UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549-1004 Form 10-K ¥ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006 OR n 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 (I.R.S. Employer Incorporation or Organization) 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) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock, $0.01 par value per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¥ No n Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes n No ¥ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¥ No n Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¥ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer ¥ Accelerated filer n Non-accelerated filer n Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes n No ¥ As of June 30, 2006, the last day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s Common Stock, $0.01 par value per share, held by non-affiliates of the registrant was approximately $1,181,505,981 based on the closing sale price of the registrant’s Common Stock as reported on the New York Stock Exchange on that date. As of February 14, 2007, the number of shares outstanding of the registrant’s Common Stock was 98,289,051. Documents Incorporated by Reference Certain portions, as expressly described in this report, of the Registrant’s Proxy Statement for the 2007 Annual Meeting of the Stockholders, to be filed within 120 days of December 31, 2006, are incorporated by reference into Part III, Items 10-14. TRW Automotive Holdings Corp. Index Page PART I Item 1. Business ............................................................... 1 Item 1A. Risk Factors ............................................................ 11 Item 1B. Unresolved Staff Comments ................................................ 14 Item 2. Properties .............................................................. 15 Item 3. Legal Proceedings ........................................................ 16 Item 4. Submission of Matters to a Vote of Security Holders .............................. 16 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities....................................................... 16 Item 6. Selected Financial Data .................................................... 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . 20 Item 7A. Quantitative and Qualitative Disclosures about Market Risk ......................... 42 Item 8. Financial Statements and Supplementary Data . ................................. 44 Reports of Independent Registered Public Accounting Firm ......................... 90 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . 92 Item 9A. Control and Procedures .................................................... 92 Item 9B. Other Information ........................................................ 92 PART III Item 10. Directors, Executive Officers and Corporate Governance ........................... 92 Item 11. Executive Compensation ................................................... 93 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ................................................................ 93 Item 13. Certain Relationships and Related Transactions, and Director Independence ............. 93 Item 14. Principal Accounting Fees and Services ........................................ 93 PART IV Item 15. Exhibits, Financial Statement Schedules........................................ 94 PART I ITEM 1. BUSINESS The Company TRWAutomotive Holdings Corp. (together with its subsidiaries, “we,” “our,” or the “Company”) is among the world’s largest and most diversified suppliers of automotive systems, modules and components to global auto- motive original equipment manufacturers (“OEMs”) and related aftermarkets. We conduct substantially all of our operations through subsidiaries. These operations primarily encompass the design, manufacture and sale of active and passive safety related products. Active safety related products principally refer to vehicle dynamic controls (primarily braking and steering), and passive safety related products principally refer to occupant restraints (primarily air bags and seat belts) and safety electronics (electronic control units and crash and occupant weight sensors). We are primarily a “Tier 1” supplier, with approximately 86% of our end-customer sales in 2006 to major OEMs. We operate our business along three segments: Chassis Systems, Occupant Safety Systems, and Automotive Components. Acquisition of the Company. Prior to the acquisition (as defined below), our predecessor operated as a segment of the former TRWAutomotive Inc. (which we did not acquire and was renamed Richmond TAI Corp.) and its subsidiaries and the other subsidiaries, divisions and affiliates of TRW Inc. (“Old TRW”), and constituted the automotive business of Old TRW for the periods prior to February 28, 2003, the date the Acquisition was consummated. Old TRW was acquired by Northrop Grumman Corporation (“Northrop”) on December 11, 2002. Old TRW entered into an Agreement and Plan of Merger with Northrop, dated June 30, 2002, whereby Northrop would acquire all of the outstanding common stock of Old TRW, including Old TRW’s automotive business, in exchange for Northrop shares. The acquisition of Old TRW by Northrop was completed on Decem- ber 11, 2002 (the “Merger”). Additionally, on November 18, 2002, an entity controlled by affiliates of The Blackstone Group, L.P. (“Blackstone”), entered into a master purchase agreement, as amended, (the “Master Purchase Agreement”) pursuant to which the Company, a newly-formed entity, would cause its indirect wholly-owned subsidiary, TRW Automotive Acquisition Corp., to purchase the shares of the subsidiaries of Old TRW engaged in the automotive business from Northrop (the “Acquisition”). The Acquisition was completed on February 28, 2003. Subsequent to the Acquisition, TRWAutomotive Acquisition Corp. changed its name to TRWAutomotive Inc. (referred to herein as “TRW Automotive”). As a result of the Acquisition, Automotive Investors L.L.C., or AIL, an affiliate of Blackstone, originally held approximately 78.4%, an affiliate of Northrop held approximately 19.6% and our management group held approximately 2.0% of our common stock. The successor and registrant, TRWAutomotive Holdings Corp. and its subsidiaries, own and operate the automotive business of Old TRW as a result of the Acquisition. Initial Public Offering. On February 6, 2004, we completed an initial public offering of 24,137,931 shares of our common stock (the “Common Stock”). After our initial public offering, including the use of a portion of the net proceeds from our initial public offering to repurchase a portion of the shares held by an affiliate of Blackstone, our majority shareholder, an affiliate of Blackstone held approximately 56.7%, an affiliate of Northrop held approx- imately 17.2% and our management group held approximately 1.7% of our Common Stock. Share Repurchases in 2005 and 2006. On March 11, 2005, we repurchased from an affiliate of Northrop 7,256,500 shares of Common Stock for approximately $143 million in cash. On November 10, 2006, we repurchased an additional 9,743,500 shares of Common Stock from an affiliate of Northrop for approximately $209 million. The shares from the repurchases were immediately retired following repurchase. As a result of these repurchases, Northrop and its affiliates hold no shares of our Common Stock. Share Issuances in 2005 and 2006. On March 11, 2005, we sold to two investment institutions 7,256,500 newly issued shares of Common Stock for approximately $143 million in cash. We filed a registration statement with the Securities and Exchange Commission (“SEC”) for the registration of the resale of these newly issued shares. Pursuant to the registration statement,