LIVONIA, Mich. -- TRW Automotive Holdings Corp. has reported fourth quarter 2010 financial results with sales of $3.7 billion, an increase of 10 percent compared to the prior year period.

For the full year, the company reported sales of $14.4 billion, an increase of $2.8 billion or 24 percent compared to 2009.

The company said it generated record free cash flow in 2010 of $758 million, compared to $254 million in 2009. The 2010 result is after the company made discretionary contributions of $170 million in the fourth quarter to certain of its pension plans. The strong cash flow generation allowed the company to reduce its year-end 2010 net debt (defined as debt less cash and cash equivalents) to a record low of $768 million, a reduction of $815 million compared to Dec. 31, 2009.

In addition to the record financial results achieved in 2010, the company says it made significant progress toward reducing its legacy liabilities. During the fourth quarter of 2010, TRW closed its U.S. salaried pension plan to further accruals. This action, along with the prior cessation of accruals in the company’s U.K. pension plan, and the discretionary contributions of $170 million to certain of the company’s pension plans, resulted in a $427 million reduction of legacy liabilities at year-end 2010 compared with year-end 2009. This significant reduction, combined with the large reduction in net debt, has further strengthened TRW’s balance sheet and provides flexibility to support the company’s future growth plans.
 
“TRW’s solid fourth quarter performance built on the positive momentum established earlier in the year and enabled the company to post its best full year results since becoming an independent company,” said John Plant, chairman, president and CEO. “TRW ended the year with a significantly improved capital structure including a record low net debt level and strong performance on reducing the company’s legacy liabilities. The outstanding business performance achieved in 2010 demonstrates TRW is executing the right strategy for long-term success.”