<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 (Fee required)
For the fiscal year ended December 31, 1998
Or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 (Fee required)
For the transition period from _____________ to ___________
Commission file number ____________________________________
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
EATON CORPORATION 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Eaton Corporation, 1111 Superior Avenue,
Cleveland, Ohio 44114-2584
Exhibit
The following exhibit is filed herewith:
Exhibit No.
(23) Consent of Independent Auditors 14
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
(Name of Plan)
EATON CORPORATION 401(k)
SAVINGS PLAN
<PAGE> 2
Date: June 28, 1999 By: Eaton Corporation Pension
Administration Committee
By: /s/ S. J. Cook
-----------------------------
(Signature)
S. J. Cook
Vice President-Human Resources
Eaton Corporation
<PAGE> 3
Audited Financial Statements and
Supplemental Schedules
EATON CORPORATION 401(k) SAVINGS
PLAN AND TRUST
PLAN NUMBER: 162
DECEMBER 31, 1998
PLAN SPONSOR
Eaton Corporation
Eaton Center
Cleveland, Ohio 44114
(216) 523-5000
Employer Identification Number: 34-0196300
PLAN ADMINISTRATOR
Eaton Corporation
Corporate Compensation and
Organization Committee
Eaton Center
Cleveland, Ohio 44114
(216) 523-5000
<PAGE> 4
Report of Independent Auditors
Corporate Compensation and Organization
Committee of Eaton Corporation
Eaton Corporation 401(k) Savings Plan and Trust
We have audited the accompanying statements of net assets available for benefits
of the Eaton Corporation 401(k) Savings Plan and Trust as of December 31, 1998
and 1997, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1998. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997 and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information in the statement of net assets available
for benefits and the statement of changes in net assets available for benefits
is presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 11, 1999
1
<PAGE> 5
Eaton Corporation 401(k) Savings Plan and Trust
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Mutual Funds
----------------------------------------------------------
EB
Money Prism American Vanguard Fidelity Templeton Vanguard
Market Reserve Balanced Windsor Contra Foreign Index
Fund Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Mutual funds $2,540,203 $949,341 $1,208,192 $ 335,633 $9,089,599
Common/collective fund $8,762,812
EB Money Market fund $ 835,188
Eaton Corporation Common Shares
Participant loans receivable
-----------------------------------------------------------------------------------
Total investments 835,188 8,762,812 2,540,203 949,341 1,208,192 335,633 9,089,599
Receivables:
Interest 3,539
Employee contributions 2,800 1,667 7,657 8,543 6,764 2,635 8,080
Other
-----------------------------------------------------------------------------------
Total assets 841,527 8,764,479 2,547,860 957,884 1,214,956 338,268 9,097,679
LIABILITIES
Other payable
-----------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 841,527 $8,764,479 $2,547,860 $957,884 $1,214,956 $ 338,268 $9,097,679
===================================================================================
<CAPTION>
Eaton
Common
Shares Loan
Fund Fund Total
------------------------------------
<S> <C> <C> <C>
ASSETS
Investments:
Mutual funds $14,122,968
Common/collective fund 8,762,812
EB Money Market fund $ 58,387 893,575
Eaton Corporation Common Shares 2,916,728 2,916,728
Participant loans receivable $ 800,793 800,793
------------------------------------
Total investments 2,975,115 800,793 27,496,876
Receivables:
Interest 426 3,965
Employee contributions 2,655 40,801
Other 41,817 41,817
------------------------------------
Total assets 3,020,013 800,793 27,583,459
LIABILITIES
Other payable 10,067 10,067
------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $3,009,946 $ 800,793 $27,573,392
====================================
</TABLE>
See notes to financial statements.
2
<PAGE> 6
Eaton Corporation 401(k) Savings Plan and Trust
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Mutual Funds
--------------------------------------------------------
Prism Key
Money Prism American Stock Vanguard Fidelity Templeton
Market Reserve Balanced Index Windsor Contra Foreign Loan
Fund Fund Fund Fund Fund Fund Fund Fund Total
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Mutual funds $ 203,979 $ 140,880 $ 309,922 $ 355,913 $127,327 $1,138,021
Common/collective fund $ 52,923 $41,106 94,029
Participant loans $ 14,163 14,163
receivable
------------------------------------------------------------------------------------------------------
Total investments 52,923 41,106 203,979 140,880 309,922 355,913 127,327 14,163 1,246,213
Receivables:
Employee contributions 1,016 1,046 4,166 3,872 11,185 6,615 2,955 30,855
------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS $ 53,939 $ 42,152 $ 208,145 $ 144,752 $ 321,107 $ 362,528 $ 130,282 $ 14,163 $1,277,068
======================================================================================================
</TABLE>
See notes to financial statements.
3
<PAGE> 7
Eaton Corporation 401(k) Savings Plan and Trust
Statement of Changes in Net Assets Available for Benefits, with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Mutual Funds
----------------------------------------------------------
EB Key
Money Prism American Stock Vanguard Fidelity Templeton
Market Reserve Balanced Index Windsor Contra Foreign
Fund Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Employee contributions $105,043 $ 304,363 $ 448,734 $28,616 $ 538,141 $ 427,440 $ 156,465
Interest 22,674
Dividends 203,244 5,213 76,277 87,818 33,310
-----------------------------------------------------------------------------------
Total additions 127,717 304,363 651,978 33,829 614,418 515,258 189,775
DEDUCTIONS
Distributions to participants 167,980 313,382 105,346 12,263 15,120 33,190
Net realized and unrealized
appreciation
(depreciation) in 93,811 (90,450) 10,912 (57,401) 139,991 (55,694)
fair value of investments
Net interfund transfers 208,878 (202,820) (151,885) (189,493) 91,845 212,296 (34,837)
Transfers from predecessor 618,973 8,840,355 2,035,418 178 3 141,932
plans
-----------------------------------------------------------------------------------
Net increase (decrease) 787,588 8,722,327 2,339,715 (144,752) 636,777 852,428 207,986
Net assets available for
benefits at beginning of 53,939 42,152 208,145 144,752 321,107 362,528 130,282
year
-----------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $841,527 $8,764,479 $2,547,860 $ 0 $ 957,884 $1,214,956 $ 338,268
===================================================================================
<CAPTION>
Mutual Funds
------------
Eaton
Vanguard Common
Index Shares Loan
Fund Fund Fund Total
------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS
Employee contributions $ 482,922 $ 168,482 $ 2,660,206
Interest $ 23,441 46,115
Dividends 121,493 20,085 547,440
------------------------------------------------
Total additions 604,415 188,567 23,441 3,253,761
DEDUCTIONS
Distributions to participants 210,841 66,019 924,141
Net realized and unrealized
appreciation
(depreciation) in 1,193,687 340,555 1,575,411
fair value of investments
Net interfund transfers (277,608) 150,419 193,205
Transfers from predecessor 7,788,026 2,396,424 569,984 22,391,293
plans
------------------------------------------------
Net increase (decrease) 9,097,679 3,009,946 786,630 26,296,324
Net assets available for
benefits at beginning of 14,163 1,277,068
year
------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $9,097,679 $3,009,946 $ 800,793 $27,573,392
================================================
</TABLE>
See notes to financial statements.
4
<PAGE> 8
Eaton Corporation 401(k) Savings Plan and Trust
Notes to Financial Statements
December 31, 1998 and 1997
A. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value as measured by quoted prices in active
markets except for the Prism Money Market Fund and the Fidelity Contra Fund
where the investments are stated at fair value as determined by the trustee. The
participant loans receivable are valued at their outstanding balances, which
approximate fair value.
The cost of shares sold for mutual funds and Eaton Common Shares Fund is based
upon the average cost of each participant's shares sold for purposes of
determining realized gains and losses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from these estimates.
B. DESCRIPTION OF THE PLAN
Effective July 1, 1996, Eaton Corporation (the "Company" or "Plan Sponsor")
established a 401(k) profit sharing plan and trust to be known as the Eaton
Corporation 401(k) Savings Plan and Trust (the "Plan").
On May 1, 1998 the Company amended the Plan and restated certain articles
therein to qualify the Plan as a profit-sharing plan under Section 401(a) of the
Internal Revenue Code (the "Code"), and include a cash or deferred arrangement
that is intended to qualify under Section 401(k) of the Code.
The Plan provides that all union employees that belong to IAM Local 78 and IAM
Local 1061, Milwaukee, Wisconsin; USWA Local 7509, Shelbyville, Tennessee; UAW
Local 164, Auburn, Indiana; Metal Processors Union IUAP and NW AFL-CIO Local 16,
Rochelle, Illinois; UAW Local 220, Marshall, Michigan; IAM and Aerospace
Workers, Local 77, Eden Prairie, Minnesota; Beaver Salaried Employees
Association and IBEW, AFL-CIO, Local 201, Beaver, Pennsylvania; and IBEW,
AFL-CIO, Local 1833, Horseheads, New York, will be eligible for membership in
the Plan on the date at which the employee has completed the specified
probationary period as stated in the applicable collective bargaining agreement.
5
<PAGE> 9
Eaton Corporation 401(k) Savings Plan and Trust
Notes to Financial Statements-Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
Eligible employees may elect to make before-tax contributions from 1 to 15
percent of their compensation. Contributions are allocated by the employee among
the following nine investment funds offered by the Plan. Beginning in 1998, the
Vanguard Index Fund and the Eaton Common Shares Fund are new investment options.
<TABLE>
<CAPTION>
Fund Description Sponsor
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
EB Money Market Fund Money Market Instruments Key Bank
Prism Reserve Fund U.S. Treasury and Agency Securities Key Bank
American Balanced Fund Stocks and Bonds of U.S. Companies Key Bank
and Government
Key Stock Index Fund Standard & Poor's 500 Index Key Bank
Vanguard Windsor Fund Common Stocks Vanguard Group
Fidelity Contra Fund Growth Common Stock Fidelity Investment Co.
Templeton Foreign Fund Foreign Stocks and Debt Obligations Templeton Investment Co.
of Companies and Governments
Vanguard Index Fund Common Stocks Vanguard Group
Eaton Common Shares Fund Company Stock Eaton Corporation
</TABLE>
Each participant's account is credited with the participant's contributions and
allocations of the Plan's earnings and is charged with an allocation of
administrative expenses. Allocations are based on participant account balances.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account. Participants are immediately vested in
their contributions and actual earnings thereon. On termination of service a
participant is eligible to receive a lump-sum amount equal to the value of his
account.
Participants may borrow from their fund accounts up to the lesser of $50,000 or
50% of their vested account balance, reduced by their highest outstanding loan
balance during the preceding 12 months. Loan transactions are treated as a
transfer from the investment fund to the loan fund. Loan terms range from 1-5
years except for loans used for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and bear interest at a
rate based on the prime interest rates as determined daily the Trustee.
Principal and interest is paid ratably through monthly payroll deductions.
All administrative and transaction costs, management fees and expenses of the
Plan shall be paid by the trustee from the trust unless such costs, fees and
expenses are paid by the Company. The Company elected to pay certain
administrative costs during 1998 on behalf of the Plan.
6
<PAGE> 10
Eaton Corporation 401(k) Savings Plan and Trust
Notes to Financial Statements-Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
The Company may amend, modify, suspend or terminate the Plan. No amendment,
modification, suspension or termination of the Plan shall have the effect of
providing that any amounts then held under the Plan may be used or diverted to
any purpose other than for the exclusive benefit of members or their
beneficiaries.
Information about the Plan is contained in the Plan document, which is available
from the Human Resources Department upon request.
C. INVESTMENTS
Key Trust Company of Ohio, N.A., trustee of the plan, holds the Plan's
investment assets and executes transactions.
The fair value of individual investments that represent 5% or more of the Plan's
net assets available for benefits are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
--------------------------
<S> <C> <C>
Key Bank Prism Reserve Fund $ 8,762,812 $ 41,106
American Balanced Fund 2,540,203 203,979
Key Stock Index Fund 140,880
Vanguard Windsor Fund 949,341 309,922
Fidelity Contra Fund 1,208,192 355,913
Templeton Foreign Fund 335,633 127,327
Vanguard Index Fund 9,089,599
Eaton Corporation Common Shares 2,975,115
</TABLE>
D. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated November 14, 1997, stating that the Plan is qualified under Section 401(a)
of the Code and that the related trust therefore, is exempt from taxation. Once
qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
7
<PAGE> 11
Eaton Corporation 401(k) Savings Plan and Trust
Notes to Financial Statements - Continued
E. TRANSACTIONS WITH PARTIES-IN-INTEREST
Party-in-interest transactions included the investment in the special funds of
the trustee and the payment of administrative expenses. Such transactions are
exempt from being prohibited transactions.
F. PLAN MERGER
During 1998, the Company authorized the merger of the Eden Prairie Division
Hourly Employee 401(k) Plan and The Eaton Corporation Savings Plan for Certain
Cutler-Hammer Represented Employees to the Plan. Total assets transferred into
the plan during 1998 were $22,391,293.
G. SUBSEQUENT EVENT
The Company authorized the mergers of the Engineered Fasteners Division Hourly
Employees 401(k) Plan and the Lincoln Plant Share Purchase and Investment Plan
and Trust into the Plan. The Plan mergers were effective February 1, 1999 and
May 1, 1999, respectively. Assets transferred into the Plan on approximately
those same dates.
H. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has determined that it will be necessary to take certain steps
in order to ensure that the Plan's information systems are prepared to handle
year 2000 dates. The Plan Sponsor is taking a two phase approach. The first
phase addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Plan Sponsor anticipates substantially
completing this phase of the project by mid-1999. Costs associated with
modifying software and equipment are not estimated to be significant and will be
paid by the Plan Sponsor.
For the second phase of the project, Plan management established communications
with its third party service providers to determine that they have developed
plans to address their own year 2000 problems as they relate to the Plan's
operations. All third party service providers have indicated that they will be
year 2000 compliant by mid-1999. If modification of data processing systems of
either the Plan, the Plan Sponsor, or its service providers are not completed
timely, the year 2000 problem could have an impact on the operations of the
Plan. Plan management has not developed a contingency plan, because they are
confident that all systems will be year 2000 ready.
8
<PAGE> 12
Eaton Corporation 401(k) Savings Plan and Trust
EIN: 34-0196300 Plan No.: 162
Form 5500, Line 27(a)--Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Description of Current
Identity of Issue Investment Cost Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* Key Bank:
Prism Reserve Fund 55,039 shares $ 8,675,182 $ 8,762,812
Employee Benefits Money Market Fund 893,575 units 893,575 893,575
American Balanced Fund 161,180 shares 2,606,692 2,540,203
Vanguard Windsor Fund 60,972 shares 1,013,206 949,341
Vanguard Index Fund 80,546 shares 7,890,409 9,089,599
Fidelity Contra Fund 21,275 shares 1,121,140 1,208,192
Templeton Foreign Fund 39,978 shares 340,893 335,633
* Eaton Corporation Common Shares 41,262 shares 2,615,196 2,916,728
* Participant Loans Receivable 8.75%--9.5%;
variable maturities 800,793
---------------------------
$ 25,156,293 $27,496,876
===========================
</TABLE>
*Indicates a party-in-interest to the Plan.
9
<PAGE> 13
Eaton Corporation 401(k) Savings Plan and Trust
EIN: 34-0196300 Plan No: 162
Form 5500, Line 27(d)--Schedule of Reportable Transactions
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Purchase Selling Cost of Current Net Gain
Description of Asset Price Price Asset Value (Loss)
- ----------------------------------------------------------------------------------------------------------
CATEGORY (I)--SINGLE TRANSACTION IN EXCESS OF 5%
OF PLAN ASSETS
<S> <C> <C> <C> <C> <C>
*Key Bank:
EB Money Market Fund $ 618,934 $ 618,934 $ 618,934
EB Money Market Fund 184,628 184,628 184,628
EB Money Market Fund 69,551 69,551 69,551
EB Money Market Fund 142,409 142,409 142,409
EB Money Market Fund 77,635 77,635 77,635
EB Money Market Fund 74,850 74,850 74,850
EB Money Market Fund 109,496 109,496 109,496
EB Money Market Fund 177,064 177,064 177,064
EB Money Market Fund 73,338 73,338 73,338
EB Money Market Fund $224,711 224,711 224,711
EB Money Market Fund 70,408 70,408 70,408
EB Money Market Fund 97,470 97,470 97,470
EB Money Market Fund 96,062 96,062 96,062
EB Money Market Fund 81,302 81,302 81,302
EB Money Market Fund 84,375 84,375 84,375
EB Money Market Fund 128,003 128,003 128,003
EB Money Market Fund 73,911 73,911 73,911
Prism Reserve Fund 329,207 329,207 329,207
Prism Reserve Fund 79,411 79,411 79,411
Prism Reserve Fund 8,511,134 8,511,134 8,511,134
Prism Reserve Fund 78,968 78,968 78,968
Prism Reserve Fund 74,797 74,797 74,797
Prism Reserve Fund 66,509 66,509 66,509
Prism Reserve Fund 72,094 72,094 72,094
Prism Reserve Fund 77,708 76,677 77,708 $ 1,031
Prism Reserve Fund 68,052 67,714 68,052 338
Prism Reserve Fund 67,271 66,687 67,271 584
Prism Reserve Fund 87,448 86,608 87,448 840
American Balanced Fund 2,035,382 2,035,382 2,035,382
American Balanced Fund 72,379 72,379 72,379
</TABLE>
10
<PAGE> 14
Eaton Corporation 401(k) Savings Plan and Trust
EIN: 34-0196300 Plan No: 162
Form 5500, Item 27(d)--Schedule of Reportable Transactions--Continued
<TABLE>
<CAPTION>
Purchase Selling Cost of Current Net Gain
Description of Asset Price Price Asset Value (Loss)
- ----------------------------------------------------------------------------------------------------------
CATEGORY (I)--SINGLE TRANSACTION IN EXCESS OF 5%
OF PLAN ASSETS--CONTINUED
<S> <C> <C> <C> <C> <C>
American Balanced Fund $ 89,602 $ 89,602 $ 89,602
American Balanced Fund 88,858 88,858 88,858
American Balanced Fund 103,518 103,518 103,518
American Balanced Fund 170,850 170,850 170,850
American Balanced Fund 154,550 154,550 154,550
American Balanced Fund $ 68,274 70,469 68,274 $ (2,195)
American Balanced Fund 74,166 81,147 74,166 (6,981)
American Balanced Fund 95,390 93,497 95,390 1,893
American Balanced Fund 94,279 98,299 94,279 (4,020)
*Key Stock Index Fund 190,752 169,924 190,752 20,828
Vanguard Windsor Fund 65,870 65,870 65,870
Fidelity Contra Fund 502,000 502,000 502,000
Fidelity Contra Fund 81,875 81,875 81,875
Fidelity Contra Fund 502,000 418,658 502,000 83,342
Fidelity Contra Fund 66,948 61,484 66,948 5,464
Templeton Foreign Fund 141,924 141,924 141,924
Templeton Foreign Fund 66,948 66,948 66,948
Templeton Foreign Fund 86,835 99,075 86,835 (12,240)
Vanguard Index Fund 190,752 190,752 190,752
Vanguard Index Fund 1,645,063 1,645,063 1,645,063
Vanguard Index Fund 72,699 72,699 72,699
Vanguard Index Fund 70,371 70,371 70,371
Vanguard Index Fund 6,130,660 6,130,660 6,130,660
Vanguard Index Fund 108,296 108,296 108,296
Vanguard Index Fund 65,765 65,765 65,765
Vanguard Index Fund 81,187 81,187 81,187
Vanguard Index Fund 111,755 111,755 111,755
Vanguard Index Fund 108,647 108,647 108,647
Vanguard Index Fund 114,975 120,177 114,975 (5,202)
Vanguard Index Fund 129,104 147,397 129,104 (18,293)
</TABLE>
11
<PAGE> 15
Eaton Corporation 401(k) Savings Plan and Trust
EIN: 34-0196300 Plan No: 162
Form 5500, Item 27(d)--Schedule of Reportable Transactions--Continued
<TABLE>
<CAPTION>
Purchase Selling Cost of Current Net Gain
Description of Asset Price Price Asset Value (Loss)
- ----------------------------------------------------------------------------------------------------------
CATEGORY (i)--SINGLE TRANSACTION IN EXCESS OF 5%
OF PLAN ASSETS--CONTINUED
<S> <C> <C> <C> <C> <C>
Vanguard Index Fund $ 73,775 $ 80,510 $ 73,775 $ (6,735)
Vanguard Index Fund 141,926 150,951 141,926 (9,025)
Vanguard Index Fund 89,215 92,878 89,215 (3,663)
Vanguard Index Fund 185,795 185,675 185,795 120
Vanguard Index Fund 64,651 57,339 64,651 7,312
Vanguard Index Fund 102,791 91,514 102,791 11,277
*Eaton Common Shares $ 179,405 179,405 179,405
*Eaton Common Shares 67,154 67,154 67,154
*Eaton Common Shares 64,235 64,235 64,235
*Eaton Common Shares 127,945 127,945 127,945
*Eaton Common Shares 173,842 187,600 173,842 (13,758)
*Eaton Common Shares 72,570 72,548 72,570 22
*Eaton Common Shares 87,519 83,332 87,519 4,187
*Eaton Common Shares 84,578 76,985 84,578 7,593
*Eaton Common Shares 96,028 91,114 96,028 4,914
CATEGORY (iii)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
*Key Bank
EB Money Market Fund 3,067,441 3,067,441 3,067,441
2,173,866 2,173,866 2,173,866
Prism Reserve Fund 9,459,470 9,459,470 9,459,470
831,574 824,030 831,574 7,544
Stock Index Fund 48,142 48,142 48,142
199,934 178,380 199,934 21,554
American Balanced Fund 3,412,183 3,412,183 3,412,183
985,509 1,008,629 985,509 (23,120)
Vanguard Windsor Fund 850,057 850,057 850,057
153,237 173,341 153,237 (20,104)
</TABLE>
12
<PAGE> 16
Eaton Corporation 401(k) Savings Plan and Trust
EIN: 34-0196300 Plan No: 162
Form 5500, Item 27(d)--Schedule of Reportable Transactions--Continued
<TABLE>
<CAPTION>
Purchase Selling Cost of Current Net Gain
Description of Asset Price Price Asset Value (Loss)
- ----------------------------------------------------------------------------------------------------------
CATEGORY (iii)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS--CONTINUED
<S> <C> <C> <C> <C> <C>
Fidelity Contra Fund $ 1,630,920 $ 1,630,920 $ 1,630,920
$918,630 827,965 918,630 $ 90,665
Templeton Foreign Fund 930,894 930,894 930,894
666,894 727,929 666,894 (61,035)
Vanguard Index Fund 9,510,993 9,510,993 9,510,993
1,615,081 1,620,584 1,615,081 (5,503)
*Eaton Common Shares 1,485,458 1,485,458 1,485,458
1,166,240 1,127,218 1,166,240 39,022
</TABLE>
There were no category (ii) or (iv) reportable transactions during for the year
ended December 31, 1998.
* Indicates a party-in-interest to the Plan.
13
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 333-28869 and Form S-8 No. 333-77245) pertaining to the Eaton
Corporation 401(k) Savings Plan and Trust of our report dated June 11, 1999,
with respect to the financial statements and schedules of the Eaton Corporation
401(k) Savings Plan and Trust included in this Annual Report (Form 11-K) for the
year ended December 31, 1998.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 23, 1999
14
