TRW AUTOMOTIVE HOLDINGS CORP
`
`FORM 10-K
`
`(Annual Report)
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`Filed 02/13/15 for the Period Ending 12/31/14
`
`
`Address
`
`
`12001TECH CENTER DRIVE
`LIVONIA, MI 48150
`734 855 2600
`Telephone
`0001267097
`CIK
`TRW
`Symbol
`3714 - Motor Vehicle Parts and Accessories
`SIC Code
`Auto & Truck Parts
`Industry
`Sector Consumer Cyclical
`Fiscal Year
`12/31
`
`http://www.edgar-online.com
`© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
`Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
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`0001
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`Magna 2061
`TRW v. Magna
`IPR2015-00436
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`Use these links to rapidly review the document
`TABLE OF CONTENTS
`PART IV
`
`Table of Contents
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, DC 20549
`
`FORM 10-K
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`(cid:1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
`ACT OF 1934
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`For the fiscal year ended December 31, 2014
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`OR
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`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
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`For the transition period from to .
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`Commission File No. 001-31970
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`TRW Automotive Holdings Corp.
`(Exact name of registrant as specified in its charter)
`
`Delaware
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`(State or other jurisdiction of
`incorporation or organization)
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`81-0597059
`(I.R.S. Employer
`Identification Number)
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`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)
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`Securities registered pursuant to Section 12(b) of the Act:
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`Title of Each Class
`Common Stock, $0.01 par value per share
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`
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`Name of Each Exchange on Which Registered
`New York Stock Exchange
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`Securities registered pursuant to Section 12(g) of the Act: None
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` Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1) No
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` 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 No (cid:1)
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` 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 (cid:1) No
`
` Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
`Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
`(or for such shorter period that the registrant was required to submit and post such files). Yes (cid:1) No
`
` Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. (cid:1)
`
` Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
`company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act
`(Check one):
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`Large accelerated filer (cid:1)
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`Accelerated filer
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`Non-accelerated filer
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`Smaller reporting company
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` Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No (cid:1)
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` As of June 27, 2014, the last business 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 $9.8 billion 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 9, 2015, the
`number of shares outstanding of the registrant's Common Stock was 114,972,298.
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`Documents Incorporated by Reference
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` Certain portions, as expressly described in this report, of the Registrant's Proxy Statement for the 2014 Annual Meeting of the
`Stockholders, to be filed within 120 days of December 31, 2014, are incorporated by reference into Part III, Items 10-14.
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`Table of Contents
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`TRW Automotive Holdings Corp.
`Index
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`PART I
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`Business
`Item 1.
`Item 1A. Risk Factors
`Item 1B. Unresolved Staff Comments
`Item 2. Properties
`Item 3. Legal Proceedings
`Item 4. Mine Safety Disclosures
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`PART II
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`Item 5.
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`Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
`Purchases of Equity Securities
`Item 6. Selected Financial Data
`Item 7. Management's Discussion and Analysis of Financial Condition and Results of
`Operations
`Item 7A. Quantitative and Qualitative Disclosures about Market Risk
`Item 8. Financial Statements and Supplementary Data
` Reports of Independent Registered Public Accounting Firm
`Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
`Disclosure
`Item 9A. Control and Procedures
`Item 9B. Other Information
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`PART III
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`Directors, Executive Officers and Corporate Governance
`Item 10.
`Item 11. Executive Compensation
`Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
`Stockholder Matters
`Item 13. Certain Relationships and Related Transactions, and Director Independence
`Item 14. Principal Accounting Fees and Services
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`PART IV
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`Exhibits, Financial Statement Schedules
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`Item 15.
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`Signatures
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`ITEM 1. BUSINESS
`
`The Company
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`PART I
`
` TRW Automotive Holdings Corp. (together with its subsidiaries, "we," "our," "us," "TRW Automotive" or the "Company") is a Delaware
`corporation formed in 2002 with a business history stretching back to the turn of the twentieth century. Our common stock is traded on the New
`York Stock Exchange under the ticker symbol TRW.
`
` The Company is among the world's largest and most diversified suppliers of automotive systems, modules and components to global
`automotive 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 and systems.
`Active safety related products and systems principally refer to vehicle dynamic controls (primarily braking and steering) and electronics
`(primarily driver assistance systems), and passive safety related products and systems principally refer to occupant restraints (primarily airbags
`and seat belts) and electronics (primarily airbag electronic control units, and crash and occupant weight sensors).
`
` We operate our business along four segments: Chassis Systems, Occupant Safety Systems, Electronics and Automotive Components. We
`are primarily a "Tier 1" original equipment supplier, with approximately 82% of our end-customer sales in 2014 made to major OEMs. Of our
`2014 sales, approximately 42% were in Europe, 33% were in North America, 21% were in Asia, and 4% were in the rest of the world.
`
`Merger Agreement
`
` On September 15, 2014, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with ZF Friedrichshafen AG, a stock
`corporation organized and existing under the laws of the Federal Republic of Germany ("ZF"), and MSNA, Inc., a Delaware corporation
`("Merger Sub") and a wholly owned subsidiary of ZF held directly by ZF North America, Inc. ("ZNA"), pursuant to which Merger Sub will be
`merged with and into the Company (the "ZF Merger") with the Company surviving the ZF Merger as an indirect wholly owned subsidiary of ZF.
`At a special stockholders meeting held on November 19, 2014, our stockholders adopted the Merger Agreement.
`
` At the effective time of the ZF Merger, each share of our common stock issued and outstanding (other than any shares of our common stock
`held by ZF, ZNA, Merger Sub or any other wholly owned subsidiary of ZF, treasury shares held by us and shares owned by stockholders who
`have properly made and not withdrawn a demand for appraisal rights under Delaware law) will be converted into the right to receive $105.60 in
`cash, without interest (the "Merger Consideration"). In addition, at the effective time of the ZF Merger, (i) all then-outstanding Company stock
`options, restricted stock units, phantom stock units and performance share units (which will vest at the "maximum level" of performance),
`whether vested or unvested, will be converted into the right to receive the Merger Consideration, less the exercise price of such awards, if any,
`and (ii) all then-outstanding Company stock appreciation rights, whether vested or unvested, will be converted into the right to receive an
`amount in cash equal to the excess of the lesser of the Merger Consideration and the "maximum value" of such stock appreciation right over the
`fair market value per share at the relevant grant date. The consummation of the ZF Merger is subject to the receipt of antitrust approvals in the
`United States and certain other jurisdictions and other customary closing conditions. The transaction is expected to close in the first half of 2015.
`If completed, the ZF Merger will result in the Company becoming a wholly owned subsidiary of ZF and our shares will no longer be listed on
`any public market.
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` Additional information about the ZF Merger and the Merger Agreement, including circumstances under which the Merger Agreement can
`be terminated and the ramifications of such termination, as well as other terms and conditions, is set forth in our Current Report on Form 8-K
`filed with the Securities and Exchange Commission ("SEC") on September 15, 2014 and in our definitive proxy statement filed with the SEC on
`October 20, 2014 (as supplemented) with respect to the related special meeting of stockholders.
`
`Engine Valve Divestiture
`
` On September 10, 2014, the Company announced it entered into a definitive agreement to divest its engine valve business for a purchase
`price of $385 million in cash, which is subject to adjustment in accordance with the agreement. The business to be divested had annual sales of
`approximately $592 million. On February 6, 2015, we closed the sale of our wholly-owned engine valve subsidiaries which represented the
`material portion of the business to be divested. The closing did not include the transfer of several of our joint ventures involved in the business.
`
`Available Company Information
`
` TRW Automotive Holdings Corp.'s Internet website is www.trw.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q,
`current reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange
`Act of 1934 are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or
`furnished to, the Securities and Exchange Commission. Our Audit Committee Charter, Compensation Committee Charter, Corporate
`Governance and Nominating Committee Charter, Corporate Governance Guidelines and Standards of Conduct (our code of business conduct and
`ethics) are also available on our website. From time to time we may amend our Standards of Conduct. We intend to disclose, by posting on our
`website, information about any amendments, as well as information concerning any waiver of the Standards of Conduct that may be granted by
`the Board, in accordance with SEC regulations.
`
`Business Developments, Strategy, and Industry Trends
`
` Our Business Developments and Strategy. We are a leader in the global automotive supply industry due to the strength of our products
`and systems, technological capabilities and systems integration skills, global presence, cost competitiveness and quality performance. Over the
`last decade, we have experienced sales growth in many of our product lines due to an increasing focus by both governments and consumers on
`safety and fuel efficiency and increasing recognition of new safety technologies by new car assessment programs. We believe that such focus is
`continuing as evidenced by ongoing regulatory activities, as well as advances in the electrification of vehicles. We believe that these trends will
`help drive growth in our advanced safety and fuel efficient products and systems, which include: electronic stability control systems, brake
`controls for regenerative brake systems, electric park brake and electrically assisted power steering systems, curtain and side airbag systems,
`active seat belt pretensioning and retractor systems, occupant sensing systems, front and side crash sensors, vehicle rollover sensors, tire pressure
`monitoring systems, and driver assistance systems.
`
` Throughout our long history as a leading supplier to major OEMs, we have focused on products and systems for which we have a
`technological advantage. We have extensive technical experience in a focused range of safety-related product lines and strong systems
`integration skills. These strengths enable us to provide comprehensive, systems-based solutions for our OEM customers. We have a broad and
`established global presence and sell to major OEMs across the world's major vehicle producing regions, including the expanding Chinese
`market. We believe our business diversification mitigates our exposure to the risks of any one geographic economy, product line or major
`customer concentration. It
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`also enables us to extend our portfolio of products and new technologies across our customer base and geographic regions, and provides us the
`necessary scale to optimize our cost structure.
`
` In general, our long-term strategic objectives are geared toward profitably growing our business, expanding our newer, innovative
`technologies, winning new contracts, generating cash, strengthening our market position, and enhancing shareholder value. On an ongoing basis,
`we evaluate our competitive position in the global automotive supply industry and determine what actions may be required to maintain and
`improve that position.
`
` We believe that a continued focus on research, development and engineering activities is critical to maintaining our leadership position in
`the industry and meeting our long-term objectives. We also continue to focus on our growth strategies, cash generation and capital structure
`improvement, while managing through near-term industry challenges, such as the fragile economic conditions in Europe, and developments in
`emerging markets (e.g., China). Our commitment to invest in facilities and infrastructure in order to support new business awards and achieve
`our long-term growth plans is evidenced by our projections of continued increases in capital expenditures through 2015.
`
` Focus on Safety. Consumers, and therefore OEMs, are increasingly focused on, and governments and International New Car Assessment
`Programs ("NCAP") are increasingly requiring, improved safety in vehicles. For example, the U.S. National Highway Traffic Safety
`Administration ("NHTSA") in 2014 announced its first regulation for driver assistance technology, requiring compulsory fitment of rear back-up
`cameras starting in 2018. In Europe, lane departure warning and automatic emergency braking will become mandatory on all commercial
`vehicles beginning in November 2015. Further, over the last few years, automobile safety regulations in emerging markets have increased
`significantly. For example, Brazilian (by 2014) and Indian (by 2015) governments have mandated the use of driver and passenger airbags and
`anti-lock braking systems for all vehicles sold in their respective markets.
`
` Each year the requirements that must be met to earn top ratings under various country/regional NCAP regimes become more extensive. For
`example, in its most recent protocol (starting with 2011 models), U.S. NCAP introduced tougher tests and rigorous new 5-star safety ratings that
`include information about vehicle safety and crash avoidance technologies. In 2013 and 2014, Euro NCAP began testing vehicles equipped with
`crash avoidance technologies to assess the effectiveness, in both low-speed ("City") and higher speed ("Inter-Urban") conditions, of autonomous
`emergency braking and forward collision warning systems in helping drivers to avoid or to mitigate a crash. This year, Euro NCAP will begin
`testing under a new protocol for pedestrian protection. Programs in emerging markets are similarly increasing the stringency of their testing
`requirements, with both Latin NCAP and China NCAP upgrading testing and rating protocols in 2014 and 2015, respectively. This year, India
`will begin testing and rating car safety under the newly established Bharat New Vehicle Safety Assessment Program.
`
` The Alliance of Automobile Manufacturers and the Insurance Institute for Highway Safety ("IIHS") monitor and report vehicle
`manufacturer compliance with voluntary performance criteria which encompass a wide range of occupant protection technologies and designs,
`including enhanced matching of vehicle front structural components and enhanced side-impact protection through the use of features such as side
`airbags, airbag curtains and revised side-impact structures. IIHS recently rolled out new versions of its small and moderate offset frontal crash
`tests, which put more structural stress on vehicles and potentially expose more weaknesses that can contribute to occupant injuries in real-world
`crashes. IIHS also has adopted testing protocols for crash avoidance systems and its crash avoidance ratings of low-speed systems in the United
`States have been in existence since 2013.
`
` Focus on Fuel Efficiency and Greenhouse Gas Emissions. Consumers, and therefore OEMs, are increasingly focused on, and
`governments are increasingly requiring, improved fuel efficiency and reduced greenhouse gas emissions from vehicles. In 2012, the U.S.
`Environmental Protection Agency (the "EPA") and NHTSA jointly approved a rule requiring model year 2017 through 2025 passenger
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`cars, light-duty trucks and medium-duty passenger vehicles to reduce greenhouse gas emissions and improve fuel economy. These standards
`require those vehicles to meet a specified average emission level in model year 2025 equivalent to 54.5 miles per gallon, if achieved exclusively
`through fuel economy improvements. These standards include miles per gallon requirements under NHTSA's Corporate Average Fuel Economy
`Standards ("CAFE") program. In 2012, the European Commission proposed regulations to reduce the average CO 2 emissions of all new
`passenger cars sold in Europe by 30% to 95 grams per kilometer by 2020; and for light trucks and vans by 19% to 147 grams per kilometer by
`2020. In 2013, the United States previously announced it will provide assistance to China in drafting stricter emissions standards. As such the
`EPA and the Department of Energy will assist China with its VI standards which, along with its China V standards, will reduce allowable sulfur
`content by 80% by 2017.
`
` The desire to lessen environmental impacts and reduce oil dependence is also spurring interest in green technologies and alternative fuels.
`As such, there is an increased focus on production of advanced powertrain, direct injection and start/stop technologies and hybrid and electric
`vehicles because of their fuel efficiency, and developing ethanol, hydrogen, natural gas and other clean burning fuel sources for vehicles.
`
` Globalization. The automotive industry continues to become more global and both OEMs and suppliers must balance resources and
`production capacity to efficiently address diverse consumer needs and preferences as well as unique market dynamics. Developing automotive
`markets, such as China and Brazil, represent significant growth opportunities; however, vehicle affordability remains a challenge in these
`markets, highlighting the need for OEMs and suppliers to meet differing requirements of consumers in both mature and emerging markets. To
`lower costs, OEMs continue to shift their production facilities from high-cost regions such as the U.S., Canada, and Western Europe to lower-
`cost regions such as China, India, Eastern Europe, and Mexico. Through these localization efforts, labor and transportation costs can be lowered,
`while positioning operations in markets with the highest potential for future growth. Additionally, to serve multiple markets more cost
`effectively, OEMs continue to move to fewer and more global vehicle platforms, which typically are designed in one location but are produced
`and sold in many different markets around the world, thereby enabling design cost savings and economies of scale through the production of a
`greater number of models from each platform. Suppliers having operations in the geographic markets in which OEMs produce global platforms
`are better positioned to meet OEMs' needs more economically and efficiently, thus making global coverage a source of significant competitive
`advantage.
`
` Increased Electronic Content and Electronics Integration. The electronic content of vehicles has increased in recent years. Consumer and
`regulatory requirements in Europe and the United States for improved automotive safety and environmental performance, as well as consumer
`demand for increased vehicle performance and functionality at lower cost, have largely driven the increase in electronic content. Electronics
`integration generally refers to replacing mechanical with electronic components and integrating mechanical and electrical functions within the
`vehicle. This allows OEMs to achieve a reduction in the weight of vehicles and the number of mechanical parts, resulting in easier assembly,
`enhanced fuel economy, improved emissions control, increased safety and better vehicle performance. We believe that electronic content per
`vehicle will continue to increase as consumers seek more competitively-priced ride and handling performance, safety, security and convenience
`options in vehicles, such as electronic stability control, electric power steering, airbags, active seat belts, keyless and passive entry, tire pressure
`monitoring, and driver assistance systems.
`
` Inflation and Pricing Pressure. Overall commodity volatility is an ongoing concern in the industry and has been a considerable
`operational and financial focus for us. As production levels rise, commodity inflationary pressures may increase, both in the automotive industry
`and in the broader economy. We continue to monitor commodity costs and work with our suppliers and customers to
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`manage changes in such costs. However, when costs increase, it is generally difficult to pass the full extent of increased prices for manufactured
`components and raw materials through to our customers in the form of price increases and, even if passed through to some extent, the recovery is
`typically on a delayed basis.
`
` Additionally, pressure from OEM customers to reduce prices is characteristic of the automotive supply industry. Virtually all OEMs have
`policies of seeking price reductions each year. Historically, we have taken steps to reduce costs and minimize or resist price reductions.
`However, to the extent our cost reductions are not sufficient to support committed price reductions, our profit margins could be negatively
`affected.
`
` Product Mix. Product mix tends to be influenced by a variety of factors such as gasoline prices, consumer income and wealth and
`governmental regulations (e.g. fuel economy standards driving higher volumes of small car production). In Europe, demand has historically
`tended to be toward smaller, more fuel efficient vehicles. In North America, product mix tends to be more correlated to short-term fluctuations in
`the price of gasoline and consumer sentiment and wealth, thereby causing production to swing between sport utility vehicles/light trucks and
`more economical passenger cars. Recent improvements in the U.S. housing market and overall economy, as well as lower gasoline prices have
`led to a higher level of light duty pickup truck production in 2014. In general, sport utility vehicles and light duty pickup trucks tend to be more
`profitable for OEMs and suppliers, while smaller, more fuel efficient vehicles tend to be less profitable for OEMs and suppliers.
`
` Supply Base. As production levels fluctuate and overall economic concerns remain, Tier 2 and Tier 3 suppliers face the challenges of
`managing through increased working capital and capital expenditure requirements. There are concerns about suppliers' viability stemming from
`broader industry restructuring actions in Europe. Further, in some cases, capacity constraints, limited availability of raw materials or components
`or financial instability of the Tier 2 and Tier 3 supply base can pose a risk of supply disruption to us. We have dedicated resources and systems
`to closely monitor the viability and performance of our supply base and are constantly evaluating opportunities to mitigate the risk and/or effects
`of any supplier disruption.
`
` Foreign Currencies. During the fourth quarter of 2014, the U.S. dollar strengthened against all major global currencies. We continually
`monitor the impact of foreign currency exchange fluctuations on our operations. Our operating results will continue to be impacted by our
`buying, selling and borrowing in currencies other than the functional currency of our operating companies. In order to abate the impact of
`fluctuations in exchange rates between these currencies and to delay the impact of adverse exchange rate trends, we utilize hedging instruments
`where appropriate, taking into consideration their cost and their effectiveness. However, this does not insulate us completely from currency
`fluctuation effects.
`
` For further discussion on industry trends, see "Item 7—Management's Discussion and Analysis of Financial Condition and Results of
`Operations."
`
`Business Segment Information
`
` See "Segment Results of Operations" under "Item 7—Management's Discussion and Analysis of Financial Condition and Results of
`Operations" and Note 20 to our consolidated financial statements included under Item 8 of this Report for further information on our segments.
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` Sales by Product Line. Our 2014, 2013 and 2012 sales by product line, listed in order of current year revenue, are as follows:
`
`
`Product Line
`Foundation brakes
`Steering gears and systems
`Modules
`Airbags
`Brake controls
`Aftermarket
`Seat belts
`Electronics
`Body controls
`Steering wheels
`Engine valves
`Engineered fasteners and components
`Linkage and suspension
`
`Percentage of Sales
`
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` 2014
` 2013
` 2012
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` 17.0 % 15.5 % 14.9 %
` 15.7 % 15.5 % 15.9 %
` 11.1 % 15.5 % 16.1 %
` 10.5 % 10.2 % 10.2 %
` 8.3 % 7.8 % 7.2 %
` 7.4 % 7.2 % 7.3 %
` 7.2 % 6.9 % 6.8 %
` 5.8 % 4.4 % 4.3 %
` 4.5 % 4.6 % 4.3 %
` 4.5 % 4.3 % 4.4 %
` 3.4 % 3.5 % 3.8 %
` 2.8 % 2.8 % 2.8 %
` 1.8 % 1.8 % 2.0 %
`
`Chassis Systems
`
` Our Chassis Systems segment focuses on the design, manufacture and sale of products and systems relating to braking, steering, modules,
`and linkage and suspension. We sell our Chassis Systems products and systems primarily to OEMs and other Tier 1 suppliers. We also sell these
`products and systems to the global aftermarket through both OEM service organizations and independent distribution networks. We believe our
`Chassis Systems segment is well-positioned to capitalize on growth trends toward (1) increasing active safety systems, particularly in the areas
`of electric power steering, electronic vehicle stability control and other advanced braking systems and integrated vehicle control systems;
`(2) increasing electronic content per vehicle; (3) integration of active and passive safety systems; (4) improving fuel economy and reducing CO 2
`emissions and (5) legislative-and market-driven demand in emerging markets.
`
`Occupant Safety Systems
`
` Our Occupant Safety Systems segment focuses on the design, manufacture and sale of products and systems relating to airbags, seat belts,
`and steering wheels. We sell our Occupant Safety Systems products and systems primarily to OEMs and other Tier 1 suppliers. We also sell
`these products and systems to OEM service organizations. We believe our Occupant Safety Systems segment is well-positioned to capitalize on
`growth trends toward (1) increasing passive safety systems, particularly in the areas of side, curtain and knee airbag systems, and active seat belt
`pretensioning and retractor systems; (2) increasing electronic content per vehicle; (3) integration of active and passive safety systems and
`(4) legislative- and market-driven demand in emerging markets.
`
`Electronics
`
` Our Electronics segment focuses on the design, manufacture and sale of electronics components and systems in the areas of safety, chassis,
`radio frequency ("RF"), powertrain, and driver assistance systems, including cameras and radars. We sell our Electronics products and systems
`primarily to OEMs and to our Chassis Systems segment (braking and steering applications). We also sell these products and systems to OEM
`service organizations. We believe our Electronics segment is well-positioned to capitalize on growth trends toward (1) increasing electronic
`content per vehicle; (2) increasing active safety systems, particularly in the areas of electric power steering, electronic
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`vehicle stability control, integrated vehicle control systems, and driver assistance systems; (3) increasing passive safety systems, particularly in
`the areas of side, curtain and knee airbag systems and active seat belt pretensioning and retractor systems; (4) integration of active and passive
`safety systems; (5) improving fuel economy and reducing CO 2 emissions and (6) legislative- and market-driven demand in emerging markets.
`
`Automotive Components
`
` Our Automotive Components segment focuses on the design, manufacture and sale of body controls, engine valves, and engineered
`fasteners and components. We sell our Automotive Components products primarily to OEMs and other Tier 1 suppliers, and to certain non-
`automotive markets and customers. We also sell these products to OEM service organizations. In addition, we sell some engine valve and body
`control products to independent distributors for the automotive aftermarket. We believe our Automotive Components segment is well-positioned
`to capitalize on growth trends toward (1) multi-valve and more fuel-efficient engines; (2) increasing electronic content per vehicle; (3) improving
`fuel economy and reducing CO 2 emissions and (4) legislative- and market-driven demand in emerging markets. On February 6, 2015, we closed
`the sale of our wholly-owned engine valve subsidiaries which represented the material portion of the business to be divested. The closing did not
`include the transfer of several of our joint ventures involved in the business.
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`Financial Information About Geographic Areas
`
` We have significant manufacturing operations outside the United States and, in 2014, approximately 74% of our sales originated outside t