- Annual Report of Employee Stock Plans (11-K)
June 23 2010 - 8:04AM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
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þ
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Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2009
OR
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o
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Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934
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For the transition period from_________ to _____________
Commission file number
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A.
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Full title of the plan and the address of the plan, if different from that of
the issuer named below:
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Eaton Savings Plan
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B.
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Name of issuer of the securities held pursuant to the plan and the address of its
principal executive office:
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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.
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(Name of Plan)
EATON SAVINGS PLAN
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Date: June 23, 2010
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By:
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Eaton Corporation Pension
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Administration Committee
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By:
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/s/ B. K. Rawot
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B. K. Rawot
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Senior Vice President and Controller
Eaton Corporation
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EATON SAVINGS PLAN
FINANCIAL STATEMENTS
WITH
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
December 31, 2009
INDEX
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Page
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Report of Independent Registered Public Accounting Firm
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Financial Statements:
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Statement of Net Assets Available for Benefits
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2
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Statement of Changes in Net Assets Available for Benefits
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3
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Notes to Financial Statements
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4 - 14
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Supplemental Schedule:
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Schedule of Assets Held for Investment Purposes at End of Year
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15
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Pension Administration Committee and the
Pension Investment Committee Eaton Corporation
We have audited the accompanying Statement of Net Assets Available for Benefits of the EATON
SAVINGS PLAN as of December 31, 2009 and 2008 and the related Statement of Changes in Net Assets
Available for Benefits for the years then ended. These financial statements are the responsibility
of the Plans management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (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. We
were not engaged to perform an audit of the Plans internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis of designing
audit procedures that are appropriate in the circumstances, but not for expressing an opinion on
the effectiveness of the Plans internal control over financial reporting. Accordingly, we express no such opinion. 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 provides 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 Eaton Savings Plan as of December 31, 2009 and
2008, and the changes in its net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of America.
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 at end of year) as of December
31, 2009, is presented for the purposes of additional analysis and is not a required part of the
financial statements but is supplemental information required by the Department of Labors Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plans management. The supplemental
information 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.
/s/ MEADEN & MOORE, LTD.
MEADEN & MOORE, LTD.
Certified Public Accountants
June 22, 2010
Cleveland, Ohio
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
Eaton Savings Plan
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December 31
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2009
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2008
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ASSETS
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Receivable Employee contributions
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$
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2,826,023
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$
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Receivable Interest
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108,761
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Total Receivables
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2,934,784
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Investments:
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Plan interest in Eaton Employee
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Savings Trust
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2,087,666,025
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1,733,203,859
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Plan interest in Eaton Employee
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Savings Trust Eaton Stable Value Fund
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124,440,918
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127,328,754
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Total Master Trust Investments
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2,212,106,943
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1,860,532,613
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Participant Loans
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56,228,661
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54,859,860
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Total Investments
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2,268,335,604
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1,915,392,473
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Net Assets Available for Benefits, at Fair Value
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2,271,270,388
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1,915,392,473
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Adjustment from fair value to contract value for fully benefit-
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responsive investment contract
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(2,237,494
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1,532,613
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Net Assets Available for Benefits
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$
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2,269,032,894
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$
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1,916,925,086
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See accompanying notes.
-2-
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Eaton Savings Plan
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Year Ended December 31
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2009
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2008
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Additions to Net Assets Attributed to:
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Contributions:
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Employer
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$
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11,258,427
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$
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47,719,474
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Employee
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87,387,026
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111,303,564
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Rollover
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13,996,905
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13,065,781
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112,642,358
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172,088,819
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Plan interest in Eaton Employee Savings
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Trust investment gain
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422,826,617
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Interest and dividend income
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3,677,529
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4,453,408
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Total Additions before Transfers
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539,146,504
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176,542,227
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Transfers from other plans
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96,338
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216,640
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Total Additions
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539,242,842
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176,758,867
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Deductions from Net Assets Attributed to:
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Plan interest in Eaton Employee Savings
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Trust investment loss
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860,090,357
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Benefits paid to participants
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186,503,026
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198,032,409
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Administrative expenses
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525,695
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606,085
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Total Deductions before Transfers
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187,028,721
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1,058,728,851
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Transfers to other plans
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106,313
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2,224
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Total Deductions
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187,135,034
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1,058,731,075
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Net Increase/(Decrease)
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352,107,808
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(881,972,208
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Net Assets Available for Benefits:
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Beginning of Year
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1,916,925,086
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2,798,897,294
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End of Year
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$
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2,269,032,894
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$
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1,916,925,086
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See accompanying notes.
- 3 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
1
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Description of Plan
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The following description of The Eaton Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document and summary plan description, which is
available from the Companys Human Resources Department upon request, for a complete description of
the Plans provisions.
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General:
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Effective July 1, 1974, Eaton Corporation (Eaton, the Company, or the Plan Sponsor)
established the Plan. The Plan was established to encourage eligible employees to make systematic
savings through payroll deductions, to provide additional security at retirement and to acquire a
proprietary interest in the Company. Effective July 5, 1989, the portion of the Plan attributable
to Company contributions was designed to be invested primarily in Eaton Common Shares and
constitute an employee stock ownership plan within the meaning of Code Section 4975(e)(7).
Effective January 1, 2002, the Plan was amended and restated. In conjunction with the amendment and
restatement, the Plan was renamed the Eaton Savings Plan.
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Eligibility:
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An Eaton employee who is in the regular service of a class of an employee in a division or
group to which Eaton Corporation has extended eligibility for membership in the Plan (other than a
temporary employee who is hired for a specific, limited period of time or for the performance of a
specific, limited assignment or employees covered by a collective bargaining agreement that does
not specify coverage under the Plan) will be eligible to participate on any date established in
accordance with administrative procedure which follows the date an employee first incurs an hour of
service.
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Contributions:
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Employee Contributions Employees may make a combination of before-tax and after-tax
contributions ranging from 1% to 30% of their compensation. Catch-up contributions are permitted in
the Plan, allowing participants age 50 and older to defer an additional amount of their
compensation as prescribed by the Internal Revenue Code.
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Employer Contributions Participants of the Plan receive a Company matching contribution of
100% of the first 3% of their compensation, plus 50% of the next 2% of compensation. The Company
matching contribution was suspended effective with the first full pay period beginning after April
1, 2009. The Company matching contribution will be reinstated effective July 1, 2010.
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Contributions are subject to limitations on annual additions and other limitations imposed by
the Internal Revenue Code as defined in the Plan agreement.
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Rollover contributions from other Plans are also accepted, providing certain specified
conditions are met.
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- 4 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
1
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Description of Plan, Continued
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Participants Accounts:
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Each participants account is credited with the participants contributions, Company matching
contributions, and an allocation of the Plans 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 participants account.
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Vesting:
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All participants are 100% vested, subject to certain provisions as defined by the Plan, in
elective deferrals, company contributions and rollover contributions made to the Plan, and actual
earnings thereon.
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Participants Loans:
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Participants may borrow from their fund accounts up to a maximum equal to the lesser of
$50,000 or 50% of their account balance (excluding any contributions made under a Savings Plan,
Individual Retirement Account or Company contributions made in the previous 24 months), reduced by
their highest outstanding loan balance during the preceding 12 months. 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 participants account and bear interest at a rate based on the prime interest rate
as determined by the Trustee. Principal and interest are paid through payroll deduction.
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Hardship Withdrawals:
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Hardship withdrawals are permitted in accordance with Internal Revenue Service guidelines.
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Payment of Benefits:
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Upon termination of service, retirement, death or total and permanent disability, a
participant is eligible to receive a lump sum amount equal to the value of his or her account. A
participant may choose to take partial withdrawals.
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Investment Options:
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Contributions may be invested in any of the fund options available under the Plan.
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- 5 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
2
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Summary of Significant Accounting Policies
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Basis of Accounting:
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The financial statements of the Eaton Savings Plan are prepared on the accrual basis of
accounting.
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Investment Valuation and Income Recognition:
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The Plans trustee is Fidelity Management Trust Company, and the Plans investments, excluding
participant loans, were invested in the Eaton Employee Savings Trust (Master Trust), which was
established for the investment of assets of the Plan and the Eaton Personal Investment Plan. The
fair value of the Plans interest in the individual funds of the Master Trust is based on the value
of the Plans interest in the fund as of January 1, 2002, plus actual contributions and allocated
investment income (loss) less actual distributions.
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Securities traded on a national securities exchange are valued at the last reported sales
price on the last business day of the Plan year. Investments traded in the over-the-counter market
and listed securities for which no sale was reported on that date are valued at the average of the
last reported bid and asked prices. Common/collective trust funds and pooled separate accounts are
valued at the redemption value of the units held at year-end. Participant loans are valued at cost,
which approximates fair value. The Eaton Stable Value Fund invests primarily in investment
contracts issued by insurance companies, banks or other financial institutions, including
investment contracts backed by high-quality fixed income securities.
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Under the revised accounting standards, investment contracts held by a defined-contribution
plan are required to be reported at fair value. However, contract value is the relevant measurement
attribute for that portion of the net assets available for benefits of a defined-contribution plan
attributable to fully benefit-responsive investment contracts because contract value is the amount
participants would receive if they were to initiate permitted transactions under the terms of the
Plan. The Statement of Net Assets Available for Benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair
value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared
on a contract value basis.
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Purchases and sales of securities are recorded on a trade-date basis.
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Use of Estimates:
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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 disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
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- 6 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
2
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Summary of Significant Accounting Policies, Continued
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Administrative Fees:
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All administrative costs, management fees and expenses of the Plan are paid by the trustee
from the Master Trust unless such costs, fees and expenses are paid by the Company. The Company
elected to pay certain administrative costs during 2009 and 2008 on behalf of the Plan. Certain
transaction costs are paid by the employee.
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Plan Termination:
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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.
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Risks and Uncertainties:
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The Master Trusts investments include investments, as listed in Footnote 4, with varying
degrees of risk, such as interest rate, credit and overall market volatility risks. Due to the
level of risk associated with certain investment securities, it is reasonably possible that changes
in the values of investment securities will occur in the near term and such changes could
materially affect the amounts reported in the statement of net assets available for Plan benefits.
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Reclassifications:
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Certain prior year amounts have been reclassified to conform with the current years
presentation.
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3
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Tax Status
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On May 16, 2003, the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The Plan has been
amended; however, the Plan Administrator and the Plans tax counsel believe that the Plan is
currently designed and being operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust
was tax-exempt as of the financial statement date.
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4
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Investments
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Fidelity Management Trust Company, trustee and recordkeeper of the Plan, holds the Plans
investment assets and executes investment transactions, and all investment assets of the Plan,
except for participant loans, are pooled for investment purposes in the Master Trust.
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- 7 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
4
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Investments, Continued
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A summary of the assets of the Master Trust is as follows:
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2009
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2008
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Registered investment companies
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$
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1,054,862,616
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$
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809,602,073
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Eaton common shares
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566,855,536
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458,101,411
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Common collective trusts
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348,625,820
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340,126,988
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U.S. government securities
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115,814,070
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96,371,693
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Guaranteed investment contracts
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112,783,573
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119,563,824
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Interest-bearing cash
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48,056,220
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45,304,644
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Corporate debt instruments
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40,675,433
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54,137,923
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Receivables
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13,517,793
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11,755,944
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Non interest-bearing cash
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9,417
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Liabilities
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(12,943,413
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(7,440,527
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Adjustment from fair value to contract value
for fully benefit-responsive investment contract
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(2,393,042
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1,632,175
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Total Investments
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$
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2,285,864,023
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$
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1,929,156,148
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The Plan had a 96.7% and 96.5% interest in the assets of the Master Trust as of December 31, 2009
and 2008, respectively.
Investment income and administrative expenses relating to the Master Trust are allocated to the
individual Plans based upon the average balance invested by each Plan in each of the individual
funds of the Master Trust. A summary of the Master Trusts net investment income allocated to the
participating Plans for the year ended December 31, 2009 and 2008, is as follows:
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2009
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2008
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Interest and dividend income
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$
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42,408,799
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$
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64,413,793
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Net appreciation in fair value of investment funds:
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Registered investment companies
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228,371,890
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(516,817,688
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Separate accounts
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130,869,711
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(378,690,874
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)
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Common collective trusts
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32,793,242
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(52,253,485
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)
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$
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434,443,642
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$
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(883,348,254
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)
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|
|
At December 31, 2009 and 2008, respectively, the Eaton Fixed Income Fund was comprised of U.S.
government securities (69% and 57%), corporate debt instruments (24% and 32%), interest-bearing and
non interest-bearing cash (5% and 6%), and pooled separate accounts (2% and 5%).
- 8 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
4
|
|
Investments, Continued
|
|
|
|
The Master Trust funds are invested in various investments through the Fidelity Management
Trust Company. Investments which constitute more than 5% of the Master Trusts net assets are:
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
Eaton Stable Value Fund
|
|
$
|
130,724,187
|
|
|
$
|
137,217,538
|
|
Fidelity Contrafund
|
|
$
|
137,679,930
|
|
|
$
|
110,825,820
|
|
Vanguard Institutional Index
|
|
$
|
138,868,213
|
|
|
$
|
115,777,490
|
|
EB Money Market Fund
|
|
$
|
155,936,734
|
|
|
$
|
177,522,862
|
|
Eaton Fixed Income Fund
|
|
$
|
167,290,070
|
|
|
$
|
169,955,591
|
|
Eaton Common Shares Fund (A unitized fund consisting
of Eaton Shares and cash)
|
|
$
|
580,209,860
|
|
|
$
|
466,831,646
|
|
5
|
|
Party-in-Interest Transactions
|
|
|
|
Party-in-interest transactions included the investments in the common stock of Eaton and the
investment funds of the trustee and the payments of administrative expenses by the Company. Such
transactions are exempt from being prohibited transactions.
|
|
|
|
During 2009 and 2008, the Master Trust received $18,218,408 and $16,649,395, respectively, in
common stock dividends from the Company.
|
|
6
|
|
Recently Issued Accounting Pronouncements
|
|
|
|
In 2009, the Financial Accounting Standards Board (FASB) issued the Accounting Standards
Codification, which establishes a sole source of U.S. authoritative generally accepted accounting
principles (GAAP). The Codification is meant to simplify user access to all authoritative
accounting standards by reorganizing U.S. GAAP pronouncements into approximately ninety accounting
topics within a consistent structure; its purpose is not to create new accounting and reporting
standards. Pursuant to the provisions of the Codification, the Plan has updated references to U.S.
GAAP in these financial statements. The adoption of the Codification did not have a material
effect on the net assets available for benefits and changes in those net assets.
|
|
|
|
In 2009, the Plan adopted the new Subsequent Events Standard, as amended, which established
general guidance for accounting and disclosure of events that occur after the balance sheet date
but before financial statements are issued. The Plan has evaluated subsequent events
through the date the financial statements were issued, and reports that the Company matching
contribution will be reinstated effective July 1, 2010.
|
- 9 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
6
|
|
Recently Issued Accounting Pronouncements, continued
|
|
|
|
In 2009, the Plan adopted the additional required guidance of the Fair Value Measurements and
Disclosures Standard. This standard addresses accounting and disclosures related to non-financial
assets and liabilities, primarily goodwill, intangible assets, non-financial assets and
liabilities related to acquired businesses, and impairment and restructuring activities. In 2009,
the Plan also adopted the revised guidance for measuring liabilities at fair value. This guidance
addresses circumstances in which a quoted price in an active market for the identical liability is
not available. The adoption of these standards did not have a material effect on the net assets
available for benefits and changes in those net assets.
|
|
7
|
|
Benefit-Responsive Investment Fund
|
|
|
|
The Plan holds the Eaton Stable Value Fund, a fund managed by Vanguard, that invests in
benefit-responsive investment contracts. The fund is credited with earnings on the underlying
investments and charged for participant withdrawals and administrative expenses. The traditional
guaranteed investment contract issuers are contractually obligated to repay the principal and a
specified interest rate that is guaranteed to the Plan and the synthetic contract issuers are
contractually obligated to guarantee the payment of a specific interest rate to the Plan.
|
|
|
|
As described in Note 2, because the guaranteed investment contracts are fully
benefit-responsive, contract value is the relevant measurement attribute for that portion of the
net assets available for benefits attributable to the guaranteed investment contract. Contract
value, as reported to the Plan by Vanguard, represents contributions made under the contracts,
plus earnings, less participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract
value.
|
|
|
|
The average market yield of the Fund for 2009 and 2008 was 4.03% and 4.38%, respectively.
This yield is calculated based on actual investment income from the underlying investments for the
last month of the year, annualized and divided by the fair value of the investment portfolio on
the report date. The average yield of the Fund with an adjustment to reflect the actual interest
rate credited to participants in the Fund was 3.13% and 3.86%, respectively.
|
|
|
|
There are no reserves against contract value for credit risk of the contract issuer or
otherwise. The crediting interest rate is based on a formula agreed upon with the issuer, but it
may not be less than zero percent. Such interest rates are reviewed quarterly for resetting.
|
|
|
|
The fair value is based on various valuation approaches dependent on the underlying
investments of the contract.
|
- 10 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
7
|
|
Benefit-Responsive Investment Fund, Continued
|
|
|
|
Certain events limit the ability of the Plan to transact at contract value with the issuers.
The Plan Administrator does not believe that the occurrence of any such value event, which would
limit the Plans ability to transact at contract value with participants is probable.
|
|
|
|
The issuer may terminate the contract for cause at any time.
|
|
8
|
|
Fair Value Measurements
|
|
|
|
In the first quarter 2008, the Plan adopted ASC 820, Fair Value Measurements and
Disclosures, which became effective on January 1, 2008. ASC 820, which applies to financial
assets and liabilities, establishes a framework for measuring fair value, establishes a fair value
hierarchy based on inputs used to measure fair value, and expands disclosure about fair value
measurements. Adopting this statement has not had an effect on the Plans net assets available
for benefits and changes in those net assets.
|
|
|
|
In accordance with ASC 820, the Plan has categorized the financial instruments, based on the
degree of subjectivity inherent in the valuation technique, into a fair value hierarchy of three
levels, as follows:
|
|
|
|
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
|
|
|
|
|
Level 2 inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the financial instrument.
|
|
|
|
|
Level 3 inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
|
|
|
Following is a description of the valuation methodologies used for assets measured at fair
value. There have been no changes in the methodologies used at December 31, 2009 and 2008.
|
|
|
|
Registered investment companies (mutual funds), and separate accounts:
Valued at the net
asset value (NAV) of shares held by the Plan at year end. Separate accounts may include U.S.
government securities and corporate debt securities.
|
|
|
|
Common collective trusts
: Valued at the net unit value of units held by the trust at year
end. The unit value is determined by dividing the Total Value of fund Assets by the Total Number
of Units of the Fund owned.
|
|
|
|
Participant loans
: Valued at amortized cost, which approximates fair value.
|
|
|
|
Guaranteed investment contract
: Valued at fair value by discounting the related cash flows
based on current yields of similar instruments with comparable durations considering the
credit-worthiness of the issuer.
|
- 11 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
8
|
|
Fair Value Measurements, Continued
|
|
|
|
The methods described above may produce a fair value calculation that may not be indicative
of net realizable value or reflective of future fair values. Furthermore, while the Plan believes
its valuation methods are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
|
|
|
|
The following table sets forth by level on a recurring basis, within the fair value
hierarchy, the Plans assets at fair value as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Totals
|
|
Registered investment companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity funds
|
|
$
|
471,406,767
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
471,406,767
|
|
Balanced funds
|
|
|
169,850,256
|
|
|
|
|
|
|
|
|
|
|
|
169,850,256
|
|
International equity funds
|
|
|
152,374,956
|
|
|
|
|
|
|
|
|
|
|
|
152,374,956
|
|
Mid-cap equity funds
|
|
|
85,234,313
|
|
|
|
|
|
|
|
|
|
|
|
85,234,313
|
|
Bond funds
|
|
|
75,639,467
|
|
|
|
|
|
|
|
|
|
|
|
75,639,467
|
|
Small-cap equity funds
|
|
|
46,457,036
|
|
|
|
|
|
|
|
|
|
|
|
46,457,036
|
|
REIT funds
|
|
|
13,876,296
|
|
|
|
|
|
|
|
|
|
|
|
13,876,296
|
|
World equity funds
|
|
|
6,998,377
|
|
|
|
|
|
|
|
|
|
|
|
6,998,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,021,837,468
|
|
|
|
|
|
|
|
|
|
|
|
1,021,837,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed investment contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stable value funds
|
|
|
|
|
|
|
124,440,918
|
|
|
|
|
|
|
|
124,440,918
|
|
|
Common collective trusts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
|
|
|
|
|
148,509,864
|
|
|
|
|
|
|
|
148,509,864
|
|
Bond funds
|
|
|
|
|
|
|
66,568,952
|
|
|
|
|
|
|
|
66,568,952
|
|
Asset allocation funds
|
|
|
|
|
|
|
59,398,871
|
|
|
|
|
|
|
|
59,398,871
|
|
International equity funds
|
|
|
|
|
|
|
36,354,478
|
|
|
|
|
|
|
|
36,354,478
|
|
Mid-cap equity funds
|
|
|
|
|
|
|
28,041,614
|
|
|
|
|
|
|
|
28,041,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
338,873,779
|
|
|
|
|
|
|
|
338,873,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separate accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company stock funds
|
|
|
|
|
|
|
569,481,504
|
|
|
|
|
|
|
|
569,481,504
|
|
Bond funds
|
|
|
|
|
|
|
157,473,274
|
|
|
|
|
|
|
|
157,473,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
726,954,778
|
|
|
|
|
|
|
|
726,954,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans
|
|
|
|
|
|
|
|
|
|
|
56,228,661
|
|
|
|
56,228,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
1,021,837,468
|
|
|
$
|
1,190,269,475
|
|
|
$
|
56,228,661
|
|
|
$
|
2,268,335,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 12 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
8
|
|
Fair Value Measurements, Continued
|
|
|
|
The following table sets forth by level on a recurring basis, within the fair value
hierarchy, the Plans assets at fair value as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Totals
|
|
Registered investment companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity funds
|
|
$
|
377,690,688
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
377,690,688
|
|
Balanced funds
|
|
|
153,310,186
|
|
|
|
|
|
|
|
|
|
|
|
153,310,186
|
|
International equity funds
|
|
|
96,445,313
|
|
|
|
|
|
|
|
|
|
|
|
96,445,313
|
|
Mid-cap equity funds
|
|
|
57,751,929
|
|
|
|
|
|
|
|
|
|
|
|
57,751,929
|
|
Bond funds
|
|
|
47,101,268
|
|
|
|
|
|
|
|
|
|
|
|
47,101,268
|
|
Small-cap equity funds
|
|
|
35,896,888
|
|
|
|
|
|
|
|
|
|
|
|
35,896,888
|
|
REIT funds
|
|
|
9,037,459
|
|
|
|
|
|
|
|
|
|
|
|
9,037,459
|
|
World equity funds
|
|
|
5,280,919
|
|
|
|
|
|
|
|
|
|
|
|
5,280,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
782,514,650
|
|
|
|
|
|
|
|
|
|
|
|
782,514,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed investment contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stable value funds
|
|
|
|
|
|
|
127,328,754
|
|
|
|
|
|
|
|
127,328,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common collective trusts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
|
|
|
|
|
169,332,916
|
|
|
|
|
|
|
|
169,332,916
|
|
Bond funds
|
|
|
|
|
|
|
67,270,488
|
|
|
|
|
|
|
|
67,270,488
|
|
Asset allocation funds
|
|
|
|
|
|
|
44,099,453
|
|
|
|
|
|
|
|
44,099,453
|
|
International equity funds
|
|
|
|
|
|
|
29,623,393
|
|
|
|
|
|
|
|
29,623,393
|
|
Mid-cap equity funds
|
|
|
|
|
|
|
21,476,123
|
|
|
|
|
|
|
|
21,476,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
331,802,373
|
|
|
|
|
|
|
|
331,802,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separate accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company stock funds
|
|
|
|
|
|
|
458,814,090
|
|
|
|
|
|
|
|
458,814,090
|
|
Bond funds
|
|
|
|
|
|
|
160,072,746
|
|
|
|
|
|
|
|
160,072,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
618,886,836
|
|
|
|
|
|
|
|
618,886,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans
|
|
|
|
|
|
|
|
|
|
|
54,859,860
|
|
|
|
54,859,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
782,514,650
|
|
|
$
|
1,078,017,963
|
|
|
$
|
54,859,860
|
|
|
$
|
1,915,392,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 13 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
8
|
|
Fair Value Measurements, Continued
|
|
|
|
The table below sets forth a summary of changes in the fair value of the Plans level 3 assets for the year ended December 31, 2009:
|
|
|
|
|
|
|
|
Participant Loans
|
|
Balance, beginning of year
|
|
$
|
54,859,860
|
|
Borrowings and repayments (net)
|
|
|
1,368,801
|
|
|
|
|
|
Balance, end of year
|
|
$
|
56,228,661
|
|
|
|
|
|
|
|
The table below sets forth a summary of changes in the fair value of the Plans level 3
assets for the year ended December 31, 2008:
|
|
|
|
|
|
|
|
Participant Loans
|
|
Balance, beginning of year
|
|
$
|
56,525,751
|
|
Borrowings and repayments (net)
|
|
|
(1,665,891
|
)
|
|
|
|
|
Balance, end of year
|
|
$
|
54,859,860
|
|
|
|
|
|
- 14 -
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
Form 5500, Schedule H, Part IV, Line 4i
Eaton Savings Plan
EIN 34-0196300
Plan Number 055
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
( c )
|
|
|
|
|
|
|
|
Identity of Issue,
|
|
Description of Investment Including
|
|
|
|
(e)
|
|
|
|
Borrower, Lessor,
|
|
Maturity Date, Rate of Interest,
|
|
(d)
|
|
Current
|
|
(a)
|
|
or Similar Party
|
|
Collateral, Par or Maturity Value
|
|
Cost
|
|
Value
|
|
*
|
|
Interest in Eaton Employee Savings Trust Master Trust
|
|
Master Trust
|
|
N/A
|
|
$
|
2,087,666,025
|
|
*
|
|
Eaton Stable Value Fund see Footnote 1
|
|
Guaranteed Investment Contract
|
|
N/A
|
|
|
122,203,424
|
|
*
|
|
Participant Loans
|
|
4%-10.5%, various maturity dates
|
|
N/A
|
|
|
56,228,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,266,098,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnote 1 denotes contract value
|
|
*
|
|
Party-in-interest to the Plan.
|
- 15 -
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 No.
333-147267, Form S-8 No. 333-77243, Form S-8 No. 333-03599, Form S-8 No. 333-104367 and Form S-8
No. 333-158820) pertaining to the Eaton Savings Plan of our report dated June 22, 2010, with
respect to the financial statements of the Eaton Savings Plan included in this Annual Report (Form
11-K) for the years ended December 31, 2009 and 2008.
/s/ Meaden & Moore, Ltd
Meaden & Moore, Ltd
Cleveland, Ohio
June 22, 2010
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