Financial Overview

(in million dollars)

	FY2011	FY2010	Rate of change (%)	Factors
Overall
Sales	16,244	14,383	12.9	-This increase was driven primarily by a higher level of global vehicle production volumes, increasing demand for its active and passive safety products and the positive effects of foreign currency exchange.
Net earnings	1,157	834	38.7	-
Chassis Systems
Sales	9,960	8,524	16.8	-This increase was driven primarily by an increase in volume of 1,157 million dollars and favorable impact of foreign currency exchange of 321 million dollars.
Occupant Safety Systems
Sales	3,580	3,441	4.0	-This increase was driven primarily by an increase in volume of 137 million dollars and favorable impact of foreign currency exchange of 116 million dollars, partially offset by price reductions provided to customers of 105 million dollars.
Electronics
Sales	842	777	8.4	-This increase was driven primarily by an increase in volume of 152 million dollars and favorable impact of foreign currency exchange of 33 million dollars.
Automotive Components
Sales	1,862	1,641	13.5	-This increase was driven primarily by an increase in volume of 166 million dollars and favorable impact of foreign currency exchange of 67 million dollars.

Recent Developments Outside USA

<Japan>
-TRW Automotive Japan Co., Ltd. is promoting sales of its new electric park brake (EPB) system for compact vehicles in Japan. The Company's new EPB system, which is fitted to the front axles and can be used in combination with a rear drum brake unit, makes the technology more affordable for a wider range of vehicle segments, while offering a number of safety benefits. The front-axle EPB is scheduled to be featured on new vehicles coming to the global market in 2013. In Japan, the Company will propose the technology to automakers, targeting A- and B-segment vehicles. Currently, there are two types of electric motor park brake systems: a cable type that generates braking force by reeling the cable connecting the brake caliper and the brake drum; and a direct type that directly activates the brake caliper. Direct EPB systems are made exclusively by the Company. (From an article in the Nikkan Jidosha Shimbun on May 9, 2011)

-RW Automotive Japan Co., Ltd. will step up its presentation of effective development techniques that can be applied to various types of components. There are two approaches. One is a modular approach involving modularization of related parts. The same development concept can be shared between the Antilock Brake System (ABS) for hybrids with an additional function of regenerative braking control and an ordinary ABS by adding an extra function to the basic design. The other is a scalable approach that can be applied to the same types of parts with different specifications like dimensions and performance. One drawing can be used for various sizes of automobiles only by changing the scale in the draft. In the case of a power steering, for instance, the same motor and control unit could be used even if the motor output and its installation position are different. (From an article in the Nikkan Jidosha Shimbun on March 4, 2011)

-TRW Automotive Japan is going to step up collaboration with other manufacturers in the industry. By working up mutual supply arrangements to make the most of each supplier's product line and capability in a flexible manner, the company aims to strengthen its global production framework in a comprehensive manner. In efforts to meet increasing needs for products with greater sophistication and diversity, the company will allocate production and development resources among its facilities in the most optimal way possible, while making positive use of the capabilities of its partner companies to offset any shortage. Specifically, in Japan, TRW will procure items, which it is not producing locally, from Japanese suppliers. Overseas, it intends to support Japanese parts manufacturers by providing its own products and helping them start local production of such items. The major factor behind the new strategy is increasingly diversifying directions in the automotive industry in terms of technological development. Car manufacturers' recent projects include development and production of cutting-edge powertrain systems and those of products for low priced vehicles targeted at emerging markets, each of them requiring a great amount of workloads. The Company will promote exchange of technologies with other auto parts suppliers by reinforcing collaborations and leveraging strengths of each company. (From an article in the Nikkan Jidosha Shimbun on February 16, 2011)

Contracts

-The Company announced that it has won its first contract to supply its video camera sensor to a European commercial truck manufacture. The Company will begin to supply the camera technology in late 2012. The contract includes the integrated scalable camera and processing unit as well as supporting software. The system can enable functions including lane departure warning (LDW), object recognition, forward collision warning, traffic sign recognition and headlight control. When combined with a radar sensor, other driver assist functions can be enabled such as automatic emergency braking (AEB). The European Union mandate calls for the installation of LDW systems and AEB systems for new heavy duty vehicle model launches sold in Europe from late 2013 and for all new trucks in Europe from late 2015. (From a press release on December 12, 2011)

-The Company announced a major contract win to supply a range of vehicle manufacturers with Electrically Powered Hydraulic Steering (EPHS) for light commercial vehicle van platforms that will launch in 2013. Compared with traditional hydraulic power steering, the Company's EPHS systems offer a fuel savings of up to 0.3L per 100km and a reduction of carbon dioxide emissions of approximately 7g/km. The system also supports rack loads of up to 18kN for vehicles of up to 7 tons in weight. (From a press release on January 18, 2011)

-The Company announced it has signed new contracts with Chinese vehicle manufacturers for the supply of its column drive electric power steering (EPS) system. The Company will initially supply the EPS system to four Chinese domestic automakers for multiple platforms. Production is expected to begin at the Company's Anting plant in Shanghai by the year end, and supply is planned to start to Chinese vehicle manufacturers in early 2012. (From an article in the Nikkan Jidosha Shimbun on January 17, 2011)

-The Company has launched its next generation Steering Column Control Modules (SCCM) on Ford Motor Company's Super Duty, F-Series, Edge, Explorer and the Lincoln MKX. The SCCM features functions such as electronic turn signal cancel, high-low beam selector and tilt-telescoping column switch. When fully launched, volumes are expected to be approximately 1 million units annually. The company is currently developing the next generation of SCCM products for Ford's upcoming global vehicle line. (From a press release on January 13, 2011)

-The Company announced it has secured several contracts for the supply of electric power steering (EPS) to domestic Chinese vehicle manufacturers, with the first launch scheduled in 2012. The Company will supply its Column Drive EPS system for platforms with four domestic manufacturers initially. Production will be located at the Company's manufacturing facility in Anting, China, which will start production this year with an annual capacity in the range of 450,000 units initially. In the next two years, the company will add local production capabilities not only for EPS, but also for other advanced technologies such as airbag inflators and electronic stability control. (From a press release on January 10, 2011)

Outlook for FY2012

-The Company expect full year 2012 sales to be in the range of 16.0 billion- to 16.4 billion dollars, including first quarter sales of approximately 4.1 billion dollars. These sales figures are based on expected 2012 production levels of 13.9 million units in North America, 18.4 million units in Europe, continued expansion in vehicle production volumes in China and the other rest of world regions, and its expectations for foreign currency exchange rates.

R&D Expenditure

(in million dollars)

	FY2011	FY2010	FY2009
Overall	827	669	653

R&D Facilities

(As of Dec. 31, 2011)

	North America	Europe	Asia Pacific	Other	Total
Chassis Systems	3	4	3	1	11
Occupant Safety Systems	2	3	-	-	5
Electronics	1	-	-	-	1
Automotive Components	1	-	-	-	1

<Europe>
-The Company is investing in its radar center of excellence in Brest, France, to bring its 24 GHz radar to market and develop a new short range radar concept that will enable 360 degree sensing. The Company also has outlined plans for its next generation of advanced braking systems to help meet the needs of lower vacuum requirements. This is being developed in Koblenz, Germany. In 2011, the Company is expecting to increase its research and development expenditure by 80 million USD compared with 2010. (From a press release on September 13, 2011)

<China>
-The Company has announced plans to open a new Technical Center in China in 2013. The 32,000 square meter facility will be built in Anting, Shanghai and will be able to accommodate more than 1,000 engineers. The new Technical Center will house research and development, engineering design and application, testing and validation activities across all of the Company's product lines. It is planned that construction of the site will commence in autumn of 2011, and will be ready for operations in 2013. (From a press release on April 19, 2011)

Technological Alliance

-The Company has signed a strategic cooperation agreement with Great Wall Motors. Under the agreement, on the basis of the existing purchase of the airbag controllers, anti-lock braking systems and other supporting products, both sides will upgrade to cooperative research and development of the active and passive safety technologies. The cooperation between Great Wall Motors and the Company began in 2008. Initially, the Company provided Great Wall Motors' Ling Ao model with the supporting air conditioning vent. Since 2009, The Company has equipped Haval SUV, Voleex C30 and other models with the airbag controller, the rear brake caliper and other safety products. Currently the companies have jointly developed the electric power steering system with more fuel economy. Moreover, in the research and development of the engine valve, rear brake caliper and other parts, the two sides have entered into the prototype development stage. (From a press release on September 27, 2011)

-TRW Automotive Japan Co., Ltd. will actively pursue cross-industrial cooperation in technology development. It will promote interactions with non-automotive companies in areas such as electronics that Japanese firms hold the state of the art technologies. Through gathering a broad range of technological information, TRW Automotive Japan intends to respond to diversification in automotive technology development. (From an article in the Nikkan Jidosha Shimbun on February 7, 2011)

R&D Activities

-The Company is developing remote acceleration sensors (RAS) offering improved crash sensing performance by detecting impacts from more than one direction simultaneously. Traditional accelerometers used in crash sensing measure acceleration data in one dimension, either longitudinal acceleration (X axis) for front impact detection or lateral acceleration (Y-axis) for side impact detection. Multi-axis sensors add additional single axis sensors in the same housing or use multi-axis sensors to measure acceleration in more than one dimension simultaneously. This can significantly improve crash sensing performance in newly required FMVSS214 regulatory oblique side pole impact. The Company's multi-axis sensing technologies will be available for use in vehicles by the 2012 model year. (From a press release on October 17, 2011)

-The Company unveiled its next generation radar technology for 360 degree sensing around a vehicle. The new concept is a short range scalable radar family which can enable functions including lane change assist, blind spot detection, cross traffic alert, side impact sensing and low speed collision warning. The sensors can also be integrated with the vehicle braking and electric power steering systems to provide limited emergency braking and traffic jam assist. TRW expects that its new radar technology will be ready for production by 2015. (From a press release on September 13, 2011)

-The Company is developing its next generation of modular brake systems for electric, hybrid and low vacuum powertrains – the technology is vacuum independent and can simplify the brake system while enhancing functionality. The systems can allow for full brake blending for all regenerative braking system architectures. Designed as a fully modular system using many standard components from the EBC460 Slip Control family, that also formed the basis for Slip Control Boost, the technology meets all standard brake and control functions such as ABS and Electronic Stability Control (ESC) and can support enhanced autonomous brake applications with highly dynamic brake pressure builds and control accuracy for systems like Adaptive Cruise Control (ACC) and ACC Stop and Go, Collision Mitigation and Automatic Emergency Braking. (From a press release on September 13, 2011)

-The Company unveiled a folding steering wheel concept which retracts into the dashboard to improve driver comfort getting in and out of a vehicle. When the vehicle is started, the steering wheel deploys into the driving position which can be pre-set and saved by any driver into their chosen position. The company intends to introduce this technology within the next 5 years. (From a press release on June 29, 2011)

Product Development

Airbags
-The Company unveiled its next generation of adaptive frontal passenger airbags. The Company's dual contour passenger airbag is capable of adjusting both the airbag pressure and size. It utilizes sensor inputs to determine occupant size and can tailor the bag size and shape to smaller or larger occupants through the use of a tether activation unit that will present the right size and shape of the bag based on the particular crash variables. The Company anticipates that its next generation of adaptive airbags will be ready for production by 2013. (From a press release on November 29, 2011)

-The Company has developed a range of curtain airbag technologies that help mitigate the risk of occupant ejection. The Company has developed one piece woven (OPW) curtain designs that include the X-Tether technology: due to this design approach the stiffness of the inflated bag cushion can be increased to mitigate the risk of occupant ejection. Other enablers include technologies such as cold gas and hybrid inflators that when combined with bag coatings can assist in keeping the curtain airbags inflated for several seconds. (From a press release on June 13, 2011)

-The Company announced that it has developed a roof airbag system, which is stored in the headliner unit unlike front airbags typically mounted in the steering wheel system or the instrument panel. The roof airbag system offers a higher level of passenger safety, while making for improved interior design freedom. The Company has engineered the new airbag technology by leveraging its expertise in a joint development project with a European automaker. (From an article in the Nikkan Jidosha Shimbun on May 28, 2011)

Passive entry systems
-The Company announced that it developed new Passive Entry (PE) systems and has secured initial business awards in North America. PE systems enable the car doors to be automatically unlocked when a person carrying the key-fob comes within close proximity of the vehicle, and lock automatically when the key fob holder moves away from the vehicle without any need to press the key-fob buttons. TRW expects to launch its Passive Entry Systems in 2012. (From a press release on November 17, 2011)

Tire pressure monitoring systems
-The Company has developed its next generation tire pressure monitoring system (TPMS) – a hybrid system which uses a combination of sensing technologies. The system uses basic, wheel-mounted direct TPMS sensors to measure the pressure and temperature of the air inside a tire, and combines this with data from a vehicle's ABS or ESC wheel speed sensors to notify the driver which tire or tires may have low pressure. The Company anticipates that its hybrid TPMS will be ready for production in 2013. (From a press release on October 11, 2011)

-The Company started mass production of its zero initiator tire pressure monitoring system (TPMS) in late 2010. Like the Company's current direct TPMS systems, the technology includes four wheel mounted sensors to directly monitor the individual tire pressure levels. The receiver is typically mounted under the rear of the vehicle or in the rear bumper area, and can determine front and rear sensor locations by comparing the received signal strengths. Left and right side sensor locations are determined by sensing and processing Earth's gravitational and magnetic fields. By combining the front/rear and left/right information, the system can determine which tire is underinflated without the need for any initiators. (From a press release on March 8, 2011)

Pedestrian detection and accident mitigation systems
-The Company developed its new pedestrian detection and accident mitigation system. If a pedestrian is detected in front of the vehicle by the camera and confirmed by the 24 GHz radar, risk assessment algorithms are employed to determine the probability of a collision. A warning is issued to the driver and a braking maneuver can be automatically initiated with the aim of slowing the vehicle and reducing the severity of the impact. This new pedestrian detection technology can be combined with the Company's production pedestrian protection safety system which uses sensors mounted at the front of the vehicle to detect an actual pedestrian impact. The Company's pedestrian collision mitigation system is scheduled for production in 2014. (From a press release on October 11, 2011)

Software of electric power steering (EPS) systems
-The Company developed new software of electric power steering (EPS) systems, which offers a range of advanced steering features to assist the driver. The new functions include the pull drift compensation technology, which makes automatic adjustments when the vehicle is drifting to one side; the torque steer compensation function, which prevents the vehicle to pull to one side under the influence of high engine torque; and the semi automatic parking system to help driver parallel park the vehicle smoothly. These technologies can be programmed within the EPS software, which will allow automakers to shorten the time needed to develop and add drive assist functions to EPS systems. (From an article in the Nikkan Jidosha Shimbun on June 24, 2011)

Camera system solutions for safety applications
-The Company developed new camera system solutions for safety applications and now has production contracts in North America, Europe and Asia Pacific. The company will begin supply of its camera systems in 2013. These new systems are based on a scalable camera design where the base camera can deliver lane departure warning and/or active lane keeping functions; and are upgradeable to enable features including forward collision warning, pedestrian detection and traffic sign recognition. When combined with a radar such as The Company's 24 GHz AC 100, vehicle longitudinal control functions including full automatic emergency braking are possible. (From a press release on June 13, 2011)

Vacuum sensor
-The Company has developed a new vacuum sensor to measure the level of vacuum in the brake booster. To meet an increasing need for high precision measurement of the vacuum level, The Company has succeeded in development of a product of high reliability and price competitiveness. The new vacuum sensor is designed for applications to powertrains for direct injection or diesel engines or on hybrid and electric vehicles. The Company expects to commercialize the technology in 2013 as a package of the brake system. (From an article in the Nikkan Jidosha Shimbun on April 15, 2011)

Electric Park Brake (EPB) system
-The Company developed its Electric Park Brake (EPB) system for front axles. The Company's EPB offers space optimization in the vehicle's passenger compartment thanks to the elimination of the handbrake lever or pedal. Similar to conventional rear EPB applications, the front axle system enhances emergency braking performance through integration with ABS/ESC in the event of hydraulic failure. In addition, a wide range of comfort and safety features can be included, for example: hill and drive away assist; ECD (electronically controlled deceleration); rollaway detection; and stand still management to support 'stop and go' and 'auto hold' functionality. The Company's front EPB is planned for launch in 2013. (From a press release on March 28, 2011)

Safety system
-The Company announced it has developed a new safety system combining its Automatic Emergency Braking (AEB) system with its Active Control Retractor (ACR) seatbelt technology. By using data of the road and traffic situation in front of the car gathered by a radar and a video camera, the system provides a warning to the driver and puts the occupants at the optimal position in anticipation of airbag deployment. Furthermore, it automatically applies a certain amount of braking force to reduce the speed. The Company says the system will be made available on 2013 production models. (From an article in the Nikkan Jidosha Shimbun on February 18, 2011)

Capital Expenditure

(in million dollars)

	FY2011	FY2010	FY2009
Chassis Systems	302	164	97
Occupant Safety Systems	73	49	55
Electronics	127	42	22
Automotive Components	62	36	25
Corporate	7	3	2
Total	571	294	201

-The Company expects to spend between 650 million- and 700 million dollars on capital expenditures during 2012.

Investment Outside USA

-The Company announced the company will open or expand its plants in 2011 and 2012. The Company announced investments in driver assist systems (DAS) technology in Brest, France and in Peterlee, the UK; steering in China, Poland and the UK; and advanced braking systems in Koblenz, Germany. At the same time, the company unveiled plans for the following new plants: an occupant safety systems and braking facility in Wuhan, Hubei province, China; an aftermarket friction plant in Qingdao, Shandong province, China; and a slip control systems and actuation plant in Queretaro, Mexico. In addition to the new facilities, The Company is expanding production of electric power steering in Poland at a new satellite facility in Czechowice, and is increasing the manufacturing of precision motors in Slovakia. It will also expand its electrically powered steering and electronics plant in Anting, Shanghai, China; its braking joint venture in Nanjing, Jiangsu province China; its occupant safety joint venture in Chengdu, Sichuan province; and its fasteners plant in Ningbo, Zhejiang province. (From a press release on September 13, 2011)

<Mexico>
-The Company announced that it will open a new facility in the state of Queretaro, Mexico, to produce brake systems. The 150,000 square foot facility will manufacture hydraulic control units for electronic stability control systems including the Company's Slip Control Boost system for hybrid and electric vehicles. The plant will also produce brake actuation units including boosters and master cylinders. Production at the new plant is anticipated to begin near the end of the first quarter in 2012, with an estimated total employment of 450 when full production is reached. TRW's foundation brake business will primarily be produced at the existing Santa Rosa, Queretaro, Mexico, facility, while the new site will be dedicated to electronic braking and actuation systems. (From a press release on November 22, 2011)

<Poland>
-The Company announced plans to expand its electrically powered steering systems manufacturing in Poland. Approximately 9,000 square meters of additional manufacturing space will be established in Bielsko Biala close to the existing site in Czechowice-Dziedzice. Production will start in the first quarter of 2012. Initially, 250 new roles will be created. The Company has four other plants in Czestochowa, Gliwice and Pruszkow and more than 6,000 employees in Poland. (From a press release on July 7, 2011)