<PAGE>

                                   FORM 10-Q


                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   (Mark One)

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

               For the quarterly period ended September 30, 2000

                                       OR

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

                   For the transition period from ______ to _____

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


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

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



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

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

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

           As of October 25, 2000, there were 124,346,127 shares of
               TRW Common Stock, $0.625 par value, outstanding.
<PAGE>

PART I.           FINANCIAL INFORMATION

Item 1.  Financial Statements
         --------------------



<TABLE>
<CAPTION>
Statements of Operations (unaudited)
TRW Inc. and subsidiaries
---------------------------------------------------------------------------------------------------------------------
                                                              Third quarter ended             Nine months ended
                                                                 September 30                    September 30
In millions except per share data                             2000           1999             2000          1999
------------------------------------------------------------------------------------     ----------------------------
<S>                                                         <C>            <C>           <C>             <C>
Sales                                                       $4,053         $4,462          $13,094       $12,344
Cost of sales                                                3,475          3,567           10,974        10,191
------------------------------------------------------------------------------------     ----------------------------
Gross profit                                                   578            895            2,120         2,153

Administrative and selling expenses                            237            308              815           823
Research and development expenses                              121            159              351           408
Purchased in-process research and
  development                                                    -              -               12            85
Interest expense                                               131            149              393           334
Amortization of goodwill and intangible assets                  38             40              106            81
Other (income)expense-net                                        1             28             (263)          (13)
------------------------------------------------------------------------------------     ----------------------------
Earnings before income taxes                                    50            211              706           435
Income taxes                                                    18             77              265           190
------------------------------------------------------------------------------------     ----------------------------
Net earnings                                                $   32         $  134          $   441       $   245
------------------------------------------------------------------------------------     ----------------------------

------------------------------------------------------------------------------------     ----------------------------
Per share of common stock
  Diluted earnings per share                                $ 0.26         $ 1.08          $  3.52       $  1.99
  Basic earnings per share                                  $ 0.26         $ 1.10          $  3.58       $  2.03
  Dividends declared                                        $  .33         $  .33          $   .66       $   .66
------------------------------------------------------------------------------------     ----------------------------

------------------------------------------------------------------------------------     ----------------------------
Shares used in computing per share
  amounts
     Diluted                                                 125.0          124.0            125.1         123.4
     Basic                                                   123.5          121.4            123.0         120.7
------------------------------------------------------------------------------------     ----------------------------
</TABLE>

                                       1
<PAGE>

<TABLE>
<CAPTION>
Balance Sheets (unaudited)
TRW Inc. and subsidiaries
------------------------------------------------------------------------------------------------------------------------------
                                                                                              September            December 31
In millions                                                                                        2000                   1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>                  <C>
Assets
Current assets
  Cash and cash equivalents                                                                     $   298                $   228
  Accounts receivable                                                                             2,395                  2,480
  Inventories                                                                                       958                  1,039
  Prepaid expenses                                                                                  125                    202
  Net assets of acquired businesses held for sale                                                     -                    827
  Deferred income taxes                                                                             329                    423
------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                              4,105                  5,199

Property, plant and equipment-on the basis of cost                                                7,831                  8,026
  Less accumulated depreciation and amortization                                                  4,289                  4,132
------------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment-net                                                           3,542                  3,894

Intangible assets
  Goodwill                                                                                        3,810                  3,743
  Other intangible assets                                                                           939                    948
------------------------------------------------------------------------------------------------------------------------------
                                                                                                  4,749                  4,691
  Less accumulated amortization                                                                     467                    360
------------------------------------------------------------------------------------------------------------------------------
Total intangible assets-net                                                                       4,282                  4,331

Investments in affiliated companies                                                               1,064                  1,185
Other notes and accounts receivable                                                                 306                    257
Prepaid pension cost                                                                              2,817                  2,876
Other assets                                                                                        566                    524
------------------------------------------------------------------------------------------------------------------------------
                                                                                                $16,682                $18,266
------------------------------------------------------------------------------------------------------------------------------

Liabilities and shareholders' investment
Current liabilities
  Short-term debt                                                                               $ 1,578                $ 2,444
  Trade accounts payable                                                                          1,677                  1,638
  Current portion of long-term debt                                                                 513                    758
  Other current liabilities                                                                       2,069                  1,889
------------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                         5,837                  6,729

Long-term liabilities                                                                             2,031                  1,991
Long-term debt                                                                                    4,835                  5,369
Deferred income taxes                                                                             1,017                  1,352
Minority interests in subsidiaries                                                                  199                    113

Capital stock                                                                                        78                     76
Other capital                                                                                       472                    465
Retained earnings                                                                                 2,658                  2,312
Treasury shares-cost in excess of par value                                                        (472)                  (549)
Accumulated other comprehensive income(loss)                                                         27                    408
------------------------------------------------------------------------------------------------------------------------------
Total shareholders' investment                                                                    2,763                  2,712
------------------------------------------------------------------------------------------------------------------------------
                                                                                                $16,682                $18,266
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
Statements of Cash Flows (unaudited)
TRW Inc. and subsidiaries
------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Nine months ended
                                                                                                      September 30
In millions                                                                                        2000              1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                              <C>              <C>
Operating activities
Net earnings                                                                                    $   441           $   245
Adjustments to reconcile net earnings to net cash
   provided by operating activities:
      Depreciation and amortization                                                                 620               585
      Purchased in-process research and development                                                  12                85
      ICO Global investment write-off                                                                 -                79
      Air bag facilities consolidation                                                               55                 -
      Gain on sale of nonoperating assets                                                          (239)             (112)
      Gain on Endwave merger                                                                        (57)                -
      Pension income                                                                               (190)             (128)
      Deferred income taxes                                                                          72               (76)
      Other-net                                                                                      32                49
Changes in assets and liabilities, net of effects of
   businesses acquired or sold:
      Accounts receivable                                                                           (64)               95
      Inventories                                                                                     3                53
      Trade accounts payable                                                                        130              (106)
      Prepaid expenses and other liabilities                                                         32               366
      Other-net                                                                                     (54)               15
-------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                           793             1,150
-------------------------------------------------------------------------------------------------------------------------

Investing activities
Net proceeds from divestitures                                                                    1,431               157
Capital expenditures including other intangibles                                                   (475)             (540)
Acquisitions, net of cash acquired                                                                   21            (6,083)
Other-net                                                                                           (79)             (169)
-------------------------------------------------------------------------------------------------------------------------
Net cash provided by(used in) investing activities                                                  898            (6,635)
-------------------------------------------------------------------------------------------------------------------------
Financing Activities
(Decrease)increase in short-term debt                                                              (964)            1,784
Proceeds from debt in excess of 90 days                                                           1,283             5,923
Principal payments on debt in excess of 90 days                                                  (1,897)           (1,772)
Dividends paid                                                                                     (123)             (120)
Other-net                                                                                            40               (30)
-------------------------------------------------------------------------------------------------------------------------
Net cash (used in)provided by financing activities                                               (1,661)            5,785
-------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash flows                                                        40               (89)
-------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                                                70               211
Cash and cash equivalents at beginning of period                                                    228                83
-------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                                      $   298           $   294
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       3

<PAGE>

<TABLE>
<CAPTION>
Operating Segments (unaudited)
TRW Inc. and subsidiaries
----------------------------------------------------------------------------------------------------------------------------------
                                                            Third quarter ended                         Nine months ended
                                                                September 30                              September 30
In millions                                                 2000           1999                      2000              1999
-------------------------------------------------------------------------------------         ------------------------------------
<S>                                                        <C>            <C>                 <C>                     <C>
Sales
   Occupant Safety Systems                                 $  639         $  694                   $ 2,127            $ 2,268
   Chassis Systems                                          1,301          1,436                     4,340              3,588
   Automotive Electronics                                     378            330                     1,287              1,187
   Other Automotive                                           179            477                       671              1,152
   Space & Electronics                                        463            498                     1,416              1,412
   Systems & Information Technology                           836            745                     2,447              2,155
   Aeronautical Systems                                       257            282                       806                582
-------------------------------------------------------------------------------------         ------------------------------------
Sales                                                      $4,053         $4,462                   $13,094            $12,344
-------------------------------------------------------------------------------------         ------------------------------------


Profit(loss) before taxes
   Occupant Safety Systems                                 $  (19)        $   45                   $    54            $   138
   Chassis Systems                                             67             91                       258                195
   Automotive Electronics                                      11             30                        76                 78
   Other Automotive                                             7             35                        89                 85
   Space & Electronics                                         41             17                       411                239
   Systems & Information Technology                            57             54                       181                112
   Aeronautical Systems                                        35             33                       101                 65
-------------------------------------------------------------------------------------         ------------------------------------
                                                              199            305                     1,170                912

Purchased in-process research and
   development                                                  -              -                       (12)               (85)
Corporate expense and other                                   (69)             6                      (218)              (141)
Pension income                                                 52             61                       163                119
Financing costs                                              (132)          (161)                     (397)              (370)
-------------------------------------------------------------------------------------         ------------------------------------
Earnings before income taxes                               $   50         $  211                   $   706            $   435
-------------------------------------------------------------------------------------         ------------------------------------
</TABLE>

                                       4
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited)


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

The financial statements include the accounts of the Company and its
subsidiaries. Investments in affiliated companies are accounted for by the
equity or cost method as appropriate. The consolidated financial statements
reflect the allocation of the purchase price for LucasVarity Limited
(LucasVarity), formerly known as LucasVarity plc, and the consolidated results
of LucasVarity's operations and cash flows subsequent to the date of
acquisition, March 25, 1999.


Cash and Cash Equivalents
-------------------------

Cash and cash equivalents consist of the following:

                                               September 30        December 31
(In millions)                                          2000               1999
                                              --------------------------------
Cash and cash equivalents                             $ 228              $ 228
Short-term securities                                    70                  -
                                                      -----              -----
Total cash and cash equivalents                       $ 298              $ 228
                                                      -----              -----

The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.  Short-term securities are stated
at fair value based on quoted market prices.


Acquisitions
------------

Endwave Corporation

On March 31, 2000, Endgate Corporation merged with TRW Milliwave Inc., a wholly-
owned subsidiary of the Company.  Endgate was the surviving corporation in the
merger and changed its name to Endwave Corporation.  The financial statements of
Endwave are consolidated with the Company's financial statements as the Company
has a 52.6 percent majority ownership interest in Endwave as of September 30,
2000.

The merger was accounted for as a purchase. Assets and liabilities of Endgate
were recorded at their respective fair values by an independent appraisal. In-
process research and development was determined using the income approach under
the proportional method.

The purchase price allocation resulted in $12 million, $6 million after the
effect of minority interest, for the fair value of five acquired in-process
research and development projects that had not reached technological feasibility
and had no alternative future use; $16 million for core and developed
technology; $7 million for other identifiable intangible assets; $25 million for
operating assets and liabilities; and goodwill of approximately $79 million.

Goodwill and identifiable intangible assets are being amortized on a straight-
line basis over six years.

The Company recorded a net gain of $53 million, $35 million after tax, for the
excess of fair value of the Company's ownership interest in Endgate that
exceeded the book value of Milliwave.

In October 2000, Endwave completed an initial public offering and as a result
the Company's ownership interest is approximately 43 percent.  The investment
will be accounted for on the equity method.

                                       5
<PAGE>

LucasVarity

On March 25, 1999, the Company acquired LucasVarity for approximately $6.8
billion in cash and assumed net debt. The transaction was accounted for as a
purchase. Assets and liabilities have been recorded based on their respective
fair values. The 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 and $517 million for identifiable intangible assets
including intellectual property and workforce. The purchase price allocation
also included incremental fair value adjustments of approximately $1.5 billion
for prepaid pension cost, primarily from an overfunded pension plan, $200
million for the valuation of fixed rate debt and the write-up of inventory of
$30 million and fixed assets of $137 million.

Total restructuring costs for the automotive, aerospace and corporate
LucasVarity businesses, primarily severance, recorded in the purchase price
allocation were $108 million, of which $29 million was paid in 1999 and $11
million and $26 million were paid in the third quarter of 2000 and nine months
ended September 30, 2000, respectively. The balance of $53 million is expected
to be paid during the fourth quarter of 2000 through the fourth quarter of 2001.

The final allocation of the purchase price is summarized as follows:

(In millions)
-------------------------------------------------------------------------------
Cash purchase price                                                     $ 6,715

Cash and cash equivalents                                                   781
Accounts receivable                                                         883
Inventory                                                                   529
Net assets of businesses held for sale                                      872
Prepaid expenses                                                            137
Current deferred income taxes                                               105
Property, plant and equipment                                             1,248
Intangible assets                                                           517
Prepaid pension costs                                                     2,399
Other assets                                                                523
-------------------------------------------------------------------------------
                                                                          7,994

Accounts payable                                                           (700)
Other accruals                                                           (1,235)
Debt                                                                       (877)
Long-term liabilities                                                      (790)
Long-term deferred income taxes                                            (701)
-------------------------------------------------------------------------------
                                                                         (4,303)

Minority interest                                                           (28)

Purchased in-process research and development                                85
-------------------------------------------------------------------------------
Goodwill                                                                $ 2,967
-------------------------------------------------------------------------------

Goodwill is being amortized on a straight-line basis over 40 years. Identifiable
intangible assets are being amortized on a straight-line basis over useful lives
ranging from 5 to 30 years.

The following pro forma financial information for the nine months ended
September 30, 1999, assumes the LucasVarity acquisition occurred as of the
beginning of the period, after giving effect to certain adjustments, including
the amortization of intangible assets, interest expense on acquisition debt,
depreciation based on the adjustments to the fair market value of the property,
plant and equipment acquired, write-off of purchased in-process research and
development, incremental pension income and related income tax effects. The pro
forma results have been prepared for informational purposes only and are not
necessarily indicative of the results of operations which may occur in the
future or that would have occurred had the acquisition of LucasVarity been
effected on the date indicated.  The pro forma results do not include the

                                       6
<PAGE>

effects of companies divested subsequent to the date of acquisition.  The
consolidated statement of operations for the quarter ended September 30, 2000
and 1999, and the nine months ended September 30, 2000, reflects LucasVarity's
operations.

                                                             Nine months ended
(In millions except per share data)                         September 30, 1999
-------------------------------------------------------------------------------
Sales                                                                $13,970
Net earnings                                                             400
Diluted earnings per share                                              3.24
-------------------------------------------------------------------------------


Restructurings
--------------

On July 29, 1998, the Company announced actions intended to enhance the legacy
TRW automotive businesses' profit margin, which would result in pre-tax charges
of up to $150 million by the end of 2000. Legacy TRW automotive refers to the
Company's automotive businesses prior to the acquisition of LucasVarity. To
date, the Company has recorded restructuring expenses of $147 million, of which
$14 million was recorded in the third quarter of 2000 and $43 million in the
nine months ended September 30, 2000. The Company expects to record
approximately $15 million in the fourth quarter of 2000, which will complete the
program. Other accruals at September 30, 2000 and December 31, 1999 are $36
million and $35 million, respectively, relating to severance costs and plant
closings. During the third quarter of 2000, $3 million was used for severance
payments and $8 million was used for plant closings. For the nine months ended
September 30, 2000, $11 million was used for severance payments and $31 million
was used for plant closings. The balance of $36 million will be used primarily
for severance costs and plant closings during the fourth quarter of 2000 and the
first half of 2001.

In addition, during the third quarter of 2000, the Company announced plans to
consolidate operations of its Mesa air bag manufacturing facilities.  As result
of this decision, the Company recorded an asset impairment and a restructuring
charge of approximately $52 million and $3 million, respectively, in Cost of
Sales.  A comparison of projected future cash flows for the Mesa I facility and
the carrying value of the assets indicated that the assets were impaired.
Property, plant and equipment were written down to fair value on the basis of
discounted estimated future cash flows and future salvage value of the assets.
Included in the restructuring charge are costs associated with future lease
obligations.  The Company expects the restructuring plan to be completed by the
first half of 2002.


Forward Exchange Contracts
--------------------------

The Company enters into forward exchange contracts that hedge firm foreign
currency commitments, anticipated transactions and certain intercompany
transactions. At September 30, 2000, the Company had contracts outstanding with
a notional amount of $1 billion denominated principally in the U.S. dollar, the
Euro, the Canadian dollar, the French franc and the British pound, maturing at
various dates through January 2007.

The combined fair market value of the forward exchange contracts was a liability
of approximately $10 million at September 30, 2000. The fair market value of
forward contracts at December 31, 1999 was an asset of $75 million. Changes in
market value of the contracts that hedge firm foreign currency commitments and
intercompany transactions are generally included in the basis of the
transactions. Changes in the market value of the contracts that 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.

                                       7
<PAGE>

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

In addition to the $525 million interest rate swaps outstanding at December 31,
1999 of which $100 million was forward starting, the Company entered into four
$50 million forward-starting fixed interest rate swaps as a hedge of future
long-term debt issuance during the first quarter of 2000.

During the second quarter of 2000, the Company entered into a $50 million
forward-starting fixed interest rate swap as a hedge of future long-term debt
issuance.  In connection with the issuance of $500 million of 8.75% Notes due
2006, the Company terminated $250 million of forward-starting fixed interest
rate swaps at a gain of $7 million.  The gain will be amortized over the life of
the long-term debt issued as a reduction of interest expense.

During the third quarter of 2000, the Company's obligation on two $50 million
forward-starting fixed interest rate swaps was changed to two $50 million
floating-to-fixed interest rate swaps.

The fair market value of the total outstanding interest rate swap agreements is
a liability of approximately $6.1 million at September 30, 2000.  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.
The Company anticipates that the financial institutions will satisfy their
obligations under the agreements.  No collateral is held in relation to the
agreements.


Forward Sale Agreements
-----------------------

During the first quarter of 2000, the Company monetized 2 million shares of its
holdings in RF Micro Devices, Inc. (RFMD) through the execution of three forward
sale agreements maturing in February 2003, August 2003 and February 2004.
During August 2000, RFMD effected a 2-for-1 stock split, thereby doubling the
number of shares currently held by the Company.  The Company received cash
proceeds of $168 million in consideration for its agreement to deliver up to 4
million shares of RFMD common stock, in the aggregate, upon maturity of the
contracts.  The actual number of shares to be delivered upon maturity of each
agreement will be determined on the basis of a formula set forth in the
agreements, comparing the average closing price of the shares for the five
trading days preceding the maturity date to the floor price per share.  The
proceeds from the transactions were used to pay down short-term debt.  The up-
front proceeds were reduced by a discount of approximately $48 million and will
be amortized as interest expense using the effective interest rate method over
the life of the agreements.  Through the setting of a floor and ceiling price,
the forward sales agreements eliminate the Company's exposure to downside market
risk, and at the same time, enable the Company to retain potential market
appreciation up to the respective ceiling price.  Certain terms of the
agreements, as restated for the 2-for-1 stock split, are summarized below:


                               February 2003     August 2003      February 2004
                                   Agreement       Agreement          Agreement
--------------------------------------------------------------------------------
Number of shares                   1,333,334       1,333,334          1,333,332
Floor price per share                    $54             $54                $54
Ceiling price per share                   79              86                 93
Up-front proceeds as a
   percent of floor price                80%             78%                75%
--------------------------------------------------------------------------------

The investment in RFMD and the monetization liability are carried at fair market
value.  Changes in fair market value of the Company's shares of RFMD, including
the 4 million shares monetized, which are limited to changes in stock price
between the floor and ceiling, are recorded in the Other Comprehensive
Income(Loss) component of Shareholders' Investment.

                                       8
<PAGE>

Prior to the 2-for-1 stock split, the Company sold 2.2 million shares of RFMD
common stock for $181 million during the first quarter of 2000 and 422,500
shares were sold for $44 million during the second quarter of 2000. At September
30, 2000, the Company owned approximately 23 million shares, including the 4
million shares the Company pledged to secure its obligations under the forward
sales agreements. The fair value of the Company's investment in RFMD at
September 30, 2000 was approximately $736 million and has been reflected in the
balance sheet of the Company in Investments in Affiliated Companies.

During the third quarter of 2000, the Company monetized its holdings of 229,354
shares in PE Corporation-Celera Genomics Group (Celera) through the execution of
a forward sale agreement maturing in December 2003. The Company received cash
proceeds of $18.6 million in consideration for its agreement to deliver up to
229,354 shares of Celera common stock, in the aggregate, upon maturity of the
contract. The actual number of shares to be delivered upon maturity will be
determined on the basis of a formula set forth in the agreement, comparing the
closing price of the shares on the maturity date to the floor price per share.
The proceeds from the transaction were used to pay down short-term debt. The up-
front proceeds were 80% of the floor value of the shares. The $4.7 million
discount will be amortized as interest expense over the life of the agreement.
Through the setting of a floor and ceiling price, the forward sales agreement
eliminates the Company's exposure to downside market risk, and at the same time,
enables the Company to retain potential market appreciation up to the respective
ceiling price. The floor and ceiling price per share is $102 and $176,
respectively.

The investment in Celera and the monetization liability are carried at fair
market value. Changes in fair market value of the Company's shares of Celera are
limited to changes in stock price between the floor and ceiling and are recorded
in the Other Comprehensive Income(Loss) component of Shareholders' Investment.
The fair value of the Company's investment in Celera at September 30, 2000 was
approximately $23 million and has been reflected in the balance sheet of the
Company in Investments in Affiliated Companies.


Comprehensive Income(Loss)
--------------------------

The components of comprehensive income(loss), net of related tax, for the third
quarter and first nine months of 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                         Third quarter ended                  Nine months ended
(In millions)                                                September 30                        September 30
                                                      -------------------------           -------------------------
                                                         2000            1999                 2000          1999
                                                         ----            ----                 ----          ----
<S>                                                   <C>               <C>               <C>              <C>
Net earnings                                            $  32           $ 134                $ 441         $ 245
Foreign currency translation (loss)gain                   (87)            215                 (297)          (95)
Unrealized losses on securities                          (142)             (6)                 (84)          (31)
                                                        -----           -----                -----         -----
Comprehensive income(loss)                              $(197)          $ 343                $  60         $ 119
                                                        -----           -----                -----         -----
</TABLE>


The components of accumulated other comprehensive income(loss), net of related
tax, at September 30, 2000 and December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                                        September 30              December 31
(In millions)                                                                   2000                     1999
                                                                        -------------------------------------------
<S>                                                                     <C>                       <C>
Foreign currency translation loss                                              $(473)                   $(176)
Unrealized gain on securities                                                    512                      596
Minimum pension liability adjustments                                            (12)                     (12)
                                                                               -----                    -----
Accumulated other comprehensive income(loss)                                   $  27                    $ 408
                                                                               -----                    -----
</TABLE>

                                       9
<PAGE>

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

During the first quarter of 2000, the Company completed the disposition of Lucas
Diesel Systems, the remaining LucasVarity wiring company and the Company's
Nelson Stud Welding and Australian steering businesses. Sales of the divested
businesses included in the Company's third quarter ended September 30, 1999
Statements of Operations were approximately $256 million. For the Company's nine
months ended September 30, 2000 and 1999 Statements of Operations, sales of the
divested businesses were approximately $56 million and $635 million,
respectively. The Company's investment in the LucasVarity wiring company and
Lucas Diesel Systems operations was included in the balance sheet in Net Assets
of Acquired Businesses Held for Sale at December 31, 1999.


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

The Company reports its businesses in seven operating segments.  The Company's
automotive businesses are reported as Occupant Safety Systems, Chassis Systems,
Automotive Electronics and Other Automotive segments.  The Company's aerospace
and information systems' businesses are reported as Space & Electronics, Systems
& Information Technology and Aeronautical Systems segments.

As a result of the dispositions of Lucas Diesel Systems, Nelson Stud Welding and
the remaining LucasVarity wiring company, segment assets for the Other
Automotive segment decreased by approximately $925 million during the first nine
months of 2000.

Intersegment sales for each segment are as follows:

<TABLE>
<CAPTION>
                                                  Third quarter ended                 Nine months ended
(In millions)                                        September 30                       September 30
                                              ------------------------            -----------------------
                                                   2000           1999                2000           1999
                                                  -----          -----               -----          -----
<S>                                           <C>                <C>              <C>               <C>
Occupant Safety Systems                          $    -          $   1               $   2          $   2
Chassis Systems                                       3              2                  12              5
Automotive Electronics                               22             22                  69             49
Other Automotive                                      -             22                   4             39
Space & Electronics                                  15              5                  41             19
Systems & Information Technology                     32             29                  97             84
Aeronautical Systems                                  -              -                   -              -
</TABLE>

Corporate expense and other includes approximately $22 million of unrealized
foreign exchange loss on hedges of anticipated transactions in the third quarter
of 2000 and $22 million of unrealized foreign exchange gains on hedges of
anticipated transactions in the third quarter of 1999.  Corporate expense and
other includes approximately $70 million of unrealized foreign exchange loss on
hedges of anticipated transactions for the nine months ended September 30, 2000
and $2 million of unrealized foreign exchange gains on hedges of anticipated
transactions for the nine months ended September 30, 1999.  In addition,
corporate expense and other for the first nine months of 1999 includes $50
million of realized foreign exchange loss related to the acquisition of
LucasVarity.

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

Inventories consist of the following:
                                            September 30        December 31
(In millions)                                       2000               1999
                                             ------------------------------
Finished products and work in process              $ 528             $  612
Raw materials and supplies                           430                427
                                                   -----             ------
                                                   $ 958             $1,039
                                                   -----             ------

                                      10
<PAGE>

Debt and Credit Agreements
--------------------------

On January 25, 2000, the Company established two revolving credit agreements in
an aggregate amount of $3.3 billion with 29 banks.  The first agreement, in an
amount of $2.3 billion, will expire on January 23, 2001 with an option to extend
the maturity of outstanding borrowings at that time to January 23, 2002.  The
second agreement, in an amount of $1 billion, will expire on January 25, 2005.
The interest rates under the agreements are either the prime rate or a rate
based on the London Interbank Offered Rate (LIBOR), at the option of the
Company.  Also on January 25, 2000, the Company terminated previously existing
revolving credit agreements in an aggregate amount of approximately $5 billion.

During the first quarter of 2000, the Company also completed an issuance
utilizing its universal shelf registration statement of $300 million of medium
term notes due March 2002.  The proceeds of this offering were used to repay
commercial paper.  The interest rate is a floating rate based on a three-month
LIBOR.

During the second quarter of 2000, the Company voluntarily reduced its $2.3
billion revolving credit agreement by $300 million.  The Company also completed
an issuance utilizing the universal shelf registration statement of $500 million
of 8.75% Notes due 2006.  The proceeds of this offering were used to repay
commercial paper.

At September 30, 2000, $200 million of short-term obligations 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 revolving credit
agreements.

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

Other (income)expense-net included the following:

<TABLE>
<CAPTION>
(In millions)                                                   Third quarter ended                      Nine months ended
                                                                    September 30                           September 30
                                                             --------------------------             -------------------------
                                                                   2000          1999                   2000          1999
                                                                  -----         -----                  -----         -----
<S>                                                          <C>                <C>                 <C>              <C>
Net gain on sale of assets                                        $   -         $ (17)                 $(262)        $(112)
ICO Global investment write-off                                       -            79                      -            79
Gain on Endwave merger                                               (2)            -                    (57)            -
(Earnings)loss of affiliates                                         (1)           (4)                    (6)          (40)
Foreign currency exchange                                            23           (26)                    66            44
Minority interests                                                    -             6                     18            15
Other income                                                        (39)          (38)                  (100)          (82)
Other expense                                                        20            28                     78            83
                                                                  -----         -----                  -----         -----
                                                                  $   1         $  28                  $(263)        $ (13)
                                                                  -----         -----                  -----         -----
</TABLE>

During the first nine months of 2000, the net gain on sale of assets includes
the sale of RFMD common stock, the Company's Nelson Stud Welding and Australian
steering businesses and the exchange of the Company's interest in Paracel Inc.,
an affiliate, for shares in Celera Genomics Corporation.  In addition, the
Company recorded other income of $57 million during the first nine months of
2000 relating to the merger of TRW Milliwave Inc., a wholly owned subsidiary,
with Endgate Corporation to form Endwave Corporation, of which the Company owns
approximately 53 percent as of September 30, 2000.

During the third quarter of 1999, a charge of $79 million was recorded to write-
off the Company's investment in ICO Global Communications (Holdings) Limited
(ICO).  The Company also sold shares of RFMD common stock resulting in a gain of
$17 million during the third quarter of 1999.  For the first nine months of
1999, the Company sold shares of RFMD common stock resulting in a gain of $140
million, which includes a gain of $29 million resulting from the shares issued
in a registered public offering.

                                      11
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                Nine months ended
(In millions)                                                                                      September 30
                                                                                      ------------------------------------
<S>                                                                                           <C>              <C>
                                                                                               2000             1999
                                                                                              -----            -----
Interest paid (net of amount capitalized)                                                     $ 341            $ 273
Income taxes paid (net of refunds)                                                            $ 135            $ 116
</TABLE>


Earnings Per Share
------------------

<TABLE>
<CAPTION>

                                                                         Third quarter ended             Nine months ended
(In millions except per share data)                                         September 30                    September 30
                                                                     -----------------------         ----------------------
                                                                         2000         1999              2000         1999
                                                                         ----         ----              ----         ----
<S>                                                                    <C>          <C>               <C>          <C>
Numerator
  Net earnings                                                         $ 32.0       $133.5            $440.8       $244.9
  Preferred stock dividends                                                .1           .1                .4           .4
                                                                       ------       ------            ------       ------
  Numerator for basic earnings per share-- net
    earnings available to common shareholders                            31.9        133.4             440.4        244.5
  Effect of dilutive securities
    Preferred stock dividends                                              .1           .1                .4           .4
                                                                       ------       ------            ------       ------
  Numerator for diluted earnings per share--
    net earnings available to common shareholders                      $ 32.0       $133.5            $440.8       $244.9
                                                                       ------       ------            ------       ------

Denominator
  Denominator for basic earnings per share--
    weighted-average common shares                                      123.5        121.4             123.0        120.7
  Effect of dilutive securities
    Convertible preferred stock                                            .8           .8                .8           .8
    Employee stock options                                                 .7          1.8               1.3          1.9
                                                                       ------       ------            ------       ------
  Dilutive potential common shares                                        1.5          2.6               2.1          2.7
  Denominator for diluted earnings per share--
    adjusted weighted-average shares after
    assumed conversions                                                 125.0        124.0             125.1        123.4
                                                                       ------       ------            ------       ------


Diluted earnings per share                                             $ 0.26       $ 1.08            $ 3.52       $ 1.99
                                                                       ------       ------            ------       ------
Basic earnings per share                                               $ 0.26       $ 1.10            $ 3.58       $ 2.03
                                                                       ------       ------            ------       ------
</TABLE>

New Accounting Pronouncements
-----------------------------

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements,"
which summarizes the staff's views regarding the application of generally
accepted accounting principles to the recognition, presentation and disclosure
of revenue in financial statements. The Company will be implementing SAB No. 101
in the fourth quarter of 2000, and believes that its adoption is not expected to
have a significant impact on the Company's financial position or results of
operations.

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" and in June
2000, issued SFAS No. 138, which amends and clarifies certain guidance in SFAS
No. 133. These statements require the recognition of derivative instruments as
assets and liabilities, based on their fair value. It further provides criteria
for derivative instruments to be designated as fair value, cash flow, or foreign
currency hedges, and establishes accounting standards for reporting changes in
the fair value of the derivative instrument. Upon adoption, the Company will be
required to adjust hedging instruments to fair value on the balance sheet and
recognize the offsetting gains or losses as adjustments to be reported in Net
Earnings or Other Comprehensive Income(Loss), as appropriate.

Management is in the process of analyzing and assessing the impact of the
adoption of SFAS No. 133, effective January 1, 2001, on the Company's
consolidated results of operations and financial position. Once adopted, changes
in the market value of forward contracts that hedge anticipated transactions,
which are recorded in Net Earnings under current accounting standards, are
expected to be recorded in Other Comprehensive Income (Loss). These statements
also provide for the recognition of a cumulative adjustment for an accounting
change, as of the date of adoption. The amount of such adjustment, and the
effect on the Company's financial position and results of operations during 2001
will depend in part on future derivative transactions entered into prior to
January 1, 2001, and the fair value of derivatives held as of such date, and
therefore is not determinable at this time. See "Forward Exchange Contract" note
to Financial Statements for derivative contracts that, along with other items
meeting the definition of a derivative under SFAS No. 133, will be affected.


                                      12
<PAGE>

Reclassifications
-----------------

Certain amounts in the prior year financial statements and related notes have
been reclassified to conform to the current year presentation.


Contingencies
-------------

TRW Vehicle Safety Systems Inc., a wholly-owned subsidiary of the Company,
reported to the Arizona Department of Environmental Quality, or ADEQ, in 1997,
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, the United States
Environmental Protection Agency, the United States Department of Justice and the
Arizona State Attorney General are conducting civil and criminal investigations
into these potential violations and the Company is cooperating with these
investigations. If proceedings were to be initiated against the Company with
respect to such matters, the Company could be liable for penalties and fines and
other relief. The Company is currently engaged in settlement discussions with
state and federal officials. The Company is not able to predict the outcome of
these discussions at this time.

On March 31, 2000, TRW Vehicle Safety Systems Inc. was served with a putative
class action lawsuit filed in Maricopa County Superior Court in the State of
Arizona. The lawsuit was filed on behalf of everyone living within a five-mile
radius of the Company's air bag manufacturing plant in Mesa, Arizona. The
lawsuit alleges that emissions from the plant have caused health problems for
residents living near the plant and that the Company concealed information about
the potential health risks of its emissions. The lawsuit also alleges that
animals and plant life have been injured or destroyed through significant
exposure to toxic emissions. Plaintiffs are asking the court to require the
Company to institute medical monitoring for the claimants, to conduct various
studies regarding, among other things, the risks of sodium azide, to cease
operations that release toxic substances into the air and to create a supervised
fund to pay for medical screening and monitoring. Plaintiffs are also seeking
attorneys' fees and punitive damages. The Company believes there is no valid
scientific basis for these claims and intends to defend itself vigorously. The
Company is not able to predict the outcome of this lawsuit at this time.

During 1996, the Company was advised by the United States Department of Justice
(DOJ) that the Company 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

                                      13
<PAGE>

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. On August 6, 1999, the Government filed
its Second Amended Complaint, which incorporated vouchers, progress payment
requests, and invoices submitted by the Company to higher tier Government
contractors among the class of allegedly false claims challenged by the
Government. On September 29, 1999, the former employee filed his Second Amended
Complaint, which incorporated subcontracts performed by the Company for higher
tier Government contractors among the class of contracts under which allegedly
false claims were presented, and added allegations relating to certain of the
former employee's pre-existing claims. On May 9, 2000, the Company voluntarily
dismissed its remaining counterclaims against the former employee, with
prejudice. On July 10, 2000, the DOJ filed a motion seeking permission to
intervene in the 1995 lawsuit, which motion was granted on August 16, 2000.
Thereafter, on August 30, 2000, the DOJ and the former employee filed a single
consolidated complaint encompassing all of the claims in the 1994 and 1995
lawsuits, as those matters were constituted prior to the filing of the DOJ's
July 10, 2000 motion. 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.

In 1992, Vinnell Mining & Minerals Corporation and Atlas Corporation, an
unrelated third party, entered into a Consent Decree with the United States
Environmental Protection Agency with respect to an operable unit of the Atlas
Asbestos Mine Superfund site in Fresno County, California. Vinnell Mining &
Minerals Corporation is a wholly-owned indirect subsidiary of BDM International,
Inc. that was acquired by the Company in December 1997. The Consent Decree
provides, among other things, for the remediation of the site and reimbursement
of oversight costs upon submission of appropriate documentation to Vinnell and
Atlas. In 1999, Vinnell and Atlas filed a Petition for Dispute Resolution in the
U.S. District Court for the Eastern District of California to obtain judicial
review of the oversight cost documentation requirements. In April 2000, the
United States Department of Justice filed a motion for penalties in this matter,
requesting that the court impose penalties in addition to the reimbursement of
oversight costs. The Company had placed the amount of all claimed oversight
costs into escrow awaiting final decision of the court and maintained that there
was no basis for the imposition of penalties. On September 6, 2000, the United
States District Court Judge entered an opinion and order ordering Vinnell to pay
or release from escrow certain of the claimed oversight costs claimed by the
United States, plus penalties in the amount of $639,500. All payments have been
made in a timely manner. The Company is planning to appeal the order. Management
believes that the ultimate resolution of this matter will not have a material
effect on the Company's financial condition or results of operations.

                                      14
<PAGE>

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.

Ernst & Young LLP, the Company's independent auditors, have performed a review
of the unaudited interim consolidated financial statements included herein, and
their review report accompanies this filing.

                                      15
<PAGE>

Independent Accountants' Review Report

Audit Committee of the
Board of Directors
TRW Inc.

We have reviewed the accompanying unaudited balance sheet of TRW Inc. and
subsidiaries as of September 30, 2000, the related unaudited statements of
operations for the three-month and nine-month periods ended September 30, 2000
and 1999 and the unaudited statements of cash flows for the nine-month periods
ended September 30, 2000 and 1999, included in the Form 10-Q of TRW Inc. for the
quarterly period ended September 30, 2000. These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of TRW Inc. as of December 31,
1999, and the related statements of operations, cash flows, and changes in
shareholders' investment for the year then ended, not presented herein, and in
our report dated January 21, 2000, we expressed an unqualified opinion on those
financial statements. Those financial statements and our report on them are
included in the Form 10-K of TRW Inc. for the year ended December 31, 1999. In
our opinion, the information set forth in the accompanying balance sheet as of
December 31, 1999, included in the Form 10-Q of TRW Inc. for the quarterly
period ended September 30, 2000, is fairly stated, in all material respects, in
relation to the balance sheet from which it has been derived.


/s/ Ernst & Young LLP

Cleveland, Ohio
October 18, 2000

                                      16
<PAGE>

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>
                                   Third quarter ended                            Nine months ended
                                      September 30                                 September 30
                          ---------------------------------------    --------------------------------------
                                                       Percent                                      Percent
                            2000     1999   Change   Inc (Dec)           2000      1999   Change  Inc (Dec)
                            ----     ----   ------   --------            ----      ----   ------  ---------
<S>                       <C>      <C>      <C>      <C>              <C>       <C>       <C>     <C>
Sales                     $4,053   $4,462   $ (409)      (9%)         $13,094   $12,344    $ 750         6%
Profit(loss) before
taxes                        199      305     (106)     (35%)           1,170       912      258        28%
Net earnings                  32      134     (102)     (76%)             441       245      196        80%
Diluted earnings
   per share                0.26     1.08    (0.82)                      3.52      1.99     1.53
Effective tax rate          36.0%    36.5%                               37.6%     43.7%
</TABLE>

The third quarter 2000 sales were $4.1 billion compared with 1999 sales of $4.5
billion. Sales for the third quarter of 2000 were comparable to the prior year,
excluding the effects of a strong U.S. dollar and businesses divested subsequent
to the third quarter of 1999, primarily Lucas Diesel Systems. Net earnings and
diluted earnings per share for the third quarter of 2000 were $32 million, or
$0.26 per share, compared with $134 million, or $1.08 per share, in 1999.

For the third quarter of 2000, unusual items resulted in a net loss of $59
million, or $0.47 per share. The unusual items for the third quarter of 2000
primarily included charges related to the consolidation of two air bag
manufacturing operations of approximately $36 million, unrealized losses on
foreign currency hedges of $14 million and automotive restructuring charges of
$10 million.

For the third quarter of 1999, unusual items reduced net earnings by $13
million, or $0.10 per share. These charges included the write-off of the
Company's investment in ICO of $51 million which was offset by income related to
the LucasVarity acquisition of $24 million and gains from the sale of assets of
$14 million, primarily RFMD stock.

Gross profit of $578 million in the third quarter of 2000 decreased $317 million
from $895 million in 1999. The decline in gross profit is attributed primarily
to businesses divested and lower gross profit from the automotive businesses and
the Space & Electronics segment. Gross profit, as a percentage of sales, was
14.2 percent for the third quarter 2000, compared to 20.1 percent in the third
quarter 1999. Gross profit in the third quarter of 2000 included charges related
to the consolidation of two air bag manufacturing operations of approximately
$55 million, product recall of approximately $10 million, inventory adjustments
of approximately $10 million, automotive restructuring expenses of $4 million
and pension income from an overfunded pension plan of $62 million. Gross profit
in the third quarter of 1999 included pension income of $67 million, income from
companies divested of approximately $26 million and expenses from the
acquisition of LucasVarity of $27 million. Excluding these items, gross profit,
as a percentage of sales, was 14.7 percent for the third quarter of 2000,
compared to 18.6 percent in the third quarter of 1999. The decrease in gross
margin was attributed to continued pressure on prices, as well as an unfavorable
mix of products within the Chassis Systems segment and higher program
performance on contracts nearing completion or completed in the third quarter of
1999 and start-up losses from investment in technology initiatives in the Space
& Electronics segment. An increase in automotive product launch costs during the
quarter also contributed to the reduction.

Administrative and selling expenses of $237 million in the third quarter of 2000
decreased $71 million from $308 million in 1999, due to the effects of
businesses divested and cost reductions among all segments.

Research and development expenses of $121 million in the third quarter of 2000
decreased $38 million from $159 million in 1999, primarily due to the effects of
businesses divested and lower spending in the automotive businesses somewhat
offset by higher spending in the Space & Electronics segment.

                                      17
<PAGE>

Interest expense of $131 million in the third quarter of 2000 decreased $18
million from $149 million in 1999, primarily due to lower average debt in the
third quarter of 2000 offset, in part, by higher short-term interest rates and
higher interest expense on fixed-rate debt issuances.

Amortization of goodwill and intangible assets of $38 million in the third
quarter of 2000 was comparable to $40 million in 1999.

Other (income)expense-net was expense of $1 million in the third quarter of 2000
and expense of $28 million in the third quarter of 1999. Included in 2000 was
$22 million related to unrealized foreign exchange losses on hedges of
anticipated transactions. Included in 1999 were the write-off of the Company's
investment in ICO of $79 million, gains on sales of shares of RFMD common stock
of $17 million and income related to the acquisition of LucasVarity of $12
million.

The effective income tax rate was 36 percent in the third quarter of 2000
compared with 36.5 percent in the third quarter of 1999.

Sales for the first nine months of 2000 were $13.1 billion compared with 1999
sales of $12.3 billion. Sales for the first nine months of 2000 increased $750
million due primarily to the inclusion of LucasVarity. Net earnings and diluted
earnings per share for the first nine months of 2000 were $441 million, or $3.52
per share, compared with $245 million, or $1.99 per share, in 1999.

For the first nine months of 2000, unusual items increased net earnings by $31
million, or $0.24 per share. The unusual items for the first nine months of 2000
included gains from asset sales, including sales of shares of RFMD common stock
and of the Company's Nelson Stud Welding and Australian Steering businesses of
$154 million, income relating to the merger of TRW Milliwave Inc., a wholly
owned subsidiary, with Endgate Corporation to form Endwave Corporation, of which
TRW owns 53 percent of $23 million and on the exchange of TRW's interest in
Paracel Inc. for shares in Celera Genomics Corporation of $15 million. These
gains were partially offset by charges for warranty reserves, claims, and
threatened litigation of $49 million, unrealized losses on foreign currency
hedges of $45 million, charges relating to the consolidation of two air bag
manufacturing operations of approximately $36 million, and for severance and
plant closing costs for the automotive restructuring program of $31 million.

For the first nine months of 1999, unusual items resulted in a net loss of $159
million, or $1.29 per share. These charges include the write-off the Company's
investment in ICO of $51 million, expenses related to the acquisition of
LucasVarity of $43 million; severance and plant closing costs for the automotive
restructuring program of $46 million, a one-time noncash charge, with no income
tax benefit, related to in-process research and development associated with the
LucasVarity acquisition of $85 million, losses on fixed-price contracts of $28
million, offset in part by gains of $94 million primarily from sales of RFMD
common stock.

Gross profit of $2,120 million for the first nine months of 2000 decreased 2
percent from $2,153 million in 1999. Gross profit was impacted by the
acquisition of LucasVarity, offset by higher charges for automotive
restructurings and warranty reserves, claims and product recall. Gross profit,
as a percentage of sales, was 16.2 percent for the first nine months of 2000,
compared to 17.4 percent in 1999. Gross profit in 2000 included charges relating
to the consolidation of two air bag manufacturing operations of approximately
$55 million, warranty reserves, claims and product recall of $50 million and
automotive restructuring expenses of $24 million, and an inventory adjustment of
approximately $10 million. In addition, pension income from an overfunded
pension plan added $190 million to gross profit in 2000. Gross profit for the
first nine months of 1999 included automotive restructuring expenses of $68
million, pension income of $128 million, income from companies divested of
approximately $70 million, losses on fixed-price contracts of $43 million and
income from the acquisition of LucasVarity of $19 million.

Administrative and selling expenses of $815 million for the first nine months of
2000 decreased $8 million from $823 million in 1999.  This decrease was due to
the effects of the businesses divested of approximately $46 million and lower
administrative and selling expenses in the automotive businesses, which were
negated by higher spending in the Space & Electronics segment and the effect of
LucasVarity.  The acquisition of the LucasVarity businesses added $110 million
in the first quarter of 2000, as the first nine months of 2000 reflect an entire
nine months of administrative and selling expenses compared to the

                                      18
<PAGE>

first nine months of 1999, which only include administrative and selling
expenses for the period March 25, 1999, the date of acquisition, through
September 30, 1999.

Research and development expenses of $351 million for the first nine months of
2000 decreased $57 million from $408 million in 1999, primarily due to
businesses divested and lower spending in the automotive businesses and the
Space & Electronics segment. This decrease was offset by the acquisition of the
LucasVarity businesses which added $35 million in the first quarter of 2000, as
the first nine months of 2000 reflect an entire nine months of research and
development expenses compared to the first nine months of 1999 which only
includes research and development expenses for the period March 25, 1999, the
date of acquisition, through September 30, 1999.

The Company recorded $12 million for the first nine months of 2000 and $85
million for the first nine months of 1999 for the fair value of in-process
research and development associated with the valuation of Endwave Corporation
and LucasVarity, respectively.

Interest expense of $393 million for the first nine months of 2000 increased $59
million from $334 million in 1999, primarily due to higher short-term interest
rates and higher interest expense on fixed-rate debt issuances, offset by lower
debt balances in the first nine months of 2000.

Amortization of goodwill and intangible assets was $106 million for the first
nine months of 2000 as compared to $81 million in 1999. The increase of $25
million from 1999 to 2000 primarily resulted from the amortization of
intangibles associated with the acquisition of LucasVarity.

Other (income)expense-net was income of $263 million in the first nine months of
2000 and income of $13 million in 1999. Included in 2000 were the following
items: gains on sales of shares of RFMD common stock of $217 million, gain on
the Endwave merger of $57 million, gain on the sale of Nelson Stud Welding of
approximately $31 million, gain on the exchange of Paracel stock of $23 million
and $70 million related to unrealized foreign exchange losses on hedges of
anticipated transactions. Included in 1999 were gains on sales of shares of RFMD
common stock of $140 million, expenses related to the acquisition of LucasVarity
of $33 million, the write-off of the Company's investment in ICO of $79 million,
and $50 million related to a nonrecurring loss on foreign currency hedges.

The effective tax rate was 37.6 percent for the nine months ended September 30,
2000 compared to 43.7 percent in 1999. Excluding the write-off of purchased in-
process research and development of $12 million for the first nine months of
2000 ($6 million after the effect of minority interest) and $85 million for the
first nine months of 1999, which have no tax benefit, the effective tax rate
would have been 37.3 percent and 36.5 percent for the nine months ended
September 30, 2000 and 1999, respectively.

                                      19
<PAGE>

Automotive Segments

Occupant Safety Systems

<TABLE>
<CAPTION>
                                        Third quarter ended                               Nine months ended
(In millions)                              September 30                                       September 30
                       --------------------------------------------         ---------------------------------------------
                                                            Percent                                               Percent
                        2000       1999       Change      Inc (Dec)           2000        1999     Change       Inc (Dec)
                       -----      -----       ------     ----------           ----        ----     ------       ---------
<S>                    <C>        <C>         <C>          <C>              <C>         <C>        <C>          <C>
Sales                  $ 639      $ 694        $(55)           (8%)         $2,127      $2,268     $(141)            (6%)
Profit(loss)
before taxes             (19)        45         (64)         (142%)             54         138       (84)           (61%)
</TABLE>

Sales for the third quarter of 2000 of $639 million decreased $55 million from
$694 million in 1999 due to the effects of a strong U.S. dollar and lower
pricing of approximately $49 million and $42 million, respectively, and
unanticipated interruptions in automotive production schedules of approximately
$15 million which were partially offset by increased volume from new product
offerings of approximately $68 million.

Profit(loss) before taxes for the third quarter of 2000 was a loss of $19
million, a decrease of $64 million from $45 million in 1999. Excluding charges
related to the consolidation of two air bag manufacturing operations of
approximately $55 million, profit(loss) before taxes decreased $9 million. The
lower profit(loss) before taxes resulted from lower pricing of approximately $42
million and increased volume from new product offerings, net of unanticipated
interruptions in automotive production schedules, of approximately $9 million
were offset by cost reductions of approximately $40 million, the effects of a
strong U.S. dollar of approximately $8 million and new product launches of
approximately $6 million.

Sales for the nine months ended September 30, 2000 of $2,127 million decreased
$141 million from $2,268 million in 1999. This decline was due to the effects of
a strong U.S. dollar and lower pricing of approximately $135 million and $125
million, respectively, as well as unanticipated interruptions in automotive
production schedules of approximately $15 million which were offset by increased
volume of approximately $142 million.

Profit(loss) before taxes for the nine months ended September 30, 2000 of $54
million decreased $84 million from $138 million in 1999. Excluding the net
effect of unusual items of approximately $90 million consisting of claims and
threatened litigation, charges related to the consolidation of two air bag
manufacturing operations and the net change in restructuring charges,
profit(loss) before taxes increased approximately $6 million. Cost reductions of
approximately $129 million and profit from increased volume of approximately $27
million were offset by lower pricing of approximately $125 million and the
effects of a strong U.S. dollar of approximately $20 million.

During the third quarter of 2000, the Company announced plans to consolidate
operations of its Mesa air bag manufacturing facilities. As result of this
decision, the Company recorded an asset impairment and a restructuring charge of
approximately $52 million and $3 million, respectively, in Cost of Sales. A
comparison of projected future cash flows for the Mesa I facility and the
carrying value of the assets indicated that the assets were impaired. Property,
plant and equipment were written down to fair value on the basis of discounted
estimated future cash flows and future salvage value of the assets. Included in
the restructuring charge are costs associated with future lease obligations. The
Company expects the restructuring plan to be completed by the first half of
2002.

                                      20
<PAGE>

Chassis Systems

<TABLE>
<CAPTION>
                                      Third quarter ended                                 Nine months ended
(In millions)                            September 30                                        September 30
                   -------------------------------------------------        -----------------------------------------------
                                                             Percent                                                Percent
                     2000            1999       Change     Inc (Dec)            2000       1999      Change        Inc (Dec)
                     ----            ----       ------     ---------            ----       ----      ------        ---------
<S>                <C>             <C>          <C>          <C>            <C>          <C>        <C>           <C>
Sales              $1,301          $1,436       $(135)          (9%)          $4,340     $3,588        $752              21%
Profit(loss)
before taxes           67              91         (24)         (26%)             258        195          63              32%
</TABLE>

Sales for the third quarter of 2000 of $1,301 million decreased $135 million
from $1,436 million in 1999. Excluding the effects of divestitures of
approximately $50 million, sales decreased $85 million due to the effects of a
strong U.S. dollar of approximately $79 million and the unanticipated
interruptions in automotive production schedules and softness in demand in
certain automotive markets, both original equipment and aftermarket, of
approximately $41 million which were partially offset by increased volume from
consolidation of a Chinese venture, previously accounted for under the equity
method, of approximately $35 million and new product offerings of approximately
$20 million.

Profit(loss) before taxes for the third quarter of 2000 of $67 million decreased
$24 million from $91 million in 1999. Excluding the effects of divestitures of
approximately $5 million, profit(loss) before taxes decreased $19 million. This
decrease resulted from the unanticipated interruptions in automotive production
schedules and softness in demand in certain automotive markets, both original
equipment and aftermarket, of approximately $12 million, lower margins on new
products of approximately $14 million and an inventory adjustment of
approximately $3 million, which were offset by cost reductions of approximately
$14 million.

Sales for the nine months ended September 30, 2000 of $4,340 million increased
$752 million from $3,588 million in 1999. This increase was mainly due to the
inclusion of LucasVarity in the first quarter of 2000 of approximately $894
million. Excluding LucasVarity and the effects of divestitures of approximately
$107 million, sales decreased $35 million. The effects of a strong U.S. dollar
of approximately $166 million, unanticipated interruptions in automotive
production schedules and softness in demand in certain automotive markets, both
original equipment and aftermarket, of approximately $41 million and lower
pricing of approximately $22 million were offset by increased volume from new
product offerings of approximately $150 million and consolidation of a Chinese
venture, previously accounted for under the equity method, of approximately $67
million.

Profit(loss) before taxes for the nine months ended September 30, 2000 of $258
million increased $63 million from $195 million in 1999. Excluding the net
effect of unusual items of approximately $17 million consisting of warranty
charges, loss on the sale of a business, the net change in restructuring charges
and the prior year one-time noncash effect of the LucasVarity inventory write-
up, profit(loss) before taxes increased $46 million. The increase in
profit(loss) before taxes resulted primarily from the inclusion of LucasVarity
in the first quarter of 2000 of approximately $80 million and cost reductions of
approximately $40 million, which were offset in part by lower pricing of
approximately $22 million, the effects of a strong U.S. dollar of approximately
$16 million and unanticipated interruptions in automotive production schedules
and softness in demand in certain automotive markets, both original equipment
and aftermarket, of approximately $12 million.

                                      21
<PAGE>

Automotive Electronics

<TABLE>
<CAPTION>
                                   Third quarter ended                                       Nine months ended
(In millions)                          September 30                                             September 30
                 -----------------------------------------------------         -----------------------------------------------
                                                             Percent                                                 Percent
                    2000           1999       Change         Inc (Dec)            2000          1999      Change     Inc (Dec)
                    ----           ----       ------         ---------           -----          ----      ------     ---------
<S>              <C>              <C>         <C>            <C>               <C>             <C>        <C>        <C>
Sales               $378          $ 330         $ 48               15%          $1,287        $1,187        $100            8%
Profit(loss)
before taxes          11             30          (19)             (64%)             76            78          (2)          (3%)
</TABLE>


Sales for the third quarter of 2000 of $378 million increased $48 million from
$330 million in 1999 due to increased volume of $78 million, offset in part by
the effects of the strong U.S. dollar of approximately $20 million.

Profit(loss) before taxes for the third quarter of 2000 of $11 million decreased
$19 million from $30 million in 1999. Excluding restructuring charges of
approximately $8 million and an inventory adjustment of approximately $7
million, profit(loss) before taxes decreased $4 million, as the net effect of
volume and unfavorable product mix of approximately $23 million and lower
pricing of approximately $5 million were offset by cost reductions of
approximately $18 million.

Sales for the nine months ended September 30, 2000 of $1,287 million increased
$100 million from $1,187 million in 1999. Excluding the effects of divestitures
of approximately $61 million, sales increased $161 million primarily due to the
inclusion of LucasVarity sales in the first quarter of 2000 of approximately
$148 million and higher volume of approximately $80 million which were offset by
the strong effect of the U.S. dollar of approximately $48 million.

Profit(loss) before taxes for the nine months ended September 30, 2000 of $76
million decreased $2 million from $78 million in 1999. Excluding the net change
in restructuring charges of approximately $9 million and an inventory adjustment
of approximately $7 million, profit(loss) before taxes for the first nine months
increased $14 million. Cost reductions of approximately $32 million and the
inclusion of LucasVarity in the first quarter of approximately $9 million were
offset in part by the net effect of volume and unfavorable product mix of
approximately $29 million and lower pricing of approximately $11 million.


Other Automotive

<TABLE>
<CAPTION>
                                  Third quarter ended                                           Nine months ended
(In millions)                        September 30                                                 September 30
                      --------------------------------------------------           -----------------------------------------------
                                                               Percent                                                   Percent
                      2000            1999       Change        Inc (Dec)           2000           1999        Change     Inc (Dec)
                      ----            ----       ------        ---------           ----           ----        ------     ---------
<S>              <C>                 <C>         <C>           <C>                <C>            <C>          <C>        <C>
Sales                $ 179           $ 477       $(298)            (62%)          $ 671         $1,152         $(481)        (42%)
Profit(loss)
before taxes             7              35         (28)            (79%)             89             85             4           5%
</TABLE>

Sales for the third quarter of 2000 of $179 million decreased $298 million from
$477 million in 1999, primarily due to the effects of divestitures of
approximately $213 million, lower volume from other products of approximately
$59 million, softness in demand in certain commercial truck markets of
approximately $23 million and the effects of a strong U.S. dollar of
approximately $10 million.

Profit(loss) before taxes for the third quarter of 2000 of $7 million decreased
$28 million from $35 million in 1999. The lower profit(loss) before taxes
resulted from softness in demand in certain commercial truck markets of
approximately $10 million and a product recall of approximately $10 million.

Sales for the nine months ended September 30, 2000 of $671 million decreased
$481 million from $1,152 million in 1999, primarily due to the effects of
divestitures of $440 million, lower volume from other

                                      22
<PAGE>

products of approximately $56 million, the effects of a strong U.S. dollar of
approximately $25 million and softness in demand in certain commercial truck
markets of approximately $23 million. The decrease in sales was offset by the
effects of acquisitions of $43 million and the inclusion of LucasVarity in the
first quarter of 2000 of approximately $26 million.

Profit(loss) before taxes for the nine months ended September 30, 2000 of $89
million increased $4 million from $85 million in 1999. Excluding the net change
in restructuring costs of approximately $5 million, profit(loss) before taxes
increased $9 million. The higher profit(loss) before taxes resulted primarily
from the gain on sale of Nelson Stud Welding of approximately $31 million, cost
reductions of approximately $24 million, which was partially offset by softness
in demand in certain commercial truck markets of approximately $10 million, a
product recall of approximately $10 million, the effects of divestitures of
approximately $8 million, lower pricing of approximately $6 million and the
effects of a strong U.S. dollar of approximately $6 million.

Automotive Restructuring

On July 29, 1998, the Company announced actions to enhance profit margins of the
legacy automotive businesses. To implement the program, the Company expects to
record before-tax charges of approximately $150 million by the end of 2000. To
date, the Company has recorded restructuring expenses of $147 million, of which
$14 million was recorded for the quarter ended September 30, 2000 and $43
million was recorded for the first nine months of 2000. The Company expects to
record approximately $15 million in the fourth quarter of 2000, which will
complete the program. The Company closed one plant during each of the first and
third quarters of 2000, bringing the total to thirteen. Two additional plants
are currently in the process of closure or sale. The Company has reduced
employee headcount by more than 7,300 against a goal of 7,500.

In addition, the Company approved several restructuring actions including the
integration of the LucasVarity automotive businesses with the legacy TRW
automotive businesses. The Company recorded approximately $45 million of
restructuring costs, primarily severance, as part of the purchase price
allocation. During 1999, $14 million was used primarily for severance payments
and $2 million and $10 million were used for severance payments during the third
quarter of 2000 and nine months ended September 30, 2000, respectively. The
remaining balance of $21 million is expected to be used during the fourth
quarter of 2000 and through the fourth quarter of 2001.

                                      23
<PAGE>

Aerospace & Information Systems Segments

Space & Electronics

<TABLE>
<CAPTION>
                                  Third quarter ended                                     Nine months ended
(In millions)                        September 30                                            September 30
                  -------------------------------------------------      ---------------------------------------------------
                                                            Percent                                                  Percent
                    2000         1999        Change       Inc (Dec)        2000            1999       Change       Inc (Dec)
                    ----         ----        ------       ---------        ----            ----       ------       ---------
<S>               <C>           <C>          <C>          <C>             <C>             <C>         <C>           <C>
Sales              $ 463        $ 498         $(35)            (7%)      $1,416          $1,412         $  4              0%
Profit(loss)
before taxes          41           17           24            155%          411             239          172             72%
</TABLE>

Sales of $463 million for the third quarter of 2000 decreased $35 million from
$498 million in 1999, primarily due to the timing of incurred costs and lower
volume on several defense programs nearing completion or completed during the
quarter of approximately $79 million, offset in part by sales from new awards,
including the start-up in the commercial satellite communication line of
business, of approximately $44 million.

Profit(loss) before taxes for the third quarter 2000 and 1999 were $41 million
and $17 million, respectively. Profit(loss) before taxes in the third quarter
1999 included unusual items of the write-off of the Company's investment in ICO
of $79 million which was partially offset by gains on sales of shares of RFMD
common stock of approximately $17 million. Excluding unusual items, profit(loss)
before taxes for the third quarter 2000 decreased $38 million due to lower
volume and higher program performance on contracts nearing completion or
completed during the third quarter of 1999 of approximately $33 million and
start-up losses from investments in technology initiatives of approximately $8
million.

Sales of $1,416 million for the nine months ended September 30, 2000 increased
$4 million from $1,412 million in 1999, primarily due to sales from new awards,
including the start-up in the commercial satellite communication line of
business of approximately $180 million, offset by the timing of incurred costs
and lower volume on several defense programs nearing completion or completed
during the year and the termination of the SBIRS Low demonstration and
validation contract of approximately $181 million.

Profit(loss) before taxes for the nine months ended September 30, 2000 increased
$172 million from $239 million in 1999. Profit(loss) before taxes for the first
nine months of 2000 included unusual items of gains on the sales of shares of
RFMD common stock of approximately $217 million and a net gain of $53 million
related to the Endwave merger. Profit(loss) before taxes for the first nine
months of 1999 included unusual items of gains on the sales of shares of RFMD
common stock of approximately $140 million which was offset by the write-off of
the Company's investment in ICO of $79 million and charges for a capped cost
reimbursable contract for the U.S. Army of $11 million. Excluding unusual items,
profit(loss) before taxes for the first nine months of 2000 decreased $48
million due to lower volume and higher program performance on contracts nearing
completion or completed during the third quarter of 1999 of $60 million, offset
in part by sales from new awards, including the start-up in the commercial
satellite communication line of business of approximately $23 million.

The Company expects the investment in technology initiatives to continue to have
a negative impact on earnings comparisons for this segment going forward. The
Company's new ventures in the commercialization of technologies encompass
advanced semi-conductors, laser technologies and commercial satellite internet
services.

                                      24
<PAGE>

Systems & Information Technology

<TABLE>
<CAPTION>
                                      Third quarter ended                                   Nine months ended
(In millions)                             September 30                                         September 30
                      -----------------------------------------------       --------------------------------------------------
                                                            Percent                                                 Percent
                       2000        1999        Change      Inc (Dec)         2000            1999      Change       Inc (Dec)
                       ----        ----        ------      ---------         ----            ----      ------       ---------
<S>                   <C>         <C>          <C>         <C>               <C>            <C>        <C>          <C>
Sales                 $ 836       $ 745           $91            12%       $2,447          $2,155        $292             14%
Profit(loss)
before taxes             57          54             3             5%       $  181             112          69             61%
</TABLE>

Sales of $836 million for the third quarter of 2000 increased $91 million from
$745 million in 1999, primarily due to new business of approximately $57 million
and higher volume on existing programs, including space and missile defense
systems contracts and the U.S. Census program, of approximately $64 million. The
higher sales were offset by lower volume on contracts nearing completion or
completed during the quarter of approximately $30 million.

Profit(loss) before taxes for the third quarter 2000 of $57 million increased $3
million from $54 million in 1999, primarily due to new business and existing
programs of approximately $14 million, offset by contracts nearing completion or
completed during the quarter of approximately $8 million and a gain on a
divestiture of a business of approximately $5 million.

Sales for the nine months ended September 30, 2000 of $2,447 million increased
$292 million from $2,155 million in 1999, primarily due to higher volume on
existing programs, including space and missile systems contracts and the U.S.
Census program of approximately $248 million and new business of approximately
$147 million. The higher sales were offset by lower volume on contracts nearing
completion or completed during the year of approximately $103 million.

Profit(loss) before taxes for the nine months ended September 30, 2000 of $181
million increased $69 million from $112 million in 1999. Profit(loss) before
taxes for the nine months ended September 30, 2000 included unusual items of a
gain on exchange of the Company's interest in Paracel Inc. of approximately $23
million and a charge for a commercial fixed-price contract of approximately $33
million for the nine months ended September 30, 1999. Excluding unusual items,
profit(loss) before taxes for the nine months ended September 30, 2000 increased
$13 million primarily due to new business and higher volume on existing programs
of approximately $14 million and $16 million, respectively, offset in part by
contracts nearing completion of approximately $20 million and a gain on a
divestiture of approximately $5 million.

Aeronautical Systems

<TABLE>
<CAPTION>
                                  Third quarter ended                                           Nine months ended
(In millions)                        September 30                                                  September 30
                 ----------------------------------------------------          -------------------------------------------------
                                                            Percent                                                    Percent
                    2000         1999       Change         Inc (Dec)            2000            1999        Change     Inc (Dec)
                    ----         ----       ------         ---------            ----            ----        ------     ---------
<S>              <C>            <C>         <C>            <C>                 <C>             <C>          <C>        <C>
Sales              $ 257        $ 282        $(25)              (9%)           $ 806           $ 582          $224           39%
Profit(loss)
before taxes          35           33           2                6%              101              65            36           56%
</TABLE>

Sales for the third quarter of 2000 and 1999 were $257 million and $282 million,
respectively. The decrease in sales is due to the effects of the strong U.S.
dollar of approximately $19 million.

Profit(loss) before taxes for the third quarter of 2000 of $35 million increased
$2 million from $33 million in 1999 due to production efficiencies and cost
reductions of approximately $13 million offset in part by unfavorable product
mix of $7 million, price reductions of $3 million and the effects of the strong
U.S. dollar of approximately $2 million.

                                      25
<PAGE>

Sales and profit(loss) before taxes for the Aeronautical Systems segment of $806
million and $101 million, respectively, for the first nine months of 2000
increased $224 million and $36 million, respectively. The increases primarily
reflect an entire nine months of sales and profit(loss) before taxes compared to
the first nine months of 1999 which only includes sales and profit(loss) before
taxes for the period March 25, 1999, the date of acquisition, through September
30, 1999.

The Company recorded approximately $54 million as a component of the purchase
price allocation for severance and other costs to close certain facilities of
the Aeronautical Systems segment. The cost was included in the purchase price
allocation and reported in other accruals. During 1999, $9 million of the
reserve was used for severance and lease termination costs. During the third
quarter of 2000, the reserve was reduced by $7 million for severance and for the
first nine of months of 2000 the reserve was reduced by $13 million for
severance. The balance of $32 million at September 30, 2000 will be used
primarily for severance payments in the fourth quarter of 2000 and the first
quarter of 2001.

                                      26
<PAGE>

ACQUISITIONS

Endwave Corporation
-------------------

On March 31, 2000, Endgate Corporation merged with TRW Milliwave Inc., a wholly-
owned subsidiary of the Company.  Endgate was the surviving corporation in the
merger and changed its name to Endwave Corporation.  The financial statements of
Endwave are consolidated with the Company's financial statements as the Company
has a 52.6 percent majority ownership interest in Endwave as of September 30,
2000.

The merger was accounted for as a purchase.  Assets and liabilities of Endgate
were recorded at their respective fair values by an independent appraisal.  In-
process research and development was determined using the income approach under
the proportional method.

The purchase price allocation resulted in $12 million, $6 million after the
effect of minority interest, for the fair value of five acquired in-process
research and development projects that had not reached technological feasibility
and had no alternative future use; $16 million for core and developed
technology; $7 million for other identifiable intangible assets; $25 million for
operating assets and liabilities; and goodwill of approximately $79 million.

Goodwill and identifiable intangible assets are being amortized on a straight-
line basis over six years.

The Company recorded a net gain of $53 million, $35 million after tax, for the
excess of fair value of the Company's ownership interest in Endgate that
exceeded the book value of Milliwave.

In October 2000, Endwave completed an initial public offering and as a result
the Company's ownership interest is approximately 43 percent.  The investment
will be accounted for on the equity method.


LucasVarity
-----------

On March 25, 1999, the Company acquired LucasVarity for approximately $6.8
billion in cash and assumed net debt. The acquisition was accounted for as a
purchase. The 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 and $517 million for identifiable intangible
assets including intellectual property and workforce. The purchase price
allocation also included incremental fair value adjustments of approximately
$1.5 billion for a prepaid pension asset, primarily from an overfunded pension
plan, $200 million for the valuation of fixed rate debt and an increase of $30
million and $137 million for the valuation of inventory and fixed assets,
respectively.

The fair value of IPR&D was determined by an independent valuation using the
income approach under the proportional method.  The following projects were
included in the valuation: next generation caliper of $26 million, next
generation anti-lock braking systems (ABS) of $23 million, aerospace engine
controls of $18 million, electro hydraulic braking of $12 million and electrical
parking brake of $6 million.  The fair value of identifiable intangibles was
also determined by an independent valuation primarily using the income approach.
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 by 2002.  The estimated cost to complete the
projects was $65 million.

As of December 31, 1999, the next generation caliper project was completed.  As
of March 31, 2000, one of the aerospace engine control programs with the
valuation of in-process research and development of $7 million was discontinued.
The Company currently anticipates that the remainder of the projects will be

                                      27

<PAGE>

successfully developed as budgeted for both the estimated cost and time of
completion, except for the next generation anti-lock braking systems which will
be delayed eight months. 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.

Restructuring costs, primarily severance, included in the purchase price
allocation were approximately $108 million. The reserve was established for
facility consolidations, relocation of certain facilities, elimination of the
LucasVarity corporate facilities and divestiture of nonstrategic or inefficient
facilities in the automotive and aerospace businesses. The balance at September
30, 2000, reported in other current liabilities, was $53 million and will be
used primarily for severance payments during the fourth quarter of 2000 and
through the fourth quarter of 2001.

See the "Acquisitions" note to Financial Statements for further discussion of
the acquisition of LucasVarity.

LIQUIDITY AND FINANCIAL POSITION

In the first nine months of 2000, proceeds from divestitures of $1,431 million,
operating activities of $793 million and other items of $22 million were used
primarily for debt payments of $1,578 million, capital expenditures of $475
million and dividend payments of $123 million. As a result, cash and cash
equivalents increased $70 million. In the first nine months of 1999, a net
increase in debt of $5,935 million, cash flow provided by operating activities
of $1,150 million and proceeds from divestitures of $157 million were used to
fund acquisitions of $6,083 million, capital expenditures of $540 million,
dividend payments of $120 million and other items of $288 million. As a result,
cash and cash equivalents increased by $211 million. In October 2000, the
company announced its plans to purchase approximately 1 million shares of its
common stock per year to offset partially the effects of shares issued in
connection with employee benefit plans.

Net debt (short-term debt, the current portion of long-term debt and long-term
debt, less cash and cash equivalents) was $6.6 billion at September 30, 2000,
compared to $8.3 billion at December 31,1999.  The ratio of net debt to total
capital (net debt, minority interests and shareholders' investment) was 69
percent at September 30, 2000 and 75 percent at December 31, 1999.  The
percentage of fixed rate debt to total debt was 64 percent at the end of the
third quarter 2000 compared to 46 percent at the end of 1999.

On January 25, 2000, the Company established two committed revolving credit
agreements in an aggregate amount of $3.3 billion with 29 banks. The first
agreement for $2.3 billion will expire on January 23, 2001 with an option to
extend the maturity of outstanding borrowings at that time to January 23, 2002.
The second agreement for $1 billion will expire on January 25, 2005. The
interest rates under the agreements are either the prime rate or a rate based on
the London Interbank Offered Rate (LIBOR), at the option of the Company. Also on
January 25, 2000, the Company terminated existing revolving credit agreements in
an aggregate amount of approximately $5 billion.

In addition to the $525 million interest rate swaps outstanding at December 31,
1999 of which $100 million is forward starting, the Company entered into four
$50 million forward-starting fixed interest rate swaps as a hedge of future
long-term debt issuance, during the first quarter of 2000.

During the first quarter, the Company also completed an issuance utilizing its
universal shelf registration statement of $300 million of medium term notes due
March 2002.  The proceeds of the offering were used to reduce commercial paper.
The interest rate is a floating rate based on a three-month LIBOR.

During the second quarter of 2000, the Company entered into a $50 million
forward-starting fixed interest rate swap as a hedge of future long-term debt
issuance.  In connection with the issuance of $500 million of 8.75% Notes due
2006, the Company terminated $250 million of forward-starting fixed interest
rate swaps at a gain of $7 million.  The gain will be amortized over the life of
the long-term debt issued as a reduction of interest expense.

During the second quarter of 2000, the Company also voluntarily reduced the $2.3
billion revolving credit agreement by $300 million.  The Company also completed
an issuance utilizing the universal shelf

                                      28
<PAGE>

registration statement of $500 million of 8.75% Notes due 2006. The proceeds of
this offering were used to repay commercial paper.

During the third quarter of 2000, the Company's obligation on two $50 million
forward-starting fixed interest rate swaps was changed to two $50 million
floating-to-fixed interest rate swaps.  The fair market value of the total
outstanding  interest rate swap agreements is a liability of approximately $6.1
million at September 30, 2000.

At September 30, 2000, $200 million of short-term obligations 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 established a $2.5 billion universal shelf registration statement
during 1999, with $1.7 billion remaining available at September 30, 2000.
Securities that may be issued under this shelf registration statement include
debt securities, common stock, warrants to purchase debt securities, warrants to
purchase common stock, stock purchase contracts and stock purchase units.

At the end of the second quarter, after meeting the Company's goal of reducing
net debt by $2.5 billion by the end of 2000, the Company established a new goal
to achieve an incremental $300 million of net debt reduction by the end of 2000.
Net debt had been reduced by approximately $200 million during the third
quarter.  For the nine months ended September 30, 2000, net debt decreased $1.7
billion and for the nine months ended September 30, 1999, since the date of
acquisition, net debt decreased $1 billion.  The Company intends to continue to
achieve additional debt reduction through operating cash flow, working capital
improvements, sale of non-core businesses, disposal of nonrevenue producing
assets and management of expenditures.

During the first quarter of 2000, the Company monetized 2 million shares of its
holdings in RF Micro Devices, Inc. (RFMD) through the execution of three forward
sale agreements maturing in February 2003, August 2003 and February 2004.
During August 2000, RFMD effected a 2-for-1 stock split, thereby doubling the
number of shares currently held by the Company.  The Company received cash
proceeds of $168 million in consideration for its agreement to deliver up to 4
million shares of RFMD common stock, in the aggregate, upon maturity of the
contracts.  The actual number of shares to be delivered upon maturity of each
agreement will be determined on the basis of a formula set forth in the
agreements, comparing the average closing price of the shares for the five
trading days preceding the maturity date to the floor price per share.  The
proceeds from the transactions were used to pay down short-term debt.  The up-
front proceeds were reduced by a discount of approximately $48 million and will
be amortized as interest expense using the effective interest rate method over
the life of the agreements.  Through the setting of a floor and ceiling price,
the forward sales agreements eliminate the Company's exposure to downside market
risk, and at the same time, enable the Company to retain potential market
appreciation up to the respective ceiling price.  The investment in RFMD and the
monetization liability are carried at fair market value.  Changes in fair market
value of the Company's shares of RFMD, including the 4 million shares monetized,
which are limited to changes in stock price between the floor and ceiling, are
recorded in the Other Comprehensive Income(Loss) component of Shareholders'
Investment.

Prior to the 2-for-1 stock split, the Company sold 2.2 million shares of RFMD
common stock for $181 million during the first quarter of 2000 and 422,500
shares were sold for $44 million during the second quarter of 2000. At September
30, 2000, the Company owned approximately 23 million shares, including the 4
million shares the Company pledged to secure its obligations under the forward
sales agreements. The fair value of the Company's investment in RFMD at
September 30, 2000 was approximately $736 million and has been reflected in the
balance sheet of the Company in Investments in Affiliated Companies.

During the third quarter of 2000, the Company monetized its holdings of 229,354
shares in PE Corporation-Celera Genomics Group (Celera) through the execution of
a forward sale agreement maturing in December 2003.  The Company received cash
proceeds of $18.6 million in consideration for its agreement to deliver up to
229,354 shares of Celera common stock, in the aggregate, upon maturity of the
contract.  The actual number of shares to be delivered upon maturity will be
determined on the basis of a

                                      29
<PAGE>

formula set forth in the agreement, comparing the closing price of the shares on
the maturity date to the floor price per share. The proceeds from the
transactions were used to pay down short-term debt. The up-front proceeds were
80% of the floor value of the shares. The $4.7 million discount will be
amortized as interest expense over the life of the agreement. Through the
setting of a floor and ceiling price, the forward sales agreement eliminates the
Company's exposure to downside market risk, and at the same time, enables the
Company to retain potential market appreciation up to the respective ceiling
price. The floor and ceiling price per share is $102 and $176, respectively.

The investment in Celera and the monetization liability are carried at fair
market value.  Changes in fair market value of the Company's shares of Celera
are limited to changes in stock price between the floor and ceiling and are
recorded in the Other Comprehensive Income(Loss) component of Shareholders'
Investment.  The fair value of the Company's investment in Celera at September
30, 2000 was approximately $23 million and has been reflected in the balance
sheet of the Company in Investments in Affiliated Companies.

At September 30, 2000, the Company had a working capital deficiency of
approximately $1.7 billion primarily due to the issuance of debt incurred to
purchase LucasVarity.  Management believes that sufficient resources, from funds
generated by operations, dispositions and existing borrowing capacity, are
available to maintain liquidity.

OTHER MATTERS

TRW Vehicle Safety Systems Inc., a wholly-owned subsidiary of the Company,
reported to the Arizona Department of Environmental Quality, or ADEQ, in 1997,
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, the United States
Environmental Protection Agency, the United States Department of Justice and the
Arizona State Attorney General are conducting civil and criminal investigations
into these potential violations and the Company is cooperating with these
investigations. If proceedings were to be initiated against the Company with
respect to such matters, the Company could be liable for penalties and fines and
other relief. The Company is currently engaged in settlement discussions with
state and federal officials. The Company is not able to predict the outcome of
these discussions at this time.

On March 31, 2000, TRW Vehicle Safety Systems Inc. was served with a putative
class action lawsuit filed in Maricopa County Superior Court in the State of
Arizona. The lawsuit was filed on behalf of everyone living within a five-mile
radius of the Company's air bag manufacturing plant in Mesa, Arizona. The
lawsuit alleges that emissions from the plant have caused health problems for
residents living near the plant and that the Company concealed information about
the potential health risks of its emissions. The lawsuit also alleges that
animals and plant life have been injured or destroyed through significant
exposure to toxic emissions. Plaintiffs are asking the court to require the
Company to institute medical monitoring for the claimants, to conduct various
studies regarding, among other things, the risks of sodium azide, to cease
operations that release toxic substances into the air and to create a supervised
fund to pay for medical screening and monitoring. Plaintiffs are also seeking
attorneys' fees and punitive damages. The Company believes there is no valid
scientific basis for these claims and intends to defend itself vigorously. The
Company is not able to predict the outcome of this lawsuit at this time.

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" note to Financial Statements for further discussion
of these matters.

Euro Conversion

                                      30
<PAGE>

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 until January 1, 2002.

The Company 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 Euro
primarily impacts the Company's automotive business.  The Company has a cross-
functional team to coordinate changes required to conduct its complete business
operations in compliance with Euro-related regulations.  All of the Company's
Euro-zone operations currently are able to invoice and receive payments in Euro,
and some of its operations have already transitioned their accounting records to
Euro as the base currency.  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 may be
forward-looking statements.  In addition, from time to time, the Company and its
representatives make statements that may be 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 the Company'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, the Company.

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

The Company's consolidated results could be affected by: unanticipated events
and circumstances that may occur and render the Company's acquisition of
LucasVarity less beneficial to the Company than anticipated; the ability to
continue technical innovation and the development of and demand for new products
and contract awards; the ability to successfully develop commercial applications
for the Company's technologies; the ability to design and develop e-commerce
initiatives for business systems and processes; pricing pressures from
customers; the ability to reduce the level of outstanding debt from cash flow
from operations and the proceeds from asset dispositions; the introduction of
competing products or technology by competitors; the availability of funding for
research and development; the ability to meet performance and delivery
requirements on systems for customers; the economic, regulatory and political
instability of Brazil, Asia and certain emerging countries; fluctuations in
currency exchange rates; and the ability to attract and retain skilled employees
with high-level technical competencies.

The Company's automotive businesses also could be affected by: the ability to
effectively implement the Company's automotive restructuring program and improve
automotive margins; changes in consumer debt levels and interest rates;
moderation or decline in the automobile build rate; work stoppages; customer
recall and warranty claims; product liability issues; and changes to the
regulatory environment regarding automotive safety.

The Company's aerospace and information systems businesses also could be
affected by: the level of defense funding by the government; 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.

The above list of important factors is not exclusive. We caution that any
forward-looking statement reflects only the beliefs of the Company 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.

                                      31
<PAGE>

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 and as a means of securing long-term, floating-rate debt.  Also, the
Company may use interest rate agreements in the management of interest rate
exposure on debt issuances.  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.

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
September 30, 2000, including fixed-rate borrowings exposed due to an interest
rate swap, 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 September 30, 2000,
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 an $89 million loss in fair value.

The Company's sensitivity analyses of the effects of changes in interest rates
and 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.

Management believes the Company's current financial position and financing
arrangements 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 and existing borrowing capacity
are adequate to fund debt service requirements, capital expenditures, working
capital including tax requirements, company-sponsored research and development
programs and dividend payments to shareholders.

Refer to the "Forward Exchange Contracts" and the "Interest Rate Swap
Agreements" notes to Financial Statements for further discussion of derivative
instruments as of September 30, 2000.

                                      32
<PAGE>

PART II.   OTHER INFORMATION

Item 1.  Legal Proceedings.

During 1996, the Company was advised by the United States Department of Justice
(DOJ) that the Company 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.  On August 6, 1999, the Government filed its Second Amended
Complaint, which incorporated vouchers, progress payment requests, and invoices
submitted by the Company to higher tier Government contractors among the class
of allegedly false claims challenged by the Government.  On September 29, 1999,
the former employee filed his Second Amended Complaint, which incorporated
subcontracts performed by the Company for higher tier Government contractors
among the class of contracts under which allegedly false claims were presented,
and added allegations relating to certain of the former employee's pre-existing
claims.  On May 9, 2000, the Company voluntarily dismissed its remaining
counterclaims against the former employee, with prejudice.  On July 10, 2000,
the DOJ filed a motion seeking permission to intervene in the 1995 lawsuit,
which motion was granted on August 16, 2000.  Thereafter, on August 30, 2000,
the DOJ and the former employee filed a single consolidated complaint
encompassing all of the claims in the 1994 and 1995 lawsuits, as those matters
were constituted prior to the filing of the DOJ's July 10, 2000 motion.  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.

In 1992, Vinnell Mining & Minerals Corporation and Atlas Corporation, an
unrelated third party, entered into a Consent Decree with the United States
Environmental Protection Agency with respect to an operable unit of the Atlas
Asbestos Mine Superfund site in Fresno County, California.  Vinnell Mining &
Minerals Corporation is a wholly-owned indirect subsidiary of BDM International,
Inc. that was acquired by the Company in December 1997.  The Consent Decree
provides, among other things, for the remediation of the site and reimbursement
of oversight costs upon submission of appropriate documentation to Vinnell and
Atlas.  In 1999, Vinnell and Atlas filed a Petition for Dispute Resolution in
the U.S. District Court for the Eastern District of California to obtain
judicial review of the oversight cost documentation requirements. In April 2000,
the United States Department of Justice filed a motion for penalties in this
matter, requesting that the court impose penalties in addition to the
reimbursement of oversight costs.

                                      33
<PAGE>

The Company had placed the amount of all claimed oversight costs into escrow
awaiting final decision of the court and maintained that there was no basis for
the imposition of penalties. On September 6, 2000, the United States District
Court Judge entered an opinion and order ordering Vinnell to pay or release from
escrow certain of the claimed oversight costs claimed by the United States, plus
penalties in the amount of $639,500. All payments have been made in a timely
manner. The Company is planning to appeal the order. Management believes that
the ultimate resolution of this matter will not have a material effect on the
Company's financial condition or results of operations.

See also Part II, Item 1 in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000.


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

(a)       Exhibits

          15  Letter re:  Unaudited Financial Information

          27  Financial Data Schedule

          99  Computation of Ratio of Earnings to Fixed Charges - Unaudited
              (Supplement to Exhibit 12 of the following Registration
              Statements of the Company: No. 333-89133 on Form S-3 and No. 333-
              48443 on Form S-3)

(b)       Reports on Form 8-K:

               None.

                                      34
<PAGE>

                                  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: November 2, 2000             By:    /s/ William B. Lawrence
                                        -----------------------------
                                          William B. Lawrence
                                          Executive Vice President, General
                                          Counsel and Secretary


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

                                      35