Annual Investor Conference · Our strategy and execution capabilities will drive growth despite the low-growth global environment Attractive capital deployment alternatives strengthen

© 2015 Eaton. All Rights Reserved..

Annual Investor Conference

Sandy Cutler, Chairman and Chief Executive Officer February 27, 2015

3 © 2015 Eaton. All Rights Reserved..

Eaton – a power management leader

Power management strategy is working

Our balance provides stability

Our strategy and execution capabilities will drive growth despite the low-growth global environment

Attractive capital deployment alternatives strengthen long-term prospects


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

Serving global OEMs, airlines and governments

Delivering solutions to the global commercial vehicle and passenger car markets

32%

29%

13%

8%

18%

% of Sales

Industrial Sector


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








We have built 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


$0

$1

$2

$3

$4

$5

2010 2014

Despite uneven market conditions, we’ve achieved strong earnings growth…

2010 2011 2012 2013 2014

Electrical

Hydraulics

Aerospace

Vehicle

Operating Earnings Per Share Market Performance


…which has outpaced our peers

0%

5%

10%

15%

2013 to 2014 2010 to 2015EETN Peer Median

Operating EPS Growth: Eaton vs Peer Median

2015E based on consensus estimates Peer group consists of ABB, DHR, DOV, EMR, HON, IR, ITW, LR, PH, ROK, SIE, SU, UTX Operating EPS excludes Q2 2014 litigation settlements and gain from Aerospace divestitures Source Data: Capital IQ


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

2000 – Feb 13, 2015 CAGR

14.0%

0100200300400500600700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Feb13,

2015

Cumulative Shareholder Returns

Eaton S&P 500 Peer Group*

11.5%

5.4%

* Peer group represents an equal weighted index of ABB, DHR, DOV, EMR, HON, IR, ITW, LR, PH, ROK, SIE, SU, UTX Source Data: Capital IQ, Eaton analysis








We are in a lower global growth environment with increased uncertainty

Recent Moderation in Global Growth

3.3% 2.7% 2.9%

2.4%

0%

4%

2000-2007

Global GDP Global Manufacturing IP

New Normal Historic

• Heightened geopolitical risks

• Volatile commodity prices and foreign exchange rates

• Potential disinflation in developed economies

• Increased regulatory requirements

• Future of the Eurozone

• Unfavorable demographics, particularly in Europe

Increased Uncertainty

“Historic” period measured from 2000-2007 “New Normal” measured from 2012-2015 Source: IHS Economics


Successful integration of Cooper continues to drive significant earnings growth

115

210

360

475

0

100

200

300

400

500

2013 2014 2015 2016

Syne

rgy

Prof

it ($

M)

• The Cooper integration is nearing completion in 2015

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

• By this time next year, we will have fulfilled our commitment to pay down the acquisition debt

Cooper Synergies Integration Update

+$95M

+$150M

+$115M


We are making substantial investments to drive growth…

Positioned across the world, allowing us to respond quickly and cost-effectively to local needs

6 Global Innovation Centers Growing investment in R&D

0

100

200

300

400

500

600

700

2010

2011

2012

2013

2014

R&D Expenditures • Over 10,000 engineering

personnel globally • Patent applications in 2014

up 13% • First-issued patents in

2014 up 27%

A solid track record of success

$M


…that have yielded several successful new product introductions

Procision Dual Clutch Transmission

• 8% to 10% improved fuel economy

• Embedded intelligent components and reduced life cycle costs

Pratt & Whitney PurePower® Engine Seal*

• Advanced Hydrodynamic seal technology

• Decreases friction and heat, reduces wear, and improves fuel efficiency

Electrical Sector Industrial Sector

Technical vitality stronger than ever

Variable Frequency Drives

IEC Low Voltage Assemblies

• Three new drives families – general purpose, machine tool, variable speed starter

• Addresses end user and regulatory requirements for more efficient motor control

• Advanced safety features minimize arc flash risk

• Smaller footprint and higher power density with advanced communication, monitoring and protection features

*photo provided by Pratt & Whitney. PurePower is a registered trademark of United Technologies Corporation


We are driving much more effective customer engagement

The largest electrical sales force in North America

Industrial added over 100 new distributors in Asia in 2014

Channel Partnerships

We have organized our capabilities to serve markets demanding cross-segment solutions

Focused on Key Markets Customer Experience

Introduced a state-of-the-art customer portal and customer relationship management system


2015 estimates reflect guidance mid-point

-5% 0% 5% 10% 15%

2015 Operating EPS Growth

2015 Organic Sales Growth

2015 Global GDP Growth

Despite negative FX and a higher tax rate, we expect to generate good earnings growth

2015 Sales Growth

2015 Operating EPS Growth

2015 Global GDP Growth

Organic

Includes impacts from FX

Includes impact from FX and Tax








Our cash flow continues to grow rapidly and our free cash flow margin continues to expand

$0

$1

$2

$3

2011 2012 2013 2014* 2015E

Cash from Operations

($B

)

Indicates 2015 guidance range

0%

5%

10%

2011 2012 2013 2014* 2015E

Free Cash Flow Margin

* Excludes litigation settlements


Starting in the middle of 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

)


Delivering results and positioned for growth

• 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



Today we want to provide increased visibility and dive deeper into several of our businesses

Corporate Industrial Sector Electrical Sector

• Financial review and guidance Rick Fearon

• Sector overview Craig Arnold

• Aerospace business Uday Yadav

• Sector overview Tom Gross

• Sales channel strategy Revathi Advaithi

• New product innovation Frank Campbell

• Lighting business Mark Eubanks

Documents

Annual Investor Conference · Our strategy and execution capabilities will drive growth despite the low-growth global environment Attractive capital deployment alternatives strengthen