SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file no. 1-924
A. Full title of the plan:
AEROQUIP-VICKERS
SAVINGS AND PROFIT-SHARING PLAN
B. Name of issuer of the securities
held pursuant to the plan and the
address of its principal executive office:
Aeroquip-Vickers, Inc.
3000 Strayer
Maumee, Ohio 43537-0050
<PAGE>
REQUIRED INFORMATION
The following financial statements are furnished for the Aeroquip-
Vickers Savings and Profit-Sharing Plan:
Page
Report of Independent Auditors 3
Statements of Assets Available for
Plan Benefits 4
Statements of Changes in Assets Available
for Plan Benefits 5
Notes to Financial Statements 6
Item 27a - Schedule of Assets Held for Investment Purposes 16
Item 27d - Schedule of Reportable Transactions 19
Exhibit
The following exhibit is filed herewith:
Exhibit
Number
(23) Consent of Independent Auditors
SIGNATURE
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.
AEROQUIP-VICKERS, INC.
SAVINGS AND PROFIT-SHARING PLAN
June 17, 1998
Date By: /S/WILLIAM R. AMMANN
William R. Ammann
Vice President - Administration and
Treasurer
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<PAGE>
REPORT OF INDEPENDENT AUDITORS
Administrative Committee
Aeroquip-Vickers
Savings and Profit-Sharing Plan
We have audited the accompanying statements of assets available for plan
benefits of the Aeroquip-Vickers Savings and Profit-Sharing Plan as of
December 31, 1997 and 1996, and the related statement of changes in assets
available for plan benefits for the year ended December 31, 1997. 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 assets available for plan benefits of the Plan at
December 31, 1997 and 1996, and the changes in its assets available for plan
benefits for the year ended December 31, 1997 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, 1997, and
reportable transactions for the year then ended, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the financial statements. The supplemental
schedules 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
Toledo, Ohio
June 5, 1998
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<PAGE>
STATEMENTS OF ASSETS AVAILABLE FOR PLAN BENEFITS
AEROQUIP-VICKERS
SAVINGS AND PROFIT-SHARING PLAN
December 31
1997 1996
ASSETS - Note 1
Contributions receivable from employer $27,508,579 $26,153,642
Contributions receivable from employees 302,958 299,411
Investments
Fixed Income Fund 231,860,798 246,370,216
Vanguard Mutual Funds 388,303,242 287,913,289
Aeroquip-Vickers Stock Fund 46,772,500 32,648,694
Cincinnati Milacron Stock Fund 1,378,428 2,497,971
Loans receivable from plan participants 17,856,938 16,493,172
686,171,906 585,923,882
ASSETS AVAILABLE FOR PLAN BENEFITS $713,983,443 $612,376,935
See accompanying notes
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<PAGE>
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS
AEROQUIP-VICKERS
SAVINGS AND PROFIT-SHARING PLAN
YEAR ENDED DECEMBER 31, 1997
ADDITIONS
Contributions by employees $21,945,346
Contributions by employer 34,080,885
Net investment income
Interest 16,855,357
Dividends 29,015,549
45,870,906
Realized and unrealized gains
on investments 60,616,534
Asset transfers in due to acquisitions 4,305,268
166,818,939
DEDUCTIONS
Distributions to participants 59,040,538
Investment management fees 104,745
Asset transfers out due to sales of facilities 6,067,148
65,212,431
NET ADDITIONS 101,606,508
Assets available for plan benefits
at beginning of year 612,376,935
ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $713,983,443
See accompanying notes
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
AEROQUIP-VICKERS
SAVINGS AND PROFIT-SHARING PLAN
December 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN
The Aeroquip-Vickers Savings and Profit-Sharing Plan (formerly the TRINOVA
Corporation Retirement Savings and Profit-Sharing Plan) (the Plan) is a
defined contribution plan. Eligible participants include all U.S. regular
full-time salaried employees and non-bargaining hourly employees of Aeroquip-
Vickers, Inc. (formerly TRINOVA Corporation)("Company") and its subsidiaries,
Aeroquip Corporation ("Aeroquip") and Vickers, Incorporated ("Vickers"), as
well as certain part-time employees who worked more than 1,000 hours during a
12-month period. Bargaining unit employees are eligible to participate only if
the bargaining agreement permits participation. Temporary employees who work
less than 1000 hours during a 12-month period and interns are not eligible to
participate in the Plan.
Effective May 1, 1997, the plan changed its name from TRINOVA Corporation
Retirement Savings and Profit-Sharing Plan to Aeroquip-Vickers Savings and
Profit-Sharing Plan.
Participants may contribute to the Plan on a pretax basis by salary reduction
up to 15 percent of their annual compensation (in increments of 1 percent)up
to an annual limit imposed by the Internal Revenue Service ($9,500 in 1997).
The contribution receivable amount primarily consists of the profit sharing
contributions for the year. Profit sharing contributions to the Plan by the
Company are based on the level of return on net assets (RONA). These
contributions are paid to the plan by the Company during the first quarter of
the following year.
Information concerning the Plan document, matching and profit-sharing
contributions and vesting is contained in the summary plan description ("SPD")
for the plan. Copies of the SPD are available from the Human Resource
Services department of the Company.
In December 1995, the Company acquired the Electronic Systems Division (ESD)
of Cincinnati Milacron, Inc. The ESD employees' retirement funds were
transferred into the Plan in March 1996 and such participants became eligible
for participation in the Plan as of the date of transfer. Participants were
given the option to retain their investment in the Cincinnati Milacron Stock
fund or to direct their funds into any options available within the Plan.
On December 7, 1996, the Company acquired the Electrical Engineering &
Manufacturing Company (EEMCO), a division of DATRON, Inc. The EEMCO
employees' funds were transferred into the Plan in February 1997 and such
participants became eligible for participation in the Plan as of the date of
transfer.
On July 25, 1997, the Company sold its interest in two manufacturing
facilities to its 51% owned subsidiary, Aeroquip Inoac Company. The two
manufacturing facilities employees' retirement funds were transferred out of
this plan in September 1997 and such participants were terminated from the
plan as of the date of transfer.
Each participant individually directs his or her contributions and Aeroquip-
Vickers' contributions, except for 25 percent of Aeroquip-Vickers' profit-
sharing contribution, into one or more of the following investment funds (in
multiples of 1 percent).
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<PAGE>
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
(1) The Fixed Income Fund is invested in fully benefit-responsive
insurance company investment contracts, including synthetic
investment contracts, bank investment contracts and their
equivalents. These contracts pay a negotiated fixed or variable
interest rate for a period of one to five years. At December 31,
1997 and 1996, the investment contracts had a weighted average
crediting interest rate of 6.92% and 6.59% respectively. The
average yield on these contracts was 6.68% and 6.36% for the years
ended December 31, 1997 and 1996 respectively.
Contracts are negotiated with insurance companies or financial
institutions rated AA+ by Standard and Poor's or its equivalent
and have a maximum average contract life of five years.
(2) Vanguard Mutual Funds are managed by The Vanguard Fiduciary Trust
Company. There are nine individual mutual funds in which
participants may invest:
(a)Vanguard Treasury Money Market Portfolio Fund
(Money Market Fund): Money in the Money Market Fund is
100 percent invested in securities backed by the full
faith and credit of the U.S. government. It seeks the
maximum current income that is consistent with the
preservation of capital and liquidity. Average
maturities for the securities held by the Money Market
Fund are normally maintained in the range of 30 - 60
days and no longer than one year.
(b)Vanguard LifeStrategy Portfolios - Conservative
Growth Portfolio (LifeStrategy Conservative Growth
Fund): Money in the Conservative Growth Portfolio is
invested in a portfolio of Vanguard mutual funds that
emphasizes either equity, fixed income, or money
market securities and seeks to provide a combination
of income and low-to-moderate growth by investing in a
combination of stocks, bonds, and short-term reserves.
(c)Vanguard Fixed Income Securities - Long-term
Corporate Portfolio Fund (Fixed Income Securities
Fund): Money in the Fixed Income Securities Fund is
invested in a diversified portfolio of long-term
investment grade bonds which seeks to provide a high
and sustainable level of current income consistent
with the maintenance of principal and liquidity.
(d)Vanguard STAR Portfolio Fund (STAR Fund): Money in
the STAR Fund is invested in a portfolio of Vanguard
mutual funds that emphasizes either equity, fixed
income or money market securities. It is designed as
a balanced "fund of funds" for long-term investors.
(e)Vanguard/Windsor II Fund (Windsor II Fund): Money
in the Windsor II Fund is invested in stocks which, in
the opinion of the fund's investment manager, are
undervalued in the marketplace. The stocks held in
the Windsor II Fund tend to offer above-average
dividend yields and will normally have below-average
price-to earnings ratios and below-average price-to-
book value ratios relative to the stock market in
general.
-7-
<PAGE>
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
(f) Vanguard Index Trust - 500 Portfolio Fund (Index
Fund): Money in the Index Fund is invested in stocks
of the companies which make up the Standard & Poor's
500 Composite Stock Price Index. The objective of the
Index Fund is to match the performance of the Standard
& Poor's 500 Index.
(g)Vanguard LifeStrategy Portfolios - Growth Portfolio
(LifeStrategy Growth Fund): Money in the Growth
Portfolio is invested in a portfolio of Vanguard
mutual funds that emphasizes either equity, fixed
income, or money market securities and seeks to
provide a combination of long-term growth and income
by investing in a combination of stocks, bonds, and
short-term reserves.
(h) Vanguard/Morgan Growth Fund (Morgan Growth Fund):
Money in the Morgan Growth Fund is invested primarily
in stocks of "established growth" companies. The
companies will normally be medium and larger size
companies with above-average growth in sales and
earnings over extended periods.
(i)Vanguard International Growth Portfolio Fund
(International Growth Fund): Money in the
International Growth Fund is invested in non-U.S.
stocks that have been selected for their growth
potential. The International Growth Fund tends to be
widely diversified both geographically and in terms of
size of companies.
(3) Aeroquip-Vickers Stock Fund is invested in Aeroquip-Vickers common
stock. Cash dividends paid on shares held by the Trust are used
to purchase additional shares for participant accounts.
Twenty-five percent of each participant's profit-sharing
allocation is automatically invested in the Aeroquip-Vickers Stock
Fund until distribution to the participant or until the
participant reaches age 55. Upon reaching age 55, the participant
has the option to redirect the investment from the Aeroquip-
Vickers Stock Fund into any of the other available funds.
Participants may also elect to have additional amounts over
Aeroquip-Vickers' 25 percent profit-sharing contribution invested
in the Aeroquip-Vickers Stock Fund. Aeroquip-Vickers common stock
is acquired in open market purchases at fair market value.
Participant directed contributions to the Aeroquip-Vickers Stock
Fund amounted to $1,661,888 and $1,847,179 for the year ended
December 31, 1997 and 1996, with accumulated participant
contributions and earnings of $19,120,338 and $14,599,867 at
December 31, 1997 and 1996.
(4) The Cincinnati Milacron Stock Fund is invested in Cincinnati
Milacron Common Stock. Cash dividends paid on shares held by the
Trust are used to purchase additional shares for participant
accounts. No contributions, rollovers, or transfers are permitted
into the fund.
-8-
<PAGE>
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard
Fiduciary Trust Company ("VFTC.") The VFTC acts as trustee for only those
investments as defined by the Plan. Transactions in such investments qualify
as party-in-interest transactions which are exempt from the prohibited
transaction rules.
Participants of the Plan have general purpose and home loans available. The
minimum loan permitted is $1,000. Under a general purpose or home loan, a
participant may borrow up to the lesser of one-half of his or her vested
account balance or the total of his or her pretax, vested, matching and roll-
in contributions to the Plan, up to a maximum of $50,000. In no event may the
aggregate amount of loans exceed $50,000. All loans are repaid to the Plan in
equal installments through payroll deductions over a period not to exceed five
years for general purpose and twenty years for home loans. Interest is
charged at the prime rate, plus 1 percent at the loan origination date.
Aeroquip-Vickers, Inc. reserves the right to amend, modify or terminate the
Plan at any time.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accounting records of the Plan are maintained on the accrual basis.
Investment Valuation and Income Recognition
Marketable securities are stated at aggregate fair value and are valued at the
last sales price quoted by a national securities exchange on the last business
day of the plan year. Mutual funds are stated at the net asset value on the
last business day of the plan year. The difference between fair value and the
cost of investments is reflected in the statement of changes in assets
available for plan benefits as unrealized gains (losses) on investments.
Guaranteed investment contracts are stated at contract value. The contract
value of these fully benefit-responsive contracts approximates the fair value.
Loans receivable are stated at cost which approximates fair value.
Realized gains or losses on the sales of investments represent the differences
between the proceeds received upon the sale and the cost of investments sold,
determined on an average cost basis.
NOTE 3 - DISTRIBUTIONS
A participant is entitled to the distributions provided by the contributions
and income thereon (including realized and unrealized gains and losses)
allocated to the participant's account.
Upon termination of employment due to retirement, total and permanent
disability or death, a participant or his or her spousal beneficiary will be
entitled to receive a distribution of the participant's entire account without
regard to the Plan's vesting rules: (i) in one lump sum amount; or (ii) in
monthly installments of a fixed amount or over a specified period of time in
an amount of at least $100 per month. Distribution payments to non-spousal
beneficiaries will be made in a lump sum only. If the value of a
-9-
<PAGE>
NOTE 3 - DISTRIBTUIONS (Continued)
participant's account is less than $3,500 ($5,000 as of January 1, 1998), the
plan administrator will distribute the participant's entire interest in one
lump sum payment.
Profit-Sharing and matching contributions and their earnings may be withdrawn
prior to age 59-1/2 in an amount not to exceed the value of the pretax
contributions account at December 31, 1993 and only after all after-tax
contributions and their earnings have been withdrawn. Withdrawals of Profit-
sharing allocations and matching contributions during a participant's
employment are not permitted prior to age 59-1/2, unless the participant can
show financial hardship for which he or she has no other available resources.
Such situations are limited to: (i) certain medical expenses; (ii) payment of
tuition and related educational fees for post-secondary education for the next
year; (iii) costs related to the purchase of a principal residence; or (iv)
payments necessary to avoid eviction from, or a foreclosure on the mortgage
of, the participant's principal residence.
NOTE 4 - INCOME TAX STATUS
The Plan has received a favorable determination letter from the Internal
Revenue Service stating that the Plan is qualified under section 401(a) of the
Internal Revenue Code of 1986 (the "Code") and that the trust, therefore, is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and the Employee Retirement Income Security Act of
1974 to maintain its tax exempt status. The Plan's administrator is not aware
of any course of action or series of events that have occurred that might
adversely affect the Plan's qualified status.
NOTE 5 - USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions and deductions during the reporting period.
Actual results could differ from those estimates.
NOTE 6 - YEAR 2000 ISSUE (UNAUDITED)
The plan sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical
data processing systems. The project also includes determining whether third
party service providers have reasonable plans in place to become year 2000
compliant. The Plan Sponsor currently expects the project to be substantially
complete by early 1999. The Plan Sponsor does not expect this project to have
a significant effect on plan operations.
-10-
<PAGE>
<TABLE>
NOTE 7 - CHANGES IN ASSETS BY INVESTMENT OPTION
<CAPTION>
Cincinnati
Vanguard Milacron
Fixed Income Mutual Aeroquip-Vickers Stock
Fund Fund Stock Fund Fund
<S> <C> <C> <C> <C>
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1996 $246,370,216 $287,913,289 $ 32,648,694 $ 2,497,971
Reclassification of prior year
contributions receivable 6,148,980 13,226,959 7,193,305
252,519,196 301,140,248 39,841,999 2,497,971
ADDITIONS
Contributions
Employee 5,150,225 16,075,925 719,196
Employer 7,129,137 19,322,914 7,628,834
12,279,362 35,398,839 8,348,030 0
Net investment income
Interest 15,394,134
Dividends 28,205,094 779,630 30,825
Realized and unrealized gains
on investments 47,198,929 13,002,712 414,893
Asset transfers in due to
acquisitions 72,909 4,218,177 14,182
27,746,405 115,021,039 22,144,554 445,718
DEDUCTIONS
Distributions to participants 25,542,532 26,885,663 4,352,186 37,881
Investment management fees 30,306 64,288 9,813 338
Asset transfers out due to sales
of facilities 2,019,380 2,398,359 1,262,661
27,592,218 29,348,310 5,624,660 38,219
NET ADDITIONS PRIOR TO TRANSFERS 154,187 85,672,729 16,519,894 407,499
Net transfers among investment
funds (15,455,252) 16,496,507 ( 2,014,548) (1,527,037)
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1997 $237,218,131 $403,309,484 $54,347,345 $1,378,433
Investment Amount Included in
Assets Available for Plan Benefits:
December 31, 1997 $231,860,799 $388,303,242 $46,772,500 $1,378,433
December 31, 1996 $246,370,216 $287,913,289 $32,648,694 $2,497,971
</TABLE>
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<PAGE>
<TABLE>
NOTE 7 - CHANGES IN ASSETS BY INVESTMENT OPTION (Continued)
<CAPTION>
Participant Contributions
Loans Receivable Total
<S> <C> <C> <C>
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1996 $ 16,493,712 $ 26,453,053 $612,376,935
Reclassification of prior year
contributions receivable (116,191) (26,453,053) 0
16,377,521 0 612,376,935
ADDITIONS
Contributions
Employee 21,945,346
Employer 34,080,885
0 0 56,026,231
Net investment income
Interest 1,461,223 0 16,855,357
Dividends 29,015,549
Realized and unrealized gains
on investments 60,616,534
Asset transfers in due to
acquisitions 4,305,268
1,461,223 0 166,818,939
DEDUCTIONS
Distributions to participants 2,222,276 59,040,538
Investment management fees 104,745
Asset transfers out due to sales
of facilities 386,748 6,067,148
2,609,024 0 65,212,431
NET ADDITIONS PRIOR TO TRANSFERS (1,147,801) 0 101,606,508
Net transfers among investment funds 2,500,330 0
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1997 $17,730,050 $ 0 $713,983,443
Investment Amount Included in
Assets Available for Plan Benefits:
December 31, 1997
December 31, 1996
</TABLE>
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<PAGE>
NOTE 8 - VANGUARD MUTUAL FUNDS
<TABLE>
A summary of the activity within the separate Vanguard Mutual Fund options
for the year ended December 31, 1997 is as follows:
<CAPTION>
Money LifeStrategy
Market Conservative Fixed Income Star Windsor II
Fund Growth Fund Securities Fund Fund Fund
<S> <C> <C> <C> <C> <C>
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1996 $11,882,796 $ 1,008,795 $ 4,572,697 $90,653,268 $58,307,898
Reclassification of prior year
contributions receivable 2,814,787 44,056 194,917 2,948,276 2,292,472
14,697,583 1,052,851 4,767,614 93,601,544 60,600,370
ADDITIONS
Contributions
Employee 1,289,292 92,723 288,165 3,290,925 3,483,799
Employer 3,503,180 141,824 296,900 3,998,982 3,640,439
4,792,472 234,547 585,065 7,289,907 7,124,238
Dividends 797,770 149,455 374,829 9,753,712 8,113,596
Realized and unrealized gains
(losses) on investments 143,697 254,562 8,901,759 12,555,369
Asset transfers in due to acquisitions 2,826,174 163,576 14,466 175,355 211,330
8,416,416 691,275 1,228,922 26,120,733 28,004,533
DEDUCTIONS
Distributions to participants 1,540,340 159,137 592,884 8,483,229 4,852,423
Investment management fees 12,242 275 619 21,237 10,682
Asset transfers out due to sales
of facilities 429,404 21,327 806,131 396,900
1,981,986 159,412 614,830 9,310,597 5,260,005
NET ADDITIONS PRIOR TO TRANSFERS 6,434,430 531,863 614,092 16,810,136 22,744,528
Net transfers among
investment funds (1,745,418) 1,940,601 260,848 (4,955,242) 8,219,449
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1997 $19,386,595 $ 3,525,315 $5,642,554 $105,456,438 $91,564,347
Investment Amount Included in
Assets Available for Plan Benefits:
December 31, 1997 $16,064,455 $ 3,408,126 $5,421,025 $102,515,386 $88,863,479
December 31, 1996 $11,882,796 $ 1,008,795 $4,572,697 $ 90,653,268 $58,307,898
</TABLE>
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<PAGE>
NOTE 8 - VANGUARD MUTUAL FUNDS (Continued)
<TABLE>
A summary of the activity within the separate Vanguard Mutual Fund options
for the year ended December 31, 1997 is as follows:
<CAPTION>
Total
LifeStrategy Morgan Vanguard
Index Growth Growth International Mutual
Fund Fund Fund Growth Fund Funds
<S> <C> <C> <C> <C> <C>
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1996 $64,651,254 $ 1,340,327 $29,408,225 $26,088,029 $287,913,289
Reclassification of prior year
contributions receivable 2,577,318 94,353 1,360,366 900,414 13,226,959
67,228,572 1,434,680 30,768,591 26,988,443 301,140,248
ADDITIONS
Contributions
Employee 4,138,673 208,201 1,998,149 1,285,998 16,075,925
Employer 4,228,331 248,584 2,099,962 1,164,712 19,322,914
8,367,004 456,785 4,098,111 2,450,710 35,398,839
Dividends 2,081,605 122,199 5,743,097 1,068,831 28,205,094
Realized and unrealized gains
(losses) on investments 21,248,701 322,424 3,784,705 (12,288) 47,198,929
Asset transfers in due to acquisitions 653,091 34,599 109,947 29,639 4,218,177
32,350,401 936,007 13,735,860 3,536,892 115,021,039
DEDUCTIONS
Distributions to participants 6,309,598 302,046 2,468,464 2,177,542 26,885,663
Investment management fees 9,563 420 4,125 5,125 64,288
Asset transfers out due to sales
of facilities 404,140 3,875 210,780 125,802 2,398,359
6,723,301 306,341 2,683,369 2,308,469 29,348,310
NET ADDITIONS PRIOR TO TRANSFERS 25,627,100 629,666 11,052,491 1,228,423 85,672,729
Net transfers among
investment funds 11,411,136 1,212,957 2,755,502 (2,603,326) 16,496,507
ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1997 $104,266,808 $3,277,303 $44,576,584 $25,613,540 $403,309,484
Investment Amount Included in
Assets Available for Plan Benefits:
December 31, 1997 $101,121,009 $3,079,518 $43,025,550 $24,804,694 $388,303,242
December 31, 1996 $ 64,651,254 $1,340,327 $29,408,225 $26,088,029 $287,913,289
</TABLE>
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<PAGE>
Supplemental Schedules
-15-
<PAGE>
<TABLE>
Aeroquip-Vickers Savings and Profit-Sharing Plan
Employer Identification No. 34-4288310
Plan No. 015
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
Principal Amount Contract or
Identity of Issue Description of Investment or Shares Cost Fair Value
<S> <C> <C> <C> <C>
Mutual Funds:
*The Vanguard Group Morgan Growth Fund 2,452,996 $37,234,333 $43,025,550
International Growth Fund 1,513,404 22,822,586 24,804,693
Money Market Fund 16,064,455 16,064,455 16,064,455
Index Fund 1,122,694 67,220,484 101,121,009
Windsor II Fund 3,104,943 69,378,054 88,863,479
STAR Fund 5,898,469 86,707,165 102,515,386
Fixed Income Securities Fund 585,424 5,184,874 5,421,025
LifeStrategy Growth Fund 191,990 2,835,630 3,079,518
LifeStrategy Conservative
Growth Fund 254,338 3,281,241 3,408,127
Total $310,728,822 $388,303,242
*Aeroquip-Vickers Aeroquip-Vickers
Stock Fund Common Stock 953,325 $31,481,160 $46,772,500
Cincinnati Milacron Stock Cincinnati Milacron
Fund Common Stock 53,144 $1,059,200 $1,378,428
Insurance Contracts: Fixed Income Fund
American International Life Assurance Company
6.46%, 3/31/99 5,241,468 $5,241,468 $5,241,468
6.37%, 1/31/2002 7,500,000 7,500,000 7,500,000
Allstate Insurance Company
5.51%, 4/1/98 5,958,961 5,958,961 5,958,961
5.30%, 9/30/98 5,572,061 5,572,061 5,572,061
Aurora National Life
5.18%, 9/3/98 1,603,663 1,603,663 1,603,663
</TABLE>
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<PAGE>
<TABLE>
Aeroquip-Vickers Savings and Profit-Sharing Plan
Employer Identification No. 34-4288310
Plan No. 015
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
Principal Amount Contract or
Identity of Issue Description of Investment or Shares Cost Fair Value
<S> <C> <C> <C> <C>
Citibank, N.A.
5.35%, 4/1/98 4,680,216 4,680,216 4,680,216
Synthetic - Assets are invested
in Dreyfus Cash Management Fund
5.69%, 7/1/98 8,619,395 8,619,395 8,619,395
Synthetic - Assets are invested
in Dreyfus Cash Management Fund
Deutsche Bank
6.35%, 6/30/2000 7,939,235 7,939,235 7,939,235
Synthetic - Assets are invested
in Vanguard Targeted Return
Trust (2-00)
John Hancock
6.50%, 9/30/99 3,048,525 3,048,525 3,048,525
6.75%, 12/29/2000 7,963,382 7,963,382 7,963,382
4.37%, 9/30/2001 10,158,589 10,158,589 10,158,589
Metropolitan Life Insurance Company
6.52%, 8/31/99 5,196,720 5,196,720 5,196,720
6.77%, 3/31/2000 5,258,623 5,258,623 5,258,623
6.74%, 4/30/2001 15,334,717 15,334,717 15,334,717
Mutual Benefit
9.75%, 12/31/99 29,224,769 29,224,769 29,224,769
9.75%, 12/31/99 13,414,488 13,414,488 13,414,488
New York Life Insurance Company
7.23%, 12/15/98 4,402,019 4,402,019 4,402,019
5.44%, 01/02/99 10,650,713 10,650,713 10,650,713
6.65%, 12/31/2001 15,688,685 15,688,685 15,688,685
Principal Mutual
6.32%, 6/30/99 5,879,435 5,879,435 5,879,435
6.83%, 2/28/2001 12,422,920 12,422,920 12,422,920
6.85%, 3/31/2002 6,101,042 6,101,042 6,101,042
</TABLE>
-17-
<PAGE>
<TABLE>
Aeroquip-Vickers Savings and Profit-Sharing Plan
Employer Identification No. 34-4288310
Plan No. 015
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
Principal Amount Contract or
Identity of Issue Description of Investment or Shares Cost Fair Value
<S> <C> <C> <C> <C>
The Prudential Asset Management Company
6.63%, 01/02/98 5,496,617 5,496,617 5,496,617
6.87%, 10/01/98 4,698,756 4,698,756 4,698,756
Rabobank Nederland
6.35%, 9/30/2001 5,361,592 5,361,592 5,361,592
Synthetic - Assets are invested
in Vanguard Targeted Return
Trust (3-01)
Security Life of Denver
5.53%, 9/30/2002 17,842,694 17,842,694 17,842,694
Synthetic - Assets are invested
in Vanguard Targeted Return Trust
(2-02) and Vanguard Targeted
Return Trust (3-02)
Union Bank of Switzerland
6.73%, 6/30/2002 5,165,795 5,165,795 5,165,795
Synthetic - Assets are invested
in Vanguard Targeted Return Trust
(2-02)
Contract adjustments due to (400,372) (400,372)
timing differences
*The Vanguard Group Vanguard Treasury Money Market
Portfolio 1,836,090 1,836,090 1,836,090
Total 231,860,798 231,860,798
Cost of Proceeds of Cost and
Identity of Borrower Rate of Interest Acquisitions Dispositions Fair Value
*Participant loans 7% - 11% $0 $0 $17,856,938
*Party-in-interest
</TABLE>
-18-
<PAGE>
<TABLE>
Aeroquip-Vickers Savings and Profit-Sharing Plan
Employer Identification No. 34-4288310
Plan No. 015
Item 27d - Schedule of Reportable Transactions
December 31, 1997
<CAPTION>
Fair
Identity of Description Purchase Selling Cost of Value of Gain
Party Involved of Assets Price Price Asset Asset (Loss)
<S> <C> <C> <C> <C> <C> <C>
The Vanguard Group
STAR Fund:
purchase transactions $28,768,952 $28,768,952
sale transactions $25,810,377 $21,978,695 $25,810,377 $3,831,682
Windsor II Fund:
purchase transactions 36,509,304 36,509,304
sale transactions 18,508,993 15,404,030 18,508,993 3,104,963
Index 500 Fund:
purchase transactions 37,418,482 37,418,482
sale transactions 22,196,702 17,602,935 22,196,702 4,593,767
Aeroquip-Vickers, Inc. Aeroquip-Vickers Common Stock
purchase transactions 21,099,185 21,099,185
sale transactions 19,976,959 15,593,443 19,976,959 4,383,516
</TABLE>
-19-
EXHIBIT INDEX
Exhibit
Number Page
(23) Consent of Independent Auditors 21
-20-
Exhibit (23)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-55399) pertaining to the Aeroquip-Vickers Savings and Profit
Sharing Plan of Aeroquip-Vickers, Inc. of our report dated June 5, 1998 with
respect to the financial statements and schedules of the Aeroquip-Vickers
Savings and Profit-Sharing Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 1997.
/S/ ERNST & YOUNG LLP
Toledo, Ohio
June 26, 1998
-21-
