<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended: December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from __________ to __________
Commission file number 1-2384
-------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
The TRW Employee Stock Ownership
and Savings Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
<PAGE> 2
Audited Financial Statements
THE TRW EMPLOYEE STOCK
OWNERSHIP AND SAVINGS PLAN
December 31, 1998 and 1997
<PAGE> 3
Report of Independent Auditors
Board of Administration
The TRW Employee Stock Ownership and
Savings Plan
We have audited the accompanying statements of net assets available for benefits
of The TRW Employee Stock Ownership and Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for the years then ended. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as 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 TRW Employee
Stock Ownership and Savings Plan as of December 31, 1998 and 1997, and the
changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes as of December 31, 1998, is presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The Fund
Information in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audit of the 1998 financial statements and, in our
opinion, are fairly stated in all material respects in relation to the 1998
basic financial statements taken as a whole.
The Plan has not presented the schedule of reportable transactions. Disclosure
of this information is required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974.
/s/ Ernst & Young LLP
June 11, 1999
Cleveland, Ohio
1
<PAGE> 4
The TRW Employee Stock Ownership and Savings Plan
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
TRW Stock Fund Primco
--------------------------------- Putnam Stable
Participant Non-Participant S&P 500 Value
Directed Directed Index Portfolio Fund
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments:
TRW Common Stock $ 392,896,554 $ 729,163,609
Shares of Putnam Income Fund
Shares of PBHG Emerging Growth Fund
Shares of Bernstein International Value Portfolio
Shares of Putnam Investors Fund
Shares of George Putnam Fund of Boston
Putnam S&P 500 Index Portfolio $ 752,463,764
Putnam Small Company Equity Portfolio
Primco Stable Value Fund $ 481,494,878
Participant loan receivables
Cash
Receivable for investments sold 4,290,389
Receivable for portfolio shares issued 1,829,427
Receivable for portfolio shares sold
Interest and dividends receivable 792,728 2,495,751
Receivable from pending transaction 458,186
Receivable for variation margins on futures 34,074
---------------------------------------------------------------------
Total assets 392,896,554 729,163,609 759,410,382 484,448,815
LIABILITIES
Accrued expenses 16,694 31,003 33,212 124,213
Payable for securities purchased 6,817,198
Payable for portfolio shares purchased
Cash overdraft 395,741
Payable for compensation to manager 118,912
---------------------------------------------------------------------
Total liabilities 16,694 31,003 7,365,063 124,213
---------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 392,879,860 $ 729,132,606 $ 752,045,319 $ 484,324,602
=====================================================================
<CAPTION>
Putnam
Small Bernstein
Company Putnam PBHG International Putnam
Equity Income Emerging Value Investors
Portfolio Fund Growth Fund Portfolio Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
TRW Common Stock
Shares of Putnam Income Fund $ 44,941,929
Shares of PBHG Emerging Growth Fund $ 17,292,794
Shares of Bernstein International Value $ 17,845,418
Portfolio
Shares of Putnam Investors Fund $ 81,168,033
Shares of George Putnam Fund of Boston
Putnam S&P 500 Index Portfolio
Putnam Small Company Equity Portfolio $ 135,355,152
Primco Stable Value Fund
Participant loan receivables
Cash 105,980
Receivable for investments sold 7,947,211
Receivable for portfolio shares issued
Receivable for portfolio shares sold 699,936
Interest and dividends receivable 161,088
Receivable from pending transaction
Receivable for variation margins on futures 101,729
-------------------------------------------------------------------------------
Total assets 144,371,096 44,941,929 17,292,794 17,845,418 81,168,033
LIABILITIES
Accrued expenses 6,222 2,260 665 851 3,047
Payable for securities purchased
Payable for portfolio shares purchased 130,827
Cash overdraft
Payable for compensation to manager 28,560
-------------------------------------------------------------------------------
Total liabilities 165,609 2,260 665 851 3,047
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 144,205,487 $ 44,939,669 $ 17,292,129 $ 17,844,567 $ 81,164,986
===============================================================================
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
George Putnam Loan
Fund of Boston Fund Total
------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments:
TRW Common Stock $1,122,060,163
Shares of Putnam Income Fund 44,941,929
Shares of PBHG Emerging Growth Fund 17,292,794
Shares of Bernstein International Value Portfolio 17,845,418
Shares of Putnam Investors Fund 81,168,033
Shares of George Putnam Fund of Boston $ 30,640,158 30,640,158
Putnam S&P 500 Index Portfolio 752,463,764
Putnam Small Company Equity Portfolio 135,355,152
Primco Stable Value Fund 481,494,878
Participant loan receivables $ 63,196,163 63,196,163
Cash 105,980
Receivable for investments sold 12,237,600
Receivable for portfolio shares issued 1,829,427
Receivable for portfolio shares sold 699,936
Interest and dividends receivable 3,449,567
Receivable from pending transaction 458,186
Receivable for variation margins on futures 135,803
------------------------------------------------------
Total assets 30,640,158 63,196,163 2,765,374,951
LIABILITIES
Accrued expenses 1,306 219,473
Payable for securities purchased 6,817,198
Payable for portfolio shares purchased 130,827
Cash overdraft 395,741
Payable for compensation to manager 147,472
------------------------------------------------------
Total liabilities 1,306 7,710,711
------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 30,638,852 $ 63,196,163 $2,757,664,240
======================================================
</TABLE>
3
<PAGE> 6
The TRW Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets Available for Benefits with Fund Information
Year Ended December 31, 1998
<TABLE>
<CAPTION>
TRW Stock Fund Primco
--------------------------------- Putnam Stable
Participant Non-Participant S&P 500 Value
Directed Directed Index Portfolio Fund
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Investment income:
Dividends $ 9,228,900 $ 16,602,547 $ 1,529
Interest $ 29,415,411
--------------------------------------------------------------------
Total investment income 9,228,900 16,602,547 1,529 29,415,411
Contributions from TRW Inc. 45,883,426
Contributions from participants 43,729,092 52,024,041 30,228,867
Net realized gain on sale of investments 32,818,802 27,894,961 16,070,506
Net unrealized appreciation (depreciation) of
investments (11,095,420) 6,748,112 155,033,320
Transfers from other funds 61,567,391 74,899 101,408,939 154,030,552
Transfer from other plan 345,619 222,138 2,668,948
Interest income on participant loans
Loan issues
Other 94,916 133,006 52,274
--------------------------------------------------------------------
136,689,300 97,203,945 324,893,479 216,396,052
Less:
Distributions 39,557,439 77,154,377 61,105,486 67,243,432
Excess contributions 935 558
Loan repayments
--------------------------------------------------------------------
39,557,439 77,154,377 61,106,421 67,243,990
Administrative expenses 140,533 248,465 229,752 579,050
Transfers to other funds 114,367,305 6,929,343 142,232,423 167,568,134
--------------------------------------------------------------------
154,065,277 84,332,185 203,568,596 235,391,174
--------------------------------------------------------------------
Increase (Decrease) in net assets for the year (17,375,977) 12,871,760 121,324,883 (18,995,122)
Net assets available for benefits at beginning
of year 410,255,837 716,260,846 630,720,436 503,319,724
--------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 392,879,860 $ 729,132,606 $ 752,045,319 $ 484,324,602
====================================================================
<CAPTION>
Putnam
Small Bernstein
Company Putnam PBHG International
Equity Income Emerging Value
Portfolio Fund Growth Fund Portfolio
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Dividends $ 65,275 $ 2,473,009 $ 57,904 $ 1,645,022
Interest
-----------------------------------------------------------------
Total investment income 65,275 2,473,009 57,904 1,645,022
Contributions from TRW Inc.
Contributions from participants 23,376,718 5,002,329 3,697,049 2,600,816
Net realized gain on sale of investments 186,818 (304,354) (535,614) (450,961)
Net unrealized appreciation (depreciation) of
investments 10,329,010 (960,815) 578,870 (2,068,885)
Transfers from other funds 35,432,464 49,010,175 25,351,725 27,414,926
Transfer from other plan 193,192 153,725 138,966 140,814
Interest income on participant loans
Loan issues
Other 6,710 142 4
-----------------------------------------------------------------
69,590,187 55,374,211 29,288,904 29,281,732
Less:
Distributions 12,279,641 5,721,283 1,006,821 724,051
Excess contributions 217 49 14 20
Loan repayments
-----------------------------------------------------------------
12,279,858 5,721,332 1,006,835 724,071
Administrative expenses 19,981 6,702 4,326 4,360
Transfers to other funds 61,011,804 31,935,542 10,985,613 10,708,734
-----------------------------------------------------------------
73,311,643 37,663,576 11,996,774 11,437,165
-----------------------------------------------------------------
Increase (Decrease) in net assets for the year (3,721,456) 17,710,635 17,292,130 17,844,567
Net assets available for benefits at beginning
of year 147,926,943 27,229,034
-----------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 144,205,487 $ 44,939,669 $ 17,292,130 $ 17,844,567
=================================================================
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
Putnam
Investors George Putnam Loan
Fund Fund of Boston Fund Total
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Dividends $ 1,977,161 $ 2,520,664 $ 34,572,011
Interest 29,415,411
----------------------------------------------------------------------
Total investment income 1,977,161 2,520,664 63,987,422
Contributions from TRW Inc. 45,883,426
Contributions from participants 8,410,304 3,824,638 172,893,854
Net realized gain on sale of investments 45,848 (104,672) 75,621,334
Net unrealized appreciation (depreciation) of
investments 10,093,828 (976,697) 167,681,323
Transfers from other funds 93,155,175 36,831,444 584,277,690
Transfer from other plan 221,707 159,571 4,244,680
Interest income on participant loans $ 5,743,582 5,743,582
Loan issues 28,887,908 28,887,908
Other 353 16,321 303,726
----------------------------------------------------------------------
113,904,376 42,271,269 34,631,490 1,149,524,945
Less:
Distributions 2,917,485 2,894,781 270,604,796
Excess contributions 46 18 1,857
Loan repayments 35,112,707 35,112,707
----------------------------------------------------------------------
2,917,531 2,894,799 35,112,707 305,719,360
Administrative expenses 14,232 6,454 1,253,855
Transfers to other funds 29,807,627 8,731,165 584,277,690
----------------------------------------------------------------------
32,739,390 11,632,418 35,112,707 891,250,905
----------------------------------------------------------------------
Increase (Decrease) in net assets for the year 81,164,986 30,638,851 (481,217) 258,274,040
Net assets available for benefits at beginning
of year 63,677,380 2,499,390,200
----------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 81,164,986 $ 30,638,851 $ 63,196,163 $2,757,664,240
======================================================================
</TABLE>
5
<PAGE> 8
The TRW Employee Stock Ownership and Savings Plan
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
TRW Stock Fund
--------------------------------
Participant Non-Participant Equity Insured Small Company
Directed Directed Fund Return Fund Equity Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
TRW Inc. Common Stock $ 408,177,969 $ 712,898,949 $ 345,984
Guaranteed investment contracts $ 472,639,861
Common Stock 628,858,179 $ 133,207,232
Bankers Trust Pyramid Discretionary
Cash Fund 2,060,875 3,412,281 27,602,178
Cash 19,002
Receivable from TRW Inc. 5,354 8,866 2,772 6,704
Receivables from investments sold 1,940,778 14,770,285
Participant loan receivables
Prepaid expenses 924 1,529
Interest receivables 46,014 2,763,378
Receivable from other funds 1,409 364,110
-------------------------------------------------------------------------------------
Total assets 410,292,545 716,321,625 631,166,715 503,376,231 147,977,517
LIABILITIES
Payable to other funds 365,362 157
Accrued expenses 36,708 60,779 80,917 56,507 50,417
-------------------------------------------------------------------------------------
Total liabilities 36,708 60,779 446,279 56,507 50,574
-------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 410,255,837 $ 716,260,846 $ 630,720,436 $ 503,319,724 $ 147,926,943
=====================================================================================
<CAPTION>
Bond
Index Fund Loan Fund Totals
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments:
TRW Inc. Common Stock $1,121,422,902
Guaranteed investment contracts 472,639,861
Common Stock 762,065,411
Bankers Trust Pyramid Discretionary
Cash Fund 33,075,334
Cash 19,002
Receivable from TRW Inc. $ 88 23,784
Receivables from investments sold 27,239,231 43,950,294
Participant loan receivables $ 63,677,380 63,677,380
Prepaid expenses 2,453
Interest receivables 2,809,392
Receivable from other funds 365,519
------------------------------------------------
Total assets 27,239,319 63,677,380 2,500,051,332
LIABILITIES
Payable to other funds 365,519
Accrued expenses 10,285 295,613
------------------------------------------------
Total liabilities 10,285 661,132
------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 27,229,034 $ 63,677,380 $2,499,390,200
================================================
</TABLE>
6
<PAGE> 9
The TRW Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets Available for Benefits with Fund
Information
Year Ended December 31, 1997
<TABLE>
<CAPTION>
TRW Stock Fund
--------------------------------
Participant Non-Participant Equity Insured Small Company
Directed Directed Fund Return Fund Equity Fund
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends--TRW Inc. Common Stock $ 8,964,299 $ 17,184,237 $ 30
Interest 158,833 290,564 $ 49,174 $ 33,650,423 36
----------------------------------------------------------------------------
Investment income 9,123,132 17,474,801 49,174 33,650,423 66
Contributions from TRW Inc. 43,311,522
Contributions from participants 33,570,464 35,503,516 23,538,722 18,232,212
Rollover contributions 1,157,756 1,733,584 1,302,178 1,291,294
Net realized gain on disposition of
investments 13,787,889 25,854,934 384,756,181 51,320,292
Change in unrealized appreciation
(depreciation) of investments 16,170,536 26,029,117 (229,445,350) (24,826,056)
Transfers from other funds 42,685,324 54,070,340 81,649,658 37,089,325
Interest income on participant loans 1,833,404 1,515,725 1,522,861 488,842
Contribution income on loan repayments 8,209,640 6,970,044 7,049,438 2,389,248
----------------------------------------------------------------------------
126,538,145 112,670,374 255,153,214 148,713,280 85,985,223
Less:
Withdrawals and distributions:
Cash 809,727 1,681,207 32,018,767 52,005,240 5,190,127
TRW Inc. common stock (579,184
participant directed shares and
804,878 non-participant
directed shares) 23,044,461 47,865,019
----------------------------------------------------------------------------
23,854,188 49,546,226 32,018,767 52,005,240 5,190,127
Distribution of dividends on TRW
common stock 16,202,810
Admin. expenses 344,523 471,264 405,576 520,114 203,906
Transfer to other funds 64,541,553 54,081,194 99,567,077 29,287,985
----------------------------------------------------------------------------
88,740,264 66,220,300 86,505,537 152,092,431 34,682,018
----------------------------------------------------------------------------
Increase (decrease) in net assets for
the year 37,797,881 46,450,074 168,647,677 (3,379,151) 51,303,205
Net assets available for benefits at
beginning of year 372,457,956 669,810,772 462,072,759 506,698,875 96,623,738
----------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $ 410,255,837 $ 716,260,846 $ 630,720,436 $ 503,319,724 $ 147,926,943
============================================================================
<CAPTION>
Bond
Index Fund Loan Fund Totals
-------------------------------------------------
<S> <C> <C> <C>
Investment income:
Dividends--TRW Inc. Common Stock $ 26,148,566
Interest $ 72 34,149,102
-------------------------------------------------
Investment income 72 60,297,668
Contributions from TRW Inc. 43,311,522
Contributions from participants 3,348,933 114,193,847
Rollover contributions 287,950 5,772,762
Net realized gain on disposition of
investments 4,508,530 480,227,826
Change in unrealized appreciation
(depreciation) of investments (2,353,500) (214,425,253)
Transfers from other funds 9,123,432 $ 30,088,267 254,706,346
Interest income on participant loans 79,267 5,440,099
Contribution income on loan repayments 386,082 25,004,452
-------------------------------------------------
15,380,766 30,088,267 774,529,269
Less:
Withdrawals and distributions:
Cash 1,391,788 93,096,856
TRW Inc. common stock (579,184
participant directed shares and
804,878 non-participant
directed shares) 70,909,480
-------------------------------------------------
1,391,788 0 164,006,336
Distribution of dividends on TRW
common stock 16,202,810
Admin. expenses 36,578 1,981,961
Transfer to other funds 7,218,143 27,568,265 282,264,217
-------------------------------------------------
8,646,509 27,568,265 464,455,324
-------------------------------------------------
Increase (decrease) in net assets for
the year 6,734,257 2,520,002 310,073,945
Net assets available for benefits at
beginning of year 20,494,777 61,157,378 2,189,316,255
-------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $ 27,229,034 $ 63,677,380 $2,499,390,200
=================================================
</TABLE>
7
<PAGE> 10
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements
December 31, 1998
A. SIGNIFICANT ACCOUNTING POLICIES
TRW STOCK FUND
Investments in the TRW Stock Fund consist solely of TRW Inc. (TRW) common
stock, which is traded on the New York Stock Exchange and valued at the last
reported sales price on the last business day of the Plan's fiscal year.
PUTNAM S&P 500 INDEX FUND (FORMERLY EQUITY FUND)
Investments in the S&P 500 Index Fund are valued at the redemption price
established by the Trustee, which is based on the fair value of the Putnam's S&P
500 Index Fund Trust assets on the last business day of the Plan's fiscal year.
This Fund is constructed and maintained with the objective of providing
investment results which approximate the overall performance of the Standard &
Poor's Composite Index of 500 stocks. Income is accumulated and reinvested in
the Fund and included in the determination of share values.
PRIMCO STABLE VALUE FUND (FORMERLY INSURED RETURN)
The Primco Stable Value Fund consists of fully benefit responsive investment
contracts with insurance companies, banks and other financial institutions and
short-term investment funds. Benefit responsive contracts provide contract value
payments for participant disbursements, loans and investment transfers as
allowed under the plan. There are exceptions for payments to participants who,
as a result of a corporate event, cease to be employed by TRW. A corporate event
includes a divestiture of an operating unit (for example, a subsidiary or a
division), a significant special early retirement program or other corporate
action that could be construed as causing increased Plan payments to
participants.
Investment contracts provide a stated rate of interest on principal for a stated
period of time. All investment contracts are accounted for at contract value
because they are fully benefit responsive. In accordance with Statement of
Position 94-4, contract value equals fair value because no event has occurred
that affects the value of any contracts. The investment contracts are of three
types: general account, separate account, and synthetic investment contracts.
Investment contracts in the general account of an insurance company where assets
are not specifically identifiable have fixed rates of interest or an indexed
rate of interest for the life of the contract. Investment contracts in separate
accounts of an insurance company have underlying assets that are specifically
identifiable and held for the benefit of the Plan.
8
<PAGE> 11
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
A. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
Under synthetic investment contracts, the Plan owns assets with an investment
contract from an insurance company, bank or other financial institution
surrounding the asset. Both separate account and synthetic contracts have
periodic interest rate resets (monthly, quarterly, or semi-annually) based on
the performance of the underlying assets. All separate account and synthetic
contracts have a guaranteed return of principal. As of December 31, 1998 and
1997, approximately $47 and $60 million was invested in general account assets,
$145 and $141 million in separate account assets, and $269 and $274 million in
assets owned by the Plan, respectively.
The weighted average yield (excluding administrative expenses) for all
investment contracts was 6.17% and 6.77% in 1998 and 1997, respectively. The
crediting interest rate for all investment contracts was 6.19% at December 31,
1998 and 6.69% at December 31, 1997.
PUTNAM SMALL COMPANY EQUITY PORTFOLIO (FORMERLY SMALL COMPANY EQUITY FUND)
Investments in the Putnam Small Company Equity Portfolio are valued at the
redemption price established by the Trustee, which is based on the fair value of
the Putnam Small Company Equity Fund assets on the last business day of the
Plan's fiscal year. The Small Company Equity Portfolio is constructed and
maintained with the objective of providing investment results which approximate
the overall performance of the 2,500 common stocks included in the Russell 3000
Equity Index less those common stocks included in the S&P 500. Income is
accumulated and reinvested in the Fund and included in the determination of
share values.
PUTNAM INCOME FUND (FORMERLY BOND INDEX FUND)
Investments in the Putnam Income Fund are valued at the redemption price
established by the Trustee on the last business day of the Plan's fiscal year.
The Fund is managed by the Trustee and is invested in a broad, diversified
portfolio of debt securities issued by the U.S. Treasury and other government
agencies and in debt securities of credit-worthy corporations. Income is
accumulated and reinvested in the fund and included in the determination of the
share value.
9
<PAGE> 12
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
A. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
PUTNAM INVESTORS FUND
Investments in the Putnam Investors Fund are valued at the redemption price
established by the Trustee on the last business day of the Plan's fiscal year.
The Fund seeks long-term growth of capital by investing primarily in stocks of
well-known, medium-to-large companies that provide opportunities for growth over
the long term. The fund also includes stocks of smaller, rapidly growing
companies. The fund spreads its portfolio across a broad range of industries
such as consumer goods, finance and technology. Income is accumulated and
reinvested in the fund and included in the determination of the share value.
PBHG EMERGING GROWTH FUND
The PBHG Emerging Growth Fund is managed by Pilgrim Baxter & Associates, Ltd.
The fund is constructed and maintained with the objective of providing long-term
capital growth by investing primarily in common stocks of emerging U.S.
companies that have market capitalizations or annual revenues of up to $500
million. Investments in the Fund are valued at the redemption price established
by the Trustee on the last business day of the Plan's fiscal year. Income is
accumulated and reinvested in the fund and included in the determination of the
share value.
BERNSTEIN INTERNATIONAL PORTFOLIO
The Bernstein International Portfolio is constructed and maintained with the
objective of providing long-term capital growth by investing in established
companies in Europe, the Far East, Australia and Canada. Investments in the Fund
are valued at the redemption price established by the Trustee on the last
business day of the Plan's fiscal year. The fund manager invests in stock
believed to be undervalued in relation to assets, dividends, and earning power.
Income is accumulated and reinvested in the fund and included in the
determination of the share value.
THE GEORGE PUTNAM FUND OF BOSTON
The George Putnam Fund of Boston is constructed and maintained with the
objective of providing capital growth and current income by investing in stocks
of large, well-established companies and U.S. government securities and
corporate bonds. Investments in the Fund are valued at the redemption price
established by the Trustee on the last business day of the Plan's fiscal year.
Income is accumulated and reinvested in the fund and included in the
determination of the share value.
OTHER
The cost of securities sold is determined by the average cost method for
purposes of determining realized gains and losses.
10
<PAGE> 13
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
A. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
B. DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan, and is comprised of the TRW Stock Fund,
Putnam S&P 500 Index Portfolio (replaces Equity Fund), PRIMCO Stable Value Fund
(replaces Insured Return Fund), Putnam Small Company Equity Portfolio (replaces
Small Company Equity Fund), Putnam Income Fund (replaces Bond Index Fund), PBHG
Emerging Growth Fund, Bernstein International Value Portfolio, Putnam Investors
Fund, and the George Putnam Fund of Boston. Participation in the Plan is
available to substantially all domestic employees of TRW who have been employed
for at least three months. The Plan is governed by the Internal Revenue Code and
related legislation.
PARTICIPANT CONTRIBUTIONS
The Plan allows eligible employees to contribute up to 16% of qualifying
compensation on a before-tax basis by way of salary reduction; such
contributions are made in increments of one percent of qualifying compensation
and could not exceed $10,000 in 1998 and $9,500 in 1997. Participants may also
elect to contribute, in increments of one percent, up to 10% of qualifying
compensation on an after-tax basis. Participants can make up to two contribution
percentage changes per month. Annual contributions to a participant's account
(including before-tax, after-tax and TRW matching contributions) and to any
other defined contribution plan is limited to the lesser of $30,000 or 25% of
the participant's annual compensation reduced by the amount of before-tax
contributions.
Participants determine the funds in which to invest their contributions.
Employee contributions may be invested, in multiples of 1% percent, in one or
more of the nine investment funds. Fund elections may be changed at any time.
11
<PAGE> 14
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
TRW CONTRIBUTIONS
TRW contributes to the Plan, out of current or accumulated earnings, an amount
equal to 100% of each participant's before-tax contributions without exceeding
three percent of the participant's qualifying compensation. Participants
immediately vest in the TRW contributions. All TRW matching contributions are
invested in the ESOP portion of the TRW Stock Fund. TRW contributions always
remain in the TRW Stock Fund and may not be transferred, except under special
circumstances. TRW contributions may be in the form of cash or treasury or
authorized and unissued shares of TRW Common Stock. TRW Common Stock contributed
is to be valued by any reasonable method selected by TRW.
The amount and type of TRW contributions are summarized as follows:
<TABLE>
<CAPTION>
1998 1997
---------------------------------------
<S> <C> <C>
TRW Common Stock $ 1,695,525
Cash $45,883,426 41,615,997
---------------------------------------
$45,883,426 $43,311,522
=======================================
</TABLE>
WITHDRAWALS AND DISTRIBUTIONS
Upon termination of employment, a participant may elect to receive his or her
account, less the unpaid balance of any loan outstanding, in a single sum except
a participant whose account balance exceeds $5,000 may defer such payments until
he or she reaches age 70. Participants receive the value of their shares in cash
unless they elect to receive shares.
12
<PAGE> 15
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
If a participant elects to defer payment of his or her account, the
undistributed account balance remains invested in the Plan. The following is the
total value of the accounts subject to deferred elections (9,153 as of December
31, 1998 and 8,484 as of December 31, 1997) that are included in the net assets
of the funds:
<TABLE>
<CAPTION>
1998 1997
----------------------------------------
<S> <C> <C>
TRW Stock Fund $287,267,573 $275,565,258
Putnam S&P 500 Index Portfolio 198,834,281 153,911,053
Primco Stable Value Fund 161,816,758 163,974,753
Putnam Small Company Equity Portfolio 28,459,430 26,464,385
Putnam Income Fund 7,495,522 4,599,245
Putnam Investors Fund 14,684,126
PBHG Emerging Growth Fund 2,166,122
Bernstein International Value Portfolio 2,832,858
George Putnam Fund of Boston 6,042,125
----------------------------------------
$709,598,795 $624,514,694
========================================
</TABLE>
Effective January 1, 1988, participants who have attained age 55 as of the end
of the preceding fiscal year-end and commenced participation in the Plan at
least ten years prior may elect, within an election period during each of the
succeeding five consecutive plan years, to receive a special ESOP distribution.
The amount eligible for this special distribution is 50% of the prior fiscal
year-end value (including previous withdrawals) of TRW Common Stock acquired for
the participant's account by the ESOP since 1986, reduced by any previous
withdrawals.
PARTICIPANT LOANS
Participants can borrow from $1,000 to $50,000 (in increments of $100) of their
before-tax contributions, but such borrowings cannot exceed 50% of a
participant's total Plan balance. The interest rate is fixed (prime rate at the
end of the last business day of the preceding quarter plus one percent) and the
repayment period cannot be less than one year or more than five years.
13
<PAGE> 16
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
OTHER
Although it has not expressed any intent to do so, TRW reserves the right to
suspend or terminate the Plan. In the event of termination, the amount of each
participant's account may be retained in trust for the benefit of the
participant.
The above description of the Plan provides only general information.
Participants should refer to the Summary Plan Description, which is available
from the Stock Savings Plan's Participant Service Center and the Plan's website,
and annual prospectus for a more complete description of the Plan's provisions.
C. INVESTMENTS
The fair value of individual investments that represent 5% or more of the Plan's
total assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
---------------------------------------------
<S> <C> <C>
TRW Inc. Common Stock $1,122,060,163 $1,121,605,331
Putnam S&P 500 Index Fund 752,463,764
</TABLE>
The net realized gain on disposition of investments is as follows:
<TABLE>
<CAPTION>
TRW STOCK FUND
1998 1997
----------------------------------------
<S> <C> <C>
Value realized $221,854,445 $174,098,988
Average cost 161,140,682 134,456,165
----------------------------------------
NET REALIZED GAIN $ 60,713,763 $ 39,642,823
========================================
</TABLE>
14
<PAGE> 17
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
C. INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
PUTNAM S&P 500
INDEX PORTFOLIO
1998 1997
----------------------------------------
<S> <C> <C>
Value realized $203,616,339 $662,753,539
Average cost 187,545,833 277,997,358
----------------------------------------
NET REALIZED GAIN $ 16,070,506 $384,756,181
========================================
</TABLE>
<TABLE>
<CAPTION>
PUTNAM SMALL COMPANY
EQUITY FUND
1998 1997
----------------------------------------
<S> <C> <C>
Value realized $ 73,355,838 $155,914,310
Average cost 73,169,020 104,594,018
----------------------------------------
NET REALIZED GAIN $ 186,818 $ 51,320,292
========================================
</TABLE>
<TABLE>
<CAPTION>
PUTMAN INCOME FUND
1998 1997
----------------------------------------
<S> <C> <C>
Value realized $ 37,671,601 $ 29,539,876
Average cost 37,975,955 25,031,346
----------------------------------------
NET REALIZED (LOSS) GAIN $ (304,354) $ 4,508,530
========================================
</TABLE>
<TABLE>
<CAPTION>
PBHG EMERGING
GROWTH FUND
1998 1997
----------------------------------------
<S> <C> <C>
Value realized $ 11,996,110 $ 0
Average cost 12,531,724 0
----------------------------------------
NET REALIZED LOSS $ (535,614) $ 0
========================================
</TABLE>
15
<PAGE> 18
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
C. INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
BERNSTEIN INTERNATIONAL
VALUE PORTFOLIO
1998 1997
---------------------------------------
<S> <C> <C>
Value realized $11,436,314 $ 0
Average cost 11,887,275 0
---------------------------------------
NET REALIZED LOSS $ (450,961) $ 0
=======================================
</TABLE>
<TABLE>
<CAPTION>
PUTNAM INVESTORS FUND
1998 1997
---------------------------------------
<S> <C> <C>
Value realized $32,736,343 $ 0
Average cost 32,690,495 0
---------------------------------------
NET REALIZED GAIN $ 45,848 $ 0
=======================================
</TABLE>
<TABLE>
<CAPTION>
GEORGE PUTNAM
FUND OF BOSTON
1998 1997
---------------------------------------
<S> <C> <C>
Value realized $11,631,112 $ 0
Average cost 11,735,784 0
---------------------------------------
NET REALIZED LOSS $ (104,672) $ 0
=======================================
</TABLE>
16
<PAGE> 19
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
C. INVESTMENTS--CONTINUED
The net unrealized appreciation (depreciation) of investments included in net
assets is as follows:
<TABLE>
<CAPTION>
Putnam
Small Company Bernstein
TRW Stock Putnam S&P 500 Equity Putnam Income PBHG Emerging International
Fund Index Portfolio Fund Growth Fund Value Portfolio
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997 $553,222,561 $229,431,429 $ 24,826,056 $ 2,353,500
Increase for the year 42,199,653 (229,445,350) (24,826,056) (2,353,500)
--------------------------------------------------------------------------------------------------
Balance at December 31, 1997 595,422,214 (13,921) 0 0 $ 0 $ 0
Increase (decrease) for the
year (4,347,308) 155,033,320 10,329,010 (960,815) 578,870 (2,068,885)
--------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998 $591,074,906 $155,019,399 $ 10,329,010 $ (960,815) $ 578,870 $ (2,068,885)
==================================================================================================
<CAPTION>
Putnam Investors George Putnam
Fund Fund of Boston
-------------------------------
<S> <C> <C>
Balance at January 1, 1997
Increase for the year
-------------------------------
Balance at December 31, 1997 $ 0 $ 0
Increase (decrease) for the
year 10,093,828 (976,697)
-------------------------------
BALANCE AT DECEMBER 31, 1998 $ 10,093,828 $ (976,697)
===============================
</TABLE>
17
<PAGE> 20
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
C. INVESTMENTS--CONTINUED
On a revalued basis, which is in accordance with Department of Labor Form 5500
requirements, the realized and unrealized gains (losses) for the year ended
December 31, 1998 are not available at the date of the Report of Independent
Auditors. A separate schedule will be included in the Form 5500 when filed. For
1997, unrealized appreciation calculated on a revalued basis was $75,341,241 and
net realized gain calculated on a revalued basis was $190,461,332.
D. ADMINISTRATIVE EXPENSES
Generally, salaries and wages of the administrative staff are paid by TRW.
Expenses relating to investment advisor fees, management fees, trustee fees,
audit fees, printing and postage are paid from Plan assets. Expenses directly
attributable to any one fund are charged to that fund. Expenses not directly
attributable to any one fund are allocated to each fund in the proportion that
the market value of the assets of each fund bears to the total market value of
all Plan assets. Brokerage fees and commissions incident to the purchase or sale
of securities are paid by the fund in which they are incurred and are included
in the cost of securities purchased or sold.
E. FEDERAL INCOME TAX STATUS OF THE PLAN
The Plan is exempt from federal income taxes as a qualified profit sharing plan.
The Plan has received a favorable determination letter from the Internal Revenue
Service as to the tax qualified status of the Plan. The Plan's Board of
Administration believes that the Plan is in operational compliance with the
Internal Revenue Code of 1986 and will remain qualified and exempt from federal
income taxes.
F. TRANSACTIONS WITH PARTIES-IN-INTEREST
Party-in-interest transactions include the purchase and sale of short-term
investments managed by the Plan's Trustee, Putnam Investments and the Plan's
former Trustee, Bankers Trust Company.
Putnam Investments managed assets of the Plan of approximately $1,044,569,035 at
December 31, 1998, and received, in cash, trustee fees of $61,217 in 1998.
Bankers Trust Company managed assets of the Plan of approximately $822,379,976
at December 31, 1997, and received, in cash, trustee fees of $633,841 in 1997.
There were no party-in-interest transactions which were prohibited under
Department of Labor Regulations.
18
<PAGE> 21
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
G. NUMBER OF PARTICIPANTS BY FUND (UNAUDITED)
The summary below sets forth the number of contributing participants by their
current investment option(s):
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
--------------------------------
<S> <C> <C>
TRW Stock Fund 20,107 17,779
Putnam S&P 500 Index Portfolio 23,506 17,738
Primco Stable Value Fund 17,329 12,815
Putnam Small Company Equity Portfolio 12,497 12,014
Putnam Income Fund 5,827 4,500
Putnam Investors Fund 7,958
PBHG Emerging Growth Fund 4,666
Bernstein International Value Portfolio 3,262
George Putnam Fund of Boston 4,680
</TABLE>
The total number of participants in the Plan is less than the sum of the number
of employees shown above because many are participating in more than one fund.
H. TRANSFER OF ASSETS TO NEW TRUSTEE
Effective January 1, 1998, Putnam Investments began as recordkeeper, trustee,
and investment manager for the plan replacing Bankers Trust and Benefit Services
Corporation. Effective January 2, 1998, all assets held by Bankers Trust were
transferred to Putnam Investments. In conjunction with the change in trustee,
the plan also offered additional investment options.
As of January 1, 1998, participants may place their contributions in a choice of
nine investment options consisting of eight investment funds and TRW Stock. The
eight investment options in addition to TRW Stock are the following: Putnam S&P
500 Index Portfolio (replaces Equity Fund), PRIMCO Stable Value Fund (formerly
Insured Return Fund), Putnam Small Company Equity Portfolio (replaces Small
Company Equity Fund), Putnam Income Fund (replaces Bond Index Fund), PBHG
Emerging Growth Fund, Bernstein International Value Portfolio, Putnam Investors
Fund, and the George Putnam Fund of Boston. A full description of these
investment options has been provided to participants in the October 1, 1997
Summary Plan Description.
19
<PAGE> 22
The TRW Employee Stock Ownership and Savings Plan
Notes to Financial Statements-Continued
I. YEAR 2000 (UNAUDITED)
The Plan Sponsor has determined that it will be necessary to take certain steps
in order to ensure that the Plan's information systems are prepared to handle
year 2000 dates. The Plan Sponsor is taking a two phase approach. The first
phase addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Plan Sponsor anticipates substantially
completing this phase of the project by June 1999. Costs associated with
modifying software and equipment are not estimated to be significant and will be
paid by the Plan Sponsor.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that they
have developed plans to address their own year 2000 problems as they relate to
the Plan's operations. All third party service providers have indicated that
they will be year 2000 compliant. If modification of data processing systems of
either the Plan, the Plan Sponsor, or its service providers are not completed
timely, the year 2000 problem could have a material impact on the operations of
the Plan. Plan management has not developed a contingency plan, because they are
confident that all systems will be year 2000 ready.
20
<PAGE> 23
The TRW Employee Stock Ownership and Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Number of Book Market
Shares Description Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
20,014,451 *TRW Stock Fund $ 530,985,257 $1,122,060,163
GUARANTEED INVESTMENT CONTRACTS
Security Backed Investments
Primco Group Trust
Beta Fund--Putnam:
Continental Assurance Co., Contract 63005575,
due September 1, 2003, 5.89% 23,101,819 23,101,819
Gamma Fund--PRIMCO:
Transamerica Life & Annuity, Contract 76540, due
November 15, 2004, 6.01% 24,738,582 24,738,582
Epsilon Fund--PRIMCO:
Monumental Life Ins. Co., Contract 00212TR-1,
due December 1, 2000, 6.53% 10,051,379 10,051,379
Theta Fund--PRIMCO:
Bankers Trust (Del) BASIC, Contract
97-892THT, due December 30, 2001, 6.25% 56,154,968 56,154,968
Kappa Fund--Putnam:
Continental Assurance Co., Contract
25719-101, due July 1, 2003, 5.85% 22,954,054 22,954,054
Omicron Fund--PRIMCO:
Caisse des Depots (CDC), Contract
1115-01,due March 31, 1999, 5.21% 5,029,306 5,029,306
-------------------------------------------
142,030,108 142,030,108
Separate Accounts
AETNA Life Ins. & Ann. Co.:
Contract 14612, due December 30, 2001, 7.21% 26,782,105 26,782,105
</TABLE>
21
<PAGE> 24
The TRW Employee Stock Ownership and Savings Plan
Schedule of Assets Held for Investment Purposes--Continued
<TABLE>
<CAPTION>
Number of Book Market
Shares Description Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GUARANTEED INVESTMENT CONTRACTS--CONTINUED
Separate Accounts--Continued
Allstate Life Ins. Co.:
Contract 31053, due July 1, 2001, 6.28% 5,749,005 5,749,005
John Hancock Mutual Life:
Contract 8712, due June 30, 2003, 6.6% 5,968,053 5,968,053
Contract 7441, due May 1, 2007, 7.04% 63,077,483 63,077,483
Contract 7441-2, due June 30, 2001, 4.5% 281,748 281,748
Metropolitan Life Ins. Co.:
Contract 24844, due December 30, 2001, 6.3% 38,192,388 38,192,388
Prudential Ins. Co. of Amer.:
Contract 6581-1, due July 11, 2001, 10.31% 253,835 253,835
Contract 6661-2, due May 15, 2001, 10.35% 3,327,757 3,327,757
Contract 6702-3, due November 20, 2000, 8.3% 240,476 240,476
-------------------------------------------
143,872,850 143,872,850
Synthetics
Continental Assurance Co.:
Contract 63005751, due April 16, 2001, 7.26% 14,670,543 14,670,543
Monumental Life Ins. Co.:
Contract 00025TR, due March 30, 2007, 7.04% 48,421,400 48,421,400
Rabobank Nederland:
Contract TRW069701, due July 15, 2003, 6.75% 5,954,447 5,954,447
Contract TRW079701, due October 21, 2002, 6.88% 4,906,628 4,906,628
Contract TRW099601, due September 25, 2003, 7.11% 5,764,491 5,764,491
Contract TRW109501, due July 2, 2001, 6.19% 4,974,293 4,974,293
</TABLE>
22
<PAGE> 25
The TRW Employee Stock Ownership and Savings Plan
Schedule of Assets Held for Investment Purposes--Continued
<TABLE>
<CAPTION>
Number of Book Market
Shares Description Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GUARANTEED INVESTMENT CONTRACTS--CONTINUED
Separate Accounts--Continued
State Street Bank & Trust:
Contract 98149, due January 1, 2001, 5.46% 15,547,171 15,547,171
-------------------------------------------
100,238,973 100,238,973
Non-Participating Synthetics
Caisse des Depots (CDC):
Contract 115-02, due April 30, 1999, 7.14% 6,015,955 6,015,955
Contract 115-05, due June 30, 2000, 7.48% 4,198,143 4,198,143
Contract 115-06, due July 2, 2001, 6.76% 4,965,644 4,965,644
Contract 115-07, due December 12, 2002, 4.53% 9,985,156 9,985,156
-------------------------------------------
25,164,898 25,164,898
-------------------------------------------
Sub-Total 411,306,829 411,306,829
General Account Investments
Fixed Rate & Fixed Term
Canada Life Assurance Co.:
Contract 45839, due June 16, 1999, 7.06% 6,191,386 6,191,386
Sun Life Assu. Canada (US):
Contract S-0910-G, due August 2, 1999, 7.39% 6,823,752 6,823,752
-------------------------------------------
13,015,138 13,015,138
Variable Rate & Fixed Term
Jackson National Life:
Contract 1152-1, due November 25, 2000, 4.83% 10,006,464 10,006,464
John Hancock Mutual Life:
Contract 7314-1, due December 2, 2002, 4.69% 6,164,816 6,164,816
Contract 7839, due March 1, 2000, 4.35% 10,000,000 10,000,000
-------------------------------------------
26,171,280 26,171,280
Variable Rate & Variable Term
Monumental Life Ins. Co.:
Contract BDA185ST1, due March 31, 1999, 5.37% 7,559,478 7,559,478
-------------------------------------------
7,559,478 7,559,478
-------------------------------------------
Sub-Total 46,745,896 46,745,896
</TABLE>
23
<PAGE> 26
The TRW Employee Stock Ownership and Savings Plan
Schedule of Assets Held for Investment Purposes--Continued
<TABLE>
<CAPTION>
Number of Book Market
Shares Description Value Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GUARANTEED INVESTMENT CONTRACTS--CONTINUED
Cash & Equivalents
Putnam Fiduciary Trust:
Contract 100232, due January 1, 1999, 5.32% 23,442,153 23,442,153
--------------------------------------
23,442,153 23,442,153
--------------------------------------
Total Guaranteed Investment Contracts 481,494,878 481,494,878
MUTUAL FUNDS
58,592,146 *Putnam S&P 500 Index Portfolio 597,444,365 752,463,764
13,353,443 *Putnam Small Company Equity Portfolio 125,026,142 135,355,152
722,037 PBHG Emerging Growth Fund 16,713,924 17,292,794
1,001,989 Bernstein International Value Portfolio 19,914,303 17,845,418
5,462,183 *Putnam Investors Fund 71,074,205 81,168,033
1,694,699 *The George Putnam Fund of Boston 31,616,855 30,640,158
6,485,127 *Putnam Income Fund 45,902,744 44,941,929
Participant loans 0 63,196,163
--------------------------------------
TOTAL INVESTMENTS $1,920,172,673 $2,746,458,452
======================================
* Indicates party-in-interest
</TABLE>
24
<PAGE> 27
SIGNATURES
The Plan. Pursuant to requirements of the Securities Exchange Act of
1934, the Board of Administration of the Plan has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
The TRW Employee Stock Ownership
and Savings Plan
Date: June 29, 1999 By: /s/ Kathleen A. Weigand
-------------------------
Kathleen A. Weigand
Attorney-in-fact
<PAGE> 28
EXHIBIT INDEX
EXHIBIT EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
23 Consent of Ernst & Young LLP
24 Power of Attorney
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in TRW Inc.'s Registration
Statement No. 333-03973 on Form S-8 pertaining to The TRW Employee Stock
Ownership and Savings Plan and the related prospectus of our report dated June
11, 1999 with respect to the financial statements of The TRW Employee Stock
Ownership and Savings Plan for the fiscal year ended December 31, 1998 included
in this Annual Report on Form 11-K.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Cleveland, Ohio
June 29, 1999
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
THE UNDERSIGNED members of the Board of Administration of the TRW Employee
Stock Ownership and Savings Plan (the "Plan") hereby appoint D. B. Goldston, W.
B. Lawrence, D. F. Menz, K. C. Syrvalin, K. A. Weigand and J. L. Manning, Jr.,
and each of them, as attorneys for the Plan and for the undersigned, with full
power of substitution and resubstitution, for and in the name, place and stead
of the Plan and the undersigned, to prepare or cause to be prepared, to execute
and file with the Securities and Exchange Commission, Washington, D. C. (the
"Commission") (i) an annual report on Form 11-K for the fiscal year ended
December 31, 1998, or information in lieu thereof, and any transition reports
under the Securities Exchange Act of 1934 (the "Exchange Act"); (ii) a
registration statement or statements on Form S-8 or any other appropriate form
or forms pursuant to the Securities Act of 1933, as amended (the "Act"), for
the purpose of registering participations in the Plan, and, if appropriate,
shares of Common Stock of TRW Inc. to be acquired, issued, contributed or sold
in connection with the Plan; and (iii) any and all amendments, including
post-effective amendments, and exhibits to such annual report and registration
statements, and any and all applications or other documents to be filed with
the Commission or elsewhere pertaining to the securities to which such
registration statement(s) relate(s), with full power and authority to take or
cause to be taken all other actions deemed necessary or appropriate to effect
the filing of the annual report, or information in lieu thereof, under the
Exchange Act or the registration under the Act of the participations in and, if
appropriate, the shares of Common Stock of TRW Inc. offered or to be offered
pursuant to the Plan.
EXECUTED on the dates set forth below.
/s/ Linda J. Croes /s/ Kathy P. Lazar
----------------------- -------------------------
Linda J. Croes Kathy P. Lazar
June 29, 1999 June 29, 1999
/s/ Donna Kasle /s/ Judith A. Williams
----------------------- -------------------------
Donna Kasle Judith A. Williams
June 29, 1999 June 29, 1999
/s/ Ann E. Killian /s/ Rose Malinak
----------------------- -------------------------
Ann E. Killian Rose Malinak
June 29, 1999 June 29, 1999
