                    |  |                    |       |  |                   |  |       |               |  |  |               |  |  |  |       | 
|----------------------------------- |  | ------------------ | ----- |  | ----------------- |  | ----- | ------------- |  |  | ------------- |  |  |  | ----- | 
|                                    |  | Three Months Ended |       |  | Nine Months Ended | 
|                                    |  |                    |       |  |                   | 
|                                    |  | September 30,      |       |  | September 24,     |  |       | September 30, |  |  | September 24, | 
|                                    |  | 2005               |       |  | 2004              |  |       | 2005          |  |  | 2004          | 
|                                    |  |                    |       |  |                   |  |       |               |  |  |               | 
|                                    |  | (In millions)      |      
|Weighted average shares outstanding |  |                    | 99.1  |  |                   |  | 98.9  |               |  |  | 99.0          |  |  |  | 97.4  | 
|Effect of dilutive securities       |  |                    | 4.0   |  |                   |  | 2.3   |               |  |  | 3.0           |  |  |  | 2.8   | 
|                                    |  |                    |       |  |                   |  |       |               |  |  |               | 
|Diluted shares outstanding          |  |                    | 103.1 |  |                   |  | 101.2 |               |  |  | 102.0         |  |  |  | 100.2 | 
|                                    |  |                    |       |  |                   |  |       |               |  |  |               | 

Warranties.


6



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)






|                                      |  |                       |     |         |          |   |          |               |  |            |                  |   |  |         |     |   |  |   |     | 
|------------------------------------- |  | --------------------- | --- | ------- | -------- | - | -------- | ------------- |  | ---------- | ---------------- | - |  | ------- | --- | - |  | - | --- | 
|                                      |  |                       |     |         |          |   |          | 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 September 30, 2005 |  | $                     | 110 |         |          | $ | 16       |               |  | $          | (10              | ) |  | $       | (6  | ) |  | $ | 110 | 
|Nine months ended September 30, 2005  |  |                       | 110 |         |          |   | 47       |               |  |            | (27              | ) |  |         | (20 | ) |  |   | 110 | 
|Three months ended September 24, 2004 |  |                       | 92  |         |          |   | 16       |               |  |            | (9               | ) |  |         | (4  | ) |  |   | 95  | 
|Nine months ended September 24, 2004  |  |                       | 74  |         |          |   | 49       |               |  |            | (23              | ) |  |         | (5  | ) |  |   | 95  | 

Stock-based compensation. Recent Accounting
Pronouncements






|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |      |  |   |    |      | 
|------------------------------------------------------------------------------------------------- | ----------- | --------------------------------------- | -- | ---- | ----------------- | - | -- | ------------- |  | - | ------------- | ---- |  | - | -- | ---- | 
|                                                                                                  |             | Three Months Ended                      |    |      | Nine Months Ended |  
|                                                                                                  |             |                                         |    |      |                   |  
|                                                                                                  |             | September 30,                           |    |      | September 24,     |   |    | September 30, |  |   | September 24, |     
|                                                                                                  |             | 2005                                    |    |      | 2004              |   |    | 2005          |  |   | 2004          |     
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|                                                                                                  |             | (In millions, except per share amounts) |   
|Net earnings, as reported                                                                         |             | $                                       | 10 |      |                   | $ | 13 |               |  | $ | 145           |      |  | $ | 91 |     
|Deduct: Stock-based compensation under SFAS 123 fair value
    method, net of related tax effects |             |                                         |   |      |                   |   | (2 | )             |  |   | (4            | )    |  |   | (6 | )   
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|Adjusted net earnings, fair value method                                                          |             | $                                       | 10 |      |                   | $ | 11 |               |  | $ | 141           |      |  | $ | 85 |     
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|Basic earnings per share:                                                                         |             |                                         |    |      |                   |   |    |               |  |   |               |      |  |   |    |     
|                                                                                                  | As reported |                                         | $  | 0.10 |                   |   | $  | 0.13          |  |   | $             | 1.46 |  |   | $  | 0.93 | 
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|                                                                                                  | Pro forma   |                                         | $  | 0.10 |                   |   | $  | 0.11          |  |   | $             | 1.42 |  |   | $  | 0.87 | 
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|Diluted earnings per share:                                                                       |             |                                         |    |      |                   |   |    |               |  |   |               |      |  |   |    |     
|                                                                                                  | As reported |                                         | $  | 0.10 |                   |   | $  | 0.13          |  |   | $             | 1.42 |  |   | $  | 0.91 | 
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     
|                                                                                                  | Pro forma   |                                         | $  | 0.10 |                   |   | $  | 0.11          |  |   | $             | 1.38 |  |   | $  | 0.85 | 
|                                                                                                  |             |                                         |    |      |                   |   |    |               |  |   |               |     

7



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




Comprehensive earnings.


|                                                    |  |                       |    |  |                   |   |    |               |  |   |               |   |  |   |    |  
|--------------------------------------------------- |  | --------------------- | -- |  | ----------------- | - | -- | ------------- |  | - | ------------- | - |  | - | -- | -
|                                                    |  | Three Months Ended    |    |  | Nine Months Ended |  
|                                                    |  |                       |    |  |                   |  
|                                                    |  | September 30,         |    |  | September 24,     |   |    | September 30, |  |   | September 24, |  
|                                                    |  | 2005                  |    |  | 2004              |   |    | 2005          |  |   | 2004          |  
|                                                    |  |                       |    |  |                   |   |    |               |  |   |               |  
|                                                    |  | (Dollars in millions) |   
|Net earnings                                        |  | $                     | 10 |  |                   | $ | 13 |               |  | $ | 145           |   |  | $ | 91 |  
|Foreign currency translation earnings (losses), net |  |                       | 15 |  |                   |   | 34 |               |  |   | (51           | ) |  |   | (4 | )
|Realized net gains (losses) on cash flow hedges     |  |                       | 10 |  |                   |   | (2 | )             |  |   | 40            |   |  |   | 7  |  
|                                                    |  |                       |    |  |                   |   |    |               |  |   |               |  
|Comprehensive earnings                              |  | $                     | 35 |  |                   | $ | 45 |               |  | $ | 134           |   |  | $ | 94 |  
|                                                    |  |                       |    |  |                   |   |    |               |  |   |               |  

Recent accounting pronouncements.








|   |                 
|-- | ----------------
|3. | Subsequent Event

 


8



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|   |                             
|-- | ----------------------------
|4. | Acquisition and Divestitures







|   |                                            
|-- | -------------------------------------------
|5. | Restructuring Charges and Asset Impairments



|                                                      |                                                   |                       |     |    |                   |   |   |               |  |   |               |    |  |   |    |    | 
|----------------------------------------------------- | ------------------------------------------------- | --------------------- | --- | -- | ----------------- | - | - | ------------- |  | - | ------------- | -- |  | - | -- | -- | 
|                                                      |                                                   | Three Months Ended    |     |    | Nine Months Ended |  
|                                                      |                                                   |                       |     |    |                   |  
|                                                      |                                                   | September 30,         |     |    | September 24,     |   |   | September 30, |  |   | September 24, |   
|                                                      |                                                   | 2005                  |     |    | 2004              |   |   | 2005          |  |   | 2004          |   
|                                                      |                                                   |                       |     |    |                   |   |   |               |  |   |               |   
|                                                      |                                                   | (Dollars in millions) |    
|Severance and other charges                           |                                                   | $                     | 32  |    |                   | $ | 5 |               |  | $ | 53            |    |  | $ | 17 |   
|Asset impairments related to restructuring activities |                                                   |                       | 1   |    |                   |   |  |               |  |   | 3             |    |  |   | 1  |   
|Curtailment gains                                     |                                                   |                       | (10 | )  |                   |   |  |               |  |   | (12           | )  |  |   |   |   
|                                                      |                                                   |                       |     |    |                   |   |   |               |  |   |               |   
|                                                      | Total restructuring charges                       |                       |     | 23 |                   |   |   | 5             |  |   |               | 44 |  |   |    | 18 | 
|Other asset impairments                               |                                                   |                       | 12  |    |                   |   |  |               |  |   | 12            |    |  |   |   |   
|                                                      |                                                   |                       |     |    |                   |   |   |               |  |   |               |   
|                                                      | Total restructuring charges and asset impairments |                       | $   | 35 |                   |   | $ | 5             |  |   | $             | 56 |  |   | $  | 18 | 
|                                                      |                                                   |                       |     |    |                   |   |   |               |  |   |               |   

Restructuring




|                        |                             |                       |    |    |                   |   |   |               |  |   |               |    |  |   |    |    | 
|----------------------- | --------------------------- | --------------------- | -- | -- | ----------------- | - | - | ------------- |  | - | ------------- | -- |  | - | -- | -- | 
|                        |                             | Three Months Ended    |    |    | Nine Months Ended |  
|                        |                             |                       |    |    |                   |  
|                        |                             | September 30,         |    |    | September 24,     |   |   | September 30, |  |   | September 24, |   
|                        |                             | 2005                  |    |    | 2004              |   |   | 2005          |  |   | 2004          |   
|                        |                             |                       |    |    |                   |   |   |               |  |   |               |   
|                        |                             | (Dollars in millions) |   
|Chassis Systems         |                             | $                     | (7 | )  |                   | $ | 1 |               |  | $ | 2             |    |  | $ | 11 |   
|Occupant Safety Systems |                             |                       | 31 |    |                   |   | 2 |               |  |   | 35            |    |  |   | 3  |   
|Automotive Components   |                             |                       | (1 | )  |                   |   | 2 |               |  |   | 7             |    |  |   | 4  |   
|                        |                             |                       |    |    |                   |   |   |               |  |   |               |   
|                        | Total restructuring charges |                       | $  | 23 |                   |   | $ | 5             |  |   | $             | 44 |  |   | $  | 18 | 
|                        |                             |                       |    |    |                   |   |   |               |  |   |               |   

9



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




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



|                        |                                   |                       |    |    |                   |   |   |               |  |   |               |    |  |   |    |    | 
|----------------------- | --------------------------------- | --------------------- | -- | -- | ----------------- | - | - | ------------- |  | - | ------------- | -- |  | - | -- | -- | 
|                        |                                   | Three Months Ended    |    |    | Nine Months Ended |  
|                        |                                   |                       |    |    |                   |  
|                        |                                   | September 30,         |    |    | September 24,     |   |   | September 30, |  |   | September 24, |   
|                        |                                   | 2005                  |    |    | 2004              |   |   | 2005          |  |   | 2004          |   
|                        |                                   |                       |    |    |                   |   |   |               |  |   |               |   
|                        |                                   | (Dollars in millions) |   
|Chassis Systems         |                                   | $                     |   |    |                   | $ | 1 |               |  | $ | 11            |    |  | $ | 11 |   
|Occupant Safety Systems |                                   |                       | 31 |    |                   |   | 2 |               |  |   | 33            |    |  |   | 2  |   
|Automotive Components   |                                   |                       | 1  |    |                   |   | 2 |               |  |   | 9             |    |  |   | 4  |   
|                        |                                   |                       |    |    |                   |   |   |               |  |   |               |   
|                        | Total severance and other charges |                       | $  | 32 |                   |   | $ | 5             |  |   | $             | 53 |  |   | $  | 17 | 
|                        |                                   |                       |    |    |                   |   |   |               |  |   |               |   





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



|                                      |  |                       |    |         |          |   |          |            |  |                   |          |  |         |             |     |   |         |   |    |  |  |   |    | 
|------------------------------------- |  | --------------------- | -- | ------- | -------- | - | -------- | ---------- |  | ----------------- | -------- |  | ------- | ----------- | --- | - | ------- | - | -- |  |  | - | -- | 
|                                      |  |                       |    |         |          |   |          |            |  | Reclassifications |          |  |        
|                                      |  |                       |    |         |          |   |          |            |  | and Effects of    |          |  |        
|                                      |  |                       |    | Current |          |   | Purchase |            |  | Used for          |          |  | Foreign |             |     |  
|                                      |  | Beginning             |    |         | Period   |   |          | Price      |  |                   | Purposes |  |         | Currency    |     |   | Ending  |  
|                                      |  | Balance               |    |         | Accruals |   |          | Allocation |  |                   | Intended |  |         | Translation |     |   | Balance |  
|                                      |  |                       |    |         |          |   |          |            |  |                   |          |  |         |             |     |   |         |  
|                                      |  | (Dollars in millions) |   
|Three months ended September 30, 2005 |  | $                     | 36 |         |          | $ | 22       |            |  | $                 |         |  |         | $           | (36 | ) |         | $ | 12 |  |  | $ | 34 | 
|Nine months ended September 30, 2005  |  |                       | 49 |         |          |   | 43       |            |  |                   |         |  |         |             | (64 | ) |         |   | 6  |  |  |   | 34 | 
|Three months ended September 24, 2004 |  |                       | 54 |         |          |   | 5        |            |  |                   |         |  |         |             | (13 | ) |         |   |   |  |  |   | 46 | 
|Nine months ended September 24, 2004  |  |                       | 79 |         |          |   | 18       |            |  |                   | 2        |  |         |             | (53 | ) |         |   |   |  |  |   | 46 | 





| |                  
| | -----------------
| | Curtailment gains



10



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




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







| |                        
| | -----------------------
| | Other asset impairments





|   |            
|-- | -----------
|6. | Inventories



|                                      |                   |                       |     |     |              |   |     |     | 
|------------------------------------- | ----------------- | --------------------- | --- | --- | ------------ | - | --- | --- | 
|                                      |                   | As of                 |    
|                                      |                   |                       |    
|                                      |                   | September 30,         |     |     | December 31, |  
|                                      |                   | 2005                  |     |     | 2004         |  
|                                      |                   |                       |     |     |              |  
|                                      |                   | (Dollars in millions) |    
|Finished products and work in process |                   | $                     | 340 |     |              | $ | 373 |    
|Raw materials and supplies            |                   |                       | 316 |     |              |   | 311 |    
|                                      |                   |                       |     |     |              |  
|                                      | Total inventories |                       | $   | 656 |              |   | $   | 684 | 
|                                      |                   |                       |     |     |              |  



|   |                               
|-- | ------------------------------
|7. | Goodwill and Intangible Assets



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



11



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




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



|                                    |                        |                          |     |     |                         |   |     |          |   |       |          |     |  |              |     |     |          |   |     |     |   |   |     |     | 
|----------------------------------- | ---------------------- | ------------------------ | --- | --- | ----------------------- | - | --- | -------- | - | ----- | -------- | --- |  | ------------ | --- | --- | -------- | - | --- | --- | - | - | --- | --- | 
|                                    |                        | As of September 30, 2005 |     |     | As of December 31, 2004 |  
|                                    |                        |                          |     |     |                         |  
|                                    |                        | 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 |                          | $   | 452 |                         |   | $   | (58      | ) |       | $        | 394 |  |              | $   | 452 |          |   | $   | (42 | ) |   | $   | 410 | 
|                                    | Developed technology   |                          |     | 80  |                         |   |     | (26      | ) |       |          | 54  |  |              |     | 81  |          |   |     | (18 | ) |   |     | 63  | 
|                                    |                        |                          |     |     |                         |   |     |          |   |       |          |     |  |              |     |     |          |  
|                                    | Total                  |                          |     | 532 |                         |   |     | (84      | ) |       |          | 448 |  |              |     | 533 |          |   |     | (60 | ) |   |     | 473 | 
|Indefinite-lived intangible assets: |                        |                          |     |     |                         |   |     |          |   |       |          |     |  |              |     |     |          |   |     |     |   |   |     |    
|                                    | Trademarks             |                          |     | 292 |                         |   |     |         |   |       |          | 292 |  |              |     | 292 |          |   |     |    |   |   |     | 292 | 
|                                    |                        |                          |     |     |                         |   |     |          |   |       |          |     |  |              |     |     |          |  
|Total                               |                        | $                        | 824 |     |                         | $ | (84 | )        |   | $     | 740      |     |  | $            | 825 |     |          | $ | (60 | )   |   | $ | 765 |    
|                                    |                        |                          |     |     |                         |   |     |          |   |       |          |     |  |              |     |     |          |  





|   |                             
|-- | ----------------------------
|8. | Other (Income) Expense  Net



|                                         |                              |                       |    |    |                   |   |    |               |  |   |               |    |  |   |     |    |  
|---------------------------------------- | ---------------------------- | --------------------- | -- | -- | ----------------- | - | -- | ------------- |  | - | ------------- | -- |  | - | --- | -- | -
|                                         |                              | Three Months Ended    |    |    | Nine Months Ended |  
|                                         |                              |                       |    |    |                   |  
|                                         |                              | September 30,         |    |    | September 24,     |   |    | September 30, |  |   | September 24, |   
|                                         |                              | 2005                  |    |    | 2004              |   |    | 2005          |  |   | 2004          |   
|                                         |                              |                       |    |    |                   |   |    |               |  |   |               |   
|                                         |                              | (Dollars in millions) |   
|Minority interest                        |                              | $                     | 1  |    |                   | $ | 3  |               |  | $ | 5             |    |  | $ | 10  |   
|Earnings of affiliates                   |                              |                       | (2 | )  |                   |   | (3 | )             |  |   | (12           | )  |  |   | (11 | ) 
|Foreign currency exchange (gains) losses |                              |                       | 4  |    |                   |   | 3  |               |  |   | 23            |    |  |   | 3   |   
|Provision for bad debts                  |                              |                       | 2  |    |                   |   | 7  |               |  |   | 17            |    |  |   | 7   |   
|Miscellaneous other income               |                              |                       | (6 | )  |                   |   | (3 | )             |  |   | (22           | )  |  |   | (18 | ) 
|                                         |                              |                       |    |    |                   |   |    |               |  |   |               |   
|                                         | Other (income) expense  net |                       | $  | (1 | )                 |   | $  | 7             |  |   | $             | 11 |  |   | $   | (9 | )
|                                         |                              |                       |    |    |                   |   |    |               |  |   |               |   





|   |                                   
|-- | ----------------------------------
|9. | Accounts Receivable Securitization





12



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)








 






|    |             
|--- | ------------
|10. | Income Taxes



13



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)










|    |                                                                            
|--- | ---------------------------------------------------------------------------
|11. | Pension Plans and Post-Retirement Benefits Other Than
    Pensions (OPEB)



| |              
| | -------------
| | Pension Plans



|                                               |  |                       |     |         |                    |   |     |       |         |   |      |   |  |      |     |   |       |   |     |   |  |   |    |  
|---------------------------------------------- |  | --------------------- | --- | ------- | ------------------ | - | --- | ----- | ------- | - | ---- | - |  | ---- | --- | - | ----- | - | --- | - |  | - | -- | -
|                                               |  | Three Months Ended    |    
|                                               |  |                       |    
|                                               |  | September 30, 2005    |     |         | September 24, 2004 |  
|                                               |  |                       |     |         |                    |  
|                                               |  |                       |     | Rest of |                    |   |     |       | Rest of |  
|                                               |  | U.S.                  |     |         | U.K.               |   |     | World |         |   | U.S. |   |  | U.K. |     |   | World |  
|                                               |  |                       |     |         |                    |   |     |       |         |   |      |   |  |      |     |   |       |  
|                                               |  | (Dollars in millions) |    
|Defined benefit plans                          |  |                       |     |         |                    |   |     |       |         |   |      |   |  |      |     |   |       |   |     |   |  |   |    |  
|Service cost                                   |  | $                     | 7   |         |                    | $ | 9   |       |         | $ | 5    |   |  | $    | 8   |   |       | $ | 9   |   |  | $ | 6  |  
|Interest cost on projected benefit obligations |  |                       | 17  |         |                    |   | 62  |       |         |   | 8    |   |  |      | 17  |   |       |   | 61  |   |  |   | 8  |  
|Expected return on plan assets                 |  |                       | (15 | )       |                    |   | (84 | )     |         |   | (3   | ) |  |      | (13 | ) |       |   | (84 | ) |  |   | (3 | )
|                                               |  |                       |     |         |                    |   |     |       |         |   |      |   |  |      |     |   |       |  
|Net pension cost (income)                      |  | $                     | 9   |         |                    | $ | (13 | )     |         | $ | 10   |   |  | $    | 12  |   |       | $ | (14 | ) |  | $ | 11 |  
|                                               |  |                       |     |         |                    |   |     |       |         |   |      |   |  |      |     |   |       |  

14



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


|                                               |  |                       |     |         |                    |   |      |       |         |   |      |   |  |      |     |   |       |   |      |   |  |   |    |  
|---------------------------------------------- |  | --------------------- | --- | ------- | ------------------ | - | ---- | ----- | ------- | - | ---- | - |  | ---- | --- | - | ----- | - | ---- | - |  | - | -- | -
|                                               |  | Nine Months Ended     |    
|                                               |  |                       |    
|                                               |  | September 30, 2005    |     |         | September 24, 2004 |  
|                                               |  |                       |     |         |                    |  
|                                               |  |                       |     | Rest of |                    |   |      |       | Rest of |  
|                                               |  | U.S.                  |     |         | U.K.               |   |      | World |         |   | U.S. |   |  | U.K. |     |   | World |  
|                                               |  |                       |     |         |                    |   |      |       |         |   |      |   |  |      |     |   |       |  
|                                               |  | (Dollars in millions) |    
|Defined benefit plans                          |  |                       |     |         |                    |   |      |       |         |   |      |   |  |      |     |   |       |   |      |   |  |   |    |  
|Service cost                                   |  | $                     | 21  |         |                    | $ | 27   |       |         | $ | 15   |   |  | $    | 24  |   |       | $ | 25   |   |  | $ | 16 |  
|Interest cost on projected benefit obligations |  |                       | 51  |         |                    |   | 192  |       |         |   | 24   |   |  |      | 51  |   |       |   | 169  |   |  |   | 22 |  
|Expected return on plan assets                 |  |                       | (43 | )       |                    |   | (260 | )     |         |   | (9   | ) |  |      | (39 | ) |       |   | (233 | ) |  |   | (9 | )
|                                               |  |                       |     |         |                    |   |      |       |         |   |      |   |  |      |     |   |       |  
|Net pension cost (income)                      |  | $                     | 29  |         |                    | $ | (41  | )     |         | $ | 30   |   |  | $    | 36  |   |       | $ | (39  | ) |  | $ | 29 |  
|                                               |  |                       |     |         |                    |   |      |       |         |   |      |   |  |      |     |   |       |  



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



|                                    |  |                       |    |   |                   |   |    |               |  |   |               |   |  |   |    | 
|----------------------------------- |  | --------------------- | -- | - | ----------------- | - | -- | ------------- |  | - | ------------- | - |  | - | -- | 
|                                    |  | Three Months Ended    |    |   | Nine Months Ended |  
|                                    |  |                       |    |   |                   |  
|                                    |  | September 30,         |    |   | September 24,     |   |    | September 30, |  |   | September 24, |  
|                                    |  | 2005                  |    |   | 2004              |   |    | 2005          |  |   | 2004          |  
|                                    |  |                       |    |   |                   |   |    |               |  |   |               |  
|                                    |  | (Dollars in millions) |   
|Service cost                        |  | $                     | 2  |   |                   | $ | 3  |               |  | $ | 6             |   |  | $ | 6  | 
|Interest cost                       |  |                       | 12 |   |                   |   | 14 |               |  |   | 36            |   |  |   | 46 | 
|Settlement gain                     |  |                       |   |   |                   |   |   |               |  |   | (3            | ) |  |   |   | 
|Amortization of unrecognized income |  |                       | (2 | ) |                   |   |   |               |  |   | (6            | ) |  |   |   | 
|                                    |  |                       |    |   |                   |   |    |               |  |   |               |  
|Net post-retirement benefit cost    |  | $                     | 12 |   |                   | $ | 17 |               |  | $ | 33            |   |  | $ | 52 | 
|                                    |  |                       |    |   |                   |   |    |               |  |   |               |  





15



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|    |     
|--- | ----
|12. | Debt



|                                             |                                        |                       |       |       |              |   |       |       | 
|-------------------------------------------- | -------------------------------------- | --------------------- | ----- | ----- | ------------ | - | ----- | ----- | 
|                                             |                                        | As of                 |      
|                                             |                                        |                       |      
|                                             |                                        | September 30,         |       |       | December 31, |  
|                                             |                                        | 2005                  |       |       | 2004         |  
|                                             |                                        |                       |       |       |              |  
|                                             |                                        | (Dollars in millions) |      
|Short-term debt                              |                                        | $                     | 38    |       |              | $ | 40    |      
|                                             |                                        |                       |       |       |              |  
|Long-term debt:                              |                                        |                       |       |       |              |   |       |      
|Senior Notes                                 |                                        | $                     | 972   |       |              | $ | 1,063 |      
|Senior Subordinated Notes                    |                                        |                       | 293   |       |              |   | 306   |      
|Term Loan facilities                         |                                        |                       | 1,293 |       |              |   | 1,512 |      
|Revolving credit facility                    |                                        |                       |      |       |              |   |      |      
|Lucas Industries Limited debentures due 2020 |                                        |                       | 186   |       |              |   | 202   |      
|Capitalized leases                           |                                        |                       | 33    |       |              |   | 39    |      
|Other borrowings                             |                                        |                       | 16    |       |              |   | 19    |      
|                                             |                                        |                       |       |       |              |  
|                                             | Total long-term debt                   |                       |       | 2,793 |              |   |       | 3,141 | 
|Less current portion                         |                                        |                       | 17    |       |              |   | 19    |      
|                                             |                                        |                       |       |       |              |  
|                                             | Long-term debt, net of current portion |                       | $     | 2,776 |              |   | $     | 3,122 | 
|                                             |                                        |                       |       |       |              |  



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

3 8 1 8  3 4 


 1 8 1 8






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

Senior Secured Credit Facilities.


16



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)










Incremental Extensions of Credit.


January 2004 Refinancing.


17



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)





April 2004 Refinancing.


November 2004 Refinancing.




|    |              
|--- | -------------
|13. | Capital Stock

Repurchase of Northrop Shares.


Issuance and Registration of Shares.




 1 8




Initial Public Offering.


18



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)






|    |                         
|--- | ------------------------
|14. | Share-based Compensation











|                     |  |      |           |  |      |  |           | 
|-------------------- |  | ---- | --------- |  | ---- |  | --------- | 
|                     |  | 2005 |           |  | 2004 | 
|                     |  |      |           |  |      | 
|Expected volatility  |  |      | 28.0%     |  |      |  | 31.0%     | 
|Dividend Yield       |  |      | 0.00%     |  |      |  | 0.00%     | 
|Expected option life |  |      | 5.0 years |  |      |  | 6.0 years | 
|Risk-free rate       |  |      | 3.70%     |  |      |  | 3.78%     | 

19



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|                                  |  |           |        |           |          |           |         |                       |  |  |           |  |  |   |     | 
|--------------------------------- |  | --------- | ------ | --------- | -------- | --------- | ------- | --------------------- |  |  | --------- |  |  | - | --- | 
|                                  |  |           |        |           |          | Weighted- |         |                       | 
|                                  |  |           |        | Weighted- |          |           | Average |                       |  | 
|                                  |  | Thousands |        |           | Average  |           |         | Remaining             |  |  | Aggregate | 
|                                  |  | of        |        |           | Exercise |           |         | Contractual           |  |  | Intrinsic | 
|                                  |  | Options   |        |           | Price    |           |         | Term                  |  |  | Value     | 
|                                  |  |           |        |           |          |           |         |                       |  |  |           | 
|                                  |  |           |        |           |          |           |         | (Dollars in millions) | 
|Outstanding at January 1, 2005    |  |           | 9,534  |           |          | $         | 16.05   |                       |  |  |           |  |  |   |     | 
|Granted                           |  |           | 938    |           |          |           | 19.82   |                       |  |  |           |  |  |   |     | 
|Exercised                         |  |           | (164   | )         |          |           | 11.67   |                       |  |  |           |  |  |   |     | 
|Forfeited or expired              |  |           | (110   | )         |          |           | 16.69   |                       |  |  |           |  |  |   |     | 
|                                  |  |           |        |           |          |           |         |                       |  |  |           | 
|Outstanding at September 30, 2005 |  |           | 10,198 |           |          |           | 16.46   |                       |  |  | 7.6       |  |  | $ | 131 | 
|                                  |  |           |        |           |          |           |         |                       |  |  |           | 
|Exercisable at September 30, 2005 |  |           | 3,280  |           |          |           | 16.29   |                       |  |  | 7.5       |  |  | $ | 43  | 
|                                  |  |           |        |           |          |           |         |                       |  |  |           | 





|                                |  |             |     |   |            |   |       | 
|------------------------------- |  | ----------- | --- | - | ---------- | - | ----- | 
|                                |  | Thousands   |     |   | Weighted-  |  
|                                |  | of          |     |   | Average    |  
|                                |  | Restricted  |     |   | Grant-Date |  
|Nonvested Shares                |  | Stock Units |     |   | Fair Value |  
|                                |  |             |     |   |            |  
|Nonvested at January 1, 2005    |  |             | 14  |   |            | $ | 19.73 | 
|Granted                         |  |             | 559 |   |            |   | 19.81 | 
|Vested                          |  |             | (4  | ) |            |   | 20.21 | 
|Forfeited                       |  |             | (4  | ) |            |   | 19.82 | 
|                                |  |             |     |   |            |  
|Nonvested at September 30, 2005 |  |             | 565 |   |            |   | 19.81 | 
|                                |  |             |     |   |            |  





|    |                           
|--- | --------------------------
|15. | Related Party Transactions

Blackstone.


20



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)






Northrop.








21



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|    |                   
|--- | ------------------
|16. | Operating Segments



|                              |                         |                              |       |       |                   |   |       |               |    |   |               |       |     |   |       |       |     | 
|----------------------------- | ----------------------- | ---------------------------- | ----- | ----- | ----------------- | - | ----- | ------------- | -- | - | ------------- | ----- | --- | - | ----- | ----- | --- | 
|                              |                         | Three Months Ended           |       |       | Nine Months Ended |  
|                              |                         |                              |       |       |                   |  
|                              |                         | September 30,                |       |       | September 24,     |   |       | September 30, |    |   | September 24, |      
|                              |                         | 2005                         |       |       | 2004              |   |       | 2005          |    |   | 2004          |      
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|                              |                         | (Dollars in millions)        |      
|Sales to external customers:  |                         |                              |       |       |                   |   |       |               |    |   |               |       |     |   |       |      
|                              | Chassis Systems         |                              | $     | 1,670 |                   |   | $     | 1,620         |    |   | $             | 5,470 |     |   | $     | 5,126 |    
|                              | Occupant Safety Systems |                              |       | 859   |                   |   |       | 751           |    |   |               | 2,755 |     |   |       | 2,504 |    
|                              | Automotive Components   |                              |       | 388   |                   |   |       | 368           |    |   |               | 1,282 |     |   |       | 1,195 |    
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|Total sales                   |                         | $                            | 2,917 |       |                   | $ | 2,739 |               |    | $ | 9,507         |       |     | $ | 8,825 |      
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|Earnings before taxes:        |                         |                              |       |       |                   |   |       |               |    |   |               |       |     |   |       |      
|                              | Chassis Systems         |                              | $     | 46    |                   |   | $     | 61            |    |   | $             | 217   |     |   | $     | 223   |    
|                              | Occupant Safety Systems |                              |       | 44    |                   |   |       | 47            |    |   |               | 232   |     |   |       | 230   |    
|                              | Automotive Components   |                              |       | 15    |                   |   |       | 16            |    |   |               | 79    |     |   |       | 78    |    
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|Segment earnings before taxes |                         |                              | 105   |       |                   |   | 124   |               |    |   | 528           |       |     |   | 531   |      
|Corporate expense and other   |                         |                              | (31   | )     |                   |   | (29   | )             |    |   | (101          | )     |     |   | (81   | )    
|Financing costs               |                         |                              | (59   | )     |                   |   | (60   | )             |    |   | (173          | )     |     |   | (183  | )    
|Loss on retirement of debt    |                         |                              |      |       |                   |   |      |               |    |   | (7            | )     |     |   | (48   | )    
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|                              |                         | Earnings before income taxes |       | $     | 15                |   |       | $             | 35 |   |               | $     | 247 |   |       | $     | 219 | 
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|Intersegment sales:           |                         |                              |       |       |                   |   |       |               |    |   |               |       |     |   |       |      
|                              | Chassis Systems         |                              | $     | 2     |                   |   | $     | 1             |    |   | $             | 6     |     |   | $     | 2     |    
|                              | Occupant Safety Systems |                              |       | 24    |                   |   |       | 7             |    |   |               | 62    |     |   |       | 16    |    
|                              | Automotive Components   |                              |       | 10    |                   |   |       | 14            |    |   |               | 32    |     |   |       | 40    |    
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      
|                              |                         | $                            | 36    |       |                   | $ | 22    |               |    | $ | 100           |       |     | $ | 58    |      
|                              |                         |                              |       |       |                   |   |       |               |    |   |               |      



|    |              
|--- | -------------
|17. | Contingencies



22



---



##### 



TRW AUTOMOTIVE HOLDINGS CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)
















23



---



##### 





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





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

Our Business.






The Unfavorable Automotive Climate.




| |   |                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a decline in market share for vehicle sales among some of our
    largest customers;                                                                                                                                                                
|
| |  | 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, reorganization under bankruptcy laws;
|
| |  | continuing pricing pressure from OEMs;                                                                                                                                                                                                              
|
| |  | the continued rise in inflationary pressures impacting certain
    commodities such as resins, chemicals and yarns, despite
    declines in the cost of ferrous metals from recent all-time
    highs;                                              
|
| |  | 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;                                                      
|
| |  | rising interest rates;                                                                                                                                                                                                                              
|
| |  | the continued strengthening of the U.S. dollar against
    various foreign currencies; and                                                                                                                                                          
|
| |  | reduced funding of research and development projects.                                                                                                                                                                                               



24



---



##### 

















25



---



##### 



Our Debt and Capital Structure.  1 8






| |                      
| | ---------------------
| | Results of Operations





| |                                    
| | -----------------------------------
| | Total Company Results of Operations

CONSOLIDATED STATEMENTS OF OPERATIONS


For the Three Months Ended September 30, 2005 and
September 24, 2004


(Unaudited)


|                                            |                              |                       |       |     |               |   |       |     | 
|------------------------------------------- | ---------------------------- | --------------------- | ----- | --- | ------------- | - | ----- | --- | 
|                                            |                              | Three Months Ended    |      
|                                            |                              |                       |      
|                                            |                              | September 30,         |       |     | September 24, |  
|                                            |                              | 2005                  |       |     | 2004          |  
|                                            |                              |                       |       |     |               |  
|                                            |                              | (Dollars in millions) |      
|Sales                                       |                              | $                     | 2,917 |     |               | $ | 2,739 |    
|Cost of sales                               |                              |                       | 2,623 |     |               |   | 2,458 |    
|                                            |                              |                       |       |     |               |  
|                                            | Gross profit                 |                       |       | 294 |               |   |       | 281 | 
|Administrative and selling expenses         |                              |                       | 135   |     |               |   | 130   |    
|Research and development expenses           |                              |                       | 43    |     |               |   | 36    |    
|Amortization of intangible assets           |                              |                       | 8     |     |               |   | 8     |    
|Restructuring charges and asset impairments |                              |                       | 35    |     |               |   | 5     |    
|Other (income) expense  net                |                              |                       | (1    | )   |               |   | 7     |    
|                                            |                              |                       |       |     |               |  
|                                            | Operating income             |                       |       | 74  |               |   |       | 95  | 
|Interest expense  net                      |                              |                       | 59    |     |               |   | 59    |    
|Accounts receivable securitization costs    |                              |                       |      |     |               |   | 1     |    
|                                            |                              |                       |       |     |               |  
|                                            | Earnings before income taxes |                       |       | 15  |               |   |       | 35  | 
|Income tax expense                          |                              |                       | 5     |     |               |   | 22    |    
|                                            |                              |                       |       |     |               |  
|                                            | Net earnings                 |                       | $     | 10  |               |   | $     | 13  | 
|                                            |                              |                       |       |     |               |  



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Three Months Ended September 30, 2005 Compared to
    Three Months Ended September 24, 2004

Sales


26



---



##### 





Gross profit


Administrative and selling expenses


Research and development expenses


Amortization of intangible assets


Restructuring charges and asset impairments


Other (income) expense  net


Interest expense  net


Accounts receivable securitization costs


Income tax expense


27



---



##### 



CONSOLIDATED STATEMENTS OF OPERATIONS


For the Nine Months Ended September 30, 2005 and
September 24, 2004


(Unaudited)


|                                            |                              |                       |       |       |               |   |       |     | 
|------------------------------------------- | ---------------------------- | --------------------- | ----- | ----- | ------------- | - | ----- | --- | 
|                                            |                              | Nine Months Ended     |      
|                                            |                              |                       |      
|                                            |                              | September 30,         |       |       | September 24, |  
|                                            |                              | 2005                  |       |       | 2004          |  
|                                            |                              |                       |       |       |               |  
|                                            |                              | (Dollars in millions) |      
|Sales                                       |                              | $                     | 9,507 |       |               | $ | 8,825 |    
|Cost of sales                               |                              |                       | 8,443 |       |               |   | 7,840 |    
|                                            |                              |                       |       |       |               |  
|                                            | Gross profit                 |                       |       | 1,064 |               |   |       | 985 | 
|Administrative and selling expenses         |                              |                       | 397   |       |               |   | 386   |    
|Research and development expenses           |                              |                       | 149   |       |               |   | 115   |    
|Amortization of intangible assets           |                              |                       | 24    |       |               |   | 25    |    
|Restructuring charges and asset impairments |                              |                       | 56    |       |               |   | 18    |    
|Other (income) expense  net                |                              |                       | 11    |       |               |   | (9    | )  
|                                            |                              |                       |       |       |               |  
|                                            | Operating income             |                       |       | 427   |               |   |       | 450 | 
|Interest expense  net                      |                              |                       | 171   |       |               |   | 181   |    
|Loss on retirement of debt                  |                              |                       | 7     |       |               |   | 48    |    
|Accounts receivable securitization costs    |                              |                       | 2     |       |               |   | 2     |    
|                                            |                              |                       |       |       |               |  
|                                            | Earnings before income taxes |                       |       | 247   |               |   |       | 219 | 
|Income tax expense                          |                              |                       | 102   |       |               |   | 128   |    
|                                            |                              |                       |       |       |               |  
|Net earnings                                |                              | $                     | 145   |       |               | $ | 91    |    
|                                            |                              |                       |       |       |               |  



| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2005 Compared to Nine
    Months Ended September 24, 2004

Sales


Gross profit


Administrative and selling expenses


Research and development expenses


28



---



##### 





Amortization of intangible assets


Restructuring charges and asset impairments


Other (income) expense  net


Interest expense  net


Loss on retirement of debt  1 8 1 8






| |   |                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $1 million related to the write-off of unamortized debt
    issuance costs in conjunction with the repayment of a portion of
    the then-existing term loan facilities in the second quarter of
    2004;                                    
|
| |  | $11 million write-off of unamortized debt issuance costs in
    conjunction with our January 2004 refinancing of the
    then-existing term loan facilities; and                                                                              
|
| |  | $30 million of redemption fees and $6 million
    write-off of unamortized debt issuance costs associated with our
    dollar and euro-denominated senior notes and senior-subordinated
    notes which were partially redeemed in March 2004.

Accounts receivable securitization


Income tax expense


29



---



##### 





| |                              
| | -----------------------------
| | SEGMENT RESULTS OF OPERATIONS



|                             |                         |                               |       |    |                   |   |       |               |       |   |               |     |       |   |       |     |       | 
|---------------------------- | ----------------------- | ----------------------------- | ----- | -- | ----------------- | - | ----- | ------------- | ----- | - | ------------- | --- | ----- | - | ----- | --- | ----- | 
|                             |                         | Three Months Ended            |       |    | Nine Months Ended |  
|                             |                         |                               |       |    |                   |  
|                             |                         | September 30,                 |       |    | September 24,     |   |       | September 30, |       |   | September 24, |    
|                             |                         | 2005                          |       |    | 2004              |   |       | 2005          |       |   | 2004          |    
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    
|                             |                         | (Dollars in millions)         |      
|Sales to external customers: |                         |                               |       |    |                   |   |       |               |       |   |               |     |       |   |       |    
|Chassis Systems              |                         | $                             | 1,670 |    |                   | $ | 1,620 |               |       | $ | 5,470         |     |       | $ | 5,126 |    
|Occupant Safety Systems      |                         |                               | 859   |    |                   |   | 751   |               |       |   | 2,755         |     |       |   | 2,504 |    
|Automotive Components        |                         |                               | 388   |    |                   |   | 368   |               |       |   | 1,282         |     |       |   | 1,195 |    
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    
|                             |                         | Total sales                   |       | $  | 2,917             |   |       | $             | 2,739 |   |               | $   | 9,507 |   |       | $   | 8,825 | 
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    
|Earnings before taxes:       |                         |                               |       |    |                   |   |       |               |       |   |               |     |       |   |       |    
|                             | Chassis Systems         |                               | $     | 46 |                   |   | $     | 61            |       |   | $             | 217 |       |   | $     | 223 |      
|                             | Occupant Safety Systems |                               |       | 44 |                   |   |       | 47            |       |   |               | 232 |       |   |       | 230 |      
|                             | Automotive Components   |                               |       | 15 |                   |   |       | 16            |       |   |               | 79  |       |   |       | 78  |      
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    
|                             |                         | Segment earnings before taxes |       |    | 105               |   |       |               | 124   |   |               |     | 528   |   |       |     | 531   | 
|Corporate expense and other  |                         |                               | (31   | )  |                   |   | (29   | )             |       |   | (101          | )   |       |   | (81   | )  
|Financing costs              |                         |                               | (59   | )  |                   |   | (60   | )             |       |   | (173          | )   |       |   | (183  | )  
|Loss on retirement of debt   |                         |                               |      |    |                   |   |      |               |       |   | (7            | )   |       |   | (48   | )  
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    
|                             |                         | Earnings before taxes         |       | $  | 15                |   |       | $             | 35    |   |               | $   | 247   |   |       | $   | 219   | 
|                             |                         |                               |       |    |                   |   |       |               |       |   |               |    



| |                
| | ---------------
| | Chassis Systems



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Three Months Ended September 30, 2005 Compared to
    Three Months Ended September 24, 2004

|                                          |  |                       |       |  |               |   |       |  
|----------------------------------------- |  | --------------------- | ----- |  | ------------- | - | ----- | -
|                                          |  | Three Months Ended    |      
|                                          |  |                       |      
|                                          |  | September 30,         |       |  | September 24, |  
|                                          |  | 2005                  |       |  | 2004          |  
|                                          |  |                       |       |  |               |  
|                                          |  | (Dollars in millions) |      
|Sales                                     |  | $                     | 1,670 |  |               | $ | 1,620 |  
|Earnings before taxes                     |  |                       | 46    |  |               |   | 61    |  
|Curtailment gains                         |  |                       | 7     |  |               |   |      |  
|Severance and other restructuring charges |  |                       |      |  |               |   | (1    | )

Sales


Earnings before taxes


30



---



##### 





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2005 Compared to Nine
    Months Ended September 24, 2004

|                                            |  |                       |       |   |               |   |       |  
|------------------------------------------- |  | --------------------- | ----- | - | ------------- | - | ----- | -
|                                            |  | Nine Months Ended     |      
|                                            |  |                       |      
|                                            |  | September 30,         |       |   | September 24, |  
|                                            |  | 2005                  |       |   | 2004          |  
|                                            |  |                       |       |   |               |  
|                                            |  | (Dollars in millions) |      
|Sales                                       |  | $                     | 5,470 |   |               | $ | 5,126 |  
|Earnings before taxes                       |  |                       | 217   |   |               |   | 223   |  
|Restructuring charges and asset impairments |  |                       | (2    | ) |               |   | (11   | )

Sales


Earnings before taxes




| |                        
| | -----------------------
| | Occupant Safety Systems



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Three Months Ended September 30, 2005 Compared to
    Three Months Ended September 24, 2004

|                                            |  |                       |     |   |               |   |     |  
|------------------------------------------- |  | --------------------- | --- | - | ------------- | - | --- | -
|                                            |  | Three Months Ended    |    
|                                            |  |                       |    
|                                            |  | September 30,         |     |   | September 24, |  
|                                            |  | 2005                  |     |   | 2004          |  
|                                            |  |                       |     |   |               |  
|                                            |  | (Dollars in millions) |    
|Sales                                       |  | $                     | 859 |   |               | $ | 751 |  
|Earnings before taxes                       |  |                       | 44  |   |               |   | 47  |  
|Restructuring charges and asset impairments |  |                       | (32 | ) |               |   | (2  | )

Sales


Earnings before taxes


31



---



##### 





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2005 Compared to Nine
    Months Ended September 24, 2004

|                                            |  |                       |       |   |               |   |       |  
|------------------------------------------- |  | --------------------- | ----- | - | ------------- | - | ----- | -
|                                            |  | Nine Months Ended     |      
|                                            |  |                       |      
|                                            |  | September 30,         |       |   | September 24, |  
|                                            |  | 2005                  |       |   | 2004          |  
|                                            |  |                       |       |   |               |  
|                                            |  | (Dollars in millions) |      
|Sales                                       |  | $                     | 2,755 |   |               | $ | 2,504 |  
|Earnings before taxes                       |  |                       | 232   |   |               |   | 230   |  
|Restructuring charges and asset impairments |  |                       | (36   | ) |               |   | (3    | )

Sales


Earnings before taxes




| |                      
| | ---------------------
| | Automotive Components



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Three Months Ended September 30, 2005 Compared to
    Three Months Ended September 24, 2004

|                                            |  |                       |     |   |               |   |     |  
|------------------------------------------- |  | --------------------- | --- | - | ------------- | - | --- | -
|                                            |  | Three Months Ended    |    
|                                            |  |                       |    
|                                            |  | September 30,         |     |   | September 24, |  
|                                            |  | 2005                  |     |   | 2004          |  
|                                            |  |                       |     |   |               |  
|                                            |  | (Dollars in millions) |    
|Sales                                       |  | $                     | 388 |   |               | $ | 368 |  
|Earnings before taxes                       |  |                       | 15  |   |               |   | 16  |  
|Restructuring charges and asset impairments |  |                       | (10 | ) |               |   | (2  | )

Sales


Earnings before taxes


32



---



##### 





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2005 Compared to Nine
    Months Ended September 24, 2004

|                                            |  |                       |       |   |               |   |       |  
|------------------------------------------- |  | --------------------- | ----- | - | ------------- | - | ----- | -
|                                            |  | Nine Months Ended     |      
|                                            |  |                       |      
|                                            |  | September 30,         |       |   | September 24, |  
|                                            |  | 2005                  |       |   | 2004          |  
|                                            |  |                       |       |   |               |  
|                                            |  | (Dollars in millions) |      
|Sales                                       |  | $                     | 1,282 |   |               | $ | 1,195 |  
|Earnings before taxes                       |  |                       | 79    |   |               |   | 78    |  
|Restructuring charges and asset impairments |  |                       | (18   | ) |               |   | (4    | )

Sales


Earnings before taxes


LIQUIDITY AND CAPITAL RESOURCES


Cash Flows


Operating activities.


Investing activities.




Financing activities.




33



---



##### 



 1 8


Debt and Commitments


Sources of Liquidity.








 1 8 1 8




Funding Our Requirements.


34



---



##### 





Senior Secured Credit Facilities.




Incremental Extensions of Credit.


Debt Restrictions.




Interest Rate Swap Agreements.


35



---



##### 



Contractual Obligations and Commitments




 1 8  




Off-Balance Sheet Arrangements












36



---



##### 









Other Receivables Facilities


 


Research, Development and Engineering




|                                  |       |                    |     |                       |                   |   |     |               |  |   |               |     |  |   |     |     | 
|--------------------------------- | ----- | ------------------ | --- | --------------------- | ----------------- | - | --- | ------------- |  | - | ------------- | --- |  | - | --- | --- | 
|                                  |       | Three Months Ended |     |                       | Nine Months Ended |  
|                                  |       |                    |     |                       |                   |  
|                                  |       | September 30,      |     |                       | September 24,     |   |     | September 30, |  |   | September 24, |    
|                                  |       | 2005               |     |                       | 2004              |   |     | 2005          |  |   | 2004          |    
|                                  |       |                    |     |                       |                   |   |     |               |  |   |               |    
|                                  |       |                    |     | (Dollars in millions) |                   |   |    
|Research and development expenses |       | $                  | 43  |                       |                   | $ | 36  |               |  | $ | 149           |     |  | $ | 115 |    
|Engineering costs                 |       |                    | 157 |                       |                   |   | 118 |               |  |   | 448           |     |  |   | 354 |    
|                                  |       |                    |     |                       |                   |   |     |               |  |   |               |    
|                                  | Total |                    | $   | 200                   |                   |   | $   | 154           |  |   | $             | 597 |  |   | $   | 469 | 
|                                  |       |                    |     |                       |                   |   |     |               |  |   |               |    





37



---



##### 





Environmental Matters










Contingencies




38



---



##### 











Recent Accounting Pronouncements




Outlook








39



---



##### 











Forward-Looking Statements






40



---



##### 












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



Foreign Currency Exchange Rate Risk.


Interest Rate Risk.


Sensitivity Analysis.


41



---



##### 





|                                 |                                |                       |   |     |                |  |   |               |   |  |  |            | 
|-------------------------------- | ------------------------------ | --------------------- | - | --- | -------------- |  | - | ------------- | - |  |  | ---------- | 
|                                 |                                | Assuming a 10%        |   |     | Assuming a 10% |  |   | Favorable     |  
|                                 |                                | increase in           |   |     | decrease in    |  |   | (unfavorable) |  
|Market Risk                      |                                | prices/rates          |   |     | prices/rates   |  |   | change in     |  
|                                 |                                |                       |   |     |                |  |   |               |  
|                                 |                                | (Dollars in millions) |  
|Foreign Currency Rate Sensitive: |                                |                       |   |     |                |  |   |               |   |  |  |           
|Forwards *                       |                                |                       |   |     |                |  |   |               |   |  |  |           
|                                 |  Long US$                     |                       | $ | (58 | )              |  | $ | 63            |   |  |  | Fair value | 
|                                 |  Short US$                    |                       | $ | 18  |                |  | $ | (19           | ) |  |  | Fair value | 
|Debt                             |                                |                       |   |     |                |  |   |               |   |  |  |           
|                                 |  Foreign currency denominated |                       | $ | (53 | )              |  | $ | 53            |   |  |  | Fair value | 
|Interest Rate Sensitive:         |                                |                       |   |     |                |  |   |               |   |  |  |           
|Debt                             |                                |                       |   |     |                |  |   |               |   |  |  |           
|                                 |  Fixed rate                   |                       | $ | 25  |                |  | $ | (26           | ) |  |  | Fair value | 
|                                 |  Variable rate                |                       | $ | (9  | )              |  | $ | 9             |   |  |  | Cash flow  | 
|Swaps                            |                                |                       |   |     |                |  |   |               |   |  |  |           
|                                 |  Pay variable/ receive fixed  |                       | $ | (1  | )              |  | $ | 1             |   |  |  | 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





PART II







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








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



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



42



---



##### 










|        |                  
|------- | -----------------
|Item 5. | Other Information

Acquisition of Dalphi Metal Espana, S.A.


 


Incremental Extensions of Credit under the Companys
Existing Credit Agreement.


Resignation of Director.




43



---



##### 








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

|        |       |              |  |  |  |                                                                                                                                                                                                                                                                                                                                                      
|------- | ----- | ------------ |  |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             
|Number  |       | Exhibit Name
|        |       |             
|        | 2.1   |              |  |  |  | Agreement for the Purchase and Sale of Shares By and Among TRW
    Automotive Inc, Automotive Holdings (Spain) SL and
    Ms. Nuria Castellón García, Mr. Luis Gras
    Tous, Ms. Maria Luisa Gras Castellón and
    Mr. José Ramón Sanz Pinedo, dated
    September 6, 2005.                                                                        
|        | 2.2   |              |  |  |  | Schedule 8.1, Representations and Warranties of the Sellers, to
    the Agreement for the Purchase and Sale of Shares By and Among
    TRW Automotive Inc, Automotive Holdings (Spain) SL and
    Ms. Nuria Castellón García, Mr. Luis Gras
    Tous, Ms. Maria Luisa Gras Castellón and
    Mr. José Ramón Sanz Pinedo, dated
    September 6, 2005.
|        | 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 theSarbanes-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.                                                                                                                                                                                                                                        

44



---



##### 



SIGNATURE






| |                              
| | -----------------------------
| | 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)



45



---



##### 



EXHIBIT INDEX


|        |       |              |  |  |  |                                                                                                                                                                                                                                                                                                                                                      
|------- | ----- | ------------ |  |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             
|Number  |       | Exhibit Name
|        |       |             
|        | 2     | .1           |  |  |  | Agreement for the Purchase and Sale of Shares By and Among TRW
    Automotive Inc, Automotive Holdings (Spain) SL and
    Ms. Nuria Castellón García, Mr. Luis Gras
    Tous, Ms. Maria Luisa Gras Castellón and
    Mr. José Ramón Sanz Pinedo, dated
    September 6, 2005.                                                                        
|        | 2     | .2           |  |  |  | Schedule 8.1, Representations and Warranties of the Sellers, to
    the Agreement for the Purchase and Sale of Shares By and Among
    TRW Automotive Inc, Automotive Holdings (Spain) SL and
    Ms. Nuria Castellón García, Mr. Luis Gras
    Tous, Ms. Maria Luisa Gras Castellón and
    Mr. José Ramón Sanz Pinedo, dated
    September 6, 2005.
|        | 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.