-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BG9UohFhZvj0SDroEf+VS4OH+7UqM/rjEL7Kn2PQUOOZiUqP8YPxkaSAaaUL68FH 7mj/JBPfkoTUohDuhJ8+8g== 0000950152-99-005661.txt : 19990630 0000950152-99-005661.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950152-99-005661 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRW INC CENTRAL INDEX KEY: 0000100030 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 340575430 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-02384 FILM NUMBER: 99654741 BUSINESS ADDRESS: STREET 1: 1900 RICHMOND RD CITY: CLEVELAND STATE: OH ZIP: 44124 BUSINESS PHONE: 2162917000 MAIL ADDRESS: STREET 1: 1900 RICHMOND ROAD CITY: CLEVELAND STATE: OH ZIP: 44124 11-K 1 TRW INC. 11-K 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 2 Audited Financial Statements THE TRW EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN December 31, 1998 and 1997 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 4 The TRW Employee Stock Ownership and Savings Plan Statements of Net Assets Available for Benefits with Fund Information December 31, 1998
TRW Stock Fund Primco --------------------------------- Putnam Stable Participant Non-Participant S&P 500 Value Directed Directed Index Portfolio Fund --------------------------------- --------------------------------- 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 ===================================================================== Putnam Small Bernstein Company Putnam PBHG International Putnam Equity Income Emerging Value Investors Portfolio Fund Growth Fund Portfolio Fund ------------------------------------------------------------------------------- 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 ===============================================================================
2 5
George Putnam Loan Fund of Boston Fund Total ------------------------------------------------------ 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 ======================================================
3 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
TRW Stock Fund Primco --------------------------------- Putnam Stable Participant Non-Participant S&P 500 Value Directed Directed Index Portfolio Fund --------------------------------- --------------------------------- 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 ==================================================================== Putnam Small Bernstein Company Putnam PBHG International Equity Income Emerging Value Portfolio Fund Growth Fund Portfolio ----------------------------------------------------------------- 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 =================================================================
4 7
Putnam Investors George Putnam Loan Fund Fund of Boston Fund Total --------------------------------------------------------------------- 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 ======================================================================
5 8 The TRW Employee Stock Ownership and Savings Plan Statements of Net Assets Available for Benefits with Fund Information December 31, 1997
TRW Stock Fund -------------------------------- Participant Non-Participant Equity Insured Small Company Directed Directed Fund Return Fund Equity Fund ------------------------------------------------------------------------------------- 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 ===================================================================================== Bond Index Fund Loan Fund Totals ------------------------------------------------ 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 ================================================
6 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
TRW Stock Fund -------------------------------- Participant Non-Participant Equity Insured Small Company Directed Directed Fund Return Fund Equity Fund ---------------------------------------------------------------------------- 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 ============================================================================ Bond Index Fund Loan Fund Totals ------------------------------------------------- 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 =================================================
7 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 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 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 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 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:
1998 1997 --------------------------------------- TRW Common Stock $ 1,695,525 Cash $45,883,426 41,615,997 --------------------------------------- $45,883,426 $43,311,522 =======================================
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 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:
1998 1997 ---------------------------------------- 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 ========================================
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 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:
DECEMBER 31 1998 1997 --------------------------------------------- TRW Inc. Common Stock $1,122,060,163 $1,121,605,331 Putnam S&P 500 Index Fund 752,463,764
The net realized gain on disposition of investments is as follows:
TRW STOCK FUND 1998 1997 ---------------------------------------- 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 ========================================
14 17 The TRW Employee Stock Ownership and Savings Plan Notes to Financial Statements-Continued C. INVESTMENTS--CONTINUED
PUTNAM S&P 500 INDEX PORTFOLIO 1998 1997 ---------------------------------------- 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 ========================================
PUTNAM SMALL COMPANY EQUITY FUND 1998 1997 ---------------------------------------- Value realized $ 73,355,838 $155,914,310 Average cost 73,169,020 104,594,018 ---------------------------------------- NET REALIZED GAIN $ 186,818 $ 51,320,292 ========================================
PUTMAN INCOME FUND 1998 1997 ---------------------------------------- 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 ========================================
PBHG EMERGING GROWTH FUND 1998 1997 ---------------------------------------- Value realized $ 11,996,110 $ 0 Average cost 12,531,724 0 ---------------------------------------- NET REALIZED LOSS $ (535,614) $ 0 ========================================
15 18 The TRW Employee Stock Ownership and Savings Plan Notes to Financial Statements-Continued C. INVESTMENTS--CONTINUED
BERNSTEIN INTERNATIONAL VALUE PORTFOLIO 1998 1997 --------------------------------------- Value realized $11,436,314 $ 0 Average cost 11,887,275 0 --------------------------------------- NET REALIZED LOSS $ (450,961) $ 0 =======================================
PUTNAM INVESTORS FUND 1998 1997 --------------------------------------- Value realized $32,736,343 $ 0 Average cost 32,690,495 0 --------------------------------------- NET REALIZED GAIN $ 45,848 $ 0 =======================================
GEORGE PUTNAM FUND OF BOSTON 1998 1997 --------------------------------------- Value realized $11,631,112 $ 0 Average cost 11,735,784 0 --------------------------------------- NET REALIZED LOSS $ (104,672) $ 0 =======================================
16 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:
Putnam Small Company Bernstein TRW Stock Putnam S&P 500 Equity Putnam Income PBHG Emerging International Fund Index Portfolio Fund Growth Fund Value Portfolio -------------------------------------------------------------------------------------------------- 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) ================================================================================================== Putnam Investors George Putnam Fund Fund of Boston ------------------------------- 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) ===============================
17 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 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):
DECEMBER 31 1998 1997 -------------------------------- 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
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 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 23 The TRW Employee Stock Ownership and Savings Plan Schedule of Assets Held for Investment Purposes December 31, 1998
Number of Book Market Shares Description Value Value - --------------------------------------------------------------------------------------------------------------------- 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
21 24 The TRW Employee Stock Ownership and Savings Plan Schedule of Assets Held for Investment Purposes--Continued
Number of Book Market Shares Description Value Value - --------------------------------------------------------------------------------------------------------------------- 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
22 25 The TRW Employee Stock Ownership and Savings Plan Schedule of Assets Held for Investment Purposes--Continued
Number of Book Market Shares Description Value Value - --------------------------------------------------------------------------------------------------------------------- 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
23 26 The TRW Employee Stock Ownership and Savings Plan Schedule of Assets Held for Investment Purposes--Continued
Number of Book Market Shares Description Value Value - ---------------------------------------------------------------------------------------------------------------- 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
24 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 28 EXHIBIT INDEX EXHIBIT EXHIBIT NUMBER DESCRIPTION - ------ ----------- 23 Consent of Ernst & Young LLP 24 Power of Attorney EX-23 2 EXHIBIT 23 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 EX-24 3 EXHIBIT 24 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 -----END PRIVACY-ENHANCED MESSAGE-----