-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UsUqXOBqRqifFZnhmLNfRh3ELOsYTsJmHLNm+1j5LFb0qyhKwiATK9a5GB3tPWpW eOpcXYjuccka5EBYsav/Ng== 0000031277-01-500007.txt : 20010205 0000031277-01-500007.hdr.sgml : 20010205 ACCESSION NUMBER: 0000031277-01-500007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010130 ITEM INFORMATION: FILED AS OF DATE: 20010131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EATON CORP CENTRAL INDEX KEY: 0000031277 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] IRS NUMBER: 340196300 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 002-25786 FILM NUMBER: 1519687 BUSINESS ADDRESS: STREET 1: EATON CTR STREET 2: 1111 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2584 BUSINESS PHONE: 2165235000 MAIL ADDRESS: STREET 1: 1111 SUPERIOR AVENUE STREET 2: EATON CENTER CITY: CLEVELAND STATE: OH ZIP: 44114 FORMER COMPANY: FORMER CONFORMED NAME: EATON YALE & TOWNE INC DATE OF NAME CHANGE: 19710822 8-K 1 jan308k2.txt EATON CORP. RESTATED FINANCIALS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 30, 2001 EATON CORPORATION - -------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 1-1396 34-0196300 - ----------------- ------------ ------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) Eaton Center Cleveland, Ohio 44114 - ---------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) (216) 523-5000 ----------------------------- Registrant's telephone number, including area code Item 5. Other Events ------------ Press Release dated January 30, 2001 On June 30, 2000, Eaton Corporation reorganized its semiconductor equipment operation into a wholly-owned subsidiary, Axcelis Technologies, Inc. (Axcelis). In July 2000, Axcelis completed an initial public offering (IPO) for the sale of 17,050,000 common shares at $22 per share. The proceeds from the IPO, net of an underwriting discount and other offering expenses, were $349.2 million and, together with cash from other sources available to Axcelis, were used to pay a $300 million dividend to Eaton. Subsequent to the IPO, Eaton owned 82.4% of the 97,050,000 outstanding common shares of Axcelis. On December 29, 2000, Eaton distributed the remaining 79,994,900 shares of Axcelis to Eaton shareholders in a tax-free dividend (spin-off). The net assets of Axcelis at the spin-off, after a reduction for the 17.6% minority interest in Axcelis, were recorded as a reduction of retained earnings in Eaton's shareholders' equity. No gain or loss was recognized for the IPO or spin-off. As a result of the decision to spin-off Axcelis, the consolidated financial statements of Eaton have been restated to display the semiconductor equipment operations as a discontinued operation. Operating results of discontinued operations were published for the fourth quarter and full year 2000 in the fourth quarter earnings release. The following financial statements have been prepared in order to provide a full comparative history of Eaton Corporation following the discontinuance of the semiconductor equipment segment. The statements include: Year 2000, by quarter, year to date and full year: Comparative Financial Summary Statement of Consolidated Income Business Segment Information Condensed Consolidated Balance Sheets Year 1999, by quarter, year to date and full year: Comparative Financial Summary Statement of Consolidated Income Business Segment Information Condensed Consolidated Balance Sheets Five Year Summary for the years 2000, 1999, 1998, 1997, 1996: Comparative Financial Summary Statement of Consolidated Income Business Segment Information Condensed Consolidated Balance Sheets Eaton Corporation Comparative Financial Summary Three months ended 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $2,184 $2,169 Income before income taxes 176 186 Income after income taxes $ 113 $ 123 Income from discontinued operations 18 22 ------ ------ Net income $ 131 $ 145 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.52 $ 1.66 Discontinued operations 0.25 0.30 ------ ------ $ 1.77 $ 1.96 ====== ====== Basic Continuing operations $ 1.55 $ 1.69 Discontinued operations 0.25 0.30 ------ ------ $ 1.80 $ 1.99 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.8 74.1 Basic 72.9 73.2 Cash dividends paid per Common Share $ 0.44 $ 0.44 Reconciliation of net income to operating earnings Net income from continuing operations $ 113 $ 123 Excluding (after tax): Unusual charges 5 7 Gain on sales of corporate assets (7) (7) ------ ------ Operating income from continuing operations $ 111 $ 123 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 1.52 $ 1.66 Per share effect of impact of unusual items (0.02) (0.01) ------ ------ Operating earnings per Common Share - continuing operations $ 1.50 $ 1.65 Operating earnings per Common Share - discontinued operations 0.25 0.30 ------ ------ Operating earnings per Common Share $ 1.75 $ 1.95 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.77 $ 1.92 Comparative Financial Summary Three months ended 2000 Sep 30 Dec 31 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $2,008 $1,948 Income before income taxes 105 85 Income after income taxes $ 69 $ 58 Income from discontinued operations 24 26 ------ ------ Net income $ 93 $ 84 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 0.95 $ 0.83 Discontinued operations 0.33 0.37 ------ ------ $ 1.28 $ 1.20 ====== ====== Basic Continuing operations $ 0.96 $ 0.84 Discontinued operations 0.33 0.37 ------ ------ $ 1.29 $ 1.21 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.8 70.1 Basic 72.0 69.6 Cash dividends paid per Common Share $ 0.44 $ 0.44 Reconciliation of net income to operating earnings Net income from continuing operations $ 69 $ 58 Excluding (after tax): Unusual charges 8 14 Gain on sales of corporate assets ------ ------ Operating income from continuing operations $ 77 $ 72 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 0.95 $ 0.83 Per share effect of impact of unusual items 0.12 0.20 ------ ------ Operating earnings per Common Share - continuing operations $ 1.07 $ 1.03 Operating earning per Common Share - discontinued operations 0.33 0.37 ------ ------ Operating earnings per Common Share $ 1.40 $ 1.40 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.34 $ 1.31 Comparative Financial Summary Year to Date 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $2,184 $4,353 Income before income taxes 176 362 Income after income taxes $ 113 $ 236 Income from discontinued operations 18 40 ------ ------ Net income $ 131 $ 276 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.52 $ 3.19 Discontinued operations 0.25 0.54 ------ ------ $ 1.77 $ 3.73 ====== ====== Basic Continuing operations $ 1.55 $ 3.23 Discontinued operations 0.25 0.55 ------ ------ $ 1.80 $ 3.78 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.8 74.0 Basic 72.9 73.1 Cash dividends paid per Common Share $ 0.44 $ 0.88 Reconciliation of net income to operating earnings Net Income from continuing operations $ 113 $ 236 Excluding (after tax): Unusual charges 5 12 Gain on sales of corporate assets (7) (14) ------ ------ Operating income from continuing operations $ 111 $ 234 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 1.52 $ 3.19 Per share effect of impact of unusual items (0.02) (0.03) ------ ------ Operating earnings per Common share - continuing operations $ 1.50 $ 3.16 Operating earnings per Common Share - discontinued operations 0.25 0.54 ------ ------ Operating earnings per Common Share $ 1.75 $ 3.70 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.77 $ 3.69 Comparative Financial Summary Year to Date 2000 Sep 30 Dec 31 ------ ------ (unaudited) (Millions except for per share data) Continuing operations Net sales $6,361 $8,309 Income before income taxes 467 552 Income after income taxes $ 305 $ 363 Income from discontinued operations 64 90 ------ ------ Net income $ 369 $ 453 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 4.15 $ 5.00 Discontinued operations 0.87 1.24 ------ ------ $ 5.02 $ 6.24 ====== ====== Basic Continuing operations $ 4.20 $ 5.06 Discontinued operations 0.88 1.25 ------ ------ $ 5.08 $ 6.31 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.5 72.6 Basic 72.6 71.8 Cash dividends paid per Common Share $ 1.32 $ 1.76 Reconciliation of net income to operating earnings Net income from continuing operations $ 305 $ 363 Excluding (after tax): Unusual charges 20 34 Gain on sales of corporate assets (14) (14) ------ ------ Operating income from continuing operations $ 311 $ 383 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 4.15 $ 5.00 Per share effect of impact of unusual items 0.08 0.28 ------ ------ Operating earnings per Common Share - continuing operations $ 4.23 $ 5.28 Operating earnings per Common Share - discontinued operations 0.87 1.24 ------ ------ Operating earnings per Common Share $ 5.10 $ 6.52 ====== ====== Cash operating earnings per Common Share - continuing operations $ 5.05 $ 6.37 Statements of Consolidated Income Three months ended 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) Net sales $2,184 $2,169 Cost & expenses Cost of products sold 1,581 1,564 Selling & administrative 340 334 Research & development 68 70 ------ ------ 1,989 1,968 ------ ------ Income from operations 195 201 Other income (expense) Interest expense - net (44) (45) Gain on sales of businesses Other - net 25 30 ------ ------ (19) (15) ------ ------ Income from continuing operations before income taxes 176 186 Income taxes of continuing operations 63 63 ------ ------ Income from continuing operations 113 123 Income from discontinued operations 18 22 ------ ------ Net income $ 131 $ 145 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.52 $ 1.66 Discontinued operations 0.25 0.30 ------ ------ $ 1.77 $ 1.96 ====== ====== Basic Continuing operations $ 1.55 $ 1.69 Discontinued operations 0.25 0.30 ------ ------ $ 1.80 $ 1.99 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.8 74.1 Basic 72.9 73.2 Cash dividends paid per Common Share $ 0.44 $ 0.44 Statements of Consolidated Income Three months ended 2000 Sep 30 Dec 31 ------ ------ (unaudited) (unaudited) Net sales $2,008 $1,948 Cost & expenses Cost of products sold 1,492 1,455 Selling & administrative 305 320 Research & development 68 63 ------ ------ 1,865 1,838 ------ ------ Income from operations 143 110 Other income (expense) Interest expense - net (42) (46) Gain on sales of businesses Other - net 4 21 ------ ------ (38) (25) ------ ------ Income from continuing operations before income taxes 105 85 Income taxes of continuing operations 36 27 ------ ------ Income from continuing operations 69 58 Income from discontinued operations 24 26 ------ ------ Net income $ 93 $ 84 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 0.95 $ 0.83 Discontinued operations 0.33 0.37 ------ ------ $ 1.28 $ 1.20 ====== ====== Basic Continuing operations $ 0.96 $ 0.84 Discontinued operations 0.33 0.37 ------ ------ $ 1.29 $ 1.21 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.8 70.1 Basic 72.0 69.6 Cash dividends paid per Common Share $ 0.44 $ 0.44 Statements of Consolidated Income Year to Date 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) Net sales $2,184 $4,353 Costs & expenses Cost of products sold 1,581 3,145 Selling & administrative 340 674 Research & development 68 138 ------ ------ 1,989 3,957 ------ ------ Income from operations 195 396 Other income (expense) Interest expense - net (44) (89) Gain on sales of businesses Other - net 25 55 ------ ------ (19) (34) ------ ------ Income from continuing operations before income taxes 176 362 Income taxes of continuing operations 63 126 ------ ------ Income from continuing operations 113 236 Income from discontinued operations 18 40 ------ ------ Net income $ 131 $ 276 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.52 $ 3.19 Discontinued operations 0.25 0.54 ------ ------ $ 1.77 $ 3.73 ====== ====== Basic Continuing operations $ 1.55 $ 3.23 Discontinued operations 0.25 0.55 ------ ------ $ 1.80 $ 3.78 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.8 74.0 Basic 72.9 73.1 Cash dividends paid per Common Share $ 0.44 $ 0.88 Statements of Consolidated Income Year to Date 2000 Sep 30 Dec 31 ------ ------ (unaudited) Net sales $6,361 $8,309 Cost & expenses Cost of products sold 4,637 6,092 Selling & administrative 979 1,299 Research & development 206 269 ------ ------ 5,822 7,660 ------ ------ Income from operations 539 649 Other income (expense) Interest expense - net (131) (177) Gain on sales of businesses Other - net 59 80 ------ ------ (72) (97) ------ ------ Income from continuing operations before income taxes 467 552 Income taxes of continuing operations 162 189 ------ ------ Income from continuing operations 305 363 Income from discontinued operations 64 90 ------ ------ Net income $ 369 $ 453 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 4.15 $ 5.00 Discontinued operations 0.87 1.24 ------ ------ $ 5.02 $ 6.24 ====== ====== Basic Continuing operations $ 4.20 $ 5.06 Discontinued operations 0.88 1.25 ------ ------ $ 5.08 $ 6.31 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.5 72.6 Basic 72.6 71.8 Cash dividends paid per Common Share $ 1.32 $ 1.76 Business Segment Information Three months ended 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions) Net sales of continuing operations Automotive Components $ 497 $ 479 Fluid Power 665 681 Industrial & Commercial Controls 579 604 Truck Components 443 405 ------ ------ Total ongoing operations 2,184 2,169 Divested operations ------ ------ Total net sales $2,184 $2,169 ====== ====== Operating profit of continuing operations Automotive Components $ 74 $ 65 Fluid Power 67 69 Industrial & Commercial Controls 49 65 Truck Components 60 52 ------ ------ Total ongoing operations 250 251 Divested operations Amortization of goodwill & other intangible assets (24) (25) Interest expense - net (44) (45) Gain on sales of businesses Corporate & other - net (6) 5 ------ ------ Income from continuing operations before income taxes 176 186 Income taxes of continuing operations 63 63 ------ ------ Income from continuing operations 113 123 Income from discontinued operations 18 22 ------ ------ Net income $ 131 $ 145 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 141 $ 166 Operating profit 27 33 Other income (expense) - net (2) (1) ------ ------ Income before income taxes 25 32 Income taxes 7 10 ------ ------ Income from discontinued operations $ 18 $ 22 ====== ====== Business Segment Information Three months ended 2000 Sep 30 Dec 31 ------ ------ (unaudited) (unaudited) (Millions) Net sales of continuing operations Automotive Components $ 421 $ 428 Fluid Power 630 631 Industrial & Commercial Controls 622 616 Truck Components 335 273 ------ ------ Total ongoing operations 2,008 1,948 Divested operations ------ ------ Total net sales $2,008 $1,948 ====== ====== Operating profit of continuing operations Automotive Components $ 41 $ 45 Fluid Power 44 55 Industrial & Commercial Controls 73 64 Truck Components 7 (12) ------ ------ Total ongoing operations 165 152 Divested operations Amortization of goodwill & other intangible assets (24) (25) Interest expense - net (42) (46) Gain on sales of businesses Corporate & other - net 6 4 ------ ------ Income from continuing operations before income taxes 105 85 Income taxes of continuing operations 36 27 ------ ------ Income from continuing operations 69 58 Income from discontinued operations 24 26 ------ ------ Net income $ 93 $ 84 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 183 $ 189 Operating profit 42 45 Other income (expense) - net (7) (5) ------ ------ Income before income taxes 35 40 Income taxes 11 14 ------ ------ Income from discontinued operations $ 24 $ 26 ====== ====== Business Segment Information Year to date 2000 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions) Net sales of continuing operations Automotive Components $ 497 $ 976 Fluid Power 665 1,346 Industrial & Commercial Controls 579 1,183 Truck Components 443 848 ------ ------ Total ongoing operations 2,184 4,353 Divested operations ------ ------ Total net sales $2,184 $4,353 ====== ====== Operating profit of continuing operations Automotive Components $ 74 $ 139 Fluid Power 67 136 Industrial & Commercial Controls 49 114 Truck Components 60 112 ------ ------ Total ongoing operations 250 501 Divested operations Amortization of goodwill & other intangible assets (24) (49) Interest expense - net (44) (89) Gain on sales of businesses Corporate & other - net (6) (1) ------ ------ Income from continuing operations before income taxes 176 362 Income taxes of continuing operations 63 126 ------ ------ Income from continuing operations 113 236 Income from discontinued operations 18 40 ------ ------ Net income $ 131 $ 276 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 141 $ 307 Operating profit 27 60 Other income (expense) - net (2) (3) ------ ------ Income before income taxes 25 57 Income taxes 7 17 ------ ------ Income from discontinued operations $ 18 $ 40 ====== ====== Business Segment Information Year to date 2000 Sep 30 Dec 31 ------ ------ (unaudited) (Millions) Net sales of continuing operations Automotive Components $1,397 $1,825 Fluid Power 1,976 2,607 Industrial & Commercial Controls 1,805 2,421 Truck Components 1,183 1,456 ------ ------ Total ongoing operations 6,361 8,309 Divested operations ------ ------ Total net sales $6,361 $8,309 ====== ====== Operating profit of continuing operations Automotive Components $ 180 $ 225 Fluid Power 180 235 Industrial & Commercial Controls 187 251 Truck Components 119 107 ------ ------ Total ongoing operations 666 818 Divested operations Amortization of goodwill & other intangible assets (73) (98) Interest expense - net (131) (177) Gain on sales of businesses Corporate & other - net 5 9 ------ ------ Income from continuing operations before income taxes 467 552 Income taxes of continuing operations 162 189 ------ ------ Income from continuing operations 305 363 Income from discontinued operations 64 90 ------ ------ Net income $ 369 $ 453 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 490 $ 679 Operating profit 102 147 Other income (expense) - net (10) (15) ------ ------ Income before income taxes 92 132 Income taxes 28 42 ------ ------ Income from discontinued operations $ 64 $ 90 ====== ====== Condensed Consolidated Balance Sheets Mar 31, Jun 30, 2000 2000 ------ ------ (unaudited) (unaudited) (Millions) Assets Current assets Cash & short-term investments $ 99 $ 103 Accounts receivable 1,289 1,307 Inventories 873 853 Deferred income taxes & other current assets 402 390 ------ ------ 2,663 2,653 Property, plant & equipment 2,246 2,223 Goodwill 1,958 1,964 Other intangible assets 596 574 Deferred income taxes & other assets 686 704 Net assets of discontinued operations 354 392 ------ ------ $8,503 $8,510 ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long term debt $ 927 $ 425 Accounts payable 428 493 Accrued compensation 211 226 Accrued income & other taxes 238 174 Other current liabilities 734 726 ------ ------ 2,538 2,044 Long-term debt 2,104 2,490 Postretirement benefits other than pensions 670 670 Deferred income taxes & other liabilities 528 538 Shareholders' equity 2,663 2,768 ------ ------ $8,503 $8,510 ====== ====== Condensed Consolidated Balance Sheets Sep 30, Dec 31, 2000 2000 ------ ------ (unaudited) (Millions) Assets Current assets Cash & short-term investments $ 72 $ 126 Accounts receivable 1,221 1,219 Inventories 856 872 Deferred income taxes & other current assets 407 354 ------ ------ 2,556 2,571 Property, plant & equipment 2,210 2,274 Goodwill 1,999 2,026 Other intangible assets 565 556 Deferred income taxes & other assets 742 753 Net assets of discontinued operations 396 ------ ------ $8,468 $8,180 ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long-term debt $ 371 $ 557 Accounts payable 420 485 Accrued compensation 224 199 Accrued income & other taxes 188 191 Other current liabilities 723 675 ------ ------ 1,926 2,107 Long-term debt 2,447 2,447 Postretirement benefits other than pensions 674 679 Deferred income taxes & other liabilities 549 537 Shareholders' equity 2,872 2,410 ------ ------ $8,468 $8,180 ====== ====== Comparative Financial Summary Three months ended 1999 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $1,604 $2,202 Income before income taxes 138 177 Income after income taxes $ 95 $ 118 Income from discontinued operations (11) 7 ------ ------ Net income $ 84 $ 125 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.32 $ 1.62 Discontinued operations (0.15) 0.09 ------ ------ $ 1.17 $ 1.71 ====== ====== Basic Continuing operations $ 1.33 $ 1.65 Discontinued operations (0.15) 0.09 ------ ------ $ 1.18 $ 1.74 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.2 72.8 Basic 71.2 71.7 Cash dividends paid per Common Share $ 0.44 $ 0.44 Reconciliation of net income to operating earnings Net income from continuing operations $ 95 $ 118 Excluding (after tax): Unusual charges 2 Gain on sales of businesses ------ ------ Operating income from continuing operations $ 95 $ 120 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 1.32 $ 1.62 Per share effect of impact of unusual items 0.03 ------ ------ Operating earnings per Common share - continuing operations $ 1.32 $ 1.65 Operating earnings per Common Share - discontinued operations (.15) .09 ------ ------ Operating earnings per Common Share $ 1.17 $ 1.74 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.48 $ 1.94 Comparative Financial Summary Three months ended 1999 Sep 30 Dec 31 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $2,118 $2,081 Income before income taxes 274 354 Income after income taxes $ 175 $ 215 Income from discontinued operations 9 9 ------ ------ Net income $ 184 $ 224 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 2.34 $ 2.86 Discontinued operations 0.12 0.12 ------ ------ $ 2.46 $ 2.98 ====== ====== Basic Continuing operations $ 2.39 $ 2.91 Discontinued operations 0.13 0.13 ------ ------ $ 2.52 $ 3.04 ====== ====== Average number of Common Shares outstanding Assuming dilution 74.9 75.1 Basic 73.2 73.7 Cash dividends paid per Common Share $ 0.44 $ 0.44 Reconciliation of net income to operating earnings Net income from continuing operations $ 175 $ 215 Excluding (after tax): Unusual charges 5 12 Gain on sales of businesses (81) (117) ------ ------ Operating income from continuing operations $ 99 $ 110 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 2.34 $ 2.86 Per share effect of impact of unusual items (1.01) (1.39) ------ ------ Operating earnings per Common Share - continuing operations $ 1.33 $ 1.47 Operating earnings per Common Share - discontinued operations .12 .12 ------ ------ Operating earnings per Common Share $ 1.45 $ 1.59 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.61 $ 1.72 Comparative Financial Summary Year to date 1999 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Continuing operations Net sales $1,604 $3,806 Income before income taxes 138 315 Income after income taxes $ 95 $ 213 Income from discontinued operations (11) (4) ------ ------ Net income $ 84 $ 209 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.32 $ 2.94 Discontinued operations (0.15) (0.06) ------ ------ $ 1.17 $ 2.88 ====== ====== Basic Continuing operations $ 1.33 $ 2.98 Discontinued operations (0.15) (0.06) ------ ------ $ 1.18 $ 2.92 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.2 72.5 Basic 71.2 71.5 Cash dividends paid per Common Share $ 0.44 $ 0.88 Reconciliation of net income to operating earnings Net income from continuing operations $ 95 $ 213 Excluding (after tax): Unusual charges 2 Gain on sales of businesses ------ ------ Operating income from continuing operations $ 95 $ 215 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 1.32 $ 2.94 Per share effect of impact of unusual items 0.03 ------ ------ Operating earnings per Common Share - continuing operations $ 1.32 $ 2.97 Operating earnings per Common Share - discontinued operations (.15) (.06) ------ ------ Operating earnings per Common Share $ 1.17 $ 2.91 ====== ====== Cash operating earnings per Common Share - continuing operations $ 1.48 $ 3.41 Comparative Financial Summary Year to date 1999 Sep 30 Dec 31 ------ ------ (unaudited) (Millions except for per share data) Continuing operations Net sales $5,924 $8,005 Income before income taxes 589 943 Income after income taxes $ 388 $ 603 Income from discontinued operations 5 14 ------ ------ Net income $ 393 $ 617 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 5.28 $ 8.17 Discontinued operations 0.07 0.19 ------ ------ $ 5.35 $ 8.36 ====== ====== Basic Continuing operations $ 5.37 $ 8.31 Discontinued operations 0.07 0.20 ------ ------ $ 5.44 $ 8.51 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.4 73.7 Basic 72.2 72.5 Cash dividends paid per Common Share $ 1.32 $ 1.76 Reconciliation of net income to operating earnings Net income from continuing operations $ 388 $ 603 Excluding (after tax): Unusual charges 7 20 Gain on sales of businesses (81) (198) ------ ------ Operating income from continuing operations $ 314 $ 425 ====== ====== Net income per Common Share from continuing operation - assuming dilution $ 5.28 $ 8.17 Per share effect of impact of unusual items (1.00) (2.41) ------ ------ Operating earnings per Common Share - continuing operations $ 4.28 $ 5.76 Operating earnings per Common Share - discontinued operations .07 .19 ------ ------ Operating earnings per Common Share $ 4.35 $ 5.95 ====== ====== Cash operating earnings per Common Share - continuing operations $ 5.03 $ 6.74 Statements of Consolidated Income Three months ended 1999 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Net sales $1,604 $2,202 Cost & expenses Cost of products sold 1,133 1,584 Selling & administrative 260 339 Research & development 58 65 ------ ------ 1,451 1,988 ------ ------ Income from operations 153 214 Other income (expense) Interest expense - net (21) (44) Gain on sales of businesses Other - net 6 7 ------ ------ (15) (37) ------ ------ Income from continuing operations before income taxes 138 177 Income taxes of continuing operations 43 59 ------ ------ Income from continuing operations 95 118 Income from discontinued operations (11) 7 ------ ------ Net income $ 84 $ 125 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.32 $ 1.62 Discontinued operations (0.15) 0.09 ------ ------ $ 1.17 $ 1.71 ====== ====== Basic Continuing operations $ 1.33 $ 1.65 Discontinued operations (0.15) 0.09 ------ ------ $ 1.18 $ 1.74 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.2 72.8 Basic 71.2 71.7 Cash dividends paid per Common Share $ 0.44 $ 0.44 Statements of Consolidated Income Three months ended 1999 Sep 30 Dec 31 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Net sales $2,118 $2,081 Costs & expenses Cost of products sold 1,543 1,532 Selling & administrative 332 317 Research & development 70 69 ------ ------ 1,945 1,918 ------ ------ Income from operations 173 163 Other income (expense) Interest expense - net (46) (41) Gain on sales of businesses 133 207 Other - net 14 25 ------ ------ 101 191 ------ ------ Income from continuing operations before income taxes 274 354 Income taxes of continuing operations 99 139 ------ ------ Income from continuing operations 175 215 Income from discontinued operations 9 9 ------ ------ Net income $ 184 $ 224 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 2.34 $ 2.86 Discontinued operations 0.12 0.12 ------ ------ $ 2.46 $ 2.98 ====== ====== Basic Continuing operations $ 2.39 $ 2.91 Discontinued operations 0.13 0.13 ------ ------ $ 2.52 $ 3.04 ====== ====== Average number of Common Shares outstanding Assuming dilution 74.9 75.1 Basic 73.2 73.7 Cash dividends paid per Common share $ 0.44 $ 0.44 Statements of Consolidated Income Year to Date 1999 Mar 31 Jun 30 ------ ------ (unaudited) (unaudited) (Millions except for per share data) Net sales $1,604 $3,806 Costs & expenses Cost of products sold 1,133 2,717 Selling & administrative 260 599 Research & development 58 123 ------ ------ 1,451 3,439 ------ ------ Income from operations 153 367 Other income (expense) Interest expense - net (21) (65) Gain on sales of businesses Other - net 6 13 ------ ------ (15) (52) ------ ------ Income from continuing operations before income taxes 138 315 Income taxes of continuing operations 43 102 ------ ------ Income from continuing operations 95 213 Income from discontinued operations (11) (4) ------ ------ Net income $ 84 $ 209 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 1.32 $ 2.94 Discontinued operations (0.15) (0.06) ------ ------ $ 1.17 $ 2.88 ====== ====== Basic Continuing operations $ 1.33 $ 2.98 Discontinued operations (0.15) (0.06) ------ ------ $ 1.18 $ 2.92 ====== ====== Average number of Common Shares outstanding Assuming dilution 72.2 72.5 Basic 71.2 71.5 Cash dividends paid per Common Share $ 0.44 $ 0.88 Statements of consolidated Income Year to Date 1999 Sep 30 Dec 31 ------ ------ (unaudited) (Millions except for per share data) Net sales $5,924 $8,005 Costs & expenses Cost of products sold 4,260 5,792 Selling & administrative 931 1,248 Research & development 193 262 ------ ------ 5,384 7,302 ------ ------ Income from operations 540 703 Other income (expense) Interest expense - net (111) (152) Gain on sales of businesses 133 340 Other - net 27 52 ------ ------ 49 240 ------ ------ Income from continuing operations before income taxes 589 943 Income taxes of continuing operations 201 340 ------ ------ Income from continuing operations 388 603 Income from discontinued operations 5 14 ------ ------ Net income $ 393 $ 617 ====== ====== Net income per Common Share Assuming dilution Continuing operations $ 5.28 $ 8.17 Discontinued operations 0.07 0.19 ------ ------ $ 5.35 $ 8.36 ====== ====== Basic Continuing operations 5.37 $ 8.31 Discontinued operations 0.07 0.20 ------ ------ $ 5.44 $ 8.51 ====== ====== Average number of Common Shares outstanding Assuming dilution 73.4 73.7 Basic 72.2 72.5 Cash dividends paid per Common Share $ 1.32 $ 1.76 Business Segment Information Three months ended 1999 Mar 31 Jun 30 ------ ------ (Millions) (unaudited) (unaudited) Net sales of continuing operations Automotive Components $ 478 $ 480 Fluid Power 159 661 Industrial & Commercial Controls 512 578 Truck Components 382 407 ------ ------ Total ongoing operations 1,531 2,126 Divested operations 73 76 ------ ------ Total net sales $1,604 $2,202 ====== ====== Operating profit of continuing operations Automotive Components $ 62 $ 65 Fluid Power 22 60 Industrial & Commercial Controls 27 49 Truck Components 60 61 ------ ------ Total ongoing operations 171 235 Divested operations 15 16 Amortization of goodwill & other intangible assets (14) (25) Interest expense - net (21) (44) Gain on sales of businesses Corporate & other - net (13) (5) ------ ------ Income from continuing operations before income taxes 138 177 Income taxes of continuing operations 43 59 ------ ------ Income from continuing operations 95 118 Income from discontinued operations (11) 7 ------ ------ Net income $ 84 $ 125 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 57 $ 98 Operating profit (12) 10 Other income (expense) - net (3) (1) ------ ------ Income before income taxes (15) 9 Income taxes (4) 2 ------ ------ Income from discontinued operations $ (11) $ 7 ====== ====== Business Segment Information Three months ended 1999 Sep 30 Dec 31 ------ ------ (Millions) (unaudited) (unaudited) Net sales of continuing operations Automotive Components $ 444 $ 455 Fluid Power 614 602 Industrial & Commercial Controls 587 597 Truck Components 414 427 ------ ------ Total ongoing operations 2,059 2,081 Divested operations 59 ------ ------ Total net sales $2,118 $2,081 ====== ====== Operating profit of continuing operations Automotive Components $ 50 $ 59 Fluid Power 43 52 Industrial & Commercial Controls 54 51 Truck Components 67 47 ------ ------ Total ongoing operations 214 209 Divested operations 9 4 Amortization of goodwill & other intangible assets (25) (25) Interest expense - net (46) (41) Gain on sales of businesses 133 207 Corporate & other - net (11) ------ ------ Income from continuing operations before income taxes 274 354 Income taxes of continuing operations 99 139 ------ ------ Income from continuing operations 175 215 Income from discontinued operations 9 9 ------ ------ Net income $ 184 $ 224 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 109 $ 133 Operating profit 16 17 Other income (expense) - net (4) (3) ------ ------ Income before income taxes 12 14 Income taxes 3 5 ------ ------ Income from discontinued operations $ 9 $ 9 ====== ====== Business Segment Information Year to date 1999 Mar 31 Jun 30 ------ ------ (Millions) (unaudited) (unaudited) Net sales of continuing operations Automotive Components $ 478 $ 958 Fluid Power 159 820 Industrial & Commercial Controls 512 1,090 Truck Components 382 789 ------ ------ Total ongoing operations 1,531 3,657 Divested operations 73 149 ------ ------ Total net sales $1,604 $3,806 ====== ====== Operating profit of continuing operations Automotive Components $ 62 $ 127 Fluid Power 22 82 Industrial & Commercial Controls 27 76 Truck Components 60 121 ------ ------ Total ongoing operations 171 406 Divested operations 15 31 Amortization of goodwill & other intangible assets (14) (39) Interest expense - net (21) (65) Gain on sales of businesses 0 Corporate & other - net (13) (18) ------ ------ Income from continuing operations before income taxes 138 315 Income taxes of continuing operations 43 102 ------ ------ Income from continuing operations 95 213 Income from discontinued operations (11) (4) ------ ------ Net income $ 84 $ 209 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 57 $ 155 Operating profit (12) (2) Other income (expense) - net (3) (4) ------ ------ Income before income taxes (15) (6) Income taxes (4) (2) ------ ------ Income from discontinued operations $ (11) $ (4) ====== ====== Business Segment Information Year to date 1999 Sep 30 Dec 31 ------ ------ (Millions) (unaudited) Net sales of continuing operations Automotive Components $1,402 $1,857 Fluid Power 1,434 2,036 Industrial & Commercial Controls 1,677 2,274 Truck Components 1,203 1,630 ------ ------ Total ongoing operations 5,716 7,797 Divested operations 208 208 ------ ------ Total net sales $5,924 $8,005 ====== ====== Operating profit of continuing operations Automotive Components $ 177 $ 236 Fluid Power 125 177 Industrial & Commercial Controls 130 181 Truck Components 188 235 ------ ------ Total ongoing operations 620 829 Divested operations 40 44 Amortization of goodwill & other intangible assets (64) (89) Interest expense - net (111) (152) Gain on sales of businesses 133 340 Corporate & other - net (29) (29) ------ ------ Income from continuing operations before income taxes 589 943 Income taxes of continuing operations 201 340 ------ ------ Income from continuing operations 388 603 Income from discontinued operations 5 14 ------ ------ Net income $ 393 $ 617 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 264 $ 397 Operating profit 14 31 Other income (expense) - net (8) (11) ------ ------ Income before income taxes 6 20 Income taxes 1 6 ------ ------ Income from discontinued operations $ 5 $ 14 ====== ====== Condensed Consolidated Balance Sheets Mar 31, Jun 30, 1999 1999 ------ ------ (Millions) (unaudited) (unaudited) Assets Current assets Cash & short-term investments $ 37 $ 38 Accounts receivable 959 1,347 Inventories 633 900 Deferred income taxes & other current assets 256 294 ------ ------ 1,885 2,579 Property, plant & equipment 1,709 2,322 Goodwill 961 1,924 Other intangible assets 175 457 Deferred income taxes & other assets 557 667 Net assets of discontinued operations 266 276 ------ ------ $5,553 $8,225 ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long-term debt $ 399 $1,577 Accounts payable 386 437 Accrued compensation 128 242 Accrued income & other taxes 92 92 Other current liabilities 478 613 ------ ------ 1,483 2,961 Long-term debt 1,188 2,008 Postretirement benefits other than pensions 559 663 Deferred income taxes & other liabilities 305 468 Shareholders' equity 2,018 2,125 ------ ------ $5,553 $8,225 ====== ====== Condensed Consolidated Balance Sheets Sep 30, Dec 31, 1999 1999 ------ ------ (Millions) (unaudited) Assets Current assets Cash & short-term investments $ 70 $ 162 Accounts receivable 1,315 1,165 Inventories 864 876 Deferred income taxes & other current assets 323 349 ------ ------ 2,572 2,552 Property, plant & equipment 2,333 2,294 Goodwill 1,916 1,853 Other intangible assets 449 598 Deferred income taxes & other assets 700 714 Net assets of discontinued operations 282 331 ------ ------ $8,252 $8,342 ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long-term debt $1,201 $ 970 Accounts payable 476 487 Accrued compensation 269 277 Accrued income & other taxes 192 255 Other current liabilities 577 579 ------ ------ 2,715 2,568 Long-term debt 1,946 1,915 Postretirement benefits other than pensions 662 666 Deferred income taxes & other liabilities 479 569 Shareholders' equity 2,450 2,624 ------ ------ $8,252 $8,342 ====== ====== Comparative Financial Summary Twelve months ended 2000 1999 1998 ------ ------ ------ (Millions except for per share data) Continuing operations Net sales $8,309 $8,005 $6,358 Income before income taxes and extraordinary item 552 943 616 Income before extraordinary item $ 363 $ 603 $ 430 Income (loss) from extraordinary item Income from discontinued operations 90 14 (81) ------ ------ ------ Net income $ 453 $ 617 $ 349 ====== ====== ====== Net income per Common Share Assuming dilution Income from continuing operations before extraordinary item $ 5.00 $ 8.17 $ 5.91 Extraordinary item Discontinued operations 1.24 0.19 (1.11) ------ ------ ------ $ 6.24 $ 8.36 $ 4.80 ====== ====== ====== Basic Income from continuing operations before extraordinary item $ 5.06 $ 8.31 $ 6.02 Extraordinary item Discontinued operations 1.25 0.20 (1.13) ------ ------ ------ $ 6.31 $ 8.51 $ 4.89 ====== ====== ====== Average number of Common Shares outstanding Assuming dilution 72.6 73.7 72.7 Basic 71.8 72.5 71.4 Cash dividends paid per Common Share $1.76 $ 1.76 $ 1.76 Reconciliation of net income to operating earnings Net Income from continuing operations $ 363 $ 603 $ 430 Excluding (after tax): Unusual charges and extraordinary item 34 20 44 Gain on sale of businesses and corporate assets (14) (198) (28) ------ ------ ------ Operating income $ 383 $ 425 $ 446 ====== ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 5.00 $ 8.17 $ 5.91 Per share effect of impact of unusual items 0.28 (2.41) 0.23 ------ ------ ------ Operating earnings per Common Share - continuing operations $ 5.28 $ 5.76 $ 6.14 Operating earnings per Common Share - discontinued operations 1.24 0.19 (0.73) ------ ------ ------ Operating earnings per Common Share $ 6.52 $ 5.95 $ 5.41 ====== ====== ====== Cash operating earnings per Common Share - continuing operations $ 6.37 $ 6.74 $ 6.75 Comparative Financial Summary Twelve months ended 1997 1996 ------ ------ (Millions except for per share data) Continuing operations Net sales $7,104 $6,515 Income before income taxes and extraordinary item 730 428 Income before extraordinary item $ 526 $ 305 Income (loss) from extraordinary item (54) Income from discontinued operations (62) 44 ------ ------ Net income $ 410 $ 349 ====== ====== Net income per Common Share Assuming dilution Income from continuing operations before extraordinary item 6.72 $ 3.89 Extraordinary item (0.69) Discontinued operations (0.79) 0.57 ------ ------ $ 5.24 $ 4.46 ====== ====== Basic Income from continuing operations before extraordinary item 6.85 $ 3.93 Extraordinary item (0.71) Discontinued operations (0.80) 0.57 ------ ------ $ 5.34 $ 4.50 ====== ====== Average number of Common Shares outstanding Assuming dilution 78.2 78.2 Basic 76.8 77.4 Cash dividends paid per Common Share $ 1.72 $ 1.60 Reconciliation of net income to operating earnings Net Income from continuing operations $ 472 $ 305 Excluding (after tax): Unusual charges and extraordinary item 69 31 Gain on sales of businesses and corporate assets (69) ------ ------ Operating income $ 472 $ 336 ====== ====== Net income per Common Share from continuing operations - assuming dilution $ 6.03 $ 3.89 Per share effect of impact of unusual items 0.40 ------ ------ Operating earnings per Common Share - continuing operations $ 6.03 $ 4.29 Operating earnings per Common Share - discontinued operations 0.30 0.58 ------ ------ Operating earnings per Common Share $ 6.33 $ 4.87 ====== ====== Cash operating earnings per Common Share - continuing operations $ 6.55 $ 4.77 Statements of Consolidated Income Twelve months ended 2000 1999 1998 ------ ------ ------ (Millions except for per share data) Net sales $8,309 $8,005 $6,358 Costs & expenses Cost of products sold 6,092 5,792 4,528 Selling & administrative 1,299 1,248 974 Research & development 269 262 252 ------ ------ ------ 7,660 7,302 5,754 ------ ------ ------ Income from operations 649 703 604 Other income (expense) Interest expense - net (177) (152) (88) Gain on sales of businesses 340 43 Other - net 80 52 57 ------ ------ ------ (97) 240 12 ------ ------ ------ Income from continuing operations before income taxes and extraordinary item 552 943 616 Income taxes of continuing operations 189 340 186 ------ ------ ------ Income from continuing operations before extraordinary item 363 603 430 Extraordinary item ------ ------ ------ Income from continuing operations 363 603 430 Income from discontinued operations 90 14 (81) ------ ------ ------ Net income $ 453 $ 617 $ 349 ====== ====== ====== Net income per Common Share Assuming dilution Income from continuing operations before extraordinary item $ 5.00 $ 8.17 $ 5.91 Extraordinary item Discontinued operations 1.24 0.19 (1.11) ------ ------ ------ $ 6.24 $ 8.36 $ 4.80 ====== ====== ====== Basic Income from continuing operations before extraordinary item $ 5.06 $ 8.31 $ 6.02 Extraordinary item Discontinued operations 1.25 0.20 (1.13) ------ ------ ------ $ 6.31 $ 8.51 $ 4.89 ====== ====== ====== Average number of Common Shares outstanding Assuming dilution 72.6 73.7 72.7 Basic 71.8 72.5 71.4 Cash dividends paid per Common Share $ 1.76 $ 1.76 $ 1.76 Statements of Consolidated Income Twelve months ended 1997 1996 ------ ------ (Millions except for per share data) Net sales $7,104 $6,515 Costs & expenses Cost of products sold 5,166 4,882 Selling & administrative 1,013 929 Research & development 249 232 ------ ------ 6,428 6,043 ------ ------ Income from operations 676 472 Other income (expense) Interest expense - net (80) (79) Gain on sales of businesses 91 Other - net 43 35 ------ ------ 54 (44) ------ ------ Income from continuing operations before income taxes and extraordinary item 730 428 Income taxes of continuing operations 204 123 ------ ------ Income from continuing operations before extraordinary item 526 305 Extraordinary item (54) ------ ------ Income from continuing operations 472 305 Income from discontinued operations (62) 44 ------ ------ Net income $ 410 $ 349 ====== ====== Net income per Common Share Assuming dilution Income from continuing operations before extraordinary item $ 6.72 $ 3.89 Extraordinary item (0.69) Discontinued operations (0.79) 0.57 ------ ------ $ 5.24 $ 4.46 ====== ====== Basic Income from continuing operations before extraordinary item $ 6.85 $ 3.93 Extraordinary item (0.71) Discontinued operations (0.80) 0.57 ------ ------ $ 5.34 $ 4.50 ====== ====== Average number of Common Shares outstanding Assuming dilution 78.2 78.2 Basic 76.8 77.4 Cash dividends paid per Common Share $ 1.72 $ 1.60 Eaton Corporation Business Segment Information Twelve months ended 2000 1999 1998 ------ ------ ------ (Millions) Net sales of continuing operations Automotive Components $1,825 $1,857 $1,741 Fluid Power 2,607 2,036 681 Industrial & Commercial Controls 2,421 2,274 2,145 Truck Components 1,456 1,630 1,478 ------ ------ ------ Total ongoing operations 8,309 7,797 6,045 Divested operations 208 313 ------ ------ ------ Total net sales $8,309 $8,005 $6,358 ====== ====== ====== Operating profit of continuing operations Automotive Components $ 225 $ 236 $ 198 Fluid Power 235 177 117 Industrial & Commercial Controls 251 181 140 Truck Components 107 235 201 ------ ------ ------ Total ongoing operations 818 829 656 Divested operations 44 49 Amortization of goodwill & other intangible assets (98) (89) (58) Interest expense - net (177) (152) (88) Gain on sales of businesses 340 43 Corporate & other - net 9 (29) 14 ------ ------ ------ Income from continuing operations before income taxes and extraordinary item 552 943 616 Income taxes of continuing operations 189 340 186 ------ ------ ------ Income from continuing operations before extraordinary item 363 603 430 Extraordinary item ------ ------ ------ Income from continuing operations 363 603 430 Income from discontinued operations 90 14 (81) ------ ------ ------ Net income $ 453 $ 617 $ 349 ====== ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 679 $ 397 $ 267 Operating profit 147 31 (123) Other income (expense) - net (15) (11) (8) ------ ------ ------ Income before income taxes 132 20 (131) Income taxes 42 6 (50) ------ ------ ------ Income from discontinued operations $ 90 $ 14 $ (81) ====== ====== ====== Unusual charges (before income taxes) Automotive Components $ 12 Fluid Power $ 47 $ 21 1 Industrial & Commercial Controls 28 Truck Components 7 17 Corporate 5 2 10 Business Segment Information Twelve months ended 1997 1996 ------ ------ (Millions) Net sales of continuing operations Automotive Components $1,601 $1,560 Fluid Power 657 587 Industrial & Commercial Controls 2,091 1,956 Truck Components 1,177 916 ------ ------ Total ongoing operations 5,526 5,019 Divested operations 1,578 1,496 ------ ------ Total net sales $7,104 $6,515 ====== ====== Operating profit of continuing operations Automotive Components $ 191 $ 170 Fluid Power 123 109 Industrial & Commercial Controls 182 149 Truck Components 149 57 ------ ------ Total ongoing operations 645 485 Divested operations 150 76 Amortization of goodwill & other intangible assets (48) (40) Interest expense - net (80) (79) Gain on sales of businesses 91 Corporate & other - net (28) (14) ------ ------ Income from continuing operations before income taxes and extraordinary item 730 428 Income taxes of continuing operations 204 123 ------ ------ Income from continuing operations before extraordinary item 526 305 Extraordinary item (54) ------ ------ Income from continuing operations 472 305 Income from discontinued operations (62) 44 ------ ------ Net income $ 410 $ 349 ====== ====== Results of the discontinued semiconductor equipment operations are as follows: Net sales $ 459 $ 446 Operating profit 29 60 Other income (expense) - net (91) (2) ------ ------ Income before income taxes (62) 58 Income taxes 14 ------ ------ Income from discontinued operations $ (62) $ 44 ====== ====== Unusual charges (before income taxes) Automotive Components $ 12 $ 10 Fluid Power 1 4 Industrial & Commercial Controls 6 3 Truck Components 4 16 Corporate Condensed Consolidated Balance Sheets Dec 31, Dec 31, Dec 31, 2000 1999 1998 (Millions) ------ ------ ------ Assets Current assets Cash & short-term investments $ 126 $ 162 $ 119 Accounts receivable 1,219 1,165 839 Inventories 872 876 629 Deferred income taxes & other current assets 354 349 233 ------ ------ ------ 2,571 2,552 1,820 Property, plant & equipment 2,274 2,294 1,769 Goodwill 2,026 1,853 970 Other intangible assets 556 598 182 Deferred income taxes & other assets 753 714 556 Net assets of discontinued operations 331 273 ------ ------ ------ $8,180 $8,342 $5,570 ====== ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long-term debt $ 557 $ 970 $ 333 Accounts payable 485 487 438 Accrued compensation 199 277 150 Accrued income & other taxes 191 255 74 Other current liabilities 675 579 441 ------ ------ ------ 2,107 2,568 1,436 Long-term debt 2,447 1,915 1,191 Postretirement benefits other than pensions 679 666 556 Deferred income taxes & other liabilities 537 569 330 Shareholders' equity 2,410 2,624 2,057 ------ ------ ------ $8,180 $8,342 $5,570 ====== ====== ====== Eaton Corporation Condensed Consolidated Balance Sheets Dec 31, Dec 31, 1997 1996 (Millions) ------ ------ Assets Current assets Cash & short-term investments $ 86 $ 57 Accounts receivable 862 897 Inventories 624 654 Deferred income taxes & other current assets 245 220 ------ ------ 1,817 1,828 Property, plant & equipment 1,692 1,749 Goodwill 905 958 Other intangible assets 187 125 Deferred income taxes & other assets 540 442 Net assets of discontinued operations 356 188 ------ ------ $5,497 $5,290 ====== ====== Liabilities & Shareholders' Equity Current liabilities Short-term debt & current portion of long-term debt $ 104 $ 30 Accounts payable 494 494 Accrued compensation 169 172 Accrued income & other taxes 74 94 Other current liabilities 431 355 ------ ------ 1,272 1,145 Long-term debt 1,272 1,062 Postretirement benefits other than pensions 552 584 Deferred income taxes & other liabilities 330 339 Shareholders' equity 2,071 2,160 ------ ------ $5,497 $5,290 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Eaton Corporation ----------------- S/S Adrian T. Dillon ----------------------------- Adrian T. Dillon Executive Vice President--Chief Financial and Planning Officer Date: January 30, 2001 -----END PRIVACY-ENHANCED MESSAGE-----