Annual Report of Employee Stock Purchase

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 11-K

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      .

Commission File No. 001-31970

TRW Automotive Retirement Savings Plan for Hourly Employees

(Full title of the Plan)

TRW Automotive Holdings Corp.

12001 Tech Center Drive
Livonia, Michigan 48150

(Name of issuer of securities held pursuant to the Plan and the address of its principal executive
office)

 

 

TRW Automotive Retirement Savings Plan for Hourly Employees Audited Financial Statements as of December 31, 2008 and 2007 and for the Year Ended December 31, 2008 and Supplemental Schedule With Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Retirement Committee of the

TRW Automotive Retirement Savings Plan
for Hourly Employees

We have audited the accompanying statements of net assets available for benefits of the TRW Automotive Retirement Savings Plan for Hourly Employees as of December 31, 2008 and 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2008. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2008 and 2007, and the changes in its net assets available for benefits for the year ended December 31, 2008, in conformity with US generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2008, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

Detroit, Michigan
June 12, 2009

See accompanying notes to financial statements.

See accompanying notes to financial statements.

TRW Automotive
Retirement Savings Plan for Hourly Employees

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

1. Description of the Plan (continued)

Employer Contributions

The Company contributed an amount equal to 50% of the participant’s pretax contribution up to 6% of the participant’s compensation for non-union hourly participants . In addition, under the Mt. Vernon agreement, the Company contributes thirty cents ($0.30) for each hour that a participant was compensated during the month provided the participant made pre-tax contributions to the Plan of 1% or more. Also, under the Fayette plan agreement, the Company does not make matching contributions, although the Company may, at its discretion, make a profit sharing contribution. The Company shall contribute to the Plan an amount equal to 30% of the first 7% of the employee’s elective deferral contributions for hourly employees of TRW Integrated Chassis Systems LLC. Matching contributions made in TRW Automotive Holdings Corp. stock prior to January 1, 2007 are subject to the Pension Protection Act (PPA) transition rule, which states matching contributions made in company stock before January 1, 2007 may be transferred to another available investment option over a 3 year period (33% in 2007, 66% in 2008 and 100% in 2009). There is an exception to this transition rule for participants who attained age 55 and completed 3 years of vesting service by December 31, 2006; these participants may transfer their pre-2007 matching contributions to another investment option immediately. For years after January 1, 2007, the matching contributions in TRW Automotive Holdings Corp. stock become diversifiable after attaining three years of service.

Company matching contributions were suspended for non-union hourly participants for payroll periods beginning after February 27, 2009.

Participant Accounts

Each participant’s account is credited with the participant’s contributions, Company’s contribution, if applicable, and Plan earnings. The benefit to which a participant is entitled cannot exceed the participant’s vested account balance.

Vesting

Participants are immediately vested in their contributions plus actual earnings thereon. For Company matching contributions, a participant is 20% vested after one year of credited service and is 100% vested after 5 years of credited service if hired before August 1, 2007.

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

1. Description of the Plan (continued)

If hired after August 1, 2007 vesting in Company contributions will be 20% each year beginning with the second year of employment and will be 100% vested after 6 years of credited service. Full vesting also occurs upon death, permanent disability or retirement.

Forfeitures

Nonvested employer contributions of terminated employees become forfeitures after a one-year break in service and shall be used to reduce future employer contributions or administrative expenses. Approximately $3,374 and $17,818 was available to pay additional Plan expenses at December 31, 2008, and December 31, 2007, respectively.

Participant Loans

Participants may borrow an amount limited to the lesser of 50% of their vested account balance or $50,000. The loan terms range from 1 — 5 years or up to 10 years for the purchase of a primary residence. Loans are repayable with interest at a market rate (prime rate plus 1%) determined at the date of application. Principal and interest are paid ratably through regular payroll deductions.

Defaulted loans are classified as either an actual distribution or deemed distribution. An actual distribution occurs if the participant was eligible to receive all or part of the loan as a distribution. Whereas, a deemed distribution occurs if a participant was not eligible to receive a distribution from the Plan.

Payment of Benefits

Upon retirement, disability, or death, the entire balance of the participant’s account becomes payable to the participant or the participant’s beneficiary. Upon any other termination of employment, the participant receives the vested portion of his or her account. Withdrawals of participant contributions are also permitted for financial hardship or upon attainment of age 59-1/2 under certain provisions of the Plan. All benefits are payable in lump sum.

Plan Termination

The Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA and the respective collective bargaining agreements. In the event of Plan termination, participants will become 100% vested in their accounts and distributions to participants and beneficiaries will be made at such time after such termination as provided by the Plan agreement.

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

1. Description of the Plan (continued)

Plan Changes

The plan balances for certain hourly manufacturing employees included in the TRW Automotive Retirement Savings Plan for Salaried Employees at December 31, 2007 were transferred to the Plan. The amount transferred to the Plan was $142,412 during 2008. The balances transferred were in-kind, thereby eliminating any impact of gains or losses that would normally occur during transfer transactions.

Investment Options

The Plan provides 25 investment options which include the following funds:

•

Alliance Bernstein International Value Fund — Class A

•

American Funds EuroPacific Growth Fund — Class R5

•

Artisan Mid Cap Fund

•

Dodge & Cox Balanced Fund

•

Dodge & Cox Stock Fund

•

DWS RREEF Real Estate Securities Fund

•

Fidelity Capital Appreciation Fund

•

Fidelity Freedom Income Fund

•

Fidelity Managed Income Portfolio

•

Fidelity Small Cap Stock Fund

•

Fidelity Freedom 2000 Fund

•

Fidelity Freedom 2005 Fund

•

Fidelity Freedom 2010 Fund

•

Fidelity Freedom 2015 Fund

•

Fidelity Freedom 2020 Fund

•

Fidelity Freedom 2025 Fund

•

Fidelity Freedom 2030 Fund

•

Fidelity Freedom 2035 Fund Lord

•

Fidelity Freedom 2040 Fund Lord

•

Lord Abbett Mid-Cap Value Fund — Class A

•

Lord Abbett Small-Cap Value Fund — Class A

•

PIMCO Total Return Fund — Administrative Class

•

Spartan U.S. Equity Index Fund

•

TRW Stock Fund

•

Victory Diversified Stock — Class A

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Accounting and Use of Estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes and supplemental schedule. Actual results could differ from those estimates.

Valuation of Investments and Income Recognition

The Plan’s investments are stated at fair value. Shares of mutual funds are valued based on quoted market prices which represent the net asset value of shares held by the Plan at year-end. Employer securities represent common stock and is valued at the closing prices reported on the active market on which the securities are traded. The fair value of the participation units in common collective trusts is based on quoted redemption values on the last business day of the Plan’s year-end. Participant loans are valued at their outstanding balances, which approximate fair value.

As described in Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health & Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully-benefit responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under terms of the Plan.

The Plan invests in investment contracts through a common collective trust (Fidelity Managed Income Portfolio). As required by the FSP, the statement of net assets available for benefits presents the fair value of the investment in the common collective trust as well as the adjustment from fair value to contract value for fully benefit-responsive investment contracts. The fair value of the Plan’s interest in the Fidelity Managed Income Portfolio is based on information reported by the issuer of the common collective trust at year-end. The contract value of the Fidelity Managed Income Portfolio Fund represents contributions plus earnings, less participant withdrawals and administrative expenses. Purchases and sales of securities are recorded on a trade date basis. Dividends are recorded on the ex-dividend date.

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

2. Basis of Presentation and Summary of Significant Accounting Policies (continued)

Administrative Expenses

Certain administrative expenses of the Plan related to loans, withdrawals and qualified domestic relation orders may be paid by the participants. All other administrative expenses are paid for by the Company.

3. Investments

During the year ended December 31, 2008, the Plan’s investments (including investments purchased, sold, as well as held during the year) depreciated in fair value as determined by quoted market prices as follows:

The fair value of individual investments that represent 5% or more of the Plan’s net assets available for benefits at fair value are as follows:

4. Fair Value Measurements

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (SFAS No. 157), “Fair Value Measurements.” SFAS No. 157 is effective pertaining to financial assets and financial liabilities in financial statements issued for fiscal years beginning after November 15, 2007 and interim periods with those years. The effective date for nonfinancial assets and nonfinancial liabilities was delayed by one year to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. This standard defines fair value for financial reporting, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles and requires additional disclosures about fair value measurements.

The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy under SFAS No. 157 was established to distinguish between those inputs that are observable and unobservable.

5. Related Party Transactions

Certain plan investments are units of participation in common trust funds and shares of mutual funds managed by Fidelity. Fidelity is the trustee as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions. Likewise, Kelsey-Hayes Company is the Plan sponsor, and therefore, transactions in shares of TRW Automotive Holdings Corp.’s stock would also qualify as party-in-interest transactions.

6. Risks and Uncertainties

The Plan allows for investments in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

TRW Automotive
Retirement Savings Plan for Hourly Employees
Notes to Financial Statements (continued)

7. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated April 25, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination letter by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor believes the Plan is being operated in compliance with applicable requirements of the Code and therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.

8. Difference between the Financial Statements and Form 5500

The following is a reconciliation of net assets available for benefits pursuant to the financial statements to the Form 5500:

The following is a reconciliation of net (loss) from investments:

Supplemental Schedule

Signature

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

TRW AUTOMOTIVE HOLDINGS CORP.

ANNUAL REPORT ON FORM 11-K