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© 2015 Eaton. All Rights Reserved..

Bank of America Merrill Lynch Global Industrials & EU Autos Conference 2015

Richard H. Fearon – Vice Chairman and Chief Financial and Planning Officer

March 17, 2015

2 © 2015 Eaton. All Rights Reserved..

Forward Looking Statements and Non-GAAP Financial Information

The information provided today will include forward-looking statements relating to our goals and estimates for future years, including statements about acquisition synergies, capital expenditures, operating earnings per share, cash flow, segment margins, our worldwide markets, our anticipated effective income tax rate and others. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated changes in the markets for the company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; competitive pressures on sales and pricing; increases in the cost of material and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions or realizing expected synergies from the Cooper acquisition; new laws and governmental regulations; interest rate changes; changes in currency exchange rates; stock market fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements. This presentation includes certain non-GAAP measures as defined by SEC rules. A reconciliation of those measures to the most directly comparable GAAP equivalent is provided in the investor relations section of our website at www.eaton.com and is contained in your packet.

http://www.eaton.com/


Eaton – A Power Management Leader

• Power management strategy is working

• Leading Electrical franchise with a successful Cooper integration nearing completion

• Industrial businesses are well positioned for growth

• Strong margin, cash flow and attractive capital deployment alternatives strengthen prospects

• Outlook


Eaton is a premier power management company…

We are uniquely positioned to provide reliable, efficient, safe and sustainable power management solutions for critical markets

Cities & Buildings

Transportation

Infrastructure Energy & Utilities

Information Technology

Industrial & Machinery

Electrical Fluid Mechanical

5 © 2015 Eaton. All Rights Reserved.. $22.6B total

…consisting of leading global power management businesses

Products

Systems & Services

Aerospace

Hydraulics

Vehicle

Electrical Sector $7.3B

$6.5B

$3.0B

$1.9B

$4.0B

2014 Sales

Providing comprehensive solutions from generation to the end user

Bringing a broad product portfolio to diverse global end markets

32%

29%

13%

8%

18%

% of Sales

Industrial Sector

Serving global OEMs, airlines and governments

Delivering solutions to the global commercial vehicle and passenger car markets


We have aggressively executed our strategy

Goals Actions Since 2000

• Higher earnings growth

• Reduced volatility

• Maintain high return on capital

• Invested $5.5 billion in research & development

• Deployed $20 billion of capital to acquire 66 businesses, markedly changing the mix

• Divested businesses with sales of over $1.5 billion

Strategy

• Change the business mix

• Upgrade the talent

• Run the business better with EBS


Our strategy has resulted in a balanced business that serves diverse markets

End Market

Country

Cycle

Segment

Electrical Vehicle Hydraulics Aerospace

Early Mid Late No

USA Int’l Developed Int’l Emerging

61%

11% 29% 29% 31%

13% 8% 18%

52%

25% 23%


Over the last decade we have driven strong growth…

Mix

Pe

rfor

man

ce

Cash from Operations ($B) Sales ($B) Operating EPS ($)

$0

$5

$10

$15

$20

$25

2004 2014$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

2004 2014$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2004 2014

Note: Cash from Operations and Operating EPS exclude Q2 2014 litigation settlements and gain from Aerospace divestitures


0.0

0.1

0.2

0.3

0.4

Eaton Stand Alone PF Eaton and Cooper

Vola

tility

of E

arni

ngs

…and with the addition of Cooper, we have a less volatile earnings stream

Notes: Eaton Pro Forma includes Cooper results prior to the acquisition Volatility of earnings is standard deviation of YoY EBIT growth data from Capital IQ

Among the most stable in our peer group

0%

2%

4%

6%

8%

10%

12%

EBIT Margin Range 2004-2014

EBIT Growth Volatility 2004-2012


We have grown our dividend at a rapid rate…

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

Dividends per Share


…and continue to aggressively return cash to our shareholders

Dividend Yield vs. Peers as of 3/6/2015

Total Cash Returned to Shareholders in 2014 ($M) 2014 Share Repurchases ($M)

0%

1%

2%

3%

4%

ABB

NS

IEE

MR

ETN S

UR

OK

DO

V LRU

TX PH

HO

NIT

W IRD

HR

$99

$225

$326

$0

$100

$200

$300

$400

Q2:14 Q3:14 Q4:14

$0

$400

$800

$1,200

$1,600

$2,000

Dividends ShareRepurchases

Total

$929

$650 $1,579

In 2014 we returned ~$1.6B to shareholders or 4.4% of our market cap at the beginning of the year


Over the long-run, we have generated outstanding returns for our shareholders

2000 – Feb. 2015 CAGR*

Return Index

13.8%

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Feb2015

Cumulative Shareholder Returns

Eaton S&P 500 Peer Group**

11.5%

5.4%

Note – ** Peer Group represents an equal weighted index of ABB, DHR, DOV, EMR, HON, IR, ITW, LR, PH, ROK, SIE, SU, UTX *CAGR = Calculated using the End Point Methodology Source Data: Capital IQ, Eaton analysis







• Outlook


Our Electrical businesses deliver solutions for the entire power system

Data Centers Industrial Utility Commercial / Resi Machinery


Our Electrical businesses are balanced both geographically and across key end markets

Non-U.S. 45%

U.S. 55%

Electrical Geographic Mix 2014 Sales $13.7B

Industrial 23%

Machine Builders

11% Data

Center / IT 15%

Utility 12%

Resi 9%

Electrical End Market Mix 2014 Sales $13.7B

Commercial & Institutional / Gov’t

30%


The successful integration of Cooper continues to drive significant earnings growth

0

100

200

300

400

500

2013 2014 2015 2016Profits from Revenue SynergiesCost Synergies

Integration Update

• The Cooper integration is nearing completion in 2015

• We are close to capturing all sales and cost-out synergies

• By January 2016, we will have fulfilled our commitment to pay down the acquisition debt

+$95M

+$150M

+$115M $475

$360

$210

$115 Syn

ergy

pro

fit ($

M)


Cost synergies come from five main areas and are approaching mature levels

Plant & Distribution

Rationalization projects on-schedule

Successful disposition of excess properties

60% complete

EBS

Application of EBS Tools

Implementation of tools proceeding per plan

70% complete

Supply Chain Economies of Scale

Leveraging common spend

Consolidating indirect spend

Leveraging distribution footprint to reduce freight costs

70% complete

Leveraging Eaton’s Infrastructure

Operating SG&A actions ahead of plan

Office consolidation projects complete

90% complete

Corporate Cost Reduction

All actions completed

IT and data center migrations ahead of schedule

100% complete

Note: percentages indicate cost synergies completed. Balance of work is underway and will be finished by year end.


Sales synergies come from four main areas

Completed the rollout of a new distributor program to channel partners (EDAP)

Boost Channel Sales

Launched new channel web portal tools (MyEaton)

Larger Package to Common Customers

Implemented integrated selling organizations on a global basis

Added resources to focus on global accounts and key EPC firms

Service Business

Rolled out a service channel module to key distributors

Coupled service offers to all Industrial, Commercial and Utility quotations and projects

Geographic Expansion

Enhanced and expanded Eaton Tech Days in Asia, Africa, and the Middle East

Integrated selling, service, and channel activities in key regions

75% of total 2016 sales synergies 25% of total 2016 sales synergies







• Outlook


Our Hydraulics business serves large and diverse end markets

• 65% Mobile Equipment • 35% Stationary Equipment • 50% Direct • 50% Through Distribution

2014 Sales of $3.0B

• Large $40B global and diverse market

• Broad product portfolio

• Positioned to outgrow end markets

Why We Like Hydraulics

Business Mix

Market Mix

Construction & Mining

Agriculture

Energy Commercial Vehicles

Manufacturing

Material Handling

Processing

Other

Expected 2015 operating margin of 12.1% to 12.7%


Growing Aftermarket

• $12B market opportunity; 3% CAGR

• One third of 2014 sales

• $18B installed base of Eaton products

• Business is both profitable and stable

• Key actions • Localizing products • Building service capabilities • Adding channel partners

Addressing Softer Markets

• Market mix: 70% stable, 30% cyclical

• Key actions to improve profitability through cycles

• Investing to grow in stable end markets

• Improving product mix • Reducing fixed costs and

optimizing our global footprint

• 2014 and 2015 restructuring actions

Hydraulics is addressing short-term market conditions and is positioned to capitalize on growth opportunities

Mining in Australia On-site 24/7 service

Current point in the cycle

Margins Through the Cycle

13-14%* 17%+ 15-16%

*Excluding restructuring

Investing in Key Technologies

• Launching industry leading technologies

• Leveraging Eaton’s electrical and hydraulic expertise

• Targeting new solutions for machine OEM market

• $4B market; 3% CAGR • $720M market opportunity

Variable Speed Drive Solutions for MOEM


Our Aerospace business is balanced across market segments and diverse platforms

2014 Sales of $1.9B

Why We Like Aerospace

Business Mix

Market Mix


• 65% Commercial / 35% Military

• 65% New Aircraft / 35% Aftermarket

• Steady market growth

• Long-cycle industry

• Advantageous technology position

Commercial OEM

Military OEM

Commercial Aftermarket

Military Aftermarket

Other OE


Launching New Technologies • Driving more than $3B in recent

wins

• Commercial Transport • Pure Power engine seals improve

fuel efficiency and extend life cycle on 777X, a $620M opportunity

•

• Optimized subsystems to improve engine buildup on A350-1000, a $425M opportunity

• Regional Jets Hydraulic system advantages in quality and reliability on E2 jet, a $400M opportunity

• Military Tanker Closed loop system optimizes fuel flow on KC-46A, a $300M opportunity

Growing Aftermarket

• $4B global market; 2.5% CAGR

• Aggressive focus on: • Improving operational

performance • Dedicated Aftermarket

organization • Driving modifications and

upgrades

Increasing Content on Next Generation Platforms

Winning technologies and aftermarket focus will drive profitable growth on both legacy and new platforms

Aftermarket Sales 7% CAGR

Commercial Transport B787 B767

4x

Military Rotorcraft

Military Fighters

Business Jets

Regional Jets

7x

2x

8x

6x

CH-53K UH-60

F-35 F-18

Falcon 900

E2 ERJ 170/190

Falcon 5X

Prior platforms New OE platforms *Photo provided by GE Aviation

2014 2018

$120M in outgrowth by 2018


Our Vehicle Group provides targeted solutions for both commercial and passenger markets

2014 Sales of $4.0B

Why We Like Vehicle

Business Mix

Market Mix


• Americas: 70%

• EMEA: 20%

• APAC: 10%

• Regulations create large opportunities for innovation

• Leader in fuel economy and emissions reduction

• Positioned to outgrow end markets

Passenger

Line Haul

Vocational

Pickup and Delivery

Ag / Off Highway Other


Vehicle Group is focused on four near-term drivers of market outgrowth

2014 2018% Automation % Manual

Procision Dual Clutch Transmission

Automated Transmissions • NAFTA heavy-duty market converting to

automation

• Automation growth creates a large market opportunity with 40-50% higher price point than equivalent manual products

Engine Technologies

• Solutions to help customers meet regulatory requirements

• Hollow Valves – 10% weight reduction and higher heat tolerance

• Variable Valve Actuation – improves engine efficiency by adjusting valves for power needs

• Cylinder Deactivation

Medium Duty Market

• Launching new Medium-duty product • Targeted toward Class 6 and 7

markets with improved fuel economy • 2014 new business wins of $300M

Leveraging Alliances • Strategic alliances expanding global scope and

driving growth • Cummins Alliance: SmartAdvantage™

• 3-6% better fuel economy

• Shaanxi Fast Gear Co., Ltd. joint venture enhances

clutch presence in China • Nittan joint venture extends our valvetrain reach in

Asia







• Outlook


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

We expect good margin improvement in 2015, consistent with our long-term trend

Segment Operating Margin +60 bps

to +120 bps

YoY

Note: Excludes acquisition integration charges


Our cash flow continues to grow rapidly and our cash earnings are strong

$0

$1

$2

$3

2011 2012 2013 2014* 2015E

Cash from Operations

($B

)

Indicates 2015 guidance range

Cash Earnings Comparison

$0

$3

$6

$9

2014 2015E

Operating EPS EBITDA / Share

Notes: Operating EPS excludes Q2 2014 litigation settlements and gain from Aerospace divestitures EBITDA / Share excludes acquisition integration charges


Beginning mid-2015, we expect to have increased cash optionality

$0

$4

Free Cash Flow -2H 2015 through

2016

DividendPayments

Debt Repayment Capitaloptionality

Mid-year 2015 cash optionality

Repurchase shares

…we repurchased $650M (2% of shares outstanding) in 2014

Increase dividend

…continue to grow dividends in line with earnings growth

Invest in acquisitions

…Cooper expanded our addressable electrical market from ~$125B to ~$195B

Significant Cash Generation in Near-Term Capital Allocation Optionality

($B

)







• Outlook


For 2015, organic revenue growth is expected to be 3% - 4%

Segment 2015 Organic Revenue Growth

Electrical 3% - 5%

Hydraulics (2)% - 0%

Aerospace 2% - 4%

Vehicle 5% - 7%

Eaton Consolidated 3% - 4%


2015 Outlook 2015 Expected

Segment Margins

Elec. Products 17.7% - 18.3%

Elec. Systems and Services 14.5% - 15.1%

Hydraulics 12.1% - 12.7%

Aerospace 15.1% - 15.7%

Vehicle 17.0% - 17.6%

Organic Revenue Growth 3% - 4%

Forex (4)%

Segment Margins 15.9% - 16.5%

Corporate pension, interest, and general corporate expenses

$30M - $40M above 2014 levels

Tax Rate 9% - 11%

Operating EPS Full Year $4.75 - $5.05

Q1 $0.95 - $1.05

Operating Cash Flow $2.7B - $3.1B

Free Cash Flow $2.0B - $2.4B

CAPEX $675M


Summary

• We are a global power management leader with strong positions in critical markets

Our power management strategy is effective

• Our technical vitality and front-end capabilities combined with Cooper synergies are producing results

We will continue to drive strong earnings growth in a slow growth environment

• Growing cash flow and improved cash flow margin provide us with attractive capital allocation alternatives

We are positioned for greater cash redeployment optionality

• Across uneven market conditions, we have produced strong results

Our balance provides stability

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