<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, 1999
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:
CUTLER-HAMMER DE PUERTO RICO COMPANY RETIREMENT 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
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)
CUTLER-HAMMER DE PUERTO RICO
COMPANY RETIREMENT SAVINGS PLAN
Date: June 27, 2000 By: Eaton Corporation Pension
Administration Committee
By: /s/ S. J. Cook
---------------
(Signature)
S. J. Cook
Vice President-Human Resources
Eaton Corporation
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AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Cutler-Hammer de Puerto Rico Company Retirement Savings Plan
Plan Number 002
December 31, 1999 and 1998 and Year Ended December 31, 1999
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Report of Independent Auditors
Corporate Compensation and Organization
Committee of Eaton Corporation
Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Cutler-Hammer de Puerto Rico Company Retirement Savings Plan as of
December 31, 1999 and 1998 and the related statement of changes in net assets
available for benefits for the year ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999, is
presented for purposes of additional analysis and is not a required part of the
financial statements but is 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. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
Cleveland, Ohio /s/ Ernst & Young LLP
June 9, 2000
1
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
----------------------------------------
<S> <C> <C>
ASSETS
Investments:
Eaton Corporation Common Shares $ 1,058,509 $ 1,038,972
Mutual funds 6,664,437 4,243,942
Common/collective trust funds 6,766,898 5,856,744
Money market funds 2,929 6,662
----------------------------------------
Total investments 14,492,773 11,146,320
Receivables:
Contributions--Employer 81,192 68,832
Contributions--Employees 214,278 181,434
Interest 92 160
----------------------------------------
Total assets 14,788,335 11,396,746
LIABILITIES
Accrued purchase of investments - 5,080
----------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 14,788,335 $ 11,391,666
========================================
</TABLE>
See notes to financial statements.
2
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Statement of Changes in Net Assets Available For Benefits
Year Ended December 31, 1999
<TABLE>
<CAPTION>
ADDITIONS
<S> <C>
Contributions--Employees $ 2,106,112
Contributions--Employer 731,926
Interest 1,670
Dividends 314,857
Net appreciation in fair value of investments 1,170,334
--------------------
Total additions 4,324,899
DEDUCTIONS
Distributions to participants 928,230
--------------------
Net increase 3,396,669
Net assets available for benefits at beginning of year 11,391,666
--------------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 14,788,335
====================
</TABLE>
See notes to financial statements.
3
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Notes to Financial Statements
December 31, 1999 and 1998
A. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Cutler-Hammer de Puerto Rico Company Retirement
Savings Plan (the "Plan") are prepared under the accrual method of accounting.
Investments are stated at fair value as measured by quoted prices in active
markets except for the money market funds, which are stated at fair value as
determined by the trustee.
The cost of shares sold for mutual funds and common shares 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.
Certain amounts in the prior year financial statements have been reclassified to
conform to the current year presentation.
B. DESCRIPTION OF PLAN
Effective February 1, 1994, Cutler-Hammer de Puerto Rico Company (the "Company"
or the "Plan Sponsor"), a wholly-owned subsidiary of Eaton Corporation,
established the Plan. The Plan provides that all employees of the Company are
eligible immediately upon employment.
Eligible employees may elect to make before-tax contributions to the Plan up to
a maximum of 8% of their compensation. The Company has agreed to voluntarily
contribute 50% of the employee contributions not exceeding 2% of the total
compensation of the employee.
Contributions are allocated by the employee to any of the three investment funds
offered by the Plan.
All administrative and transaction costs, management fees and expenses of the
Plan shall be paid by the Company.
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Notes to Financial Statements--Continued
B. DESCRIPTION OF PLAN--CONTINUED
Each participant's account is credited with the participant's contributions and
allocations of Company contributions, Plan earnings and administrative expenses.
Allocations are based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account. On termination of service, a
participant may receive a lump-sum amount equal to the vested value of his or
her account.
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of continuous service. Participants
are 100% vested after three years of credited service or upon the death of the
participant. Forfeitures of non-vested amounts shall be used to reduce future
Company contributions.
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 investment 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
1999 1998
--------------------------------------
<S> <C> <C>
EB Managed Guaranteed Investment Contract Fund $ 6,766,898 $ 5,856,744
Victory Stock Index Fund 6,664,437 4,243,942
Eaton Corporation Common Shares 1,058,509 1,038,972
</TABLE>
5
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Notes to Financial Statements--Continued
C. INVESTMENTS--CONTINUED
During 1999, the Plan's investments (including investments bought, sold, and
held during the year) appreciated in fair value as follows:
<TABLE>
<S> <C>
Eaton Corporation Common Shares $ 18,745
Mutual Funds 755,062
Common/collective Trust Funds 396,527
--------------------
$ 1,170,334
====================
</TABLE>
D. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
---------------------------------------
<S> <C> <C>
Net assets available for benefits per the financial
statements $ 14,788,335 $ 11,391,666
Amounts allocated to withdrawing participants (266,390) (246,530)
---------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS PER FORM 5500 $ 14,521,945 $ 11,145,136
=======================================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
--------------------
<S> <C>
Benefits paid to participants per the financial statements $ 928,230
Add: Amounts allocated to withdrawing
participants at December 31, 1999 266,390
Deduct: Amounts allocated to withdrawing
participants at December 31, 1998 (246,530)
--------------------
BENEFITS PAID TO PARTICIPANTS PER FORM 5500 $ 948,090
====================
</TABLE>
6
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
Notes to Financial Statements--Continued
D. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500--CONTINUED
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to the
end of the Plan year but not yet paid.
E. INCOME TAX STATUS
The Plan has received a determination letter from the Puerto Rico Treasury
Department stating that the Plan meets the requirements for qualification under
Puerto Rico income tax laws and that the related trust is exempt from income
taxes.
F. TRANSACTIONS WITH PARTIES-IN-INTEREST
Party-in-interest transactions include the investment in the special funds of
the trustee and the payment of administrative expenses. Such transactions are
exempt from being prohibited transactions.
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Cutler-Hammer de Puerto Rico Company
Retirement Savings Plan
EIN 34-1756466 Plan Number: 002
Schedule H, Line 4(i)--Schedule of Assets Held for
Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
Description of Current
Identity of issue Investment Value
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* KeyBank:
EB Managed Guaranteed Investment
Contract Fund 486,460 units $ 6,766,898
Victory Stock Index Fund 272,797shares 6,664,437
EB Money Market Fund 2,929 units 2,929
* Eaton Corporation Common Shares 14,575 shares 1,058,509
----------------------
$ 14,492,773
======================
</TABLE>
* Indicates a party-in-interest to the Plan.
8
