<PAGE>   1

                                    FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   (Mark One)

             [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ____________to____________

                          Commission file number 1-2384
                                                 ------

                                    TRW Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                 Ohio                                      34-0575430
     ------------------------------                   -------------------
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                   Identification No.)



                    1900 Richmond Road, Cleveland, Ohio 44124
                    -----------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (216) 291-7000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all
 reports required to be filed by Section 13 or 15(d) of the Securities Exchange
   Act of 1934 during the preceding 12 months (or for such shorter period that
 the registrant was required to file such reports), and (2) has been subject to
                 such filing requirements for the past 90 days.

                                 Yes X    No
                                    ---     ---

            As of October 21, 1998, there were 119,752,498 shares of
                TRW Common Stock, $0.625 par value, outstanding.

<PAGE>   2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



<TABLE>
<CAPTION>
Statements of Earnings (unaudited)
TRW Inc. and subsidiaries
----------------------------------------------------------------------------------------------------
                                                Third quarter ended              Nine months ended
                                                   September 30                    September 30
In millions except per share data               1998           1997             1998          1997
----------------------------------------------------------------------------------------------------

<S>                                           <C>            <C>              <C>           <C>   
Sales                                         $2,836         $2,521           $8,959        $8,033
Cost of sales                                  2,314          2,055            7,370         6,551
----------------------------------------------------------------------------------------------------
Gross profit                                     522            466            1,589         1,482

Administrative and selling expenses              201            165              592           501
Research and development expenses                126            115              370           338
Interest expense                                  24             20              100            57
Other (income)expense-net                          7              -              (39)            6
----------------------------------------------------------------------------------------------------
Earnings before income taxes                     164            166              566           580
Income taxes                                      60             58              207           218
----------------------------------------------------------------------------------------------------
Net earnings                                  $  104         $  108           $  359        $  362
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Per share of common stock
  Diluted earnings per share                  $  .85         $  .85           $ 2.88        $ 2.83
  Basic earnings per share                    $  .86         $  .88           $ 2.95        $ 2.92
  Dividends declared                          $  .31         $  .31           $  .62        $  .62
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Shares used in computing per share
  amounts
     Diluted                                   123.2          127.4            124.9         128.1
     Basic                                     120.5          123.1            121.7         124.0
----------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>   3


<TABLE>
<CAPTION>
Balance Sheets (unaudited)
TRW Inc. and subsidiaries
--------------------------------------------------------------------------------------------
                                                            September 30         December 31
In millions                                                         1998                1997
--------------------------------------------------------------------------------------------
<S>                                                              <C>                  <C>   
Assets
Current assets
     Cash and cash equivalents                                   $   79               $   70
     Accounts receivable                                          1,635                1,617
     Inventories                                                    685                  573
     Prepaid expenses                                               141                   79
     Deferred income taxes                                          284                   96
--------------------------------------------------------------------------------------------
Total current assets                                              2,824                2,435

Property, plant and equipment-on the basis of cost                6,522                6,074
     Less accumulated depreciation and amortization               3,883                3,453
--------------------------------------------------------------------------------------------
Total property, plant and equipment-net                           2,639                2,621

Intangible assets
     Intangibles arising from acquisitions                          790                  673
     Other                                                          344                  232
--------------------------------------------------------------------------------------------
                                                                  1,134                  905
     Less accumulated amortization                                  126                   94
--------------------------------------------------------------------------------------------
Total intangible assets-net                                       1,008                  811
Investments in affiliated companies                                 276                  139
Other assets                                                        455                  404
--------------------------------------------------------------------------------------------
                                                                 $7,202               $6,410
--------------------------------------------------------------------------------------------

Liabilities and shareholders' investment
Current liabilities
     Short-term debt                                             $  875               $  411
     Accounts payable                                               856                  859
     Current portion of long-term debt                               19                  128
     Other current liabilities                                    1,195                1,321
--------------------------------------------------------------------------------------------
Total current liabilities                                         2,945                2,719

Long-term liabilities                                               817                  788
Long-term debt                                                    1,443                1,117
Deferred income taxes                                                41                   57

Minority interests in subsidiaries                                   92                  105

Capital stock                                                        75                   79
Other capital                                                       455                  450
Retained earnings                                                 1,989                1,778
Accumulated other comprehensive income                              (11)                (120)
Treasury shares-cost in excess of par value                        (644)                (563)
--------------------------------------------------------------------------------------------
Total shareholders' investment                                    1,864                1,624
--------------------------------------------------------------------------------------------
                                                                 $7,202               $6,410
--------------------------------------------------------------------------------------------
</TABLE>


<PAGE>   4


<TABLE>
<CAPTION>


Statements of Cash Flows (unaudited)
TRW Inc. and subsidiaries
--------------------------------------------------------------------------------
                                                         Nine months ended
                                                           September 30
In millions                                               1998       1997
--------------------------------------------------------------------------------

<S>                                                      <C>        <C>
Operating activities
Net earnings                                             $ 359      $ 362
Adjustments to reconcile net earnings to net cash
  provided by operating activities:
     Depreciation and amortization                         414        366
     Deferred income taxes                                (217)        21
     Other-net                                               4         14
Changes in assets and liabilities, net of effects of
  businesses acquired or sold:
     Accounts receivable                                    20        (66)
     Inventories and prepaid expenses                     (151)       (48)
     Accounts payable and other accruals                  (109)      (141)
     Other-net                                              (4)        19
--------------------------------------------------------------------------------
Net cash provided by operating activities                  316        527
--------------------------------------------------------------------------------

Investing activities
Capital expenditures                                      (361)      (361)
Acquisitions, net of cash acquired                        (247)      (415)
Other-net                                                  (57)       (34)
--------------------------------------------------------------------------------
Net cash used in investing activities                     (665)      (810)
--------------------------------------------------------------------------------

Financing activities
Increase in short-term debt                                 43        258
Proceeds from debt in excess of 90 days                    912        107
Principal payments on debt in excess of 90 days           (314)       (37)
Reacquisition of common stock                             (179)      (207)
Dividends paid                                            (114)      (116)
Other-net                                                   19         37
--------------------------------------------------------------------------------
Net cash provided by financing activities                  367         42
--------------------------------------------------------------------------------
Effect of exchange rate changes on cash                     (9)        (9)
--------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents             9       (250)
Cash and cash equivalents at beginning of period            70        386
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period               $  79      $ 136
--------------------------------------------------------------------------------
</TABLE>



<PAGE>   5


<TABLE>
<CAPTION>


Results by Business Segments (unaudited)
TRW Inc. and subsidiaries
---------------------------------------------------------------------------------------
                                          Third quarter ended         Nine months ended
                                              September 30              September 30
In millions                                 1998         1997         1998         1997
---------------------------------------------------------------------------------------

<S>                                       <C>          <C>          <C>          <C>   
Sales
Automotive                                $1,685       $1,570       $5,384       $5,239
Space, Defense & Information Systems       1,151          951        3,575        2,794
---------------------------------------------------------------------------------------
Sales                                     $2,836       $2,521       $8,959       $8,033
---------------------------------------------------------------------------------------

Operating profit
Automotive                                $  105       $  136       $  400       $  485
Space, Defense & Information Systems         106           77          327          235
---------------------------------------------------------------------------------------
Operating profit                             211          213          727          720
Company Staff and other                      (20)         (29)         (55)         (77)
Minority interest in earnings of
  consolidated subsidiaries                   (3)          (3)          (9)         (14)
Interest expense                             (24)         (20)        (100)         (57)
Earnings from affiliates                       -            5            3            8
---------------------------------------------------------------------------------------
Earnings before income taxes              $  164       $  166       $  566       $  580
---------------------------------------------------------------------------------------
</TABLE>






<PAGE>   6


NOTES TO FINANCIAL STATEMENTS
(unaudited)


Principles of Consolidation

The financial statements include the accounts of the Company and its
subsidiaries except for two wholly owned insurance subsidiaries. The insurance
subsidiaries and the investments in affiliated companies, which are not
significant individually, are accounted for by the equity or cost method as
appropriate.

Comprehensive Income

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income." Statement 130 establishes
new rules for the reporting and display of comprehensive income and its
components. The adoption of this Statement requires that unrealized gains or
losses on the Company's available-for-sale securities, foreign currency
translation and minimum pension liability adjustments be included in other
comprehensive income, which prior to adoption were reported separately in
shareholders' equity. Prior year financial statements have been reclassified to
conform to the requirements of Statement 130.

The components of comprehensive income, net of related tax, for the third
quarter and first nine months of 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                               Third quarter ended    Nine months ended
(In millions)                                      September 30         September 30
                                               -------------------    -----------------
                                                 1998       1997       1998       1997
                                                 ----       ----       ----       ----

<S>                                             <C>        <C>        <C>        <C>  
Net earnings                                     $104       $108       $359       $362
Unrealized gains on securities                     45         15         41         15
Foreign currency translation gains (losses)        77        (39)        68       (108) 
                                                -----      -----      -----      -----  
Comprehensive income                             $226       $ 84       $468       $269  
                                                -----      -----      -----      -----  
</TABLE>


The components of accumulated other comprehensive income, net of related tax, at
September 30, 1998 and December 31, 1997 are as follows:

<TABLE>
<CAPTION>


                                            September 30        December 31
(In millions)                                       1998               1997
                                             -------------------------------
<S>                                                 <C>               <C>  
Unrealized gains on securities                      $ 53              $  12
Foreign currency translation gains (losses)          (62)              (130)
Minimum pension liability adjustments                 (2)                (2)
                                                    ----              -----
Accumulated other comprehensive income              $(11)             $(120)
                                                    ----              -----
</TABLE>


<PAGE>   7

Inventories

Inventories consist of the following:
<TABLE>
<CAPTION>

(In millions)                           September 30     December 31
                                                1998            1997
                                        ------------     -----------

<S>                                             <C>            <C> 
Finished products and work in process           $359            $292
Raw materials and supplies                       326             281
                                                ----            ----
                                                $685            $573
                                                ----            ----
</TABLE>


Long-Term Liabilities

Long-term liabilities at September 30, 1998 and December 31, 1997 include 
$653 million, relating to postretirement benefits other than pensions.


Other (Income)Expense-Net

Other (income)expense-net included the following:

<TABLE>
<CAPTION>
(In millions)                      Third quarter ended       Nine months ended
                                      September 30             September 30
                                   -------------------       ------------------
                                    1998        1997           1998       1997
                                    ----        ----           ----       ----

<S>                                 <C>         <C>            <C>        <C>  
Other income                        $(14)       $(19)          $(95)      $(47)
Other expense                         19          18             52         48
Foreign currency translation           2           1              4          5
                                     ---         ---           ---         ---
                                    $  7        $  -           $(39)      $  6
                                     ---         ---            ---        ---
</TABLE>                                                    

Other income for the nine months ended September 30, 1998 includes a 
$48.5 million benefit from the settlement of certain patent litigation.


Supplemental Cash Flow Information

<TABLE>
<CAPTION>
                                                Nine months ended
(In millions)                                     September 30
                                              --------------------
                                              1998            1997
                                              ----            ----

<S>                                           <C>              <C>
Interest paid (net of amount capitalized)     $ 96             $56
Income taxes paid (net of refunds)            $396             $36

</TABLE>

For purposes of the statements of cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to be cash
equivalents.



<PAGE>   8


Earnings Per Share

<TABLE>
<CAPTION>
                                                            Quarter ended           Nine months ended
In millions except per share data                           September 30               September 30
                                                         ------------------         ------------------ 
                                                           1998        1997           1998        1997
                                                           ----        ----           ----        ----
Numerator
<S>                                                      <C>         <C>            <C>         <C>   
  Net earnings                                           $104.2      $108.7         $359.4      $362.3
  Preferred stock dividends                                  .2          .1             .5          .4
                                                         ------      ------         ------      ------
  Numerator for basic earnings per
   share--earnings available to common
   shareholders                                           104.0       108.6          358.9       361.9

  Effect of dilutive securities
    Preferred stock dividends                                .2          .1             .5          .4
                                                         ------      ------         ------      ------

  Numerator for diluted earnings per share--
   earnings available to common shareholders
   after assumed conversions                             $104.2      $108.7         $359.4      $362.3
                                                         ------      ------         ------      ------

Denominator
  Denominator for basic earnings per
   share--weighted-average common shares                  120.5       123.1          121.7       124.0

  Effect of dilutive securities
    Convertible preferred stock                              .9         1.1             .9         1.0
    Employee stock options                                  1.8         3.2            2.3         3.1
                                                         ------      ------         ------      ------
  Dilutive potential common shares                          2.7         4.3            3.2         4.1

  Denominator for diluted earnings per
   share--adjusted weighted-average shares
   and assumed conversions                                123.2       127.4          124.9       128.1
                                                         ------      ------         ------      ------

Basic earnings per share                                 $  .86      $  .88         $ 2.95      $ 2.92
                                                          -----       -----          -----       -----

Diluted earnings per share                               $  .85      $  .85         $ 2.88      $ 2.83
                                                         ------      ------         ------      ------
</TABLE>


Contingencies

During 1997, TRW Vehicle Safety Systems Inc., a wholly owned subsidiary of the
Company, reported to the Arizona Department of Environmental Quality ("ADEQ")
potential violations of the Arizona hazardous waste law at its Queen Creek,
Arizona facility for the possible failure to properly label and dispose of
wastewater that might be classified as hazardous waste. ADEQ is conducting an
investigation into these potential violations and the Company is cooperating
with the investigation. If ADEQ initiates proceedings against the Company with
respect to such matters, the Company could be liable for penalties and fines and
other relief. The Company has been apprised by state and federal officials that
there are ongoing civil and criminal investigations with respect to these
potential violations. Management is currently evaluating this matter and is
unable to make a meaningful estimate of the amount or range of possible
liability, if any, at this time, although management believes that the Company
would have meritorious defenses. 


During 1996, the Company was advised by the United States Department of Justice
("DOJ") that it had been named as a defendant in two lawsuits brought by a
former employee of the Company's former Space & Technology Group and 


<PAGE>   9


originally filed under seal in 1994 and 1995, respectively, in the United States
District Court for the Central District of California under the qui tam
provisions of the civil False Claims Act. The Act permits an individual to bring
suit in the name of the United States and share in any recovery. The allegations
in the lawsuits relate to the classification of costs incurred by the Company
that were charged to certain of its federal contracts. Under the law, the
government must investigate the allegations and determine whether it wishes to
intervene and take responsibility for the lawsuits. On February 13, 1998, the
DOJ intervened in the litigation. On February 19, 1998 and March 4, 1998, the
former employee filed amended complaints in the Central District of California
that realleged certain of the claims included in the 1994 and 1995 lawsuits and
omitted the remainder. The amended complaints allege that the United States has
incurred substantial damages and that the Company should be ordered to cease and
desist from violations of the civil False Claims Act and is liable for treble
damages, penalties, costs, including attorneys' fees, and such other relief as
deemed proper by the court. On March 17, 1998, the DOJ filed its complaint
against the Company upon intervention in the 1994 lawsuit, which set forth a
limited number of the allegations in the 1994 lawsuit and other allegations not
in the 1994 lawsuit. The DOJ elected not to pursue the other claims in the 1994
lawsuit or the claims in the 1995 lawsuit. The DOJ's complaint alleges that the
Company is liable for treble damages, penalties, interest, costs and "other
proper relief." On March 18, 1998, the former employee withdrew the first
amended complaint in the 1994 lawsuit at the request of the DOJ. On May 18,
1998, the Company filed answers to the former employee's first amended complaint
in the 1995 lawsuit and to the DOJ's complaint, denying all substantive
allegations against the Company contained therein. At the same time, the Company
filed counterclaims against both the former employee and the federal government.
On July 20, 1998, both the former employee and the DOJ filed motions seeking to
dismiss the Company's counterclaims. The Company cannot presently predict the
outcome of these lawsuits, although management believes that their ultimate
resolution will not have a material effect on the Company's financial condition
or results of operations.


Interim Statements

The financial statements are based in part on approximations and are subject to
adjustments that may develop, such as unsettled contract and renegotiation
matters and matters that arise in connection with the annual audit of the
financial statements; however, in the opinion of management, all adjustments
(which consist of normal recurring accruals) necessary for a fair presentation
of the results of operations for the periods presented have been included.
Results of operations for any interim period are not necessarily indicative of
the results to be expected for the full year.



<PAGE>   10


Item 2.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
(In millions except per share data)
                                                                        Nine Months Ended
                                        Third Quarter                      September 30
                                -------------------------------   -------------------------------
                                                      Percent                            Percent
                                1998        1997      Inc (Dec)   1998         1997      Inc (Dec)
                                ----        ----      ---------   ----         ----      ---------
<S>                            <C>         <C>          <C>      <C>         <C>          <C>
Sales                          $2,836      $2,521       13%      $8,959      $8,033       12%
Operating Profit               $  211      $  213       (1%)     $  727      $  720        1%
Net Earnings                   $  104      $  108       (4%)     $  359      $  362       (1%)
Diluted Earnings Per Share     $  .85      $  .85         -      $ 2.88      $ 2.83        2%
Effective Tax Rate               36.5%       34.4%                 36.5%       37.5%
</TABLE>

Sales for the third quarter and first nine months of 1998 increased due to the
acquisition of BDM, new contract awards in the space, defense and information
systems business, and from higher volume in most automotive product lines. The
increase in sales was partially offset by the reduction of $57 million due to a
contract modification in the space, defense and information systems business and
by lower volume due to the General Motors strike, the weakening economic
conditions in Brazil and Asia and lower pricing across all product lines in the
automotive segment. The increase in sales for the first nine months of 1998 was
also partially offset by the effect of a strong U.S. dollar.

Third quarter operating profit declined slightly as operating profit increases
related to the acquisition of BDM and excellent award fees earned on space
programs were offset by a $12.6 million automotive restructuring charge, lower
volume due to the General Motors strike, higher research and development
expenditures, the costs of launching new automotive products, and the weakening
economic conditions in Asia and Brazil. The contract modification in the space,
defense and information systems business had no impact on operating profit or
net earnings.

Operating profit for the first nine months of 1998 increased due to the
acquisition of BDM, strong performance on space, defense and information systems
contracts, the benefit from the settlement of certain patent litigation, cost
reductions in the automotive business and higher automotive sales volume. The
increase in operating profit was partially offset by lower automotive pricing,
charges for litigation and contract reserves and severance costs relating to the
combination of the Company's systems integration business with BDM, start-up
costs for new facilities and new product introduction, higher research and
development expenditures, the automotive restructuring charge, lower volume due
to the General Motors strike and the effects of a strong U.S. dollar.

Net earnings for the third quarter reflect an $8 million charge relating to the
automotive restructuring. Net earnings for the first nine months of 1998
included a $31.5 million benefit from the settlement of certain patent
litigation, offset by $26.5 million in charges for litigation and contract
reserves, severance costs relating to the combination of the Company's systems
integration business with BDM and $8 million relating to the automotive
restructuring charge.

Interest expense was $100 million for the first nine months of 1998 compared to
$57 million for the first nine months of 1997. The increase in interest expense
was primarily due to financing the acquisition of BDM. Third quarter interest
expense included a reclassification of $8 million from interest 


<PAGE>   11


expense to compensation expense relating to the appreciation on deferred
compensation balances and the benefit from an interest accrual adjustment
relating to litigation.

The higher 1998 third quarter effective tax rate was primarily attributable to
the absence of certain federal and state tax incentives and the tax benefit from
the realignment of certain foreign operations realized in 1997.


Automotive

<TABLE>
<CAPTION>
                                                           Nine Months Ended
(In millions)                Third Quarter                   September 30
                     ------------------------------    ----------------------------
                                           Percent                         Percent
                     1998        1997      Inc (Dec)   1998       1997     Inc (Dec)
                     ----        ----      ---------   ----       ----     ---------

<S>                  <C>        <C>        <C>       <C>        <C>        <C>  
Sales                $1,685     $1,570       7%      $5,384     $5,239       3%
Operating Profit     $  105     $  136     (23%)     $  400     $  485     (17%)
</TABLE>


The increase in sales for the third quarter and first nine months of 1998 was
primarily due to higher volume in most product lines -- particularly occupant
restraint systems and electrically assisted steering. The increase was partially
offset by lower pricing across all product lines, primarily occupant restraint
systems, weakening economic conditions in Brazil and Asia and lower volume due
to the General Motors strike. The increase in sales for the first nine months of
1998 was also partially offset by the effect of a strong U.S. dollar.

Lower operating profit for the third quarter and first nine months of 1998
resulted as higher volume and cost reductions were offset by lower pricing, a
$12.6 million restructuring charge for severance costs, lower volume due to the
General Motors strike, higher research and development expenditures, the effects
of launching new products and the weakening economic conditions in Asia and
Brazil.


Space, Defense & Information Systems

<TABLE>
<CAPTION>
                                                     Nine Months Ended
(In millions)              Third Quarter                September 30
                      ------------------------    ----------------------------

                                      Percent                         Percent
                      1998     1997   Inc (Dec)   1998       1997     Inc (Dec)
                      ----     ----   ---------   ----       ----     ---------

<S>                  <C>        <C>      <C>     <C>        <C>        <C>
Sales                $1,151     $951     21%     $3,575     $2,794     28%
Operating Profit     $  106     $ 77     39%     $  327     $  235     39%
</TABLE>

The increase in sales for the third quarter and first nine months of 1998 was
primarily due to the acquisition of BDM, which contributed $230 million in sales
for the third quarter and $684 million year-to-date, and new contract awards.
The increase in sales was partially offset by the third quarter reduction of 
$57 million due to a contract modification.

The higher operating profit for the third quarter was due to the acquisition of
BDM, excellent award fees earned on a number of Department of Defense space
programs, and the continued success in commercial gallium arsenide product
lines. The contract modification had no impact on operating profit.

The higher operating profit for the first nine months of 1998 was due to the
acquisition of BDM, excellent award fees earned on a number of Department of


<PAGE>   12


Defense space programs, continued success in commercial gallium arsenide product
lines and the benefit from the settlement of certain patent litigation. The
increase in operating profit for the first nine months of 1998 was partially
offset by charges for litigation and contract reserves and severance costs
relating to the combination of the Company's systems integration business with
BDM.


LIQUIDITY AND FINANCIAL POSITION

In the first nine months of 1998, cash flow provided by operating activities of
$316 million and a net increase in debt of $641 million were used to fund
business acquisitions of $247 million, capital expenditures of $361 million,
reacquisition of common stock of $179 million of which $5 million was for the
settlement of shares purchased in 1997, dividend payments of $114 million and
other items of $47 million. As a result, cash and cash equivalents increased by 
$9 million. Third quarter operating cash flow included tax payments of 
$180 million related to the closure of certain long-term contracts and an 
additional $60 million will be paid in the fourth quarter.

Net debt (short-term debt, the current portion of long-term debt and long-term
debt less cash and cash equivalents) was $2.3 billion at September 30, 1998,
compared to $1.6 billion at December 31, 1997. The ratio of net debt to total
capital (net debt, minority interests and shareholders' investment) was 
53.6 percent at September 30, 1998, compared to 47.8 percent at December 31, 
1997.

During the first nine months of 1998, the Company refinanced short-term debt by
issuing $659 million of notes and debentures that mature at various dates
through 2028.

As of the end of the third quarter 1998, $268 million of short-term debt was
reclassified to long-term debt as the Company intends to refinance the
borrowings on a long-term basis and has the ability to do so under its U.S. and
multicurrency revolving credit agreements.

During the first quarter 1998, the Company established a $1 billion Universal
Shelf Registration Statement. Securities that may be issued under this shelf
registration statement include debt securities, common stock, warrants to
purchase debt securities and warrants to purchase common stock.

During the first nine months of 1998, 3,521,410 shares of TRW common stock were
repurchased for $176 million, of which $2 million was settled in October 1998.

Management believes that funds generated from operations and existing borrowing
capacity are adequate to fund the current share repurchase program and finance
planned growth, capital expenditures, working capital requirements including tax
requirements, company-sponsored research and development programs and dividend
payments to shareholders.


OTHER MATTERS

During 1997, TRW Vehicle Safety Systems Inc., a wholly owned subsidiary of the
Company, reported to ADEQ potential violations of the Arizona hazardous waste
law at its Queen Creek, Arizona facility for the possible failure to properly
label and dispose of wastewater that might be classified as hazardous waste. If
ADEQ initiates proceedings against the Company with respect to such matters, the
Company could be liable for penalties and fines and other relief. Management is
currently evaluating this matter and is unable to make a meaningful estimate of
the amount or range of possible liability, if any, at this time, although
management believes that the Company would have meritorious defenses.


<PAGE>   13


During 1996, the Company was advised by the DOJ that it had been named as a
defendant in two lawsuits brought by a former employee and filed under seal in
1994 and 1995, respectively, in the United States District Court for the Central
District of California under the qui tam provisions of the civil False Claims
Act. The Company cannot presently predict the outcome of these lawsuits,
although management believes that their ultimate resolution will not have a
material effect on the Company's financial condition or results of operations.

Refer to the "Contingencies" footnote in the Notes to Financial Statements for
further discussion of these matters.

Year 2000

A company-wide Year 2000 ("Y2K") compliance program has been implemented to
determine Y2K issues and define a strategy to assure Y2K compliance. The
compliance program has four major areas: internal computer systems, factory
floor systems, supplier and service management and products and contracts.

The general phases common to all areas of the compliance program are: Project
Start-up; Inventory and Assessment; Conversion, Upgrade and Renovation;
Validation, including testing; and Implementation. The Project Start-up and the
Inventory and Assessment phases are essentially complete for all four areas of
the program with a limited set of activities relating to the inventory and
assessment phase scheduled to be complete by year-end. The remainder of the Y2K 
compliance program is scheduled to be completed by year-end 1999, except for
certain Y2K upgrades for non-material and low priority items.

The Company's internal computer systems are comprised of engineering and
research and development facilities, business computer systems, end user systems
and technical infrastructure. The Company estimates that 49% of internal
computer systems have been renovated to date. The remainder of the systems are
expected to be renovated by year-end 1998 with a limited set of software
upgrades and installations to be completed by April 1999 as initially planned by
the Company. The Validation and Implementation phases for this area of the
program are expected to be complete by the end of the first quarter 1999. The
Company also expects critical contingency plans to be developed by the end of
the first quarter 1999.

The factory floor systems are comprised of manufacturing and warehousing
equipment. The Company estimates that the conversion, upgrade and renovation of
these systems is 35% complete to date. A significant portion of the remaining
systems are expected to be renovated by year-end 1998, however the renovation of
a limited number of systems is expected to complete during the first six months
of 1999. Validation, implementation and critical contingency planning for the
systems being renovated in 1998, are expected to be complete by the end of the
first quarter 1999. Validation, implementation and contingency planning related
to the systems being renovated during the first six months of 1999 will complete
by year-end 1999.

The Company is currently assessing Y2K issues associated with its automotive
suppliers by working with the Automotive Industries Action Group (AIAG), which
represents several of its largest automotive customers and major tier one
suppliers. An analysis has been performed to assess each supplier's criticality
and potential business risk to the Company. The analysis includes factors such
as the amount purchased from the supplier and the availability of alternate
sources of the items purchased. The AIAG sent self-assessment surveys to
approximately 9,000 automotive suppliers on the Company's behalf. Approximately
30% of the surveys have been returned to the AIAG to date of which 27% have
been released to the Company. The suppliers must provide a signed release in
order for the completed surveys to be provided to the Company. The Company is   
contacting suppliers that have not responded to or released the survey to
assure that the surveys and appropriate release forms are returned. In
addition, telephone surveys, workshops, or on-site visits will be conducted by
the Company for perceived high-risk suppliers. Service providers are also being
surveyed to determine Y2K readiness. The Company expects the assessment and
validation of automotive suppliers' and service providers' Y2K readiness to be
complete by the end of the first quarter 1999. The Company also expects
critical contingency plans to be developed for suppliers and service providers  
by the end of the first quarter 1999. Such plans may include alternate
sourcing, stockpiling of inventory and supplies and disaster recovery
scenarios.



<PAGE>   14

For Space, Defense & Information Systems (SD&IS) suppliers and service
providers, a similar assessment and validation process is underway.
Self-assessment surveys were sent to approximately 3,500 suppliers, of which
about 350 are critical to SD&IS, during the second quarter. To date,
approximately 77% of those critical suppliers surveyed have responded and have
certified compliance. Self-assessment surveys were distributed to the remaining
1,400 suppliers at the end of the third quarter with responses anticipated by
the end of the fourth quarter. The Company is contacting suppliers that do not
respond to the surveys to ensure that timely responses are received. The Company
expects the assessment and validation of SD&IS suppliers and service providers
to be complete by year-end 1998. The Company also expects critical contingency
plans to be developed by the end of the first quarter 1999.

The Company has assessed its automotive products and determined that there
should be no Y2K issues.

Contracts entered into by the Company, under which systems have been developed
for commercial and government customers, after January 1, 1996 and contract
modifications entered into after January 1, 1996 which add major scope to
earlier contracts are being evaluated to determine the existence of material Y2K
issues. The Company estimates that 60% of these contracts have been evaluated to
date. The assessment and validation of these contracts are expected to be
complete by year-end 1998. As the Company determines which systems it will be
required to renovate, the Company will work together with the applicable
customers to develop mutually acceptable plans and timetables for achieving Y2K
compliance. As such timetables must be developed in cooperation with the
applicable customers, the Company is currently unable to determine when such
renovations will be complete. The Company does expect critical contingency plans
to be developed by the end of the first quarter 1999. 

As part of a continuing process, Y2K issues are being assessed as they are
identified, using formal program reviews to assess progress and initiate
required actions. As the Y2K compliance program proceeds, contingency plans will
be prepared, updated and implemented as necessary to address the risks
identified.

The Company has identified the most likely risks of Y2K noncompliance as the
risk that automotive suppliers will not be Y2K compliant and the risk that      
contracts on which SD&IS is performing work will have Y2K-related performance
issues. Due to the general uncertainty inherent in the Y2K problem, the Company
is unable to determine at this time whether the consequences of Y2K compliance
failures will have a material effect on the Company's results of operations or
financial condition. In addition, the Company does not have control over        
service providers and as a result cannot currently estimate to what extent
future operating results may be adversely affected by the failure of these
service providers to successfully address their Y2K issues.

The total cost of the Y2K program is estimated to be $150 million and includes
$77 million for capitalizable costs and $73 million of costs that will be
expensed as incurred. The Company has expensed approximately $31 million to date
and expects to expense an additional $12 million by year-end. The Company does
not anticipate that the overall costs will have a material effect on the
Company's financial results or financial condition.

The dates of completion and the costs of the project are based on management's
estimates, which were derived utilizing assumptions of future events, including
the availability of certain resources, third party modification plans and other
factors. There can be no guarantee that these estimates will be achieved, and if
the actual timing and costs for the Y2K program differ materially from those
anticipated, the Company's financial results and financial condition could be
materially adversely affected.


<PAGE>   15


Euro Conversion

On January 1, 1999, certain member countries of the European Union are scheduled
to irrevocably fix the conversion rates between their national currencies and a
common currency, the "Euro", which will become their legal currency on that
date. The participating countries' former national currencies will continue to
exist as denominations of the Euro between January 1, 1999 and January 1, 2002.
The Company has established a Steering Committee that is currently evaluating
the business implications of conversion to the Euro, including the need to adapt
internal systems to accommodate Euro-denominated transactions, the competitive
implications of cross-border price transparency, and other strategic
implications. While still in the assessment phase, the Company does not expect
the conversion to the Euro to have a material effect on its financial condition
or results of operations.

Restructuring

On July 29, 1998, the Company announced actions intended to enhance the
operating profit margins in its automotive businesses by 1.5 percentage points
over the next two years, which will improve operating cash flow by approximately
$100 million a year. To accomplish the improvements, the Company will implement
the following actions: close 10 to 15 percent of the Company's 137 manufacturing
plants; reduce employment by 7,500; eliminate $75 million, or 20 percent, of
selling, general and administrative costs per year; reduce the cost of materials
through more effective use of global sourcing and purchasing and by reducing the
number of automotive suppliers by 50 percent over the next few years; improve
productivity by reducing manufacturing costs by at least 25 percent over the
next few years through the use of lean manufacturing practices and improved
quality; and reduce aggregate capital expenditures by $300 million over the next
five years. To implement these changes, the Company will take pre-tax charges of
$125 to $150 million over the next 18 months, of which $12.6 million was
expensed in the third quarter of 1998 related to severance costs.

FORWARD-LOOKING STATEMENTS

Statements in this filing that are not historical facts are forward-looking
statements, which involve risks and uncertainties that could affect the
Company's actual results. Important factors that could cause the Company's
actual results to differ materially from the forward-looking statements
contained in this report include the ability to achieve cost reductions,
mitigate pricing pressure and effectively implement the restructuring program in
the Company's automotive business, as well as the ability to effectively
implement the company-wide Y2K compliance program in accordance with the
estimated timetable and costs described herein. Additional factors can be found
in the Company's Form 8-K filed with the Securities and Exchange Commission on
May 29, 1998. The Company undertakes no obligation to update any forward-looking
statement.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in market risk exposures during the first
nine months of 1998 that affect the disclosures presented in the Company's
Annual Report to Shareholders for the year ended December 31, 1997.

<PAGE>   16


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits:

         27   Financial Data Schedule

         99   Computation of Ratio of Earnings to Fixed Charges -- Unaudited
              (Supplement to Exhibit 12 of the following Form S-3 Registration
              Statement of the Company: No. 333-48443, filed March 23, 1998)

(b)      Reports on Form 8-K:

         None.



<PAGE>   17

SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                          TRW Inc.



Date:  October 26, 1998                   By: /s/ William B. Lawrence
                                          --------------------------------------
                                          William B. Lawrence
                                          Executive Vice President and Secretary


                                          By: /s/ Carl G. Miller
                                          --------------------------------------
                                          Carl G. Miller
                                          Executive Vice President
                                          and Chief Financial Officer