<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 March 31, 1999

                                       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 May 7, 1999, there were 120,365,445 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
----------------------------------------------------------------------------------------------------------------------------
                                                                                                  Quarter ended
                                                                                                     March 31
In millions except per share data                                                             1999              1998
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>   
Sales                                                                                       $3,097            $3,095
Cost of sales                                                                                2,618             2,575
----------------------------------------------------------------------------------------------------------------------------
Gross profit                                                                                   479               520

Administrative and selling expenses                                                            184               199
Research and development expenses                                                              144               121
Purchased in-process research and development                                                   85                 -
Interest expense                                                                                43                38
Other (income)expense-net                                                                       16               (42)
----------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                                                     7               204
Income taxes                                                                                    35                75
----------------------------------------------------------------------------------------------------------------------------
Net earnings(loss)                                                                          $  (28)           $  129
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
   Diluted earnings(loss) per share                                                         $ (.24)           $ 1.03
   Basic earnings(loss) per share                                                           $ (.24)           $ 1.05
   Dividends declared                                                                       $  .00            $  .00
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Shares used in computing per share amounts
     Diluted                                                                                 120.1             126.2
     Basic                                                                                   120.1             122.6
----------------------------------------------------------------------------------------------------------------------------
</TABLE>





                                       1






<PAGE>   3



<TABLE>
<CAPTION>
Balance Sheets (unaudited)
TRW Inc. and subsidiaries
-------------------------------------------------------------------------------------------------------------------------------
                                                                                          March 31            December 31
In millions                                                                                   1999                   1998
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>                    <C>    
Assets
Current assets
     Cash and cash equivalents                                                             $ 1,058                $    83
     Accounts receivable                                                                     2,826                  1,721
     Inventories                                                                             1,123                    616
     Prepaid expenses                                                                          275                    104
     Net assets of acquired businesses held for sale                                           739                      -
     Deferred income taxes                                                                     326                    179
-------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                         6,347                  2,703

Property, plant and equipment-on the basis of cost                                           7,986                  6,604
     Less accumulated depreciation and amortization                                          3,890                  3,921
-------------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment-net                                                      4,096                  2,683

Intangible assets
     Intangibles arising from acquisitions                                                   3,759                    850
     Other                                                                                     780                    360
-------------------------------------------------------------------------------------------------------------------------------
                                                                                             4,539                  1,210
     Less accumulated amortization                                                             150                    143
-------------------------------------------------------------------------------------------------------------------------------
Total intangible assets-net                                                                  4,389                  1,067
Investments in affiliated companies                                                            335                    243
Long-term deferred income taxes                                                                  -                     33
Other notes and accounts receivable                                                            349                    227
Prepaid pension cost                                                                         2,198                      -
Other assets                                                                                   437                    213
-------------------------------------------------------------------------------------------------------------------------------
                                                                                           $18,151                $ 7,169
-------------------------------------------------------------------------------------------------------------------------------

Liabilities and shareholders' investment
Current liabilities
     Short-term debt                                                                       $ 1,837                $   839
     Short-term payable for LucasVarity plc                                                  2,899                      -
     Accounts payable                                                                        1,614                    964
     Current portion of long-term debt                                                         677                     30
     Other current liabilities                                                               1,890                  1,185
-------------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                    8,917                  3,018

Long-term liabilities                                                                        1,764                    826
Long-term payable for LucasVarity plc                                                        3,359                      -
Long-term debt                                                                               1,663                  1,353
Long-term deferred income taxes                                                                590                      -
Minority interests in subsidiaries                                                             131                     94
Capital stock                                                                                   75                     75
Other capital                                                                                  459                    457
Retained earnings                                                                            1,991                  2,021
Treasury shares-cost in excess of par value                                                   (625)                  (637)
Accumulated other comprehensive income(loss)                                                  (173)                   (38)
-------------------------------------------------------------------------------------------------------------------------------
Total shareholders' investment                                                               1,727                  1,878
-------------------------------------------------------------------------------------------------------------------------------
                                                                                           $18,151                $ 7,169
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>





                                       2

<PAGE>   4






<TABLE>
<CAPTION>
Statements of Cash Flows (unaudited)
TRW Inc. and subsidiaries
----------------------------------------------------------------------------------------------------------------------------
                                                                                                  Quarter ended
                                                                                                     March 31
In millions                                                                                   1999              1998
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>   
Operating activities
Net earnings(loss)                                                                          $  (28)           $  129
Adjustments to reconcile net earnings(loss) to net cash
     provided by operating activities:
     Purchased in-process research and development                                              85                 -
     Depreciation and amortization                                                             142               135
     Deferred income taxes                                                                       2               (68)
     Other-net                                                                                 (43)                5
Changes in assets and liabilities, net of effects of businesses acquired:
     Accounts receivable                                                                      (255)             (162)
     Inventories and prepaid expenses                                                           32               (23)
     Accounts payable and other accruals                                                       (49)              (29)
     Other-net                                                                                 (20)              (33)
----------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                                         (134)              (46)
----------------------------------------------------------------------------------------------------------------------------

Investing activities
Capital expenditures                                                                          (111)             (140)
Purchase of LucasVarity plc shares                                                            (519)                -
Acquisitions, net of cash acquired                                                             (36)             (228)
Other-net                                                                                        -                13
----------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                         (666)             (355)
----------------------------------------------------------------------------------------------------------------------------

Financing activities
Increase (decrease) in short-term debt                                                         705               (40)
Proceeds from debt in excess of 90 days                                                        524               620
Principal payments on debt in excess of 90 days                                               (180)             (110)
Reacquisition of common stock                                                                    -               (24)
Dividends paid                                                                                 (40)              (38)
Other-net                                                                                        1                14
----------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                    1,010               422
----------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash                                                         (9)                1
----------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                                          201                22
Acquired cash and cash equivalents of LucasVarity                                              774                 -
Cash and cash equivalents at beginning of quarter                                               83                70
----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of quarter                                                 $1,058             $  92
----------------------------------------------------------------------------------------------------------------------------
</TABLE>




                                       3

<PAGE>   5



<TABLE>
<CAPTION>
Results by Business Segments (unaudited)
TRW Inc. and subsidiaries
----------------------------------------------------------------------------------------------------------------------------
                                                                                                       Quarter ended
                                                                                                          March 31
In millions                                                                                        1999             1998
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>               <C>      
Sales
Automotive                                                                                       $1,965            $1,886
Aerospace & Information Systems                                                                   1,132             1,209
----------------------------------------------------------------------------------------------------------------------------
Sales                                                                                            $3,097            $3,095
----------------------------------------------------------------------------------------------------------------------------



Segment profit before income taxes
Automotive                                                                                       $  136            $  149
Aerospace & Information Systems                                                                      99               126
----------------------------------------------------------------------------------------------------------------------------
Segment profit before income taxes                                                                  235               275
Purchased in-process research and development                                                        85                 -
Corporate expense and other                                                                          89                31
Financing costs                                                                                      54                40
----------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                                                     $    7            $  204
----------------------------------------------------------------------------------------------------------------------------
</TABLE>





                                       4

<PAGE>   6


NOTES TO FINANCIAL STATEMENTS
(unaudited)


Principles of Consolidation
---------------------------

The financial statements include the accounts of the Company and its
subsidiaries except for four wholly owned insurance subsidiaries. The insurance
subsidiaries and the investments in affiliated companies are accounted for by
the equity or cost method as appropriate. The consolidated financial statements
reflect the preliminary allocation of the purchase price for LucasVarity plc
(LucasVarity), which may be adjusted as further information becomes available,
and the consolidated results of LucasVarity's operations and cash flows
subsequent to the date of acquisition, March 25, 1999.


Acquisition
-----------

On February 6, 1999, TRW commenced an offer for the entire issued share capital
of LucasVarity. The offer was declared unconditional in all respects on March
25, 1999. On March 29, 1999, TRW issued notices to those LucasVarity
shareholders who had not already accepted the offer, informing them that it
intended to exercise its rights under section 429 of the Companies Act of 1985
to acquire compulsorily all LucasVarity shares that had not been acquired in the
offer. At midnight on May 10, 1999, TRW compulsorily acquired all shares that
had not been acquired in the offer, thereby closing the acquisition of
LucasVarity.

LucasVarity manufactures and supplies advanced technology systems, products and
services in the automotive and aerospace industries. It is a major producer of
braking systems, fuel injection systems, electrical and electronic systems and
has a significant position in aftermarket operations and services.

LucasVarity provides the aerospace industry with high integrity systems in
engine controls, electrical power generation and management, flight controls and
cargo handling, all backed by a worldwide customer support operation.

LucasVarity is headquartered in the U.K. and employs approximately 51,000
employees worldwide. LucasVarity maintains the majority of its operating
facilities in Europe and the United States.

The aggregate cash purchase price for LucasVarity was approximately $6.8 billion
and the transaction was accounted for as a purchase business combination.

Assets and liabilities have been recorded based on their respective fair values.
The preliminary purchase price allocation resulted in an $85 million charge to
earnings, with no income tax benefit, for the fair value of acquired in-process
research and development that had not reached technological feasibility and had
no future alternative use.

The fair values of acquired in-process research and development and identified
intangible assets were determined using the income approach under the
proportional method. A risk adjusted discount rate of 18 percent representing
the cost of capital and a premium for the risk was used to discount the
projects' cash flows. Operating margins were assumed to be similar to historical
margins of similar products. The size of the applicable market was verified for
reasonableness with outside research sources. The projects were in various
stages of completion ranging from approximately 40 to 80 percent complete as of
the valuation date. The stage of completion for each project was estimated by
evaluating the cost to complete, complexity of the technology and time to
market. The projects are anticipated to be completed from late 1999 through
2002. The estimated cost to complete the projects is $65 million. 




                                       5
<PAGE>   7



The estimated goodwill and the preliminary allocation of the purchase price are
summarized as follows:

<TABLE>
<CAPTION>
(In millions)

<S>                                                                                <C>   
Cash purchase price                                                                $6,778

Cash and cash equivalents                                                             774
Accounts receivable                                                                   888
Inventory                                                                             552
Net assets of businesses held for sale                                                739
Prepaid expenses                                                                      136
Current deferred income taxes                                                         149
Property, plant and equipment                                                       1,531
Intangible assets                                                                     413
Prepaid pension costs                                                               2,198
Other assets                                                                          414
                                                                                    -----
Total assets                                                                        7,794

Accounts payable                                                                     (686)
Other accruals                                                                       (798)
Debt                                                                                 (938)
Long-term liabilities                                                                (932)
Long-term deferred income taxes                                                      (631)
                                                                                   ------
Total liabilities                                                                  (3,985)

Minority interest                                                                     (39)

Purchased in-process research and development                                          85
                                                                                   ------
Excess of purchase price over fair value of net assets acquired                    $2,923
                                                                                   ======

</TABLE>

Goodwill is being amortized on a straight-line basis over 40 years and
identifiable intangible assets are being amortized on a straight-line basis over
useful lives ranging from 16 to 30 years.

Pro forma financial statements are not included in this filing as the first
quarter 1999 and the first quarter 1998 are comparable, except that the first
quarter 1999 reflects approximately $5 million of LucasVarity's net earnings
subsequent to March 25, the date of acquisition, as well as the $85 million
charge to earnings, with no income tax benefit, for in-process research and
development. Pro forma financial information can be found in TRW's Current
Report on Form 8-K, originally filed with the Securities and Exchange 
Commission on March 26, 1999, as amended on May 17, 1999.


Foreign Exchange Contracts
--------------------------

The Company enters into forward exchange contracts which hedge firm foreign
currency commitments, anticipated transactions and certain intercompany
transactions. At March 31, 1999, the Company had contracts outstanding amounting
to $1.2 billion denominated principally in the British pound, the U.S. dollar,
the Spanish peseta, the French franc, the German deutsche mark, the Euro and the
Canadian dollar, maturing at various dates through January 2007. Contracts
outstanding increased from $162 million at December 31, 1998 primarily due to
the acquisition of LucasVarity.

A foreign currency option transaction for a notional amount of approximately $42
million was outstanding at March 31, 1999. The option was settled during




                                       6

<PAGE>   8



April 1999, and the Company will recognize a before tax gain of approximately $1
million in the second quarter.

The combined fair market value of the forward exchange contracts and the foreign
currency option was approximately $85 million at March 31, 1999, primarily all
of which related to LucasVarity. The fair market value of forward contracts at
December 31, 1998 was $1 million. Changes in market value of the contracts which
hedge firm foreign currency commitments and intercompany transactions are
generally included in the basis of the transactions. Changes in market value of
the contracts which hedge anticipated transactions are generally recognized in
earnings.

Foreign exchange contracts are placed with a number of major financial
institutions to minimize credit risk. No collateral is held in relation to the
contracts, and the Company anticipates that these financial institutions will
satisfy their obligations under the contracts.


Interest Rate Swap Agreements
-----------------------------

In anticipation of offering debt securities to finance the acquisition of
LucasVarity, the Company entered into forward starting interest rate swaps
during the first quarter of 1999 with a mandatory cash settlement in the second
quarter. These agreements effectively fixed the base rate of interest on an
aggregate notional principal amount of $900 million of debt that the Company
plans to issue. The fair market value of the forward starting interest rate
swaps is approximately $5 million at March 31, 1999. Net payments or receipts
under the agreements will be recognized as an adjustment to interest expense.
The agreements were entered into with major financial institutions, and the
Company anticipates that the financial institutions will satisfy their
obligations under the agreements. No collateral is held in relation to the
agreements.


Issuance of a Subsidiary's Stock
--------------------------------

The Company includes gains or losses arising from the issuance of a
subsidiary's or equity affiliate's stock in non-operating income.


Comprehensive Income
--------------------

The components of comprehensive income, net of related tax, for the first
quarter of 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                                         Quarter ended
(In millions)                                                                               March 31
                                                                              ------------------------------------
                                                                                    1999                 1998
                                                                                    ----                 ----
<S>                                                                               <C>                   <C>  
Net earnings(loss)                                                                $ (28)                $ 129
Foreign currency translation adjustments                                           (124)                  (23)
Unrealized gain(loss) on securities                                                 (11)                    2
                                                                                  -----                 -----
Comprehensive income(loss)                                                        $(163)                $ 108
                                                                                  -----                 -----
</TABLE>





                                       7



<PAGE>   9



The components of accumulated other comprehensive income, net of related tax, at
March 31, 1999 and December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                                  March 31               December 31
(In millions)                                                         1999                      1998
                                                             ------------------------------------------
<S>                                                                 <C>                       <C>   
Foreign currency translation adjustments                            $(179)                    $ (55)
Unrealized gain on securities                                          19                        30
Minimum pension liability adjustments                                 (13)                      (13)
                                                                    -----                      ----
Accumulated other comprehensive income(loss)                        $(173)                     $(38)
                                                                    -----                      ----
</TABLE>


New Accounting Pronouncement
----------------------------

In 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
is effective for years beginning after June 15, 1999. However, the Company is
considering earlier adoption. The effect this statement will have on the
Company's results of operations and financial condition has not yet been
determined.


Divestitures
------------

On May 17, 1999, the Company announced it will divest its engine
businesses, which consist of TRW Engine Components and Lucas Diesel System
operations; TRW Nelson Stud Welding; and the LucasVarity Wiring companies.

Sales included in the Company's first quarter of 1999 and 1998 statements of
earnings for the businesses to be sold were $174 million and $153 million, 
respectively. The first quarter of 1999 included sales of $25 million for
LucasVarity Wiring companies and Lucas Diesel Systems operations.

The Company's investment in the LucasVarity Wiring companies and Lucas Diesel
Systems operations is included in the balance sheet caption "Net assets of
acquired businesses held for sale".

The Company expects to complete the divestitures of these businesses by year end
1999.


Operating Segments
------------------

On April 28, 1999, TRW announced a reorganization of its business into two
segments: Automotive and Aerospace & Information Systems. TRW's and
LucasVarity's automotive businesses were combined into TRW's Automotive Segment
and TRW's space, defense and information systems businesses were combined with
LucasVarity's aerospace business to form the Aerospace & Information Systems
Segment.

As a result of the acquisition of LucasVarity, segment assets increased
significantly. However, as the valuation to determine the value of the assets
applicable to each segment has not been finalized, the Company cannot currently
provide the value of the segment assets for the Automotive Segment and the
Aerospace & Information Systems Segment.

The caption "Financing costs" displayed in the reconciliation of segment profit
before income taxes to consolidated earnings before income taxes includes
interest expense as well as the underwriting and participation fees associated
with the acquisition of LucasVarity.








                                       8

<PAGE>   10


Inventories
-----------

Inventories consist of the following:
<TABLE>
<CAPTION>
                                                                               March 31           December 31
(In millions)                                                                      1999                  1998
                                                                       ------------------------------------------

<S>                                                                              <C>                   <C>   
Finished products and work in process                                            $  642                $  316
Raw materials and supplies                                                          481                   300
                                                                                  -----                 -----
                                                                                 $1,123                $  616
                                                                                  -----                 -----
</TABLE>

The increase in inventory is due to the acquisition of LucasVarity.


Long-Term Liabilities
---------------------

Long-term liabilities at March 31, 1999 and December 31, 1998, include $1,169
million and $651 million, respectively, relating to postretirement benefits
other than pensions. The increase is due to the acquisition of LucasVarity.


Other (Income)Expense-Net
-------------------------

Other (income)expense-net included the following:
<TABLE>
<CAPTION>
                                                                                        Quarter ended
(In millions)                                                                              March 31
                                                                       ------------------------------------------
                                                                                   1999                 1998
                                                                                   ----                 ----

<S>                                                                                <C>                  <C>  
Other income                                                                       $(40)                $(66)
Other expense                                                                        36                   22
Gain from issuance of equity affiliate's stock                                      (29)                   -
Foreign currency exchange                                                            49                    2
                                                                                   ----                 ----
                                                                                   $ 16                 $(42)
                                                                                   ----                 ----
</TABLE>
During the first quarter 1999, RF Micro Devices, Inc. (RFMD), an equity
affiliate which designs, develops, manufactures and markets priority radio
frequency integrated circuits for wireless communications applications, issued
2,012,500 shares of stock at $61.44 per share in a registered public offering.
First quarter 1999 "Other(income)expense-net" included a gain of $29 million
from the issuance of stock by RFMD. The Company's ownership decreased from 32
percent to 27 percent primarily due to the issuance of these shares. Deferred
taxes have been appropriately provided on the gain.

In addition, first quarter 1999 other income included $15 million from the
Company's sale of 287,500 shares of RFMD common stock in the registered public
offering. First quarter 1999 other expense included a $10 million before tax
charge for underwriting and participation fees incurred to secure committed
credit facilities related to the acquisition of LucasVarity. First quarter 1999
foreign currency exchange included a $50 million nonrecurring before tax loss on
foreign currency hedges related to the acquisition of LucasVarity. First quarter
1998 other income included a $49 million benefit from the settlement of certain
patent litigation.

Supplemental Cash Flow Information
----------------------------------

<TABLE>
<CAPTION>
                                                                                       Quarter ended
(In millions)                                                                             March 31
                                                                       ------------------------------------------
                                                                                 1999                 1998
                                                                                 ----                 ----
<S>                                                                            <C>                   <C> 
Interest paid (net of amount capitalized)                                         $47                  $30
Income taxes paid (net of refunds)                                                $33                  $41
</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.







                                       9


<PAGE>   11



During the first quarter of 1999, the Company incurred short-term borrowings of
approximately $519 million to finance the purchase of LucasVarity's Ordinary
Shares on the open market. In addition, a $6.3 billion payable was incurred for
LucasVarity shares tendered into the offer. During April 1999, the Company
settled a significant portion of the payable for LucasVarity shares by issuance
of commercial paper.


Earnings Per Share
------------------
The effects of convertible preferred stock and employee stock options were
excluded from the calculation of 1999 diluted earnings per share as they would
have been antidilutive.

<TABLE>
<CAPTION>
                                                                                         Quarter ended
(In millions except per share data)                                                        March 31
                                                                        ----------------------------------------
                                                                                 1999                  1998
                                                                                 ----                  ----
<S>                                                                            <C>                   <C>   
NUMERATOR
 Net earnings(loss)                                                            $(28.4)               $129.4
 Preferred stock dividends                                                         .3                    .2
                                                                                   --                    --
 Numerator for basic earnings per share--
  earnings(loss) available to common
  shareholders                                                                  (28.7)                129.2
 Effect of dilutive securities
  Preferred stock dividends                                                         -                    .2
                                                                                 ----                 -----
 Numerator for diluted earnings per
  share--earnings(loss) available to common
  shareholders after assumed conversions                                      $ (28.7)               $129.4
                                                                                 ----                 -----

DENOMINATOR
 Denominator for basic earnings per share--
  weighted-average common shares                                                120.1                 122.6
 Effect of dilutive securities
  Convertible preferred stock                                                       -                    .9
  Employee stock options                                                            -                   2.7
                                                                                -----                 -----
 Dilutive potential common shares                                                   -                   3.6
 Denominator for diluted earnings per share--
  adjusted weighted-average shares and
  assumed conversions                                                           120.1                 126.2
                                                                                -----                 -----

Basic earnings(loss) per share                                                $(0.24)                $ 1.05
                                                                                ----                  -----
Diluted earnings(loss) per share                                              $(0.24)                $ 1.03
                                                                                ----                  -----
</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 Arizona State Attorney General also is investigating matters,
and federal, civil and criminal governmental investigations with respect to
these potential violations are ongoing. 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.




                                       10


<PAGE>   12



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 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. On November 23, 1998 (entered as an Order on January 21, 1999),
the court dismissed certain counterclaims asserted against the former employee
and the federal government and took under advisement the former employee's
motion to dismiss certain other counterclaims. On March 15, 1999, the DOJ was
granted leave to file a First Amended Complaint, which adds certain allegations
concerning the Company's subcontracts. 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.








                                       11

<PAGE>   13


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


RESULTS OF OPERATIONS

(In millions except per share data)

<TABLE>
<CAPTION>
                                                                                   First Quarter
                                                               ----------------------------------------------------
                                                                                                        Percent
                                                                   1999               1998              Inc(Dec)
                                                               ---------------    ----------------    -------------

<S>                                                              <C>                <C>                     
Sales                                                            $3,097             $3,095                 -
Segment profit before income taxes                                  235                275               (15)%
Net earnings(loss)                                                  (28)               129              (122)%
Diluted earnings(loss) per share                                  (0.24)              1.03              (123)%
Effective tax rate                                                504.6%             36.50%
</TABLE>


Sales of $3.1 billion were essentially unchanged compared with the first quarter
of 1998. An increase in sales as a result of the inclusion of $106 million from
LucasVarity, subsequent to March 25, 1999, the date of acquisition, was offset
by a decrease in the aerospace and information systems business.

A net loss of $28 million, or a net loss of $.24 per share, was reported in the
first quarter 1999 compared with net earnings of $129 million, or $1.03 per
share, reported in the first quarter 1998.

First quarter 1999 net loss included the following: an $85 million charge, with
no income tax benefit, for the fair value of acquired in-process research and
development that had not reached technological feasibility and had no future
alternative use; a $28 million after tax charge for a commercial fixed-price
contract and a capped cost reimbursable contract for the U.S. Army; a
non-recurring after tax loss of $33 million relating to forward contracts and
currency options to purchase British pounds in connection with the LucasVarity
acquisition; and $52 million of up front underwriting and participation fees to
secure committed credit facilities and fees for unutilized credit facilities of
which $12 million, or $8 million after tax, was charged to expense in the first
quarter of 1999.

First quarter 1999 net loss also included after tax gains of $19 million from
the public offering of stock by RFMD and $10 million from the Company's sale of
287,500 shares of RFMD stock in the public offering. The Company may, from time
to time, sell a portion of the remaining RFMD stock it owns. In addition,
approximately $5 million of LucasVarity's net earnings subsequent to March 25,
the date of acquisition, were included in the first quarter of 1999.

First quarter 1998 net earnings included a $32 million benefit from the
settlement of certain patent litigation, offset in part by $22 million in
charges for litigation, contract reserves, and severance costs relating to the
combination of the Company's systems integration business with BDM
International, Inc., acquired in 1997.

Interest expense was $43 million for the first quarter of 1999, compared to $38
million for the first quarter 1998, primarily due to financing higher working
capital requirements and the purchase of LucasVarity shares in the open market.

The effective tax rate for continuing operations was 504.6 percent for the first
quarter 1999 compared to 36.5 percent in 1998. Excluding the write-off of
purchased in-process research and development, which has no tax benefit, the
effective tax rate would have been 38.4 percent. The


                                       12

<PAGE>   14



higher effective tax rate for the first quarter 1999 was primarily attributable
to the tax impact of nondeductible intangibles associated with the LucasVarity
acquisition and the mix of non-U.S. earnings.


<TABLE>
<CAPTION>
Automotive
(In millions)
                                                                                   First Quarter
                                                               ----------------------------------------------------
                                                                                                         Percent
                                                                      1999               1998            Inc(Dec)
                                                               ---------------    ----------------    -------------

<S>                                                                 <C>                <C>                <C>
Sales                                                               $1,965             $1,886              4%
Segment profit before income taxes                                     136                149             (9)%
</TABLE>


In the automotive segment, first quarter 1999 sales increased to $2.0 billion
from $1.9 billion in the first quarter of 1998 due to the inclusion of
LucasVarity automotive operations. Higher volume, primarily in Europe in the
occupant restraints and electronics businesses, was offset by lower pricing
across all product lines.

Automotive segment profit before tax decreased to $136 million, compared with
$149 million in the first quarter of 1998. First quarter 1999 segment profit
before tax included $9.7 million in charges relating to the previously announced
restructuring program and the results of LucasVarity's automotive business
subsequent to the date of acquisition. The decline in segment profits resulted
primarily from delays in anticipated savings associated with the automotive
restructuring program and start-up costs related to new facilities and products.
Lower pricing and production inefficiencies, offset in part by higher volume and
cost reductions, also contributed to the decline in segment profits.

The automotive restructuring program is currently behind plan and delays in
achieving cost savings have negatively impacted automotive margins. However, the
Company remains committed to implementing the cost-reduction steps and improving
segment margins to achieve its goals. In the first quarter of 1999, the Company
eliminated approximately 500 of the 4,500 suppliers targeted for reduction,
while achieving a 20 percent improvement in supplier quality parts per million.


<TABLE>
<CAPTION>
Aerospace & Information Systems
(In millions)
                                                                                   First Quarter

                                                               ----------------------------------------------------
                                                                                                         Percent
                                                                      1999               1998            Inc(Dec)
                                                               ---------------    ----------------    -------------

<S>                                                                 <C>                <C>                <C> 
Sales                                                               $1,132             $1,209              (6)%
Segment profit before income taxes                                      99                126             (21)%
</TABLE>


In the Aerospace & Information Systems segment, first quarter 1999 sales
decreased to $1.1 billion from $1.2 billion in 1998. The decline in sales in the
quarter resulted from delays in the start-up of commercial space programs,
reduced funding on current programs, including a contract modification announced
in 1998, the termination of the SBIRS-Low contract, contracts nearing
completion, and lower than expected growth in commercial information technology,
offset in part by new contract awards.

Segment profit before tax decreased to $99 million in 1999, compared with $126
million in the first quarter of 1998. The decline in segment profit before tax
resulted from the lower sales volume and increased product development costs
associated with commercial programs.


                                       13


<PAGE>   15


Included in the 1999 segment results was a before tax gain of approximately $44
million from the public offering of stock by RFMD and the Company's sale of
287,500 shares of RFMD stock in the public offering. This gain was offset by a
$43 million before tax charge for a commercial fixed-price contract and a capped
cost reimbursable contract for the U.S. Army.

First quarter 1998 segment profit included a benefit from the settlement of
certain patent litigation, offset in part by charges for litigation and contract
reserves and severance costs relating to the combination of the Company's
systems integration business with BDM.


ACQUISITIONS

LucasVarity
On March 25, 1999, TRW acquired LucasVarity for approximately $6.8 billion in
cash. The acquisition was accounted for as a purchase. The preliminary purchase
price allocation resulted in an $85 million charge to earnings, with no income
tax benefit, for the fair value of acquired in-process research and development
(IPR&D) that had not reached technological feasibility and had no future
alternative use, $412 million of identified intangible assets including
intellectual property and workforce, $177 million of fixed assets and $30
million of inventory.

The fair value of IPR&D was determined using the income approach under the
proportional method. The following projects were included in the valuation: next
generation caliper of $26 million, next generation ABS brakes of $23 million,
electro hydraulic braking of $12 million, aerospace engine controls of $18
million, and electrical parking brake of $6 million.

A risk adjusted discount rate of 18 percent representing the cost of capital and
a premium for the risk was used to discount the projects' cash flows. Operating
margins were assumed to be similar to historical margins of similar products.
The size of the applicable market was verified for reasonableness with outside
research sources. The projects were in various stages of completion ranging from
approximately 40 to 80 percent complete as of the valuation date. The stage of
completion for each project was estimated by evaluating the cost to complete,
complexity of the technology, and time to market. The projects are anticipated
to be completed from late 1999 through 2002. The estimated cost to complete the
projects is $65 million.

The Company currently anticipates that these projects will be successfully
developed as budgeted for both the estimated cost and time of completion. Any
delay or cancellation of the projects would not have a material adverse impact
on the results of operations or the financial condition of the Company.

See the "Acquisitions" footnote in the Notes to Financial Statements for further
discussion of the LucasVarity acquisition.

Astrolink LLC 
On May 6, 1999, TRW announced that it will make a $250 million investment in
Astrolink LLC, a strategic venture initiated by Lockheed Martin. In addition to
TRW's investment, Lockheed Martin Global Telecommunications will invest $400
million, and Telespazio, a Telecom Italia Group Company, will invest $250
million. With this funding, Astrolink will commence construction of a system
that will make it the world's first global, on-demand, wireless broadband
service provider, scheduled to offer service in 2003.

Astrolink will focus on the high-growth area of broadband data services,
carrying traffic for Internet, intranet, multimedia and corporate data networks.
TRW will build the digital, packet-switched communications payloads for 
Astrolink's satellites, and will have the opportunity to be an Astrolink



                                       14


<PAGE>   16



service provider. TRW's $250 million investment will be made in five
installments over the next eighteen months.

BDM International, Inc.
During 1997, the Company acquired BDM International, Inc., resulting in a charge
for in-process research & development of $548 million. To date, several
commercial projects, including the Web-enabled warehouse and distribution
project, have been delayed about one year due to the following circumstances:
competitive pressures in the information technology markets requiring different
or added functionality; delay in industry standards to be enacted by third
parties; change in internal project staffing; and increased focus on Year 2000
compliance by customers. The costs to complete the projects are substantially
unchanged from the assumptions used in the valuation.

The Company anticipates that these projects will be successfully developed;
however, there can be no assurance that the products will be viable in the
rapidly changing commercial marketplace.


LIQUIDITY AND FINANCIAL POSITION

In the first quarter of 1999, a net increase in debt of $1,049 million was used
to fund open market purchases of LucasVarity's Ordinary Shares of $519 million,
operating activities of $134 million, capital expenditures of $111 million,
dividend payments of $40 million, acquisitions of $36 million and other items of
$8 million. As a result, cash and cash equivalents increased by $201 million. In
addition, the Company received $774 million of cash and cash equivalents as part
of the LucasVarity acquisition.

Net debt (short-term debt, the current portion of long-term debt, long-term debt
and the payables for LucasVarity less cash and cash equivalents) was $9.4
billion at March 31, 1999, compared to $2.1 billion at December 31, 1998. The
ratio of net debt to total capital (net debt, minority interests and
shareholders' investment) was 83 percent at March 31, 1999, compared to 52
percent at December 31, 1998.

During the first quarter of 1999, the Company incurred short-term borrowings of
approximately $519 million to finance the purchase of LucasVarity's Ordinary
Shares on the open market. In addition, a $6.3 billion payable was incurred for
LucasVarity shares tendered into the offer. During April 1999, the Company
settled a significant portion of the payable for LucasVarity shares by issuance
of commercial paper.

At March 31, 1999, $3.6 billion of short-term obligations, primarily payable for
LucasVarity tendered shares, were reclassified to long-term obligations as the
Company intends to refinance the obligations on a long-term basis and has the
ability to do so under its existing credit agreements.

The Company received fully underwritten financing for the acquisition of
LucasVarity in the form of a $7.4 billion two-tranche credit agreement with 59
banks. Tranche one of $3.7 billion expires December 31, 1999 and the second
tranche expires January 26, 2000 with an option to extend the maturity of up to
$2 billion of borrowings to January 26, 2001. The interest rates under the
agreement are the prime rate and a rate based on a London Interbank Offered
Rate. At March 31, 1999, there were no outstanding borrowings under this
agreement. Issuance of long-term debt securities in the public or private
capital markets and the net proceeds from divestitures, among other things,
reduce the amount of the commitments by 100 percent under tranche one until it
is zero and then by 50 percent under tranche two, with a maximum reduction under
tranche two of $1.7 billion.

During the first quarter of 1999, the Company amended the terms of its $750
million and $745 million U.S. revolving credit agreements and its $250 million
multicurrency revolving credit agreement to change commitment fees, borrowing
margins and other key terms and conditions to conform to the terms of the $7.4


                                       15



<PAGE>   17



billion agreement. In addition, the expiration date of the $745 million
agreement was extended from December 6, 1999 to January 26, 2000, with the
provision that the Company may extend the date to January 26, 2001.

No securities were issued under the Universal Shelf Registration Statement
during the first quarter of 1999.

As a result of the debt incurred for the LucasVarity acquisition, ratings on
TRW's short and long-term debt were lowered. Moody's Investors Service has rated
the Company's commercial paper at P-2 and senior unsecured debt at Baa1.
Standard & Poor's has rated the Company's commercial paper at A-2 and senior
unsecured debt at BBB. These rating changes are not expected to have a material
impact on the Company's financial position.

On May 17, 1999, the Company announced that it will divest its engine
businesses, which consist of TRW Engine Components and Lucas Diesel System
operations; TRW Nelson Stud Welding; and the LucasVarity Wiring companies. The
estimated net proceeds from these divestitures of $1.2 to $1.5 billion will be
applied to reduce debt incurred to finance the acquisition of LucasVarity. The
Company has established a goal of reducing its net debt by approximately $2.5
billion, including the effects of these divestitures, during the next 18 months.

Management believes the Company's current financial position and financing
arrangements, including financing for the acquisition of LucasVarity, allow
flexibility in worldwide financing activities and permit the Company to respond
to changing conditions in credit markets. Management believes that funds
generated from operations, the divestiture program and existing borrowing
capacity are adequate to fund capital expenditures, working capital including
tax requirements, company-sponsored research and development programs, dividend
payments to shareholders and the acquisition of LucasVarity.


OTHER MATTERS

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. 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.

During 1996, the Company was advised by the United States Department of Justice
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.





                                       16

<PAGE>   18


Year 2000

A company-wide Year 2000 (Y2K) compliance program has been implemented to
determine Y2K issues and assure Y2K compliance. The Company's Y2K compliance
program now encompasses the Y2K program of LucasVarity, which was recently
acquired by TRW. The compliance program has four major areas: internal computer
systems, factory floor systems, supplier and service management and products and
contracts.

The general phases 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 complete. Conversion, Upgrade and Renovation are essentially complete with
the remainder of the Y2K compliance program scheduled to be complete by year-end
1999, except for certain Y2K upgrades for nonmaterial and low priority items.

The 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 80 percent of TRW's
internal computer systems are Y2K compliant and expects the remaining systems to
be Y2K compliant by the end of the second quarter 1999. The Company estimates
that 95 percent of LucasVarity's internal computer systems are Y2K compliant and
expects the remaining systems to be Y2K compliant by the end of July 1999. The
Company expects to develop the majority of critical contingency plans for these
systems during the second quarter 1999 and the remainder during the third
quarter 1999.

The factory floor systems are comprised of manufacturing and warehousing
equipment. The Company estimates that 90 percent of TRW's factory floor systems
are Y2K compliant and expects the remaining systems to be Y2K compliant by the
end of the second quarter of 1999. The Company estimates that 95 percent of
LucasVarity's factory floor systems are Y2K compliant and expects the remaining
systems to be Y2K compliant by the end of July 1999. The Company expects to
develop the majority of critical contingency plans for these systems during the
second quarter 1999 and the remainder during the third quarter 1999.

The Company is continuing to evaluate Y2K issues associated with suppliers to
TRW's Automotive business by working with the Automotive Industries Action Group
(AIAG), which consists of several of TRW's largest automotive customers and
suppliers. The AIAG sent self-assessment surveys to approximately 15,000 TRW
suppliers, of which about 3,900 are critical to TRW's automotive business. The
Company is validating the critical suppliers' state of Y2K readiness and
evaluating the risk to the Company by reviewing the self-assessment surveys and
by conducting telephone surveys, workshops or on-site visits for selected
critical suppliers. The Company estimates that 65 percent of the critical
automotive suppliers' Y2K readiness has been validated and expects the
validation of the remaining critical suppliers to be completed during the second
quarter 1999. Service providers' Y2K readiness is also being validated. The
Company is currently developing critical contingency plans for suppliers and
service providers and will continue this activity throughout 1999. Such plans
consider alternate sourcing, stockpiling of inventory and supplies and disaster
recovery scenarios.

Y2K certification requests were sent to approximately 8,200 suppliers and
service providers to TRW's space, defense and information systems businesses, of
which about 1,200 are considered critical. Approximately 85 percent of those
critical suppliers have certified Y2K compliance and the Company expects the
remaining critical suppliers to respond during the second quarter 1999. The
Company also expects the majority of critical contingency plans to be developed
by the end of the second quarter 1999.

Approximately 5,500 of LucasVarity's 20,000 automotive and aerospace suppliers
and service providers are critical to its business. Each critical supplier and


                                       17





<PAGE>   19



service provider is being contacted and their state of Y2K readiness is being
validated. LucasVarity has received responses from approximately 98 percent of
its critical suppliers and service providers, and these responses have been
reviewed to determine what, if any, follow up actions may be necessary.
Suppliers and service providers assessed as being high risk, or of particular
significance to the business, have been reviewed further to evaluate the risks
to LucasVarity. As a result, LucasVarity has provided support to certain
suppliers and service providers for their compliance efforts and has re-sourced
a number of critical material and component suppliers. The validation and
contingency planning related to LucasVarity's suppliers and service providers
will be essentially complete by the end of July 1999.

The Company has assessed the products of the existing TRW automotive business
and determined that there should be no Y2K issues. Also, LucasVarity has
assessed its automotive and aerospace products and determined that there should
be no Y2K issues.

Contracts entered into by TRW's space, defense and information systems
businesses after January 1, 1996 and contract modifications entered into after
January 1, 1996 that add major scope to earlier contracts have been assessed.
Approximately 440 contracts were identified to have a potential Y2K impact. The
Company has determined that 410 of these contracts have Y2K impacts; however,
the customer and TRW have agreed that renovation, if any, will be funded by the
customer. For the remaining 30 contracts, communications continue with the
customers to determine whether there is a Y2K impact and to develop mutually
acceptable renovation plans, if necessary. The Company expects renovations and
critical contingency planning to be performed throughout 1999.

As part of a continuing process under the Y2K program, issues are being assessed
as they are identified, using formal program reviews to assess progress and
initiate required actions. As the Company's Y2K compliance program proceeds,
contingency plans are being 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 key suppliers will not be Y2K compliant and the risk that space,
defense and information systems' contracts will have unanticipated Y2K-related
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 address their Y2K issues successfully.

The total cost of the Company's Y2K compliance program including LucasVarity is
estimated to be $202 million and includes $99 million for capitalizable costs
and $103 million of costs that are being expensed as incurred. The increase in
the total cost of the Y2K compliance program is due to the acquisition of
LucasVarity. TRW and LucasVarity have expensed approximately $70 million to
date, of which approximately $19 million was expensed by LucasVarity prior to
the acquisition. The Company expects to expense an additional $26 million
throughout the remainder of 1999. The Company does not anticipate that the
overall costs of the Company's Y2K compliance program will have a material
effect on the Company's financial results or financial condition.

The dates of completion and the costs of the Company's Y2K 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 Company's
Y2K program differ materially from those anticipated, the Company's


                                       18


<PAGE>   20



financial results and financial condition could be materially adversely
affected.


Euro Conversion

On December 31, 1998, certain member countries of the European Union irrevocably
fixed the conversion rates between their national currencies and a common
currency, the "Euro," which became their legal currency on January 1, 1999. 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 evaluated the business implications of conversion to the Euro,
including the need to adapt internal systems to accommodate Euro-denominated
transactions, including receipts and payments, the competitive implications of
cross-border price transparency and other strategic implications. The Company's
primary customers in the automotive industry in Europe are expected to require
Euro invoicing during 1999. Invoicing and other business functions will be
Euro-capable by the end of the transition period but may be converted earlier
where operationally efficient or cost-effective or to meet customer
requirements. The Company's exposure to foreign currency risk and the related
use of derivative contracts to mitigate that risk is expected to be reduced as a
result of conversion to the Euro.

The Company does not expect the conversion to the Euro to have a material effect
on its financial condition or results of operations.

Forward-Looking Statements

Statements in this filing that are not statements of historical fact are
forward-looking statements. In addition, from time to time, TRW and its
representatives may make statements that are forward-looking. All
forward-looking statements involve risks and uncertainties. This section
provides readers with cautionary statements identifying, for purposes of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995,
important factors that could cause TRW's actual results to differ materially
from those contained in forward-looking statements made in this filing or
otherwise made by, or on behalf of, TRW.


The following are some of the factors that could cause actual results to differ
materially from estimates contained in TRW's forward-looking statements:

Our consolidated results could be affected by: the continued development of and
demand for new products; the ability to continue technical innovation;
availability of funding for research and development; the ability to
successfully identify and integrate acquisitions; pricing pressures from
customers; pricing pressures resulting from the European Economic Union's
conversion to a single currency; the ability to reduce the level of outstanding
debt; the ability to achieve targeted proceeds from the dispositions planned in
our automotive business; the ability to generate targeted cash flow from
operations; the ability to effectively implement the company-wide Y2K compliance
program in accordance with the estimated timetable and costs described herein;
the introduction of competing products or technology by competitors; the ability
to meet performance and delivery requirements on systems for customers; the
economic, regulatory and political instability of certain emerging countries;
economic conditions in Brazil and Asia; the effects of changes in laws and
regulations as they relate to the Company's businesses; foreign exchange rates;
the cost and availability of funds; interest rate risk; the impact of legal
proceedings; and the ability to attract and retain skilled employees with
high-level technical competencies.


                                       19


<PAGE>   21
Our automotive business also could be affected by: the ability to effectively
implement our automotive restructuring program and improve automotive margins;
changes in consumer debt levels and interest rates; the cyclical nature of the
automotive industry; moderation or decline in the automobile build rate;
successful new product launches; the ability to achieve cost reductions; work
stoppages; customer warranty claims; changes to the regulatory environment
regarding automotive safety; and our ability to increase the vehicle content of
our products per vehicle.


Our aerospace and information systems business also could be affected by: the
level of defense funding by the government; our ability to receive contract
awards; the termination of existing government contracts; and the ability to
develop and market products and services for customers outside of the
traditional aerospace and information systems markets.


Certain statements contained in this filing or otherwise made by or on behalf of
TRW regarding the purchase of LucasVarity, particularly those regarding
synergies, future performance and costs, depend on certain events, risks and
uncertainties that may be outside of TRW's control. Factors that could cause
actual operating results to differ materially from those described in such
forward-looking statements include: unanticipated events and circumstances that
may occur and render the transaction less beneficial to TRW than anticipated;
intense competition in our markets that make it impossible to guarantee that we
will achieve the expected financial and operating results and synergies; and the
ability of TRW to integrate LucasVarity into its operations and thereby achieve
the anticipated cost savings and be in a position to take advantage of potential
growth opportunities.


The foregoing list of important factors is not exclusive.


We caution you that any forward-looking statement reflects only the beliefs of
TRW or its management at the time the statement is made. The Company undertakes
no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the statement was made.

                                      20


<PAGE>   22

Item 3.    Quantitative and Qualitative Disclosures about Market Risk
           ----------------------------------------------------------

The Company is subject to inherent risks attributed to operating in a global
economy. It is the Company's policy to utilize derivative financial instruments
to manage its interest rate and foreign currency exchange rate risks. When
appropriate, the Company uses derivatives to hedge its exposure to short-term
interest rate changes as a lower cost substitute for the issuance of fixed-rate
debt. The Company manages cash flow transactional foreign exchange risk pursuant
to a written corporate policy. Forward contracts and, to a lesser extent,
options are utilized to protect the Company's cash flow from adverse movements
in exchange rates. Also, at certain times, the Company may use interest rate
agreements in the management of interest rate exposure on debt issuances.

The Company is exposed to credit loss in the event of nonperformance by the
other party to the derivative financial instruments. The Company limits this
exposure by entering into agreements with a number of major financial
institutions that meet credit standards established by the Company and that are
expected to satisfy fully their obligations under the contracts. Derivative
financial instruments are viewed by the Company as a risk management tool and
are not used for speculative or trading purposes.

Based on the Company's interest rate exposure on variable rate borrowings at
March 31, 1999, a one-percentage-point increase in the average interest rate on
the Company's variable rate borrowings would increase future interest expense by
approximately $2 million per month.

Based on the Company's exposure to foreign currency exchange rate risk resulting
from derivative foreign currency instruments outstanding at March 31, 1999, a 10
percent uniform strengthening in the value of the U.S. dollar relative to the
currencies in which those derivative foreign currency instruments are
denominated would result in a loss of $91 million.

Based on the Company's interest rate exposure with regard to the issuance of
debt at March 31, 1999, a 10 percent decrease in the market rate at March 31,
1999 on the Company's forward starting interest rate swaps would result in a
loss of $37 million.

The Company's sensitivity analyses of the effects of changes in foreign currency
exchange rates do not reflect the effect of such changes on the related hedged
transactions or on other operating transactions. The Company's sensitivity
analyses of the effects of changes in interest rates and foreign currency
exchange rates do not factor in a potential change in the level of variable rate
borrowings or derivative instruments outstanding that could take place if these
hypothetical conditions prevailed.

Refer to the "Foreign Exchange Contracts" and the "Interest Rate Swap
Agreements" footnotes in the Notes to Financial Statements for further
discussion of derivative instruments as of March 31, 1999.






                                       21

<PAGE>   23


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.
         ------------------

During 1996, the United States Department of Justice, or the DOJ, advised the
Company that it had been named as a defendant in two lawsuits brought by Richard
D. Bagley, a former employee of the Company's former Space & Technology Group,
and 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, Bagley
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 certain additional allegations. 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, Bagley withdrew the first amended complaint in the 1994 lawsuit at the
request of the DOJ. On May 18, 1998, the Company filed answers to Bagley's first
amended complaint in the 1995 lawsuit and to the DOJ's complaint, denying all
substantive allegations contained therein. At the same time, the Company filed
counterclaims against both Bagley and the federal government. On July 20, 1998,
both Bagley and the DOJ filed motions seeking to dismiss the Company's
counterclaims. On November 23, 1998 (entered as an Order on January 21, 1999),
the court dismissed certain counterclaims asserted against Bagley and the
federal government and took under advisement Bagley's motion to dismiss certain
other counterclaims. On March 15, 1999, the DOJ was granted leave to file a
First Amended Complaint, which adds certain allegations concerning the Company's
subcontracts. 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.

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

(a)      Exhibits:

         10.1       Amendment dated as of March 25, 1999 to the Revolving Credit
                    Agreement dated as of December 10, 1997 and amended as of
                    December 8, 1998 among TRW Inc. and various financial 
                    institutions

         10.2       Amendment dated as of March 25, 1999 to the Multi-Year
                    Revolving Credit Agreement dated as of July 1, 1992 and
                    amended and restated as of May 8, 1996 and amended as of 
                    August 7, 1997 among TRW Inc. and various financial 
                    institutions

         10.3       Letter Agreement between TRW Inc. and Peter S. Hellman

         27         Financial Data Schedule





                                       22

<PAGE>   24


         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:

         Current Report on Form 8-K, dated January 28, 1999, announcing that TRW
         Inc. and LucasVarity plc had reached agreement on the terms of a
         recommended cash offer to be made on behalf of TRW Inc. to acquire the
         entire issued share capital of LucasVarity plc.

         Current Report on Form 8-K, dated February 5, 1999, disclosing the
         audited financial statements of TRW Inc. for the fiscal year ended
         December 31, 1998.

         Current Report on Form 8-K, dated March 26, 1999, reporting that the
         offer to acquire the entire issued share capital of LucasVarity plc was
         declared unconditional in all respects on March 25, 1999.

















                                       23

<PAGE>   25


                                   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:  May 17, 1999                 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