Page 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 1994
------------------
Commission file number 1-1396
------
Eaton Corporation
- -------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0196300
- -------------------------------------------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
Eaton Center, Cleveland, Ohio 44114-2584
- -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 523-5000
- -------------------------------------------------------------
(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
and (2) has been subject to such filing requirements for the
past 90 days. Yes X
---
There were 76.3 million Common Shares outstanding as of
September 30, 1994.
<PAGE>
Page 2
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eaton Corporation
Condensed Consolidated Balance Sheets
September 30, December 31,
(Millions of dollars) 1994 1993
---- ----
ASSETS
Current assets
Cash $ 16 $ 32
Short-term investments 47 268
Accounts receivable 934 550
Inventories 677 434
Deferred income taxes and other
current assets 220 182
------ ------
1,894 1,466
Property, plant and equipment 1,423 1,188
Excess of cost over net assets of
businesses acquired 817 265
Deferred income taxes and other assets 561 349
------ ------
$4,695 $3,268
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of
long-term debt $ 28 $ 124
Accounts payable and other
current liabilities 1,029 663
------ ------
1,057 787
Long-term debt 1,113 649
Postretirement benefits other than
pensions 572 509
Other long-term liabilities 347 218
Shareholders' equity 1,606 1,105
------ ------
$4,695 $3,268
====== ======
See accompanying notes.
<PAGE>
<PAGE>
Page 3
<TABLE>
Eaton Corporation
Statements of Consolidated Income
Three Months Ended Nine Months Ended
September 30 September 30
<CAPTION> ------------------ ------------------
(Millions of dollars except for per share data) 1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $1,531 $1,053 $4,447 $3,286
Costs and expenses
Cost of products sold 1,120 787 3,234 2,466
Selling and administrative expense 221 146 645 439
Research and development expense 52 39 157 115
------ ------ ------ ------
1,393 972 4,036 3,020
------ ------ ------ ------
Income from operations 138 81 411 266
Other income and (expense)
Interest expense (25) (20) (71) (61)
Interest income 2 2 5 6
Other income--net 11 2 13 14
------ ------ ------ ------
(12) (16) (53) (41)
------ ------ ------ ------
Income before income taxes 126 65 358 225
Income taxes 42 21 114 75
------ ------ ------ ------
Income before extraordinary item 84 44 244 150
Extraordinary item (3)
------ ------ ------ ------
Net income $ 84 $ 44 $ 244 $ 147
====== ====== ====== ======
Per Common Share
Income before extraordinary item $ 1.10 $ .63 $ 3.25 $ 2.17
Extraordinary item (.05)
------ ------ ------ ------
Net income $ 1.10 $ .63 $ 3.25 $ 2.12
====== ====== ====== ======
Cash dividends paid $ .30 $ .30 $ .90 $ .85
Average number of Common Shares outstanding
(in millions) 76.3 69.8 75.0 69.6
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<PAGE>
Page 4
Eaton Corporation
Condensed Statements of Consolidated Cash Flows
Nine Months Ended
September 30
------------------
(Millions of dollars) 1994 1993
---- ----
Operating activities
Income before extraordinary item $ 244 $ 150
Adjustments to reconcile to net cash
provided by operating activities
Depreciation and amortization 187 146
Changes in operating assets and
liabilities (145) 51
Other--net 56 (19)
------ ------
Net cash provided by operating activities 342 328
Investing activities
Acquisitions of businesses, net of cash acquired (1,052) (12)
Sale of business 54
Expenditures for property, plant and
equipment (143) (145)
Net change in short-term investments 218 (41)
Other--net 14 3
------ ------
Net cash used in investing activities (909) (195)
Financing activities
Long-term borrowings 766 2
Payments of long-term debt (399) (93)
Proceeds from sale of Common Shares 252
Proceeds from exercise of stock options
by employees 18 15
Cash dividends paid (68) (62)
Net change in short-term debt (18) (7)
------ ------
Net cash provided by (used in) financing activities 551 (145)
------ ------
Decrease in cash (16) (12)
Cash at beginning of year 32 30
------ ------
Cash at end of period $ 16 $ 18
====== ======
See accompanying notes.
<PAGE>
Page 5
The following notes are included in accordance with the requirements
of Regulation S-X and Form 10-Q:
Preparation of Financial Statements
- -----------------------------------
The condensed consolidated financial statements of Eaton Corporation
(Eaton or the Company) are unaudited. However, in the opinion of
management, all adjustments have been made which are necessary for a
fair presentation of financial position, results of operations and
cash flows for the stated periods. These financial statements should
be read in conjunction with the consolidated financial statements and
related notes included in the Company's 1993 Annual Report on Form
10-K.
Net Income per Common Share
- ---------------------------
Net income per Common Share is computed by dividing net income by the
average month-end number of shares outstanding during each period.
The dilutive effect of common stock equivalents is not material.
Inventories
- -----------
September 30, December 31,
(Millions of dollars) 1994 1993
---- ----
Raw materials and supplies $182 $144
Work in process and
finished goods 586 374
---- ----
Gross inventories at FIFO 768 518
Excess of current cost
over LIFO cost (91) (84)
---- ----
Net inventories at LIFO $677 $434
==== ====
Acquisition of DCBU
- -------------------
On January 31, 1994, the Company acquired the Distribution and
Control Business Unit (DCBU) of Westinghouse Electric Corporation for
a net purchase price of $1.05 billion, plus the assumption of certain
liabilities. DCBU, a leading North American manufacturer of
electrical distribution equipment and industrial controls with 1993
sales of $1.1 billion, was combined with Eaton's Industrial Control
and Power Distribution Operations (ICPDO), which market Cutler-Hammer
products, to form a new Cutler-Hammer business unit.
The acquisition has been accounted for as a purchase and,
accordingly, the statements of consolidated income include the
results of DCBU beginning February 1, 1994. The acquired assets and
liabilities were recorded at estimated fair values as determined by
Eaton's management based on information currently available and on
current assumptions as to future operations. The allocation of the
purchase price to the acquired assets and liabilities is subject to
revision as a result of the final determination of appraised and
other fair values. The excess of cost over net assets acquired is
estimated to be $567 million and is being amortized over 40 years.
Page 6
The unaudited pro forma results of operations for the first nine
months of 1994 and 1993, as if Eaton and DCBU had been combined as of
the beginning of those years, follow. The pro forma results include
preliminary estimates and assumptions which Eaton's management
believe are reasonable. The pro forma results are not necessarily
indicative of the results which would have occurred if the business
combination had been in effect on the dates indicated, or which may
result in the future and do not include any cost savings or other
effects of the planned integration of DCBU and ICPDO.
Nine Months Ended
September 30
-----------------
(Millions of dollars) 1994 1993
---- ----
Net sales $4,532 $4,044
Income before
extraordinary item 239 155
Income before extraordinary
item per Common Share $3.19 $2.23
The purchase price of DCBU was financed through the liquidation of
$170 million of short-term investments, the sale in March of 3.8
million Common Shares to the public for net proceeds of $214 million,
the sale in April of $100 million of 6-3/8% notes due 1999 and $100
million of 7-5/8% debentures due 2024 and the balance in short-term
commercial paper. At September 30, 1994, the remaining balance of
the short-term commercial paper of $264 million is classified as
long-term debt on the balance sheet because the Company intends, and
has the ability under a five-year $400 million revolving credit
agreement, to refinance this debt on a long-term basis.
Concurrent with the sale of the 6-3/8% notes and 7-5/8% debentures,
the Company terminated, and settled for cash, interest rate swap
agreements with notional amounts totaling $200 million which had been
entered into to hedge the sale of the notes and debentures. The gain
on the termination of the interest rate swap agreements is being
amortized to interest expense over the life of the notes and
debentures and effectively reduces the annual cost of the notes to
4.79% and the debentures to 7.07%.
As a result of the sale of the Common Shares, notes and debentures,
and cash flow from operations, the Company canceled a $555 million
364-day revolving credit agreement and $155 million of a $555 million
five-year revolving credit agreement which had been entered into in
January 1994 to provide interim financing for the acquisition of
DCBU.
Sale of Common Shares
- ---------------------
In January 1994, in a private placement, the Company sold 800,000
Common Shares for net proceeds of $38 million. In March 1994, the
Company sold 3.8 million Common Shares to the public for net proceeds
of $214 million to partially finance the acquisition of DCBU as
described above.
Page 7
Sale of Business
- ----------------
In August 1994, the Company sold the metal enclosure product line of
the Cutler-Hammer business unit for $54 million in cash, resulting in
no gain or loss. The selling price is subject to adjustment based
upon changes in the product line's adjusted net assets sold.
Pending Business Acquisition
- ----------------------------
In October 1994, the Company announced the signing of a letter of
intent to acquire the stock of Lectron Products (Lectron). The
business combination is planned to be accounted for as a
pooling-of-interests and is expected to be completed in November
1994.
Lectron, a privately-held manufacturer of electronic and precision
electromechanical controls for automotive manufacturers, had net
sales of $128 million for the fiscal year ended April 30, 1994.
Lectron, which is headquartered in Rochester Hills, Michigan, has
more than 950 employees who are located at two facilities in the
United States.
Restructuring Charge
- --------------------
Cost of products sold for the first nine months of 1993 includes a
second quarter pretax charge of $9 million for the restructuring of
certain vehicle components operations in Europe. The charge reduced
operating profit of the Vehicle Components business segment.
Extraordinary Item
- ------------------
In March 1993, the Company called for redemption, in April 1993, the
$74 million outstanding balance of its 9% debentures. The
extraordinary loss on this redemption, including the write-off of
debt issue costs, was $5 million before income tax credits ($3
million after income tax credits, or $.05 per Common Share).
Summary Financial Information for Eaton ETN Offshore Ltd.
- ---------------------------------------------------------
Eaton ETN Offshore Ltd. (Eaton Offshore) was incorporated by Eaton
under the laws of Ontario, Canada, primarily for the purpose of
raising funds through the offering of debt securities in the United
States and making these funds available to the Company or it's
subsidiaries. All of the issued and outstanding capital stock of
Eaton Offshore is owned directly or indirectly by Eaton. Eaton
Offshore owns all of the issued and outstanding capital stock of a
number of subsidiaries. These subsidiaries are engaged principally
in the manufacture of fasteners, leaf spring assemblies, engine
components, and electrical and electronic controls. Effective
January 31, 1994, Eaton Offshore, through its subsidiaries, acquired
certain of the Canadian and Brazilian operations of DCBU. On June
30, 1994, ownership of certain other assets of DCBU was transferred
to a subsidiary of Eaton Offshore from a subsidiary of Eaton.
Summary financial information for Eaton Offshore and its consolidated
subsidiaries follows:
Page 8
Nine Months Ended
September 30
-----------------
(Millions of dollars) 1994 1993
---- ----
Income statement data
Net sales $361 $253
Gross margin 61 35
Net income 13 9
September 30, December 31,
1994 1993
---- ----
Balance sheet data
Current assets $298 $160
Net intercompany (payables)
receivables (114) (15)
Noncurrent assets 127 109
Current liabilities 93 50
Noncurrent liabilities 113 114
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
- ---------------------
Strong sales growth continued, resulting in the Company reporting its
third consecutive quarter of record sales, earnings and earnings per
share. The improvement in sales was broadly based with higher sales
volumes achieved in all of the Company's product classes. Each
product class produced double-digit growth in the third quarter and
first nine months of 1994 compared to the same periods in 1993.
Net sales for the three months and nine months ended September 30,
1994 increased 45% and 35% to $1.53 billion and $4.45 billion,
respectively, over the comparable periods in 1993. The improved
sales reflect the acquisition on January 31, 1994 of the Distribution
and Control Business Unit (DCBU) of Westinghouse Electric
Corporation, the results of which have been included in the
statements of consolidated income beginning February 1, 1994. The
sales increase also reflects substantially improved sales of the
Truck Components product class due to the strong pace of North
American factory sales of heavy trucks. The Company expects that the
North American economy will continue to favor it's primary
transportation and capital goods markets. The economic recovery that
began in the United Kingdom in the past year appears to have spread
to the European continent as additional strength is evident in
Germany, France, Italy and other continental countries. The Company
expects its European businesses to benefit substantially as the
recovery continues.
Income from operations increased to $138 million and $411 million in
the third quarter and first nine months of 1994, respectively, from
$81 million and $266 million in the same periods in 1993. These
increases reflect the higher level of sales described above,
including the contribution of DCBU, the results of continuous
improvement initiatives and inventory controls, efforts to maintain
and improve efficiency and productivity in the face of greatly
increased demand, and the benefits of recent restructurings.
Page 9
Interest expense of $25 million in the third quarter and $71 million
for the first nine months of 1994 was up from $20 million and $61
million in the comparable periods in 1993. These increases were
primarily caused by a higher average borrowing level due to the
issuance of $716 million of debt in 1994 to partially finance the
acquisition of DCBU.
Other income--net of $11 million for the third quarter of 1994
increased $9 million from the same period in 1993 primarily due to
gains on foreign currency exchange, disposal of fixed assets and
settlement of an outstanding claim.
Net income rose 91% to $84 million and 66% to $244 million in the
third quarter and the first nine months of 1994, respectively, over
the comparable periods in 1993 largely due to increased sales and
other improvements in operating results discussed above. However,
net income per Common Share for the third quarter and first nine
months of 1994 increased by a lesser percentage (75% for the third
quarter and 53% for the first nine months of 1994) due to the effect
of additional shares outstanding resulting from the sale of 5.9
million Common Shares in the fourth quarter of 1993 and the first
quarter of 1994, the proceeds of which were used primarily to
partially finance the acquisition of DCBU and to fund the redemption
in January 1994 of the $89 million outstanding balance of the 8.5%
debentures.
Results of the Company's Vehicle Components segment are summarized as
follows:
Three Months Ended
September 30
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales
Truck Components $450 $366
Passenger Car Components 146 113
Off-Highway Vehicle
Components 105 82
---- ----
$701 $561
==== ====
Operating profit $ 87 $ 50
==== ====
Page 10
Nine Months Ended
September 30
-----------------
(Millions of dollars) 1994 1993
---- ----
Net sales
Truck Components $1,325 $1,119
Passenger Car Components 456 396
Off-Highway Vehicle
Components 308 243
------ ------
$2,089 $1,758
====== ======
Operating profit $ 264 $ 179
====== ======
The Vehicle Components segment continued to experience significant
growth in sales, with increases of 25% and 19% in the third quarter
and the first nine months of 1994, respectively, over the results for
the same periods of 1993. Each product class reported increases in
excess of 20% for the third quarter and first nine months of 1994
compared to the same periods in 1993. These increases were the
result of the continuing strong pace of North American factory sales
of heavy trucks which are running at record levels and are on track
to reach or exceed the record levels of 1979. Order backlogs for
heavy trucks have reached an all-time high of 192,000 units. Segment
sales also reflect the higher sales of components for sport utility
vehicles, minivans and light trucks. United States production of
these light vehicles increased by 21% in the third quarter of 1994
from year earlier levels. Sales of Off-Highway Vehicle Components
have shown marked improvement as a result of strong demand for
hydraulic components from the agricultural, construction and
industrial markets. Passenger Car Components sales in the third
quarter of 1994 have increased substantially over the third quarter
of 1993 due to an increase in industry sales of passenger cars in the
United States. Traditionally, Passenger Car Components sales in the
third quarter are lower than the second quarter as a result of
preparations by vehicle manufacturers for the following model year
and their temporary shutdowns for the taking of annual physical
inventories.
Operating profit for the Vehicle Components segment was strong,
rising 74% and 47% for the third quarter and first nine months of
1994, respectively, over the same periods of 1993. This amounts to a
12% return on sales for the third quarter of 1994 (9% in 1993) and
13% return on sales for the first nine months of 1994 (10% in 1993).
The increased profits were attributable largely to improved sales
levels. Improved profits also reflect continuing stringent cost
containment efforts as well as the economies achieved through
restructurings of certain businesses which have better positioned
operations to benefit from further growth and market opportunities in
global vehicle markets. The restructuring of certain Vehicle
Components operations in Europe in the second quarter of 1993 reduced
operating profit by $9 million for the first nine months of 1993.
Page 11
Several factors give the Company reason for a positive outlook
concerning the growth of the Vehicle Components product lines,
including the continued adoption of multi-valve automobile
engines, continued consumer preference for minivans, light trucks
and sport utility vehicles and the increased use of heavy trucks to
support domestic manufacturing.
Eaton's significant market share in the United States in heavy truck
transmissions, axles and brakes results in the Company benefiting
from any trend which causes a greater demand for trucks. Since truck
components sales provide over one fourth of Company sales, truck
market trends are vital. Over the past ten years, United States
manufacturers have made greater use of trucks. Because the country's
manufacturing economy grew 50% faster than the pace of the general
economy, these uses have had a strong ripple effect on heavy truck
sales as 70% of manufactured goods travel by truck.
An equally positive trend affects another vehicle business -
passenger cars and light trucks. Industry sales in the United States
have been increasing since 1991. The biggest percentage increase has
been in the sale of light trucks, which includes minivans and sport
utility vehicles, where the Company supplies parts which can equal
hundreds of dollars per vehicle. This market is dominated by the
United States Big Three automobile manufacturers, the Company's
traditional customer base. Passenger cars are important to the
Company as it has product content on many models. The continuing
need of automotive manufacturers to gain more fuel economy and
improve emission controls means more engine valve and hydraulic
lifter sales for the Company.
Results of the Company's Electrical and Electronic Controls segment
are as follows:
Three Months Ended
September 30
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales
Industrial and Commercial
Controls $489 $201
Automotive and Appliance
Controls 201 167
Specialty Controls 105 83
---- ----
$795 $451
==== ====
Operating profit $ 66 $ 33
==== ====
Page 12
Nine Months Ended
September 30
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales
Industrial and Commercial
Controls $1,330 $ 572
Automotive and Appliance
Controls 611 555
Specialty Controls 322 250
------ ------
$2,263 $1,377
====== ======
Operating profit $ 172 $ 100
====== ======
Sales for the Electrical and Electronic Controls segment showed
significant improvement, rising 76% in the third quarter and 64% in
the first nine months of 1994 over the results for the same periods
of 1993. The Electrical and Electronic Controls segment now
represents more than one-half of the Company's total sales. Although
this increase was principally in the Industrial and Commercial
Controls product class where the DCBU operations have more than
doubled sales compared to the third quarter and first nine months of
1993, each of the product classes in the Electrical and Electronic
Controls segment reported increases in excess of 20% for the third
quarter of 1994 compared to third quarter 1993. These increases are
a reflection of strong growth in industrial, residential and
commercial construction markets.
The sales increase was also the result of robust sales of
semiconductor equipment. Sales have risen sharply over the past two
years due to increased penetration and worldwide demand for
semiconductor equipment. Order backlogs for the Company's ion
implanters are at record levels. The Company's market leadership has
permitted it to benefit substantially from the industry's growth.
Operating profit for the Electrical and Electronic Controls segment
was up 100% in the third quarter and 72% for the first nine months of
1994 over the same periods in 1993. These results amount to an 8%
return on sales for the third quarter and first nine months of 1994
compared to 7% for comparable periods in 1993. These improvements in
profits resulted from higher sales, including the DCBU contribution,
as well as improved results of the Specialty Controls product lines,
primarily semiconductor equipment. The profits of this segment
continue to benefit from continuing stringent cost containment
efforts as well as from economies achieved through restructurings of
certain businesses to benefit from further growth and market
opportunities in global controls markets.
The combination of DCBU with the Company's existing Industrial
Control and Power Distribution Operations (ICPDO) has strengthened
the Company's competitive position and will provide the opportunity
for significant cost savings resulting from the complementary fit of
the two businesses. The combined operations have a total of 97
plants and warehouses. Substantial efficiencies are beginning to be
experienced due to the combination of the two operations. The
Company has a comprehensive integration plan which is focused on the
Page 13
rationalization of product lines and manufacturing operations, the
integration of sales and distribution functions and the reduction of
administrative expenses. The plan includes plant closures over the
next few years to eliminate over-capacity. To date, the Company has
closed and/or announced the closure of twenty-two facilities. The
Company has also sold three facilities as a result of its divestiture
activities. It has also begun the relocation of several product
lines as a result of the rationalization plan. The cost of the
consolidation program for ICPDO locations was accrued in 1993 and
included in Eaton's $55 million pretax integration charge. For
actions related to DCBU locations, such costs have been considered in
the allocation of the purchase price of DCBU.
The acquisition of DCBU has substantially bolstered the prospects for
the Company's Electrical and Electronic Controls segment. With this
acquisition, the segment is expected to account for approximately 55%
to 60% of the Company's annual sales. The broad demand for
technologically advanced controls for industrial and commercial
markets benefit the Company's product lines in the Electrical and
Electronic Controls segment. Continuing strength in future quarters
is expected.
Results of the Company's Defense Systems segment are as follows:
Three Months Ended
September 30
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales $ 35 $ 41
Operating profit 4 (1)
Nine Months Ended
September 30
-----------------
1994 1993
---- ----
Net sales $ 95 $151
Operating profit 2
Changes in Financial Condition
- ------------------------------
The Company's financial condition remained strong during the first
nine months of 1994. Net working capital increased to $837 million
at September 30, 1994 from $679 million at the end of 1993, with a
slight decrement in the current ratio to 1.8 from 1.9 at those dates,
respectively.
The reduction of $221 million in short-term investments at September
30, 1994 from December 31, 1993 was primarily the result of the
liquidation of $170 million to partially fund the acquisition of DCBU
and the redemption in January of the $89 million outstanding balance
of the 8.5% debentures. The redemption of the 8.5% debentures was
funded by the issuance of 1.3 million Common shares in December 1993
for aggregate net proceeds of $62 million and an additional 800,000
Common Shares in January 1994 for aggregate net proceeds of $38
million.
Page 14
Accounts receivable increased by $384 million at September 30, 1994
from the end of 1993 largely due to the acquisition of DCBU and
increased sales levels. The acquisition of DCBU was also the
principal cause of the substantial increases in inventories, excess
of cost over net assets of businesses acquired, other noncurrent
assets, and other current and long-term liabilities at September 30,
1994 compared to the end of 1993.
Total debt, consisting of short-term, long-term and the current
portion of long-term debt, increased to $1.14 billion at September
30, 1994 from $773 million at the end of 1993, primarily due to debt
issued to finance the acquisition of DCBU as discussed under
"Acquisition of DCBU" in this report. The increase in total debt in
the first nine months of 1994 was net of the redemption in January of
the $89 million outstanding balance of the 8.5% debentures.
Net cash provided by operating activities was $342 million for the
first nine months of 1994 compared to $328 million for the comparable
period in 1993. The improvement in cash flow resulting from
increased net income and other items exceeded the cash requirements
to fund increased working capital, primarily the result of the
substantial increase in accounts receivable caused by the higher
level of sales reported in the first nine months of 1994. Net cash
provided by operating activities in the first nine months of 1994,
supplemented by the liquidation of short-term investments, funding
from commercial paper and other borrowings, and the proceeds from the
sale of a business and the issuance of Common Shares were used to
fund the purchase price of DCBU, capital expenditures, cash dividends
and the repayment of debt, which included the 8.5% debentures.
Page 15
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index attached.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the three months ended
September 30, 1994.
Page 16
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Eaton Corporation
-----------------
Registrant
Date: November 3, 1994 Stephen R. Hardis
----------------------------
Vice Chairman and Chief
Financial and Administrative
Officer (Principal Financial
Officer)
Page 1
EATON CORPORATION
EXHIBIT INDEX
Regulation S-K,
Item 601 - Exhibit
Reference Number Exhibit
- ---------------- -------
4 Pursuant to Regulation S-K
Item 601 (b)(4), the Company
agrees to furnish to the
Commission, upon request, a copy
of the instruments defining
the rights of holders of long-term
debt of the Company and its
subsidiaries.
11 Computations of net income per
Common Share can be determined from
the Statements of Consolidated Income
on page 3 and the footnote "Net Income
per Common Share" on page 5.
27 See Financial Data Schedule attached
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 16
<SECURITIES> 47
<RECEIVABLES> 948
<ALLOWANCES> 14
<INVENTORY> 677
<CURRENT-ASSETS> 1,894
<PP&E> 2,847
<DEPRECIATION> 1,424
<TOTAL-ASSETS> 4,695
<CURRENT-LIABILITIES> 1,057
<BONDS> 1,113
<COMMON> 38
0
0
<OTHER-SE> 1,568
<TOTAL-LIABILITY-AND-EQUITY> 4,695
<SALES> 4,447
<TOTAL-REVENUES> 4,447
<CGS> 3,234
<TOTAL-COSTS> 4,036
<OTHER-EXPENSES> (18)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71
<INCOME-PRETAX> 358
<INCOME-TAX> 114
<INCOME-CONTINUING> 244
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 244
<EPS-PRIMARY> 3.25
<EPS-DILUTED> 3.18
</TABLE>
