Financial Overview

(in million dollars)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	14,383	11,614	23.8	-
Net earnings	834	55	1416.4	-
Chassis Systems
Sales	8,577	6,856	25.1	-This increase was driven primarily by an increase in volume (net of price reductions provided to customers) of $1,718 million.
Occupant Safety Systems
Sales	3,482	2,922	19.2	-This increase in sales was driven primarily by an increase in volume (net of price reductions provided to customers) of $664 million, partially offset by the unfavorable impact of foreign currency exchange of $104 million.
Electronics
Sales	1,150	864	33.1	-This increase was driven primarily by an increase in volume (net of price reductions provided to customers) of $276 million and the favorable impact of foreign currency exchange of $10 million.
Automotive Components
Sales	1,707	1,341	27.3	-This increase in sales was driven primarily by an increase in volume (net of price reductions provided to customers) of $371 million, partially offset by the unfavorable impact of foreign currency exchange of $5 million.

Contracts

-The Company has won its first contract to supply an integrated Driver Assist System (DAS) and chassis control unit for a major European car manufacturer. The Company will begin to supply the control units, known as the Safety Domain ECU or SDE, in 2013 for 2014 model year applications. (From a press release on November 22, 2010)

-The Company supplies its Belt Drive (Rack Drive) Electrically Powered Steering (EPS) to a leading automotive manufacturer. It will be fitted on their mid-size passenger cars beginning in 2012. This marks the second nomination of the Company's BELT Drive EPS after Ford Motor Company. In addition to North American launches over the past two years with Ford, the system will launch in Europe for the first time with Ford in 2010. (From a press release on June 24, 2010)

-The Company has secured its first production contract with a major Asian auto manufacturer for an integrated Remote Keyless Entry (RKE) and Direct Tire Pressure Monitoring system (TPMS) receiver. The system is anticipated to launch in 2012 for a 2013 Model Year vehicle. (From a press release on February 17, 2010)

Joint Ventures

-TRW Asia Pacific Co., Ltd signed a joint venture agreement with China's Xi'an Dong Fang Group Co., Ltd to set up an airbag inflator and seat belt pretensioner manufacturing facility in Xi'an, Shaanxi Province. Through its six joint ventures and three wholly owned plants, TRW manufactures its safety systems such as airbags, seat belts, steering wheels, braking, steering and suspension products in China. Dong Fang Group is a machinery company affiliated to China North Industries Group Corporation. (From a press release on March 19, 2010)

Outlook for FY2011

-The Company expect full year 2011 sales to be in the range of $14.9 billion to $15.3 billion, including first quarter sales of approximately $3.9 billion. These sales figures are based on expected 2011 production levels of 12.7 million units in North America, 18.7 million units in Europe, continued strong growth in our fastest growing market, China, and our expectations for foreign currency exchange rates.

R&D Expenditure

(in million USD)

	FY2010	FY2009	FY2008
Overall	669	653	857

R&D Facilities

(As of Dec. 31, 2010)

	North America	Europe	Asia Pacific	Other
Chassis Systems	3	4	3	1
Occupant Safety Systems	2	3	-	-
Electronics	1	-	-	-
Automotive Components	1	-	-	-

<India>
-In Apr. 2009, the Company has announced the opening of a new test track in Heihe in the northern region of China. The facility offers comprehensive product development and validation during the winter season, offering a variety of track surfaces which are designed to test active safety systems such as advanced braking and steering systems and integrated vehicle control and driver assist technologies. The facility is situated on approximately 350 acres, comprised of around 320 acres of lake tracks and 30 acres of land tracks. (From a press release on Apr. 30, 2009)

Product Development

Seat Belt Technology
-The Company developed its next generation seat belt pretensioner with compact size and light weight. Its design is simplified because it uses a plastic piston instead of conventional metal components to transfer tensioning torque. The new product will be ready for production in 2013. (From an article in the Nikkan Jidosha Shimbun on December 17, 2010)

-The Company developed the "Dynamic Locking Tongue (DLT) seat belt technology to reduce loads on the occupant's chest in case of a collision. A rotating cam and a spring are attached to a seat belt tongue, which is a plate that fastens into the buckle. In the event of a sudden braking or a crash resulting in greater than 45 Newtons of force on the belt, the DLT clamps the webbing to mitigate the impact on the chest portion of the occupant. TRW has already started production of products employing the DLT technology. (From an article in the Nikkan Jidosha Shimbun on September. 9, 2010)

-The Company developed the Self-Adaptive Load Limiter (SALL) system. The SALL is designed to meet the needs of rear seat occupants and is in production on the Mercedes E Class. It can adjust the force level according to the amount of webbing that an occupant pulls out when they are buckled up. This enables the system to identify the size of the occupant and classify it into two categories, so that in a crash situation, a lower load level is triggered for a smaller passenger and a higher load level for a larger passenger. (From a press release on June 7, 2010)

Head Protection System
-The Company developed its second generation Head Protection System for Convertibles (HPSC II). HPSC II airbag module is fully integrated in the backrest bolster eliminating the need for an integrated head rest and thereby increasing its compatibility with a broader range of convertible vehicles. HPSC II will be ready for vehicle launches in 2013. (From a press release on August 18, 2010)

Pedestrian Protection System
-The Company developed a Pedestrian Protection System. The system uses up to three Remote Acceleration Sensors (RAS) located in the front bumper area. These sensors continuously transmit acceleration signals to an ECU which analyzes the sensor data. In the event of a collision, the system will determine if the vehicle has struck a human body or another object. If a pedestrian collision is detected, the system triggers hood lifter mechanism to activate and create more space between the hood and the engine components to help reduce potential injury. The system is currently in production with a European auto manufacturer. (From a press release on December 13, 2010)

Tire Pressure Monitoring System
-The Company developed a Low Cost Clamp-in (LSSI) Sensor for Tire Pressure Monitoring System (TPMS) applications. Introduction of a new mechanism contributes to reducing the number of parts, slashing cost, and enhancing product reliability. The new sensor will be put into practical use in 2011 model year vehicles. (From an article in the Nikkan Jidosha Shimbun on October. 13, 2010)

Braking Technology
-The Company developed Collision Mitigation Braking (CMB) technology, which is primarily designed for urban driving conditions including heavy traffic. The system uses a 24GHz radar sensor to measure the distance and relative speed to objects in front of the host vehicle. If a potential collision is identified, a warning is triggered to alert the driver; this warning can be audible, visual or haptic. If the driver does not react to the warning and the system determines that a collision is likely to occur, a certain amount of brake pressure can be applied automatically to slow the vehicle. If the driver does respond to the warning and depresses the brake pedal, the brake system will automatically provide maximum brake boost to mitigate the collision. (From a press release on July 1, 2010)

Power Steering Technology
-The Company developed new Electric Power Steering (EPS) technology - Belt Drive EPS (Rack Drive) - on a range of vehicles including the Ford Fusion, Flex, Taurus, Mercury Milan, Lincoln MKT and MKS. (From a press release on March 10, 2010)

Electronic Stability Control System
-The Company developed Electronic Stability Control system (ESC) with an integrated inertial measurement unit (IMU) on the Lancia Delta. (From a press release on February 24, 2010)

Capital Investment

(in million dollars)

	FY2010	FY2009	FY2008
Chassis Systems	164	97	214
Occupant Safety Systems	49	55	149
Electronics	42	22	50
Automotive Components	36	25	54
Corporate	3	2	15
Total	294	201	482

-The Company expects to spend approx. 540 million dollars for such capital expenditures during 2011.