LIVONIA, Mich. -- TRW Automotive Holdings Corp. (TRW) has reported fourth quarter 2009 sales of $3.4 billion, an increase of $571 million or 20.3 percent from the prior year period. Compared to the prior year, the 2009 quarter benefited from a higher level of sales in Europe and the rest of the world resulting from increased vehicle production volumes in those regions. Currency movements during the quarter also had a positive impact on sales compared to the same period a year ago.
 
The company's fourth quarter 2009 operating income was $229 million compared with an operating loss of $892 million last year. Both the 2009 and 2008 periods included restructuring and fixed asset impairment charges totaling $26 million and $81 million, respectively. In addition, the 2008 period included goodwill and other intangible asset impairment charges totaling $787 million. Excluding these charges from both periods, operating income for the fourth quarter of 2009 was $255 million, which compares to an operating loss of $24 million in the prior year period. The year-to-year improvement of $279 million was driven primarily by the positive profit impact from the higher level of sales between the two quarters, the positive impact of the company's restructuring and cost containment actions implemented over the past year, lower raw material prices and a favorable currency outcome. In addition, the 2009 quarter benefited from certain favorable customer and employee benefit plan settlements.

"Our strong fourth quarter and full year results demonstrate that TRW not only survived the industry challenges in 2009, but has emerged as a stronger global franchise," said John Plant, president and chief executive officer. "In the midst of the worst recession in recent memory, TRW was profitable on an operating and net income level, generated positive cash flow for the third consecutive year, reduced its net debt to the lowest level in the history of the company and strengthened its capital structure by issuing new equity and extending debt maturities. The positive operating results combined with our strengthened balance sheet provide a strong foundation to continue support of our growth in the future."

The company reported 2009 sales of $11.6 billion, a decrease of $3.4 billion or 22.5 percent compared to prior year sales. The decrease in sales resulted from the sharply reduced global automotive production volumes between the two years and the overall negative effects of foreign currency movements compared to 2008.

Both the 2009 and 2008 full-year results included restructuring and fixed asset impairment charges of $100 million and $145 million, respectively. In addition, the company incurred a one-time trademark impairment charge of $30 million in 2009 and goodwill and other intangible impairment charges of $787 million in 2008.

Excluding these charges and asset impairments from both periods, operating income in 2009 was $419 million, which is a decrease of $45 million or 10 percent compared to the prior year result of $464 million. The positive benefits achieved from restructuring and cost containment actions, along with lower commodity prices enabled the company to significantly offset the lost contribution on the $3.4 billion of lower sales and unfavorable foreign currency movements.
 
As of Dec. 31, 2009, the company had $2,371 million of debt and $788 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $1,583 million. This net debt outcome is a historic low for the company, $573 million lower than the balance at the end of 2008 and is the fourth consecutive year the company has successfully reduced its net debt. Committed liquidity facilities and cash on hand provided the company with available liquidity in excess of $1.8 billion as of Dec. 31, 2009.

TRW's 2010 planning assumptions for industry production volumes are approximately 10.8 million units in North America and 16 million units in Europe, up 27 percent and down 2 percent, respectively compared to 2009 levels. Based on these production levels and the company's expectations for foreign currency exchange rates, full year 2010 sales are expected to range between $12.3 billion and $12.9 billion, with first quarter sales expected to be approximately $3.4 billion.

The company currently expects that the continuing recovery in the North American market and the benefits achieved from downturn management actions implemented in 2009 will offset an increase in pension expense, rising commodity prices and other factors in 2010.
 
"We are optimistic the positive momentum that emerged in the industry in the second-half of 2009 will continue into 2010," said Plant. "As we start a new decade, TRW is well positioned to build on the success achieved in 2009 given its leading diversification, key technology portfolio and improved cost and capital structure."