- Annual Report of Employee Stock Plans (11-K)
June 22 2011 - 4:50PM
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, 2010
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 22, 2011
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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, 2010
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, 2010 and 2009 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.
As discussed in Note 1, during 2010, the Plan retrospectively adopted the changes related to
classifying and measuring loans to participants in accordance with ASC 962 Plan Accounting -
Defined Contribution Pension Plans.
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, 2010 and
2009, 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, 2010, 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.
Certified Public Accountants
June 22, 2011
Cleveland, Ohio
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
Eaton Savings Plan
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December 31
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2010
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2009
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ASSETS
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Receivable Employer contributions
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$
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1,553,172
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$
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Receivable Employee contributions
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3,271,862
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2,826,023
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Receivable Interest
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99,022
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108,761
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Notes receivable from participants
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59,886,044
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56,228,661
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Total Receivables
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64,810,100
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59,163,445
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Investments:
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Plan interest in Eaton Employee
Savings Trust
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2,548,444,959
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2,087,666,025
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Plan interest in Eaton Employee
Savings Trust Eaton Stable Value Fund
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133,076,794
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124,440,918
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Total Investments
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2,681,521,753
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2,212,106,943
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Net Assets Available for Benefits, at Fair Value
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2,746,331,853
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2,271,270,388
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Adjustment from fair value to contract value for fully
benefit-
responsive investment contract
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(4,642,003
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(2,237,494
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Net Assets Available for Benefits
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$
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2,741,689,850
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$
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2,269,032,894
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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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2010
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2009
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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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20,619,017
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$
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11,258,427
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Employee
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93,961,868
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87,387,026
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Rollover
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7,818,621
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13,996,905
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122,399,506
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112,642,358
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Plan interest in Eaton Employee Savings
Trust investment gain
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515,160,601
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422,826,617
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Interest and dividend income
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3,120,921
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3,677,529
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Total Additions before Transfers
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640,681,028
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539,146,504
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Transfers from other plans
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5,698,219
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96,338
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Total Additions
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646,379,247
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539,242,842
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Deductions from Net Assets Attributed to:
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Benefits paid to participants
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173,204,643
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186,503,026
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Administrative expenses
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489,264
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525,695
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Total Deductions before Transfers
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173,693,907
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187,028,721
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Transfers to other plans
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28,384
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106,313
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Total Deductions
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173,722,291
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187,135,034
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Net Increase
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472,656,956
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352,107,808
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Net Assets Available for Benefits:
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Beginning of Year
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2,269,032,894
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1,916,925,086
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End of Year
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$
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2,741,689,850
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$
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2,269,032,894
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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 to rename the Plan the Eaton Savings Plan. The Plan was
restated January 1, 2010 to incorporate previous amendments to the plan into the Plan document.
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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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Effective April 1, 2011, newly hired employees will be automatically enrolled in the Plan.
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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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Effective April 1, 2011, the contribution limit was raised to 50% of compensation.
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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 was 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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Notes Receivable from Participants:
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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 for active
employees. Terminated employees are permitted to make loan payments directly to Fidelity.
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In September 2010, the FASB issued an amendment, Plan Accounting-Defined Contribution Pension
Plans (Topic 962): Reporting Loans to Participants by Defined Contribution Pension Plans (ASU
2010-25), which provides guidance on how loans to participants should be classified and measured by
defined contribution pension plans. The amendment requires that participant loans be classified as
notes receivable from participants, which are segregated from plan investments and measured at
their unpaid principal balance plus any accrued but unpaid interest. This amendment requires
retrospective application to all periods presented. This amendment was adopted for the year ended
December 31, 2010, and retrospectively applied to December 31, 2009. Prior year amounts and
disclosures have been revised to reflect the retrospective application of adopting this new
amendment. There was no impact to the net assets as of December 31, 2010 or 2009, as a result of
the adoption.
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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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- 5 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
2
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Summary of Significant Accounting Policies
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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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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
notes receivable from participants, 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 2010 and 2009 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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Subsequent Events:
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Management evaluates events occurring subsequent to the date of the financial statements in
determining the accounting for and disclosure of transactions and events that affect the financial
statements.
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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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- 7 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
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 are
pooled for investment purposes in the Master Trust.
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A summary of the assets of the Master Trust is as follows:
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2010
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2009
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Registered investment companies
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$
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1,218,817,740
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$
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1,054,862,616
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Eaton common shares
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773,662,830
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566,855,536
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Common collective trusts
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408,092,967
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348,625,820
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U.S. government securities
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138,676,004
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115,814,070
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Guaranteed investment contracts
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130,534,458
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112,783,573
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Interest-bearing cash
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45,318,397
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48,056,220
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Corporate debt instruments
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50,669,806
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40,675,433
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Receivables
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8,908,308
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13,517,793
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Non interest-bearing cash
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9,417
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Liabilities
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(8,924,009
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(12,943,413
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Adjustment from fair value to contract value
for fully benefit-responsive investment contract
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(4,961,335
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(2,393,042
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Total Investments
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$
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2,760,795,166
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$
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2,285,864,023
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The Plan had a 96.9% and 96.7% interest in the assets of the Master Trust as of December 31, 2010
and 2009, respectively.
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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, 2010 and 2009, is as follows:
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2010
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2009
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Interest and dividend income
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$
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44,010,926
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$
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42,408,799
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Net appreciation in fair value of investment funds:
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Registered investment companies
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139,351,523
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228,371,890
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Separate accounts
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319,014,837
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130,869,711
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Common collective trusts
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24,433,596
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32,793,242
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$
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526,810,882
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$
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434,443,642
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- 8 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
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At December 31, 2010 and 2009, respectively, the Eaton Fixed Income Fund was comprised of U.S.
government securities (69% and 69%), corporate debt instruments (25% and 24%), interest-bearing and
non interest-bearing cash (5% and 5%), and pooled separate accounts (1% and 2%).
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|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
Eaton Stable Value Fund
|
|
|
N/A
|
|
|
$
|
130,724,187
|
|
Fidelity Contrafund
|
|
$
|
157,309,901
|
|
|
$
|
137,679,930
|
|
Vanguard Institutional Index
|
|
$
|
152,898,887
|
|
|
$
|
138,868,213
|
|
EB Money Market Fund
|
|
$
|
163,797,652
|
|
|
$
|
155,936,734
|
|
Eaton Fixed Income Fund
|
|
$
|
201,626,331
|
|
|
$
|
167,290,070
|
|
Eaton Common Shares Fund (A unitized fund
consisting of Eaton Shares and cash)
|
|
$
|
791,626,366
|
|
|
$
|
580,209,860
|
|
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 2010 and 2009, the Master Trust received $18,201,828 and $18,218,408, respectively, in
common stock dividends from the Company.
|
|
6
|
|
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.
|
- 9 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
6
|
|
Benefit-Responsive Investment Fund, Continued
|
|
|
|
The average market yield of the Fund for 2010 and 2009 was 3.13% and 3.39%, 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 2.97% and 3.19%, 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.
|
|
|
|
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.
|
|
7
|
|
Transfers In
|
|
|
|
On October 12, 2010, the EMC Engineers, Inc. 401(k) Plan was merged into the Eaton Savings
Plan. As a result, 401(k) balances totaling $5,480,249 and a total of $92,152 in notes receivable
from participants were transferred into the Eaton Savings Plan as a result of the plan merger. The
balance of the transfers relate to the other Eaton plans.
|
|
8
|
|
Fair Value Measurements
|
|
|
|
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, 2010 and 2009.
|
- 10 -
NOTES TO FINANCIAL STATEMENTS
Eaton Savings Plan
8
|
|
Fair Value Measurements, Continued
|
|
|
|
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.
|
|
|
|
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.
|
|
|
|
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.
|
- 11 -
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, 2010. There are no assets which fall under
Level 3 of the hierarchy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Fair Value
|
|
|
Totals
|
|
Registered investment companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity funds
|
|
$
|
530,871,916
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
530,871,916
|
|
Balanced funds
|
|
|
185,158,016
|
|
|
|
|
|
|
|
|
|
|
|
185,158,016
|
|
International equity
funds
|
|
|
166,590,792
|
|
|
|
|
|
|
|
|
|
|
|
166,590,792
|
|
Mid-cap equity funds
|
|
|
109,062,756
|
|
|
|
|
|
|
|
|
|
|
|
109,062,756
|
|
Bond funds
|
|
|
98,092,958
|
|
|
|
|
|
|
|
|
|
|
|
98,092,958
|
|
Small-cap equity funds
|
|
|
62,260,578
|
|
|
|
|
|
|
|
|
|
|
|
62,260,578
|
|
REIT funds
|
|
|
23,433,923
|
|
|
|
|
|
|
|
|
|
|
|
23,433,923
|
|
World equity funds
|
|
|
7,271,508
|
|
|
|
|
|
|
|
|
|
|
|
7,271,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,182,742,447
|
|
|
|
|
|
|
|
|
|
|
|
1,182,742,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed investment contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stable value funds
|
|
|
|
|
|
|
133,076,794
|
|
|
|
|
|
|
|
133,076,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common collective trusts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
|
|
|
|
|
155,864,970
|
|
|
|
|
|
|
|
155,864,970
|
|
Bond funds
|
|
|
|
|
|
|
78,137,334
|
|
|
|
|
|
|
|
78,137,334
|
|
Asset allocation funds
|
|
|
|
|
|
|
88,834,800
|
|
|
|
|
|
|
|
88,834,800
|
|
International equity
funds
|
|
|
|
|
|
|
37,142,241
|
|
|
|
|
|
|
|
37,142,241
|
|
Mid-cap equity funds
|
|
|
|
|
|
|
35,890,540
|
|
|
|
|
|
|
|
35,890,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
395,869,885
|
|
|
|
|
|
|
|
395,869,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separate accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company stock funds
|
|
|
|
|
|
|
778,376,186
|
|
|
|
|
|
|
|
778,376,186
|
|
Bond funds
|
|
|
|
|
|
|
191,456,441
|
|
|
|
|
|
|
|
191,456,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
969,832,627
|
|
|
|
|
|
|
|
969,832,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
1,182,742,447
|
|
|
$
|
1,498,779,306
|
|
|
$
|
|
|
|
$
|
2,681,521,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 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, 2009. There are no assets which fall under
Level 3 of the hierarchy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
1,021,837,468
|
|
|
$
|
1,190,269,475
|
|
|
$
|
|
|
|
$
|
2,212,106,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
Recent Accounting Pronouncements
|
|
|
|
In January 2010, the FASB issued an accounting standard update titled Fair Value Measurements
and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements. This new
guidance requires additional disclosures to be provided, including: 1) transfers in and out of
Levels 1 and 2 and the reasons for the transfers, 2) additional breakout of asset and liability
categories and 3) purchases, sales, issuances and settlements to be reported separately in the
Level 3 roll forward. This guidance was effective for periods beginning after December 15, 2009,
except for the item related to the Level 3 roll forward which is effective for periods beginning
after December 15, 2010 and interim periods within those years. This guidance was effective for
the Company for the year ended December 31, 2010. The adoption did not have a material impact on
the Plan.
|
- 13 -
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, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
$
|
2,548,444,959
|
|
*
|
|
Participant Loans
|
|
4.0 10.5%; various maturity dates
|
|
|
N/A
|
|
|
$
|
59,886,044
|
|
*
|
|
Eaton Stable Value Fund see Footnote 1
|
|
Guaranteed Investment Contract
|
|
|
N/A
|
|
|
|
128,434,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,736,765,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnote 1 - denotes contract value
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Party-in-interest to the Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
- 14 -
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, 2011, 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, 2010 and 2009.
/s/ Meaden & Moore, Ltd
Cleveland, Ohio
June 22, 2011
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