TRW Automotive Holdings Corp. : TRW Reports Fourth Quarter and Full Year 2012 Financial Results
02/15/2013| 07:05am US/Eastern
Recommend:
LIVONIA, Mich., Feb. 15, 2013 /PRNewswire/ --
-- Fourth quarter sales of $4.0 billion, an increase of 4% excluding the
impact of currency movements and divestitures; record full year sales of
$16.4 billion, an increase of 7% on the same basis.
-- Fourth quarter GAAP net earnings of $3.26 per diluted share; full year
GAAP net earnings of $7.83 per diluted share.
-- Excluding special items, fourth quarter net earnings of $1.55 per
diluted share; full year net earnings of $6.14 per diluted share.
-- Fourth quarter free cash flow (cash flow from operating activities less
capital expenditures) of $413 million; 2012 full year free cash flow of
$333 million.
-- Total gross debt and net debt of $1,462 million and $239 million,
respectively - both historic lows for the Company.
-- Returned $268 million to shareholders through share repurchases in 2012.
TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported fourth quarter 2012 financial results with sales of $4.0 billion, an increase of 1% compared to the prior year period (up 4% excluding the impact of currency movements and divestitures). The Company reported GAAP fourth quarter net earnings of $419 million or $3.26 per diluted share.
Excluding special items from the Company's current and prior year quarterly results, the Company reported fourth quarter 2012 net earnings of $199 million, or $1.55 per diluted share, which compares to net earnings of $238 million or $1.84 per diluted share in the prior year period.
The Company's full year 2012 sales grew to a record $16.4 billion, an increase of 7% compared to 2011 excluding the impact of currency movements and divestitures. For the year, GAAP net earnings were $1,008 million, or $7.83 per diluted share. Similar to the Company's quarterly results, both the 2012 and 2011 full year results contain special items. Excluding special items, the Company reported full year 2012 net earnings of $788 million, or $6.14 per diluted share, which compares to net earnings of $971 million, or $7.42 per diluted share in 2011. Compared to last year's pro forma adjusted results (reflecting the U.S. deferred tax asset valuation allowance reversal), diluted earnings per share in 2012 were slightly higher compared to full year 2011.
"2012 was a successful year for TRW as the Company delivered solid financial performance, as evidenced by our fourth quarter and full year results reported today. We also continued to execute our significant growth strategy and initiated a $1 billion share repurchase program," said John C. Plant, Chairman and Chief Executive Officer. "TRW's success and ability to build on its positive momentum, despite the challenges the automotive industry faced in Europe during the year, demonstrate the Company's resilience and strong market position."
Fourth Quarter 2012
The Company reported fourth quarter 2012 sales of $4.0 billion, an increase of $46 million from the prior year period. The impact of increasing demand for TRW's innovative technologies, higher vehicle production volumes in North America and China and a higher level of module sales globally were partially offset by sharply lower vehicle production in Europe and the negative impact of currency movements between the two periods.
The Company's fourth quarter 2012 operating income was $155 million, compared with $280 million in the 2011 period. The 2012 and 2011 periods included restructuring and asset impairment charges totaling $88 million and $27 million, respectively. In addition, the current period included a net charge of $52 million relating to certain pension and other post retirement benefit matters, primarily lump sum pension buyouts made to certain of our U.S. retirees and former employees, partially offset by certain post employment benefit plan settlements. Excluding these special items from both periods, operating income for the fourth quarter was $295 million, which compares to $307 million in the prior year period. The positive contribution from the higher level of sales and lower legal expense was more than offset by planned increases in costs to support future growth and the negative profit impact of currency movements between the two periods.
Net interest expense for the fourth quarter of 2012 totaled $29 million, which compares to $28 million in the 2011 period. In addition, the 2011 period included a net loss on retirement of debt totaling $1 million.
A tax benefit of $286 million was recognized in the fourth quarter of 2012, which compares to a benefit of $174 million in the prior year period. Both the 2012 and 2011 periods include special tax items. In 2012, net special tax items totaling $360 million were recognized primarily relating to changes in TRW's overall deferred tax position as a result of tax planning initiatives and the reversal of the Company's valuation allowance on deferred tax assets in Canada. The 2011 period included $217 million of net special tax items, the most significant of which was associated with the reversal of the valuation allowance on the Company's deferred income tax assets in the United States.
The Company reported 2012 fourth quarter GAAP net earnings of $419 million, or $3.26 per diluted share, which compares to GAAP net earnings of $425 million, or $3.27 per diluted share in the 2011 period.
Excluding special items, the Company reported fourth quarter 2012 net earnings of $199 million, or $1.55 per diluted share, which compares to net earnings of $238 million or $1.84 per diluted share in the 2011 period. Compared to last year's pro forma adjusted results (reflecting the U.S. deferred tax asset valuation allowance reversal), diluted earnings per share in the fourth quarter of 2012 were slightly higher compared to the 2011 period.
Earnings before interest, taxes, depreciation and amortization and special items ("adjusted EBITDA") were $404 million in the fourth quarter of 2012, compared to the prior year level of $413 million. See page A6 for a description of the special items excluded in calculating adjusted EBITDA.
Full Year 2012
The Company reported record 2012 sales of $16.4 billion, an increase of $200 million compared to prior year sales (up 7% excluding the impact of currency movements and divestitures). The increase in sales resulted from a higher level of demand for TRW's broad array of active and passive safety products, improved vehicle production volumes in North America and a higher level of module sales globally, partially offset by lower vehicle production volumes in Europe and the negative impact of currency movements between the two periods.
For full year 2012, the Company reported operating income of $1,085 million which compares to $1,260 million in the prior year. The 2012 period included restructuring and asset impairment charges totaling $95 million and a net charge of $52 million relating to certain pension and other post retirement benefit matters, primarily lump sum pension buyouts made to certain of our U.S. retirees and former employees, partially offset by certain post employment benefit plan settlements. The 2011 period included restructuring and asset impairment charges of $27 million, a gain related to a favorable resolution of a commercial matter totaling $19 million and a charge related to the termination of a service contract totaling $10 million. Excluding these items from both periods, the Company reported operating income of $1,232 million in 2012, which compares to $1,278 million in the prior year. The positive contribution from the higher level of sales was more than offset by planned increases in costs to support future growth and the negative profit impact from higher raw material prices and currency movements between the two periods.
Net interest expense for 2012 totaled $111 million, which compares to $118 million in the prior year period. In addition, the 2012 period included a net loss on retirement of debt totaling $6 million compared with 2011, which recognized a net loss on retirement of debt totaling $40 million.
A tax benefit of $33 million was recognized in 2012, which compares to a benefit of $47 million in the prior year. Excluding tax benefits related to special items in both years, tax expense was $340 million and $190 million for 2012 and 2011, respectively. The increase in expense is attributable to a higher effective tax rate in the current period resulting from the reversal of the Company's valuation allowance on deferred income tax assets in the United States that occurred in late 2011.
The Company reported 2012 GAAP net earnings of $1,008 million, or $7.83 per diluted share, which compares to GAAP net earnings of $1,157 million, or $8.82 per diluted share in the prior year period.
Excluding special items, the Company reported 2012 net earnings of $788 million, or $6.14 per diluted share, which compares to net earnings of $971 million or $7.42 per diluted share in 2011. Compared to last year's pro forma adjusted results (reflecting the U.S. deferred tax asset valuation allowance reversal), diluted earnings per share in 2012 were slightly higher compared to full year 2011.
Adjusted EBITDA totaled $1,648 million in 2012, compared to $1,726 million in the prior year. See page A6 for a description of the special items excluded in calculating adjusted EBITDA.
Cash Flow and Capital Structure
Fourth quarter 2012 net cash flow provided by operating activities totaled $711 million, which compares to $608 million in the fourth quarter of 2011. Capital expenditures were $298 million in the current quarter compared to $267 million last year. Fourth quarter free cash flow (cash flow from operating activities less capital expenditures) was $413 million, compared to $341 million in the prior year quarter.
For full year 2012, net cash flow provided by operating activities totaled $956 million, which compares to $1,120 million in the prior year. Capital expenditures were $623 million in 2012, which compares to $571 million last year. For 2012, free cash flow was a positive $333 million, compared to $549 million in 2011. The lower level of free cash flow compared with last year resulted primarily from higher capital expenditures, increased payments pertaining to benefit plans and higher cash taxes.
During 2012, TRW used approximately $321 million of cash to repurchase over 5.6 million shares of its common stock and retire $48 million of face value senior notes.
As of December 31, 2012, the Company had $1,462 million of debt and $1,223 million of cash and cash equivalents, resulting in net debt (defined as debt less cash and cash equivalents) of $239 million. Both total debt and net debt set historic lows for the Company, $70 million and $52 million lower than the balances at the end of 2011, respectively.
2013 Outlook
TRW's planning assumptions for industry production volumes in 2013 are approximately 15.8 million units in North America and 18.3 million units in Europe, up 3% and down 4%, respectively, compared to 2012 levels. The Company continues to expect expansion in vehicle production volumes in China and rest of world regions. Based on these production levels and the Company's expectations for foreign currency exchange rates, full year 2013 sales are expected to range between $16.4 billion and $16.7 billion, with first quarter sales expected to be approximately $4.1 billion.
"TRW enters 2013 from a position of strength. Increased demand for the Company's innovative products combined with our leading customer, product and regional diversification will help offset the difficult economic environment and lower vehicle production levels that are expected in Europe," said Mr. Plant. "Remaining focused on executing the Company's growth strategy, while mitigating the negative impact related to the industry challenges in Europe, especially in the first half of the year, are key objectives in 2013."
Fourth Quarter and Full Year 2012 Conference Call
The Company will host its fourth quarter conference call at 8:30 a.m. (Eastern time) today, Friday, February 15(th), to discuss financial results and other related matters. To participate in the conference call, please dial (877) 852-7898 for U.S. locations, or (706) 634-1095 for international locations.
An audio replay of the conference call will be available approximately two hours after the conclusion of the call and will be accessible afterward for approximately two weeks. To access the replay, U.S. locations should dial (855) 859-2056, and locations outside the U.S. should dial (404) 537-3406. The replay code is 86342613. A live audio webcast and replay of the conference call will also be available on the Company's website at www.trw.com.
Reconciliation to GAAP
In addition to GAAP results included within this press release, the Company has provided certain information which is not calculated according to GAAP ("non-GAAP"), such as net earnings, operating income, diluted earnings per share and tax expense each excluding special items; adjusted EBITDA; and free cash flow. Management uses these non-GAAP measures to evaluate the operating performance of the Company and its business segments and to forecast future periods. Management believes that investors will likewise find these non-GAAP measures useful in evaluating such performance. Such measures are frequently used by security analysts, institutional investors and other interested parties in the evaluation of companies in our industry. In addition, the Company has provided a comparison of adjusted diluted earnings per share to pro forma adjusted results in order to reflect a tax valuation neutral comparison to the prior period.
Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to similarly titled measures of other companies. For a reconciliation of non-GAAP measures to the most comparable GAAP financial measure and for share amounts used to derive earnings per share, please see the financial schedules that accompany this release.
About TRW
With 2012 sales of $16.4 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 25 countries and employs approximately 65,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. All references to "TRW Automotive", "TRW" or the "Company" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is available on the internet at www.trw.com.
Forward-Looking Statements
This release contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We caution readers not to place undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements are subject to numerous assumptions, risks and uncertainties which could cause our actual results to differ materially from those suggested by the forward-looking statements, including those set forth in our Report on Form 10-K for the fiscal year ended December 31, 2011 (our "Form 10-K") and our Reports on Form 10-Q for the fiscal quarters ended March 30, 2012, June 29, 2012 and September 28, 2012 such as: any developments related to antitrust investigations adversely affecting our financial condition, results, cash flows or reputation; economic conditions adversely affecting our business, results or the viability of our supply base; the unsuccessful implementation of our current expansion efforts adversely impacting our business or results; any shortage of supplies causing a production disruption for any customers or us; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations impacting our results; risks associated with non-U.S. operations, including economic and political uncertainty in some regions, adversely affecting our business, results or financial condition; any inability to protect our intellectual property rights adversely affecting our business or our competitive position; the loss of any of our largest customers materially adversely affecting us; commodity inflationary pressures adversely affecting our profitability or supply base; pricing pressures from our customers adversely affecting our profitability; costs of product liability, warranty and recall claims and efforts by customers to adversely alter contract terms and conditions concerning warranty and recall participation; costs or adverse effects on our business, reputation and results from governmental regulations; costs or liabilities relating to environmental, health and safety regulations adversely affecting our results; any increase in the expense of our pension and other postretirement benefits or the funding requirements of our pension plans reducing our profitability; work stoppages or other labor issues at our facilities or at the facilities of our customers or those in our supply chain adversely affecting our business or results; any disruption in our information technology systems adversely impacting our business and operations; any impairment of a significant amount of our goodwill or other intangible assets; and other risks and uncertainties set forth in our Form 10-K and in our other filings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to release publicly any update or revision to any of the forward-looking statements.
TRW Automotive Holdings Corp.
Index of Consolidated Financial
Information
Page
----
Consolidated Statements of Earnings
(unaudited) A2
for the three months ended December
31, 2012 and December 31, 2011
Consolidated Statements of Earnings A3
for the years ended December 31, 2012
(unaudited) and December 31, 2011
Consolidated Balance Sheets A4
as of December 31, 2012 (unaudited)
and December 31, 2011
Consolidated Statements of Cash Flows A5
for the years ended December 31, 2012
(unaudited) and December 31, 2011
Reconciliation of Non-GAAP Financial
Measures (unaudited) A6
for the three months and years ended
December 31, 2012 and December 31,
2011
Reconciliation of GAAP Net Earnings
to Adjusted Earnings (unaudited):
* For the three months ended December
31, 2012 A7
* For the year ended December 31,
2012 A8
* For the three months ended December
31, 2011 A9
* For the year ended December 31,
2011 A10
The accompanying unaudited consolidated financial information and reconciliation schedules should be read in conjunction with the TRW Automotive Holdings Corp. Annual Report on Form 10-K for the year ended December 31, 2011, and Quarterly Reports on Form 10-Q for the periods ended March 30, 2012, June 29, 2012, and September 28, 2012, each of which were filed with the United States Securities and Exchange Commission.
A2
TRW Automotive Holdings Corp.
Consolidated Statements of Earnings
(Unaudited)
(In millions, except per share amounts) Three Months Ended
December 31,
------------
2012 2011
---- ----
Sales $4,032 $3,986
Cost of sales 3,607 3,535
----- -----
Gross profit 425 451
Administrative and selling expenses 197 159
Amortization of intangible assets 3 3
Restructuring charges and asset impairments 88 27
Other (income) expense - net (18) (18)
--- ---
Operating income 155 280
Interest expense - net 29 28
Loss on retirement of debt - net - 1
Adjustment to gain on business acquisition - 2
Equity in earnings of affiliates, net of tax (11) (10)
--- ---
Earnings before income taxes 137 259
Income tax benefit (286) (174)
---- ----
Net earnings 423 433
Less: Net earnings attributable to noncontrolling
interest, net of tax 4 8
--- ---
Net earnings attributable to
TRW $419 $425
==== ====
Basic earnings per share:
Earnings per
share $3.45 $3.44
Weighted
average shares
outstanding 121.3 123.7
Diluted earnings per share:
Earnings per
share $3.26 $3.27
Weighted
average shares
outstanding 128.7 131.0
A3
TRW Automotive Holdings Corp.
Consolidated Statements of Earnings
Years Ended
(In millions, except per share amounts) December 31,
------------
2012 2011
---- ----
(Unaudited)
Sales $16,444 $16,244
Cost of sales 14,655 14,384
------ ------
Gross profit 1,789 1,860
Administrative and selling expenses 634 613
Amortization of intangible assets 12 15
Restructuring charges and asset impairments 95 27
Other (income) expense - net (37) (55)
--- ---
Operating income 1,085 1,260
Interest expense - net 111 118
Loss on retirement of debt - net 6 40
Gain on business acquisition - (7)
Equity in earnings of affiliates, net of tax (40) (39)
--- ---
Earnings before income taxes 1,008 1,148
Income tax benefit (33) (47)
--- ---
Net earnings 1,041 1,195
Less: Net earnings attributable to
noncontrolling interest, net of tax 33 38
--- ---
Net earnings attributable to
TRW $1,008 $1,157
====== ======
Basic earnings per share:
Earnings per
share $8.24 $9.37
Weighted
average shares
outstanding 122.4 123.5
Diluted earnings per share:
Earnings per
share $7.83 $8.82
Weighted
average shares
outstanding 129.7 133.0
A4
TRW Automotive Holdings Corp.
Consolidated Balance Sheets
(Dollars in millions) As of December 31,
------------------
2012 2011
---- ----
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $1,223 $1,241
Accounts receivable - net 2,200 2,222
Inventories 975 845
Prepaid expenses and other current
assets 165 126
Deferred income taxes 165 193
Total current assets 4,728 4,627
Property, plant and equipment - net 2,385 2,137
Goodwill 1,756 1,753
Intangible assets - net 293 298
Pension assets 823 918
Deferred income taxes 380 87
Other assets 492 442
--- ---
Total assets $10,857 $10,262
Liabilities and Equity
Current liabilities:
Short-term debt $67 $65
Current portion of long-term debt 26 39
Trade accounts payable 2,423 2,306
Accrued compensation 254 283
Income taxes 36 69
Other current liabilities 1,075 1,078
Total current liabilities 3,881 3,840
Long-term debt 1,369 1,428
Postretirement benefits other than
pensions 396 421
Pension benefits 898 831
Deferred income taxes 123 173
Long-term liabilities 421 430
--- ---
Total liabilities 7,088 7,123
Commitments and contingencies
Stockholders' equity:
Capital stock 1 1
Paid-in-capital 1,635 1,602
Retained earnings 2,408 1,668
Accumulated other comprehensive
earnings (losses) (466) (331)
Total TRW stockholders' equity 3,578 2,940
Noncontrolling interest 191 199
--- ---
Total equity 3,769 3,139
----- -----
Total liabilities and equity $10,857 $10,262
======= =======
A5
TRW Automotive Holdings Corp.
Consolidated Statements of Cash Flows
(Dollars in millions) Years Ended
December 31,
------------
2012 2011
---- ----
(Unaudited)
Operating Activities
Net earnings $1,041 $1,195
Adjustments to reconcile net earnings to net
cash provided by (used in) operating
activities:
Depreciation
and
amortization 409 447
Net pension
and other
postretirement
benefits
income and
contributions (224) (282)
Net gain on
sales of
assets and
divestitures (6) (15)
Amortization
of debt
issuance
costs 5 7
Loss on
retirement of
debt -net 6 40
Gain on
business
acquisition - (7)
Asset
impairment
charges 4 7
Deferred
income taxes (204) (145)
Share-based
compensation
expense 21 15
Exchangeable
bond premium
amortization 7 8
Other - net (32) (14)
Changes in assets and liabilities, net of
effects of businesses acquired:
Accounts
receivable -
net 76 (210)
Inventories (113) (105)
Trade accounts
payable 62 279
Prepaid
expense and
other assets (47) 19
Other
liabilities (49) (119)
Net cash provided by
operating activities 956 1,120
Investing Activities
Capital expenditures, including other
intangible assets (623) (571)
Cash acquired in acquisition of business - 15
Net proceeds from asset sales and
divestitures 15 47
--- ---
Net cash used in investing
activities (608) (509)
Financing Activities
Change in short-term debt - 41
Proceeds from issuance of long-term debt,
net of fees 3 1
Fees paid to refinance credit facility (9) -
Redemption of long-term debt (86) (455)
Repurchase of capital stock (268) -
Proceeds from exercise of stock options 21 20
Dividends paid to noncontrolling interest (46) (12)
--- ---
Net cash used in financing
activities (385) (405)
Effect of exchange rate changes on cash 19 (43)
--- ---
(Decrease) increase in cash and cash
equivalents (18) 163
Cash and cash equivalents at beginning of
period 1,241 1,078
----- -----
Cash and cash equivalents at end of period $1,223 $1,241
====== ======
A6
TRW Automotive Holdings Corp.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
EBITDA, Adjusted EBITDA and free cash flow are not recognized terms under GAAP and do not purport to be alternatives to the most comparable GAAP amounts. Further, since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies.
EBITDA and Adjusted EBITDA
EBITDA as calculated below is a measure used by management to evaluate the operating performance of the Company and its business segments and to forecast future periods. Adjusted EBITDA is defined as EBITDA excluding restructuring charges, asset impairments and other significant special items. Management uses Adjusted EBITDA to evaluate the performance of ongoing operations separate from items that may have a disproportionate impact in any particular period. EBITDA and Adjusted EBITDA are frequently used by securities analysts, institutional investors and other interested parties in the evaluation of companies in our industry.
EBITDA and Adjusted EBITDA do not purport to be alternatives to net earnings as an indicator of operating performance, nor to cash flows from operating activities as a measure of liquidity. Additionally, neither is intended to be a measure of free cash flow for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
(Dollars in millions) Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
GAAP net earnings attributable to TRW $419 $425 $1,008 $1,157
Income tax benefit (286) (174) (33) (47)
Interest expense - net 29 28 111 118
Depreciation and amortization 102 104 409 447
EBITDA 264 383 1,495 1,675
Restructuring charges and asset
impairments 88 27 95 27
Pension buyouts and OPEB curtailments 52 - 52 -
Termination of a service contract - - - 10
Loss on retirement of debt - net - 1 6 40
Favorable resolution of a commercial matter - - - (19)
Gain on business acquisition - 2 - (7)
--- --- --- ---
Adjusted EBITDA $404 $413 $1,648 $1,726
==== ==== ====== ======
Free Cash Flow
Free cash flow represents net cash provided by (used in) operating activities less capital expenditures, and is used by management in analyzing the Company's ability to service and repay its debt and to forecast future periods. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service debt or for other non-discretionary expenditures.
(Dollars in millions) Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Cash flow provided by (used in) operating activities $711 $608 $956 $1,120
Capital expenditures (298) (267) (623) (571)
---- ---- ---- ----
Free cash flow $413 $341 $333 $549
==== ==== ==== ====
A7
TRW Automotive Holdings Corp.
Reconciliation of GAAP Net Earnings to Adjusted Earnings
(Unaudited)
Among other adjustments, the Company recorded restructuring charges of $86 million related to severance and other charges, and asset impairment charges of $2 million.
Three Months Three Months
Ended Ended
December 31, December 31,
2012 2012
(In millions, except per share amounts) Actual Adjustments Adjusted
------ ----------- --------
Sales $4,032 $ - $4,032
Cost of sales 3,607 - 3,607
----- --- -----
Gross profit 425 - 425
Administrative and selling expenses 197 (52) (a) 145
Amortization of intangible assets 3 - 3
Restructuring charges and asset impairments 88 (88) (b) -
Other (income) expense - net (18) - (18)
--- --- ---
Operating income 155 140 295
Interest expense - net 29 - 29
Equity in earnings of affiliates, net of tax (11) - (11)
--- --- ---
Earnings before income taxes 137 140 277
Income tax (benefit) expense (286) 360 (c) 74
---- --- ---
Net earnings 423 (220) 203
Less: Net earnings attributable to noncontrolling interest, net of tax 4 - 4
--- --- ---
Net earnings attributable to TRW $419 $(220) $199
==== ===== ====
Basic earnings per share:
Earnings per share $3.45 $1.64
Weighted average shares
outstanding 121.3 121.3
Diluted earnings per share:
Earnings per share $3.26 $1.55
Weighted average shares
outstanding 128.7 128.7
__________
(a) Represents the elimination of pension buyouts and OPEB curtailments.
(b) Represents the elimination of restructuring charges and asset impairments.
(c) Represents the elimination of (i) the reversal of the Company's valuation allowance on net deferred
tax assets in Canada, and tax benefits related to various tax planning initiatives and other tax
matters, and (ii) the income tax impact of the above adjustments, by calculating the income tax
impact of each of these items using the appropriate tax rate for the jurisdiction where the
charges were incurred.
A8
TRW Automotive Holdings Corp.
Reconciliation of GAAP Net Earnings to Adjusted Earnings
(Unaudited)
Among other adjustments, the Company recorded restructuring charges of $91 million related to severance and other charges, and asset impairment charges of $4 million.
Year Ended Year Ended
December 31, December 31,
2012 2012
(In millions, except per share amounts) Actual Adjustments Adjusted
------ ----------- --------
Sales $16,444 $ - $16,444
Cost of sales 14,655 - 14,655
------ --- ------
Gross profit 1,789 - 1,789
Administrative and selling expenses 634 (52) (a) 582
Amortization of intangible assets 12 - 12
Restructuring charges and asset impairments 95 (95) (b) -
Other (income) expense - net (37) - (37)
--- --- ---
Operating income 1,085 147 1,232
Interest expense - net 111 - 111
Loss on retirement of debt - net 6 (6) (c) -
Equity in earnings of affiliates, net of tax (40) - (40)
--- --- ---
Earnings before income taxes 1,008 153 1,161
Income tax (benefit) expense (33) 373 (d) 340
--- --- ---
Net earnings 1,041 (220) 821
Less: Net earnings attributable to noncontrolling interest, net of tax 33 - 33
--- --- ---
Net earnings attributable to TRW $1,008 $(220) $788
====== ===== ====
Basic earnings per share:
Earnings per share $8.24 $6.44
Weighted average shares
outstanding 122.4 122.4
Diluted earnings per share:
Earnings per share $7.83 $6.14
Weighted average shares
outstanding 129.7 129.7
__________
(a) Represents the elimination of pension buyouts and OPEB curtailments.
(b) Represents the elimination of restructuring charges and asset impairments.
(c) Represents the elimination of the loss on retirement of debt.
(d) Represents the elimination of (i) the reversal of the Company's valuation allowance on net deferred
tax assets in Canada, and tax benefits related to various tax planning initiatives and other tax
matters, and (ii) the income tax impact of the above adjustments, by calculating the income tax
impact of each of these items using the appropriate tax rate for the jurisdiction where the charges
were incurred.
A9
TRW Automotive Holdings Corp.
Reconciliation of GAAP Net Earnings to Adjusted Earnings
(Unaudited)
Among other adjustments, the Company recorded restructuring charges of $21 million related to severance and other charges, and asset impairment charges of $6 million.
Three Months Three Months
Ended Ended
December 31, December 31,
2011 2011
(In millions, except per share amounts) Actual Adjustments Adjusted
------ ----------- --------
Sales $3,986 $ - $3,986
Cost of sales 3,535 - 3,535
----- --- -----
Gross profit 451 - 451
Administrative and selling expenses 159 - 159
Amortization of intangible assets 3 - 3
Restructuring charges and asset impairments 27 (27) (a) -
Other (income) expense - net (18) - (18)
--- --- ---
Operating income 280 27 307
Interest expense - net 28 - 28
Loss on retirement of debt - net 1 (1) (b) -
Adjustment to gain on business acquisition 2 (2) (c) -
Equity in earnings of affiliates, net of tax (10) - (10)
--- --- ---
Earnings before income taxes 259 30 289
Income tax (benefit) expense (174) 217 (d) 43
---- --- ---
Net earnings 433 (187) 246
Less: Net earnings attributable to noncontrolling interest, net of tax 8 - 8
--- --- ---
Net earnings attributable to TRW $425 $(187) $238
==== ===== ====
Basic earnings per share:
Earnings per share $3.44 $1.92
Weighted average shares
outstanding 123.7 123.7
Diluted earnings per share:
Earnings per share $3.27 $1.84
Weighted average shares
outstanding 131.0 131.0
__________
(a) Represents the elimination of restructuring charges and asset impairments.
(b) Represents the elimination of the loss on retirement of debt.
(c) Represents the elimination of the adjustment to gain on business acquisition.
(d) Represents the elimination of (i) the reversals of valuation allowances on net deferred tax assets
in the U.S. and certain foreign subsidiaries, (ii) the income tax impact of the adjustments made
to restructuring charges and asset impairments, by calculating the income tax impact of each of
these items using the appropriate tax rate for the jurisdiction where the charges were incurred,
and (iii) tax benefits related to the favorable resolution of various tax matters.
A10
TRW Automotive Holdings Corp.
Reconciliation of GAAP Net Earnings to Adjusted Earnings
(Unaudited)
Among other adjustments, the Company recorded restructuring charges of $20 million related to severance and other charges, and asset impairment charges of $7 million.
Year Ended Year Ended
December 31, December 31,
2011 2011
(In millions, except per share amounts) Actual Adjustments Adjusted
------ ----------- --------
Sales $16,244 $ - $16,244
Cost of sales 14,384 19 (a) 14,403
------ --- ------
Gross profit 1,860 (19) 1,841
Administrative and selling expenses 613 (10) (b) 603
Amortization of intangible assets 15 - 15
Restructuring charges and asset impairments 27 (27) (c) -
Other (income) expense - net (55) - (55)
--- --- ---
Operating income 1,260 18 1,278
Interest expense - net 118 - 118
Loss on retirement of debt - net 40 (40) (d) -
Gain on business acquisition (7) 7 (e) -
Equity in earnings of affiliates, net of tax (39) - (39)
--- --- ---
Earnings before income taxes 1,148 51 1,199
Income tax (benefit) expense (47) 237 (f) 190
--- --- ---
Net earnings 1,195 (186) 1,009
Less: Net earnings attributable to noncontrolling interest, net of tax 38 - 38
--- --- ---
Net earnings attributable to TRW $1,157 $(186) $971
====== ===== ====
Basic earnings per share:
Earnings per share $9.37 $7.86
Weighted average shares
outstanding 123.5 123.5
Diluted earnings per share:
Earnings per share $8.82 $7.42
Weighted average shares
outstanding 133.0 133.0
__________
(a) Represents the elimination of the gain related to the favorable resolution of a commercial matter.
(b) Represents the elimination of the expense related to the termination of service contract.
(c) Represents the elimination of restructuring charges and asset impairments.
(d) Represents the elimination of the loss on retirement of debt.
(e) Represents the elimination of the gain on business acquisition.
(f) Represents the elimination of (i) the reversals of valuation allowances on net deferred tax assets
in the U.S. and certain foreign subsidiaries, (ii) the income tax impact of the adjustments made to
restructuring charges and asset impairments, by calculating the income tax impact of each of these
items using the appropriate tax rate for the jurisdiction where the charges were incurred, and
(iii) tax benefits related to the favorable resolution of various tax matters in foreign
jurisdictions.
SOURCE TRW Automotive Holdings Corp.
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