EXHIBIT 99(a)
FINANCIAL STATEMENTS
THE TRW CANADA
STOCK SAVINGS PLAN
December 31, 1999 and 1998
REPORT OF INDEPENDENT AUDITORS
To the Participants and the Board of Administration of
The TRW Canada Stock Savings Plan
We have audited the statements of financial condition of the TRW Stock Fund,
Pooled Money Market Fund Employees Profit Sharing Plan, Pooled Balanced Fund
Registered Retirement Savings Plan and Pooled Money Market Fund Registered
Retirement Savings Plan [constituting The TRW Canada Stock Savings Plan] as at
December 31, 1999 and 1998 and the related statements of operations and changes
in fund equity for these funds for the years then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in Canada. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the several funds of The TRW Canada Stock
Savings Plan as at December 31, 1999 and 1998 and the results of their
operations and the changes in fund equity for the years then ended in accordance
with accounting principles generally accepted in Canada.
Hamilton, Canada, /s/ Ernst & Young LLP
March 10, 2000. Chartered Accountants
The TRW Canada Stock Savings Plan
TRW Stock Fund
STATEMENTS OF FINANCIAL CONDITION
As at December 31
1999 1998
$ $
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[expressed in Canadian dollars]
ASSETS
Cash 5,246 5,149
Receivable from TRW Canada Limited 87,163 82,681
Investments at quoted market value
TRW Inc. common stock
13,089 shares [cost $957,618] in 1999 and
12,225 shares [cost $943,274] in 1998 981,170 1,048,903
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1,073,579 1,136,733
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LIABILITIES AND FUND EQUITY
Withdrawals, terminations, and short-term distributions 828,383 921,630
Fund equity [including net unrealized appreciation of investments] 245,196 215,103
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1,073,579 1,136,733
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Number of shares outstanding at December 31 13,089 12,225
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Fund equity per share at December 31 18.7329 17.5953
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See accompanying notes
The TRW Canada Stock Savings Plan
TRW Stock Fund
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
Years ended December 31
1999 1998
$ $
[expressed in Canadian dollars]
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INVESTMENT INCOME
Dividends on TRW Inc. common stock 11,030 12,196
Interest 34 219
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11,064 12,415
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CONTRIBUTIONS
Participants 455,563 451,113
TRW Canada Limited
50% of total participants' contributions to all funds 440,952 428,733
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896,515 879,846
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Net realized gain on transfer
of investments to participants [note 4] 90,527 28,984
Unrealized appreciation (depreciation) of investments [note 4] (82,077) 66,083
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8,450 95,067
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916,029 987,328
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Less withdrawals and terminations
Paid
Cash 1,583 910
TRW Inc. common stock
713 shares in 1999; 1,352 shares in 1998 55,970 87,457
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57,553 88,367
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Payable
Cash 7,979 15,841
TRW Inc. common stock
11,594 shares in 1999; 10,557 shares in 1998 820,404 905,789
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828,383 921,630
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885,936 1,009,997
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Increase (decrease) in fund equity 30,093 (22,669)
Fund equity at January 1 215,103 237,772
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Fund equity at December 31 245,196 215,103
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Money Market Fund Employees Profit Sharing Plan
STATEMENTS OF FINANCIAL CONDITION
As at December 31
1999 1998
$ $
- ------------------------------------------------------------------------------------------
[expressed in Canadian dollars]
ASSETS
Cash 11,879 5,571
Receivable from TRW Canada Limited 22,019 21,253
Investments at market value
Royal Trust Company Classified Money Market Fund
22,325 units [cost $223,250] in 1999 and
22,591 units [cost $225,908] in 1998 223,250 225,908
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257,148 252,732
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LIABILITIES AND FUND EQUITY
Withdrawals, terminations, and short-term distributions 211,299 217,815
Fund equity 45,849 34,917
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257,148 252,732
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Number of units outstanding at December 31 4,584.9 3,491.7
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Fund equity per unit at December 31 10.0 10.0
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Money Market Fund Employees Profit Sharing Plan
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
Years ended December 31
1999 1998
$ $
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[expressed in Canadian dollars]
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Interest income 5,506 6,622
Participants' contributions 230,976 221,027
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236,482 227,649
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Less cash withdrawals and terminations
Paid 20,126 6,680
Payable 205,424 217,815
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225,550 224,495
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Increase in fund equity 10,932 3,154
Fund equity at January 1 34,917 31,763
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Fund equity at December 31 45,849 34,917
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Balanced Fund Registered Retirement Savings Plan
STATEMENTS OF FINANCIAL CONDITION
As at December 31
1999 1998
$ $
- -----------------------------------------------------------------------------------------------------
[expressed in Canadian dollars]
ASSETS
Cash 9,021 1,737
Receivable from TRW Canada Limited 12,653 13,068
Dividends receivable 5,077 14,194
Investments at quoted market value
Royal Trust Company Classified Balanced Fund
40,584.5417 units [cost $565,355] in 1999 and
36,235.7677 units [cost $484,708] in 1998 686,045 562,577
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712,796 591,576
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LIABILITIES AND FUND EQUITY
Withdrawals, terminations, and short-term distributions 13,503 5,106
Fund equity [including net unrealized appreciation of investments] 699,293 586,470
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712,796 591,576
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Number of units outstanding at December 31 40,584.5417 36,235.7677
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Fund equity per unit at December 31 17.230 16.184
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Balanced Fund Registered Retirement Savings Plan
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
Years ended December 31
1999 1998
$ $
- -------------------------------------------------------------------------------------------
[expressed in Canadian dollars]
Income 25,558 33,732
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Contributions
Participants' contributions 136,422 130,483
Transfer from Pooled Money Market Fund RRSP -- 1,442
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136,422 131,925
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Net realized gain on disposition of investments [note 4] 10,587 5,982
Unrealized appreciation of investments [note 4] 42,821 3,953
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53,408 9,935
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215,388 175,592
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Less cash withdrawals and terminations
Paid 102,565 76,947
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Increase in fund equity 112,823 98,645
Fund equity at January 1 586,470 487,825
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Fund equity at December 31 699,293 586,470
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Money Market Fund Registered Retirement Savings Plan
STATEMENTS OF FINANCIAL CONDITION
As at December 31
1999 1998
$ $
- -------------------------------------------------------------------------------------------
[expressed in Canadian dollars]
ASSETS
Cash 5,177 1,432
Receivable from TRW Canada Limited 5,695 5,013
Investments at market value
Royal Trust Company Classified Pooled Money Market Fund
23,897 units [cost $238,966] in 1999 and
26,331 units [cost $263,312] in 1998 238,966 263,312
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249,838 269,757
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FUND EQUITY
Fund equity 249,838 269,757
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Number of units outstanding at December 31 24,983.8 26,975.7
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Fund equity per unit at December 31 10.0 10.0
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See accompanying notes
The TRW Canada Stock Savings Plan
Pooled Money Market Fund Registered Retirement Savings Plan
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
Years ended December 31
1999 1998
$ $
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[expressed in Canadian dollars]
Interest income 12,336 11,782
Participants' contributions 59,633 55,108
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71,969 66,890
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Less cash withdrawals and terminations
Paid 91,888 35,015
Transfer to Pooled Balanced Fund RRSP -- 1,442
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91,888 36,457
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Increase (decrease) in fund equity (19,919) 30,433
Fund equity at January 1 269,757 239,324
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Fund equity at December 31 249,838 269,757
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See accompanying notes
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
1. GENERAL PLAN PROVISIONS
The investment programs of The TRW Canada Stock Savings Plan [the "Plan"] are as
follows:
Participant contributions
Upon enrollment or re-enrollment, each participant directs that his
contributions [computed in increments of one percent, from two percent to six
percent of qualifying compensation] are to be invested in accordance with any of
the following investment options:
[a] 100% in the TRW Stock Fund [the common stock of TRW Inc. in accordance with
the Trust agreement and the Plan].
[b] 100% in the Pooled Money Market Fund Employees Profit Sharing Plan. At
present, the Trustee invests all of the Pooled Money Market Fund amounts in
the Royal Trust Company, Classified Money Market Fund in accordance with
the Trust agreement and the Plan.
[c] 100% in the Pooled Balanced Fund Registered Retirement Savings Plan. At
present, the Trustee invests all of the Pooled Balanced Fund amounts in the
Royal Trust Company, Classified Balanced Fund, in accordance with the Trust
agreement and the Plan.
[d] 100% in the Pooled Money Market Fund Registered Retirement Savings Plan. At
present, the Trustee invests all of the Pooled Money Market Fund amounts in
the Royal Trust Company, Classified Pooled Money Market Fund in accordance
with the Trust agreement and the Plan.
[e] A combination of options [a] through [d] in multiples of 25%.
Such direction may be revised on 30 days prior notice, effective January 1 of
any year.
TRW Canada Limited contributions
TRW Canada Limited shall contribute to the Plan for each month, out of current
or accumulated earnings, an amount equal to 50% of participant contributions for
such month. TRW Canada Limited contributions vest immediately.
All TRW Canada Limited contributions are invested in the TRW Stock Fund.
TRW Canada Limited does not charge a fee for administering the Plans.
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The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
The number of participants in each Fund at December 31 is as follows:
1999 1998
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TRW Stock Fund 245 293
Pooled Money Market Fund Employees Profit Sharing Plan 75 115
Pooled Balanced Fund Registered Retirement Savings Plan 62 81
Pooled Money Market Fund Registered Retirement Savings Plan 39 49
The total number of participants in the Plan is less than the sum of the number
of participants shown above because many are participating in more than one
Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with accounting
principles generally accepted in Canada, and are within the framework of the
accounting policies summarized below.
Gains and losses on investments
The realized gains or losses on disposition or transfer of an investment is
determined from the market value of the investment at the date of disposition or
transfer and the average cost base of that specific pool of investments prior to
the disposition or transfer.
Unrealized gains or losses are determined as the net effect of the change in
appreciation (depreciation) of investments from January 1 to December 31, based
on market value and the average cost base of each investment at those respective
dates.
Income recognition
Dividends are recognized as earned.
Interest income is recognized as it is earned consistent with the accrual basis
of accounting.
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The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
3. INCOME TAXES
The Plan is exempt from Canadian federal income taxes under provisions of the
Income Tax Act. Federal income tax consequences to the participants under the
Plan are as provided in the Income Tax Act. TRW Canada Limited contributions
are taxable to the participants as is the income and all post-1971 capital gains
less post-1971 capital losses of the Plan, all of which are allocated to the
participants by the Trustee during the year, whether or not such amounts are
paid to the participants by the Trustee during the year. In some circumstances,
the amounts taxable could exceed the amounts allocated. The amount of foreign
non-business income tax paid on foreign source income by the trusts under the
Plan for the year is allocated to and deemed to have been paid by the
participants for Canadian federal income tax purposes. Participants who are
non-resident taxpayers are subject to special rules depending on whether they
have performed duties in Canada during the year and are subject to 15%
withholding tax on amounts paid or credited to them under the Plan.
4. UNREALIZED AND REALIZED (LOSSES) GAINS
Investments are stated at their quoted market value. The net unrealized
appreciation (depreciation) of investments included in fund equity is as
follows:
TRW Pooled
Stock Balanced
Fund Fund
$ $
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[expressed in Canadian dollars]
Balance at December 31, 1997 39,546 73,916
Change for the year
Market value 66,083 3,953
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Balance at December 31, 1998 105,629 77,869
Change for the year
Market value (82,077) 42,821
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Balance at December 31, 1999 23,552 120,690
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3
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
The net realized gains on the transfer or disposition of investments are
summarized as follows:
TRW Stock Fund
-------------------------------
1999 1998
$ $
- ------------------------------------------------------------------
[expressed in Canadian dollars]
Amount realized 942,356 784,783
Cost - average 851,829 755,799
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Net realized gain (loss) 90,527 28,984
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Pooled Balanced Fund
Registered Retirement
Savings Plan
-------------------------------
1999 1998
$ $
- ------------------------------------------------------------------
[expressed in Canadian dollars]
Amount realized 66,113 33,999
Cost - average 55,526 28,017
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Net realized gain 10,587 5,982
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5. RELATED PARTY TRANSACTIONS
All expenses related to The TRW Canada Stock Savings Plan are paid by TRW Canada
Limited.
4