eaton report 12

7/28/2019 Eaton Report 12

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2012 Annual Report

APowerful CombinAtion


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2 Financial Highlights3 Letter to Shareholders8 Tapping a Megatrend16 Sustainability Report24 Financial Table of Contents25 Reports on Financial Statements26 Reports on Internal Control Over Financial Reporting27 Consolidated Financial Statements32 Notes to Consolidated Financial Statements50 Managements Discussion and Analysis56 Quarterly Data57 Ten-Year Consolidated Financial Summary58 Directors and Leadership Team59 Shareholder Information

Combining our strengths.ACCelerAting our growth.

$16 Billion in SaleS * $5.4 Billion in SaleS *

74,000 employeeS WorldWide 29,000 employeeS WorldWide

150+ CountrieS 100+ CountrieS

1911 year Founded 1833 year Founded

8,794 patentS 2,075 patentS *2011 net sales

Eaton is a diversifed power management company providingenergy-e fcient solutions that help our customers e ectivelymanage electrical, hydraulic and mechanical power. With 2012 sales of $16.3 billion, Eaton is a global technology leader in electricalproducts, systems and services for power quality, distribution andcontrol, power transmission, lighting and wiring products; hydraulicscomponents, systems and services or industrial and mobileequipment; aerospace fuel, hydraulics and pneumatic systems forcommercial and military use; and truck and automotive drivetrainand powertrain systems for performance, fuel economy and safety .Eaton acquired Cooper Industries plc in 2012 . Eaton has approxi-mately 103,000 employees and sells products to customers in more than 175 countries. For more information, visit www.eaton.com.


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Eaton coopErEatons electrical business has long been a pioneer in powermanagement with a ocus on power distribution or utilities,residential and non-residential construction; power quality ordata centers and IT markets; and electrical control or machinebuilders and the actory oor. Our service business deliversenergy-e fcient solutions to a wide range o energy users.

With the acquisition o Cooper, the largestin our 101 year history, we are beginninga new era of accelerated growth and change at Eaton. This is a trans ormativestep. By bringing together two exceptionalcompanies, both with extraordinary talent, we are creating a power managementpowerhouse and are positioning ourselves

or even greater success today and wellinto the uture.

TogeTher,More Powerful

For 180 years, Cooper has been a leader in providing world -class electrical and sa ety products or industrial, utility,commercial and residential markets. Its systems engineeringdivision helped pioneer major breakthroughs in electricaldistribution and sa ety.

+


4/62eaton 2012 Annual Repor t2

2012 2011 2012 2011(In millions except or per share data)

Net sales $ 16,311 $ 16,049 $ 16,311 $ 16,049Income be ore income taxes 1,251 1,553 1,473 1,567

Net income $ 1,220 $ 1,352 $ 1,387 $ 1,362Less net income or noncontrolling interests (3) (2) (3) (2)

Net income attributable to Eaton ordinary shareholders $ 1,217 $ 1,350 $ 1,384 $ 1,360

Net income per ordinary share diluted $ 3.46 $ 3.93 $ 3.94 $ 3.96

Weighted-average number o ordinary shares outstanding diluted 350.9 342.8Cash dividends declared per ordinary share $ 1.52 $ 1.36

Total assets $ 35,848 $ 17,873Total debt 10,833 3,773Eaton shareholders equity 15,086 7,469

*Results on an operating basis exclude pretax charges or acquisition integration charges and transaction costs o$222in2012 ($167a ter-tax, or$0.48per ordinary share)and $14in2011 ($10a ter-tax, or$0.03per ordinary share).

AS ADJUSTEDON AN OPERATING BASIS*

2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

$15.4

$11.9

$16.3

$13.7

$16.0

$2.81

$3.96 $3.94

$1.28 $1.25

$1.66

23.7%26.5%

39.2%

$3.42 $1.44

37.2%

$1.30

$1.41

28.4%

NET SALES(Billions o dollars)

OPERATING EARNINGS PERORDINARY SHARE(Dollars per share)

CASH FLOW FROM OPERATIONS

(Billions of dollars)NET-DEBT-TO-TOTAL-CAPITALRATIO (Percentage)

2012 f c h t

AS REPORTED

$500 $400

$300 $200 $100 0

The above graph compares the cumulative total return to shareholders or Eaton and theS&P 500Index on an initial$100investment over the time period2000through2012. The shareholderreturns re ected on the graph assume dividends were reinvested as o the ex-dividend date.

Eaton S&P 500Index

COMPANY STOCK PERFORMANCE

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


5/62eaton 2012 Annual Report

To Our Shareholders:

Just two years ago, we celebrated our 100 th anniversary, payingtribute to generations o employees whose relentless ingenuityand passionate spirit have made Eaton one o the worlds leading power management companies. Over that proud history,we demonstrated time and again that the only way to succeedis to maintain a bold course regardless o economic conditions,and to continuously trans orm our business to adapt to changingmarkets and customer needs.

During 2012 , we sustained that strategy by acquiring CooperIndustries plc, a company with a heritage that is as rich as ourownand a history o accomplishments that dates back even

urther. The $13 billion acquisitionthe largest weve everaccomplishedis a trans ormational milestone that expandsthe electrical solutions we can o er to customers, strengthensour capabilities in growing market segments (including oil andgas, mining, data centers and utilities) and increases ourpresence in key geographic regions.

Im pleased to welcome Coopers shareholders and employeeswith this letter, and weve dedicated this years annual reportto exploring the myriad opportunities that our combined businesses have already begun to pursue. Together, we trulydo make a power ul combinationa combination that Imconfdent will continue to trans orm our business in many ways

or years to come.

D t t t c myWhile 2012 began with great promise, global economiessputtered during the second hal o the year, de ating many oour end markets. In act, our end markets shrank by 5 percentduring the ourth quartermore than twice the decline weexpected. Despite this weakness, we continued to post solid fnancial results and deliver strong returns to Eatons shareholders.Among the years fnancial and operating highlights (includingone month o results rom the Cooper acquisition, which weclosed on November 30):

We posted record sales o $16.3 billion, up 2 percentrom 2011.

Net income per share ell 12 percent to $3.46 , due in large

part to acquisition, integration and restructuring costsincurred during the year.

We generated $1.7 billion in cash rom operations andincreased our dividend by 12 percent.

We contributed $413 million to our pension plans, strengthen-ing our balance sheet.

We completed fve acquisitions: three new electrical busi-nesses (Cooper, Rolec Comercial e Industrial S.A. and Gycoms low-voltage power distribution business) and twonew hydraulics businesses (Polimer Kauuk Sanayi ve Pazar-lama A.S., which manu actures hoses under the SEL brand, and Jeil Hydraulics Co. Ltd.).

a TransforMaTionalYearIn times o economic uncertainty

around the world, many people and organizations begin to hesitateand make themselves victims o

orces they consider beyondtheir control. At Eaton, we havechosen instead to move orwardwith con dence and purposeand to create our own growth.


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47%

18%

11%

14%

10%

2012 salesby business segment

28%

24%

48% 2012 salesby fnal destination

U.S.International Developed

International Emerging

ElectricalHydraulics

Aerospace

TruckAutomotive

60%

14%

8%

11%

7%


27%

23%

50%2012 sales

by fnal destination

U.S.

International Developed



Aerospace

Truck

Automotive

eaTon 2000

$8.3Billion sales

eaTon 2012

$16.3Billion sales

eaTon 2012(Pro forMa)

$21.8Billion sales

U.S.

International Developed


2000 salesby fnal destination

10%

80%

10%

eaton 2012 Annual Repor t4


Aerospace

Truck

Automotive


19%

18%26%

29%

8%


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We strengthened our commitment to sustainability leadership by reducing our greenhouse gas emissions, waste to landflland water consumption, while expanding our e orts to buildbetter, sa er and stronger workplaces and communities.

We launched a global Zero Incident Sa ety Culture to urtherengage our employees and to strengthen our sa ety process,reducing our number o severe injuries by 17 percent rom theprevious year.

Ninety-six percent o our work orce participated in our globalemployee survey, demonstrating continued strong employeeengagement.

Our stock attained new record highs during 2012 . For the year, the value o Eaton shares (including quarterly dividends)increased by 29 percent compared to gains o 10 percent or theDow Jones industrial average, 16 percent or the S&P 500 and17 percent or the Nasdaq composite index. Since 2000 , Eatonstock has delivered a strong 14 percent compounded annualtotal shareholder return.

As part o our acquisition o Cooper, we reincorporated our company in Ireland. Eaton continues to trade on the New YorkStock Exchange under the ticker symbol ETN.

M t b c d b t t yEaton is a signifcantly largerand ar di erent companytoday than we were only 12 years ago, driven by the stronggrowth o our electrical, hydraulics and aerospace businesses(see pie charts on page 4). Since 2000 , revenues rom thesebusinesses have nearly tripled, while revenues rom our vehiclebusinesses are up just under 10 percent.

Our acquisition o Cooper accelerates that evolution, establish-ing Eaton as one o the worlds largest electrical com panies.Renowned Cooper ranchises such as Crouse-Hinds and

Bussmann orti y our expertise and expand our powerhouseport olio o electrical product lines that now includes Cutler-Hammer, Holec, Powerware, Moeller, Phoenixtec, McGraw-Edison, Kyle, Halo and many more.

As a result, we believe weve never been better positioned to ocus our e orts on attractive growth opportunities while

maintaining a strategically diversifed mix o businesses. Goingorward, we estimate:

Our electrical business will generate approximately 60 perceno our annual sales, compared to only 29 percent in 2000 .

More than 80 percent o our annual sales will be generated by our combined electrical, hydraulics and aerospacebusinesses with the balance o our sales generated by our vehicle business.

Hal o our revenues will be generated outside o the U.S. compared to only 20 percent in 2000 . (This projection isslightly lower than our 2011 and 2012 results because moreo Coopers sales are currently U.S. -based.)

This diversifcation o our businesses both across geographiesand business cyclescontinues to help us balance thevariability and volatility that is inherent in managing a globalindustrial company. During 2012 , or example, strong commercial and residential sales in the Americas enabled ourelectrical business to achieve record revenues and profts,despite weakness in European and Asia Pacifc markets.Modest growth in our hydraulics and aerospace businesseshelped o set declines in automotive and truck. (Read more inour operating highlights on page 6 .)

To re ect the evolution o our company, we will begin reportingour fnancial results in 2013 using the ollowing fve businesssegments: electrical products, electrical systems and services,hydraulics, aerospace and vehicle.

Eaton is a signi cantly largerand ar di erentcompany todaythan we were only 12 years ago,driven by the strong growth o ourelectrical, hydraulics and aerospacebusinesses and our rapid expansionaround the world.

Together, thesebusinesses will now generatemore than 80 percent o ourrevenues.

eaton 2012 Annual Report


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oPeraTing highlighTs2012

ELECTRICALIncluding one month o revenues

rom our acquisition o CooperIndustries, sales o our globalelectrical business grew by 8percent in 2012 to $7.7 billion, anew record. Pro ts topped $1.1 billion, also a record. Sales andpro ts in the Americas achievedall-time highs with both the powerdistribution and power qualitybusinesses showing equalstrength at year-end. Electrical sales declined in the rest o theworld but improved signi cantlyduring the second hal o the year,in spite o continued weaknessin European and Asia Paci cmarkets. Our new line o highly

e cient mid-range uninterruptible power systems and our PowerXpert UX amily o medium-voltage switchgear are just twoexamples o how we continued to expand our industry leadership.Our acquisition o Rolec Comerciale Industrial S.A. strengthens ourcapabilities in the mining sectorand adds to our local presence inChile and Peru. Our acquisition o Cooper was the capstone to anoutstanding year.Integrated solutions or large-scale projectssuch as a $27 million contract to provideturnkey equipment design,electrical assemblies andengineering services or thePanama Canal expansion

programhelped drive ourgrowth during 2012 . We alsoexperienced strong demand orsustainable building solutions,including a $10 million contract toincrease the energy e ciency o 15 Veterans Health Administrationmedical centers. Innovationsin lean automation technology,combined with expandeddistribution, boosted sales toglobal machine manu acturers.We expect that our acquisitiono Cooperwith its exceptionalstrength in commercial,residential, industrial and utilityend marketswill expand theseand other growth opportunities in2013 and beyond. (Read more onpages 8 through 15 .)

HYDRAULICSOur hydraulics business grewagain in 2012 , although slowerthan in recent years due toreduced in rastructure and construction spending. For theyear, sales totaled $3.0 billion,up 4 percent compared to 2011 .These results include two keyacquisitionsPolimer Kauuk (SEL), strengthening our industrial

and specialty hose port olio, andKoreas Jeil Hydraulics, creating new opportunities in theconstruction equipment market.Sales to A rica, Eastern Europeand Russia were strong and wecontinued to expand ourbusiness in agriculture, miningand energy markets, includingBrazils oil and gas indust ry.New contracts in China included Guizhou Aviation Industry

Group (cotton harvestingequipment), XCMG Group (construction machinery) andWanda Group (entertainment).Sales o fltration productsto the ood and beveragemarket grew by double digitsduring the year; we also madegains in marine, pharmaceutical,blood ractionation andrefnery markets.

AEROSPACEWe continued to expand oursales o sa e, reliable ande fcient power managementsolutions to global aerospacecustomers in 2012 , withrevenues growing by 4 percentduring the year. New wins willsecure uture growth ueled

by contracts with Boeing (majorcomponents and subsystems

or the KC-46 tanker), COMAC (cargo-door actuation system orthe C919 passenger aircra t),GE Aviation (debris monitoringcomponents or the LEAP-X engine) and Embraer (hydrauliccomponents and uel-tankinerting or the KC-390 militarytransport aircra t). During 2012 ,we celebrated our 50 th year o

supporting NASA missions,including supplying high-pressure seals or the Curiosityrover, which landed on Marsin August.

VEHICLESales or our truck businessdeclined 13 percent during 2012 to $2.3 billion. However, wemaintained strong margins18.2 percent as a result o reduced warranty claims,aggressive spending controlsand lower commodity costs.Commercial vehicle buyerscontinue to drive demand or

our uel-e cient UltraShi t PLUS automated transmissions, including new contracts in SouthAmerica, South A rica, China andBrazil. Our automotive businessposted sales o $1.6 billion, an 8percent decline compared to theprevious year. Net o oreignexchange and divestitures, results were fat. European markets,which slumped to levels closeto the lows o the last decade,

erased gains in other parts o theworld. Demand remains strong

or Eaton technologies that boostuel economy, including our

superchargers (currently availableor in development on about 75 vehicles), variable-valve li ts,hollow valves and cylinder-deactivation technology. We alsowon our rst ELocker lockingdi erential contract in Russia.



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delivering aster than expected e fciencies in our supply chainand selling, general and administrative expenses. Were alsoahead o plan in terms o our cash ow generation and ability torepay debt. As a result, we believe the Cooper acquisition willbe accretive to earnings in 2013 , a ull year ahead o our originalprojections. During our ourth quarter con erence call, weissued guidance o $4.05 to $4.45 operating earnings per share

or2013 , which would establish a new record or our companyeven in this challenging environment.

I want to salute our associates commitment to never standingstill, even in the ace o uncertainty. Their courage to continue toinnovate, to adopt and explore new concepts, and to serve ourcustomers in new ways is truly admirable. Not hesitating,always moving orwardtheir accomplishments each andevery day are truly impressive. I have seen the same coura-geous commitment rom the talented leaders and associates oCooper Industries, creating a dynamic environment or growth.

While strong, our teams collective pride in our enterprise is tempered by our recognition that we have so much more toimprove and accomplish. Eatons trans ormation will continue,

ueled by our values-based culture and our customers growingdemand or sa e, reliable, e fcient and sustainable powermanagement solutions. We live our values every day and areprepared to once again make this annual pledge to ourshareholders: We are committed to Doing Business Right!

On behal o our entire Eaton team, thank you or yourcontinued support.

C t t c t m tGlobal economies decelerated as we progressed through 2012 ,leading to another year o sub-par growth. We dont expect that environment to change dramatically in 2013 as the Eurozonestruggles with challenging fscal and monetary decisions, theU.S. remains captive to the pressures o fscal imbalance, andemerging nationsonce the source o strong growthcontinue their slow rebound.

As a result, our economic outlook or 2013 eels much like it did ayear ago when I wrote in this same letter: Faced with sub-

trend global economic growth, companies must create their own growth. Im confdent that the actions our team took in2012 have already put us solidly on that course:

We believe our acquisition o Cooper will add approximately $5.8 billion to our 2013 revenues. By 2016 , we believethe Cooper acquisition will create $405 million in annualpre-tax operational synergies and an additional $160 millionin annual a ter-tax synergies rom cash management andresultant tax benefts.

Our acquisitions o Rolec, Gycom, Polimer Kauuk ( SEL) andJeil will add another $200 million to our 2013 revenues andcreate new opportunities or us in attractive markets.

We have continued our aggressive investments in newproducts and technologies, and the steady stream o newproducts and services emanating rom these investmentscontinues to drive premium growth opportunities.

To respond to continuing so t market conditions, particularlyin Europe, we restructured, consolidated or closed several oour manu acturing acilities, reducing uture costs.

While the Cooper acquisition will demand signifcant manage-ment and fnancial resources or the next several years, Impleased to report that our integration plan is ahead o schedule,

Alexander M. CutlerChairman and Chie Executive O fcer

30%

11%

30%

29%

No cycle$2.4 billion in revenues

Electrical service,de ense, fltration,

aerospace a termarket

Late cycle$6.5 billion in revenues

Commercial aerospace, utilities,nonresidential construction,

large data centers

Mid cycle$6.4 billion in revenuesHydraulics, industrial controls,medium duty truck,mid-sized data centers

Early cycle$6.5 billion in revenuesResidential construction,single phase power quality,heavy duty truck, automotive

o b b c d t t c m c cyc

2012 global cycle(pro orma)



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In late October 2012 , Hurricane Sandy pounded the east coasto the United States, knocking out power to more than 8 millionhomes and businesses many or days, some much longer.The massive disruption supported what experts havecontended or years: Aging electrical in rastructure in the U.S. and other developed nations is sagging under the demands omodern society.

Hal way across the globe in developing economies like China,India and A rica growing middle-class populations are buyingcomputers, household appliances and more, urther pressuringglobal energy supplies. The International Energy Agency hasestimated that global demand or electricity could rise by 70 percent between 2010 and 2035 , driven largely by these ast-growing regions. The world needs to invest to advance.

s t y- t d dAt Eaton, we view these events as part o a much larger powermanagement challenge: controlling the rising costs andaddressing the environmental impact o the worlds growingenergy use. As we address this multibillion-dollar megatrendacross our company, we expect to capitalize on opportunities orthe combined Eaton and Cooper electrical business to help ourcustomers achieve:

Improved e fciency. Eatons electrical solutions helpbusinesses and consumers reduce their electrical use, cut theirutility bills and ease the strain on overstressed power systemsand energy resources.

Increased reliability. In the ace o growing electrical outagesand disruptions, Eaton power systems and services help

maintain vital operations with steady, high-quality power everyminute o every day.

Enhanced sa ety. As power needs have increased, so have thedemands or power sa ety. Eaton reduces electrical hazardswith products and alert systems that help customers recognizeand avoid danger.

Greater sustainability. We help to make solar, wind andhydroelectric power more a ordable, accessible and e fcient.Were also at the ore ront o developing sa e and reliablein rastructure or charging electric vehicles.

a -t m c t pp t tyThrough our acquisition o Cooper, we have expanded our

capabilities across all o these ronts, enabling us to become aneven more vital resource or our customers.

The complementary nature o the two businesses coming together ft well with Eatons short-term and long-term plans orproftable growth, while delivering the greatest value to our customers and the world.

We are better positioned to address global needs or managingenergy consumption, modernizing grid in rastructure andprotecting people, equipment and data. We believe this demandwill continue to grow as the world copes with the rising cost oand demand or energy.

TaPPingoPPorTuniTies aCrossMarkeT segMenTs Eatons global electrical business is broad and balanced acrossdiverse market segments:

Residential: We provideproduct and service solutions ornew residential construction orsingle- amily and multi- amilyhomes as well as upgrades andreplacements or existing homes.

Commercial: Our compre-hensive solutions or thecommercial market help power buildings more sa ely, e cientlyand reliably. We also provideengineering services that supportevery stage o a project romdesign to post-installation support.

Industrial: We deliver turnkeypower system solutions or largeindustrial customers, helping themimprove acility productivity andsa ety and reduce operating costs.

Utility: Were an industryleader in providing generationand distribution solutions or the utility segment.

Machinery: We enable machinebuilders to increase their machine throughput and unctionalitywith our control, logic, sensingand inter acing technologies, as well as our electro-hydraulicsolutions.

Data Centers: Our solutionsreduce the energy consumption o power-hungry data centers anddeliver clean, sa e and reliablepower to critical applications,enabling customers to operate without interruption.

a MegaTrenD



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Through our acquisition o Cooper, weve signifcantly expandedour capabilities with little overlap or duplication; the solutionswe provide are complementary and adjacent to one another.Historically, Eatons core business ocused primarily on

acilities power distribution and power qualitymoving powerinto and throughout the places where we live and work. Coopersproduct port olio allows us to move upstream into utilitydistribution, grid automation and smart grid systems and downstream into lighting, lighting controls and wiring devices.

e m t t p t tThis per ect ft between our two companies means that wecan now o er customers ar more comprehensive andintegrated solutions to their power management challenges

rom the point o generation to the point o consumption. It alsosubstantially increases the size o our electrical businesstotalsales in 2012 o Eatons electrical business and Cooper topped$13 billion giving us the scale to deliver those solutions tomore markets and geographies.

Our businesses complement each other strategically andorganizationally, too:

Were ocused on many o the same key markets, includingthe oil and gas industry, mining, data centers, energy e f-ciency and alternative energy.

We have leading solutions in the markets we serve, andwere both growing strongly organically and throughacquisition.

We have complementary histories, cultures and principles,including an unwavering commitment to ethics, businessintegrity and solving our customers problems.

M t t t tBoth o our companies have strong research and developmentteams and histories o innovation, creating a port olio opatented technologies that give us an edge in competitivemarkets. Among the many recognitions weve earned: Thomson Reuters named Eaton to its Top 100 Innovators List othe second consecutive year in 2012 ; The Patent Board namedCooper the No. 1 innovator in the industrial components andfxtures category just one year prior.

By combining our talents, we plan to develop new solutionsor our customers, including expanding our port olio o smart

grid products and technologies a market that the ElectricPower Research Institute estimates will average $17 billion to$24 billion annually in the U.S. alone or the next 20 years.

exPanDingThrough our acquisition o Cooper,we can now o er comprehensive

solutions to customers across thepower distribution chain:

uPsTreaMUtility Power Distribution:

Comprehensive solutions thatbring e ciencies and reliability to the electrical distribution system;automate the electrical grid anddrive smart grid development;help utilities plan, construct, protect and automate substationprojects; and automate, protectand optimize electrical trans-mission systems.

MiDsTreaM Facilities Power Distribution

and Power Quality: Industry-leading products and services

or distributing power to homes,businesses and industries.Includes integrated powerassemblies, low- and medium-voltage switchgear, motor control centers, trans ormers, grid-tieinverters, automatic trans erswitches, rectifers, batterychargers, protective relays andmore. Plus, power quality andmonitoring solutions, uninter-ruptible power systems, surge

protection, circuit protection andarc-fash reduction systems.

DownsTreaM Lighting Control and Load

Management: Wiring devicesand lighting, LED and controlssolutions that help customers improve energy e ciency, reducecosts and enrich the quality o the environment. Leading customer-managed load managementsolutions, including demandresponse systems that helpdecrease both electricity con-sumption and greenhouse

gas emissions.

uP anD DownsTreaM



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Increasingly, customers seek integrated solutions to their powermanagement challenges rather than individual products orservices. Thats particularly true o large, multinational companiesand massive, complex projects. Through our acquisition o Cooper, well be able to participate in greater numbers o theseprojects multiplying our opportunities or growth.

e d-t - d t b c t mThe illustration at right provides a vivid example o the end-market synergies generated by combining our companies.While both Eaton and Cooper have had strong sales in the oiland gas industry, we provide di erent products and expertise.Cooper provides many in rastructure and sa ety products toleading energy companies, whereas Eatons historical strengthhas been in power distribution, control, power quality andengineering services.

Customers can now turn to one supplier or these solutions,accelerating the design, engineering and construction process.In the Middle East, or example, were combining our capabilities to help build one o the largest integrated chemical complexesin the world or a global joint venture.

We see similar opportunities in other high-growth markets.For example, Coopers historical strength in delivering powerdistribution solutions to electrical utilities opens new doors ormarketing Eaton switchgear and other products. Eatonsleadership in providing uninterruptible power systems andenergy-saving solutions or data centers creates new opportunities to market Cooper B-Line enclosures, cablemanagement and support systems.

exp d c d d t b tEatons engineering and consulting group is one o the worldslargest and most experienced teams o power systemsengineers, dedicated to helping customers at every phase o apower systems li e cyclesystem design, construction andsupport. We will now be able to o er these services to abroader array o customers, helping to build stronger relationships and deliver more o the end-to-end solutions thatcompanies seek.

Eaton and Cooper distribution channelswholesalers, distributors and retailersalso are largely complementary andprovide opportunities to selectively expand distribution, driving growth or our partners and us.

C -b y dd t t p t tAcquiring Cooper will create new opportunities or cross-business synergies within Eaton, urther strengthening ourcapabilities or customers. In the oil and gas industry, orexample, our hydraulics business provides a broad variety osolutions, including drilling, hoisting and material handling systems, subsea equipment and fltration products and services.Our electrical and hydraulics teams also collaborate on solutions

or wind, solar and hydropower customers, among others.

MulTiPlYingBoth Eaton and Cooper have been

ocused on the growing needs o

the energy industry, including oiland gas, mining and alternativeenergy companies. Together, wereable to deliver a broader plat ormo electrical solutions to customers,as illustrated by the examples onthis o shore drill ship.

eaTon soluTions inCluDe:Low- and medium-voltage

switchgear that provides cen-tralized control and protection o power equipment and circuits.Integrated power assemblies thatreduce the weight and ootprint o power systems, speeding system

installation and startup.

Arc-resistant motor controlcenters to help prevent injury romelectric shock, arc fash burn andarc blast impact.

Uninterruptible power systems that keep GPS , lighting and othervital systems up and running onidle vessels.

Drilling and material handlingsystems that enhance equipmentper ormance, reliability and sa ety.

Comprehensive engineeringservices, including systemsanalysis and design, equipmentinstallation and post-installationmaintenance and support.

CooPer soluTions inCluDe:Explosion-proo enclosures

designed to protect personnel and equipment. Structural supports designed to withstand the harshestconditions. Cable managementsystems and other criticalmechanical systems that protectvaluable equipment and data.

Hazardous lighting designed to meet both National Electrical Code and International ElectrotechnicalCommission standards andimprove sa ety in both hazardousand non-hazardous areas.

Li e sa ety and integratedcommunications systems thathelp save lives, mitigate casualtiesand minimize chaos in the evento an emergency.

our oPPorTuniTies



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For more than a decade, we have ocused on building thebreadth and depth o our electrical business. Weve achievedthis through a combination o organic growth and strategicacquisitions and divestitures, each expanding our port olio osolutions and geographic reach. The long-term plan has includedthe purchase o 32 electrical businesses since 2000 , includingseveral pivotal acquisitions (see examples at le t).

By acquiring Cooper, we build on both companies successes bysubstantially growing our global scale, reach and the range oelectrical products and services we can o er to customers. Thisincludes combining our strengths to expand our opportunities inthe Middle East, China, South Korea and Australia.

g tt t b t m b t bEatons track record or success ul acquisitions starts by

selecting the right companies that can help us expand ourport olio, employ new technologies, enter new markets andleverage valuable business models. But our success is basedequally on our disciplined integration process, which has beencontinuously refned with each acquisition weve made.

Our integration o Cooper will ollow the same blueprint. Usingthe Eaton Business System as its oundation, a team rom Cooperand Eaton is developing and executing our integration plan, bringing together best practices rom both organizations. Whileour acquisition o Cooper delivers many immediate benefts, weanticipate that ully integrating our two companies will requiretwo to three years, depending on business conditions.

r c xp d p t t s t am cDuring 2012 , we also acquired Rolec Comercial e Industrial S.Aheadquartered in Santiago, Chile. Rolec provides engineeringservices and manu actures integrated power assemblies andlow- and medium-voltage switchgear used in mining, pulp andpaper, energy in rastructure and other heavy industry appli-cations in Chile and Peru. The acquisition, while signifcantlysmaller than Cooper in size, o ers many o the same strategicbenefts, including expansion into target markets andgeographies. Rolec also creates new opportunities to market Eaton and Cooper products in the region.

keY eleCTriCal aCquisiTionsover The PasT DeCaDe

(2003) Electrical division oDelta plc: London, England.Included acquisition o leadingbrand names such as Holec, Elekand MEM , and expanded ourdistribution o low- and medium-voltage power distributionproducts into key European andAsia Paci c markets.

(2004) Powerware: Raleigh, North Carolina. Added uninterruptible power systems(UPSs) to our product port olio and increased power qualityand reliability solutions orcustomers. Established plat orm

or our success ul data centerbusiness; expanded distribution channels globally.

(2007) MGE O fce ProtectionSystems: Saint-Ismier, France.Added to our port olio o UPSs ,expanding our power qualitysolutions. Distribution to morethan 40 countries; strengthenedmanu acturing presence in China.

(2008) Moeller: Bonn, Germany.Leading supplier o components

or commercial and residential

building applications andindustrial controls. Providedsignifcant sales expansionin Western Europe and Asia Paci c. Fi teen global production

acilities, including China. Created a product port olio orInternational ElectrotechnicalCommission markets.

(2008) Phoenixtec: Taipei,Taiwan. Added to our leadershipin UPSs . Leading market positionsin China, Southeast Asia andEastern Europe. Extensiveengineering expertise and manu-

acturing acilities in Taiwanand China.

(2012) Cooper Industries plc: Dublin, Ireland. Largest electrical business acquisition, signi -icantly expanding our port olioo solutions both upstream and downstream (see page 11).Marketed in more than100 countries .

exTenDingour reaCh



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sTrengTheningour CoMMiTMenT

Can companies both do well and

do good? Weve been answeringthat question yes or years; evenpublishing our fnancial and sustainability reports side by side.Were pleased that a recent Harvard Business Review (HBR) article agreed,naming Eaton a trendsetter increating shared value. Only fve percent o the 1,100 companies that HBR analyzed

or its cover story (The Best-Per orming CEO s in the World,January-February 2013 ) earned the same top ranking rom thepublication or having delivered great fnancial per ormanceyear over year and per ormed strongly on social and environ-mental dimensions. The authors o the article added: Its arare achievement, indeed, but it is possible.

While it eels great to be recognized, we also acknowledge thatachieving sustainable growth is a continuous and demandingjourney, not a destination. During 2012 , we continued to makeprogress on that trek, improving our per ormance across fve key measures (at right), which we evaluate when grading ourown report card. Our dedication to delivering results across thisspectrum o sustainability measures helped us to earn severalother important distinctions during the year:

Eaton is ranked among the worlds top sustainability per orm-ers in the Nasdaq OMX CRD Global Sustainability 100 Index.

We were one o only 11 companies in the S&P 500 to berecognized as a top per ormer on both the Carbon DisclosureProjects Carbon Disclosure Leadership Index and CarbonPer ormance Leadership Index.

We were named one o Corporate Responsibility magazines100 Best Corporate Citizens or the f th consecutive year,moving rom No. 33 to No. 17 overall.

The Ethisphere Institute named us one o the Worlds MostEthical Companies or the sixth straight year. Eaton is one oonly 24 companies that has earned the honor every yearsince the list was established in 2007 .

In China, we were recognized as one o the best corporatebrands at the 2012 China Finance Summit or our dedicatede orts in sustainability and innovation.

We were named among Indias Best Companies to WorkFor and one o the Best Employers in Puerto Rico by leadingorganizations.

GI Jobs named Eaton one o the Top 100 Military FriendlyEmployers in the U.S. and the U.S. National Minority SupplierDevelopment Council honored us or our long-term supporto diverse supplier relationships.

aChieving susTainaBlegrowTh

Through the responsible use o resources, we aim to:

Increase shareholder value through proactive governanceand by providing sa e, reliable,e cient and sustainable powermanagement or our globalcustomers.

Improve the natural environ-ment by reducing the environ-mental impact o our productsand operations and the productso our customers.

Expand transparencythrough reports like this oneand by sharing our data andbest practices throughcooperative e orts such as theCarbon Disclosure Project.

Foster a thriving workplaceby protecting the health and sa ety o our employees, building teams o diverse talent, andinspiring and promoting top per ormers.

Build stronger communitiesby investing our time andresources in local e orts that make everywhere we do business a better place to live and work.




inCreaseshareholDer

value

iMProve ThenaTural

environMenT

exPanDTransParenCY

osTer a Thriving

workPlaCe

BuilD sTronger CoMMuniTies

resPonsiBleuse o

resourCes


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s t b ty d c t m d d Sustainability is integral to Eatons mission o providing sa e, reli-able and e fcient power management solutions or our globalcustomers. These technologies improve the energy e fciencyo buildings, vehicles and machinery; help to conserve naturalresources; shrink the carbon ootprints o our customers; and reduce the environmental impact oeveryday li e. Our acquisition o Cooper Industries expands our port olio osustainable solutions with productssuch as LED lighting and smart tech-nologies behind the smart grid.

Global megatrendsincluding risingenergy costs, increased demand ornatural resources and climate changecontinue to drive demand or our powermanagement solutions, contributing toour sales growth rom $8.3 billion in2000 to more than $16 billion in 2012 .Over the same period, Eaton share-holders gained more than 400 percenton their investments, including stockappreciation and dividends.

During 2012 , Eaton invested $439 mil-lion on research and development tocontinue to launch innovative productsand solutions that help our customers meet their most demand-ing energy and emission requirements. We estimate that new

technologies being developed by Eaton have the potential toreduce the CO 2 emissions o our applications by more than 60 percent by 2050 , helping to combat climate change.

Weve integrated Design or Environment (D E)into our designprocess to reduce the environmental impact o our products atevery stage o their li e. During 2012 , R&D magazine awardedour Li eSense hose, an intelligent hydraulic hose conditionmonitoring system that reduces hose ailures and eliminateswaste ul time-based hose replacements, its prestigious R&D100 Award. Eatons Hay ow flters, which reduce processwastes sent to landflls and incinerators and reduce energyused in industrial processes, earned Eatons Green Lea designation or delivering exceptional, industry-leading envi-ronmental benefts.

imp m t, t d ty(ehs) p m cEaton is committed to being a global leader in protecting the envi-ronment and sa eguarding the health and sa ety o our employ-ees. Since publishing our frst sustainability report in 2006 , wehave reduced our total greenhouse gas (GHG) emissions by259,000 million metric tons per year (nearly 26 percent on an

absolute basis and 28 percent indexedto sales) and reduced our rate o sa etyincidents (Total Recordable Case Rate)by nearly 70 percent. Since 2010 , wevereduced our waste generated and waterconsumed, indexed to sales, by 19.0 percent and 11.6 percent, respectively,and are well on our way to achieving our2015 landfll reduction goal o 30 percent

and water consumption goal o 20 per-cent (both indexed to sales).

During 2012 , we continued to expandour e orts to reduce GHG emissions,prevent pollution, conserve naturalresources and protect our work orceboth through our own operations andthose o our suppliers. For the year:

We reduced GHG emissions 2.6 percent on an absolute basis, exceedingour 2 percent goal. Indexed to sales, we

reduced GHG emissions by 0.5 percent (compared to a 6 per-cent goal), re ecting at or lower sales among our higherenergy-consuming businesses, including truck and automotive.

Indexed to sales, we reduced our landflled waste by 7.5 percent (compared to a 6 percent goal) and reduced waterconsumption by 2.6 percent (compared to a 5 percent goal).

We reduced our use o virgin polystyrene product packagingmaterial by 24 percent, or nearly 484,000 pounds.

Our Total Recordable Case Rate remained at at 0.88 . OurDays Away Case Rate rose by 3 percent to 0.36 . Both mea-sures ell short o our goals o 0.85 and 0.30 , respectively, andwell continue to expand our sa ety e orts in the year ahead.

Our goals or 2013 (all indexed to sales): reduce GHG emissionsby 6 percent, which is equivalent to 3 percent on an absolutebasis; reduce waste to landfll by 6 percent, which is equivalent

C p fc t yxp d p t

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eaton 2012 Annual Repor t18(Continued on page 21)


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Co 2 generaTionIndexed to sales, our greenhouse gas (GHG)generation decreased by 0.5 perc ent in 2012

compared to 2011. On an absolute basis, wedecreased our GHG generation by 19,000metric tons, or 2.6 percent, compared to theprior year.

Since 2006, we have reduced the totalamount o carbon dioxide generated by ouroperations rom 1,002,000 metric tons to743,000 metric tons, which equals a 25.8percent reduction. Indexed to sales, welowered our GHG emissions by 28.0 percentover the period, allowing us to achieve ourBusiness Roundtable pledge o reducingindexed GHG by 18 percent through 2012.

Emission rates are generated using World Resources Institute-recommended CO 2 conversion actors, which account orvariations by region. These conversion actors are based on typical energy generation methods, such as those using ossil

uels or other ene rgy sources. When we comp are 2012 to 2011, sales rom the manu acturing plant s that make up Eatons

carbon dioxide profle decreased by 2.1 percent.

CARBON DIOxIDE GENERATED

Thousand metric tons of CO2 per yearINDExED CARBON DIOxIDE GENERATED

Metric tons of CO2 per million dollars of salesCO2Indexed IndirectCO2Indexed DirectCO2Indexed IndirectCO2Indexed Direct G

CO2 IndirectCO2 DirectCO2 Indirect GoalCO2 Direct Goal

Energy Consumpti on Data was compiled rom a majority o Eatons manu acturing plants world wide. O the sitesreporti ng, 13 percent were located in Asia Pacifc; 32 percen t in Europe, the Middle East and A rica; 4 percent in SouthAmerica; and 51 percent in North Amer ica. When we compare 2012 to 2011, sales rom the manu acturing plants thatmake up Eatons energy profle decreased by 2.1 percent.

ENERGY USED

Million kilowatt-hoursINDExED ENERGY USED

Kilowatt-hours per $1,000 of salesEnergy IndirectEnergy DirectEnergy Indirect ProjectionEnergy Direct Projection

Energy Indexed IndirectEnergy Indexed DirectEnergy Indexed Indirect ProEnergy Indexed Direct Proje

1568

2379

811

1525

2255

730

1473

2326

853

1151

1741

590

1265

1862

597

1304

1936

632

1266

1847

581

1218

1777

559

2006 2007 2008 2009 2010 2011 2012 2013

118

179

61

112

166

54

106

167

61

108

164

56

104

153

49

93

138

45

93

135

42

87

127

40

82

120

38

77

112

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 20

energY ConsuMPTionIndexed to sales, our energy use decreasedby 2.5 percen t in 2012 when compared to2011. On an absolute basi s, our energyconsumption decreased by 88 millionkilowatt-hours, or 4.6 percent, compared tothe prior year.

Since 2006, we have reduced the tot alenergy used by our operations rom 2,379million kilowatt-hours to 1,847 millionkilowatt-hours, which equals a 22.4 percentreduction. Indexed to sales, we reducedusage by 24.6 percent over the period.


2006

855

1002

147

816

948

132

771

926

155

576

107

633

741

108

648

762

114

637

743

106

618

102

2007 2008 2009 2010 2011 2012 2013

747Goal

683720

51.3Goal

75

11

64

2006

70

10

60

67

11

56

64

10

54

61

9

52

54

8

46

54

8

46

51

7

44

7

41

45

6

39

2007 2008 2009 2010 2011 2012 2013 2014 201

48

Water Consumption Data was compiled rom a majorit y o Eatons manu acturing plants worldwid e. O the sitesreporti ng, 16 percent were in Asia Pacifc; 30 percent in Europe, the Midd le East and A rica; 4 percent in South America;and 50 percent in North A merica. When we compare 2012 to 2011, sales rom the manu acturing pl ants used to createEatons waste profle decreased by 2.1 percent.

WATER CONSUMED

Thousand cubic meters of waterINDExED WATER CONSUMED

Cubic meters of water per $1,000 of sales

2010

2979

3989

1010

2011

3091

4135

1044

2012

2849

3946

1097

2013

2792

3867

1075

Water PurchasedWater PumpedWater Purchased GoalWater Pumped Goal

2010

0.23

0.31

0.08

2011

0.21

0.28

0.07

2012

0.20

0.27

0.07

2013

0.18

0.25

0.07

2014

0.17

0.24

0.07

2015

0.17

0.23

0.06

Water Purchased Indexed to SalesWater Withdrawn Indexed to SalesWater Purchased Indexed to Sales GWater Withdrawn Indexed to Sales

waTer ConsuMPTionIndexed to sales, our water consumptiondecreased by 2.6 percent in 2012 compared to2011. On an absolute basis, we decreased our

water consumption by 4.6 percent comparedto the prior year.

Since 2010, we have reduced our waterconsumption rom 3,989,000 cubic metersto 3,946,000 cubic meters, which equals a1.1 percent reduction. Indexed to sales, wereduced water usage by 11.6 percent overthe period, putting us on track to achieveour 2015 target o 20 percent reductionversus the 2010 baseline.

susTainaBiliTY sCoreCarDeaTon

0.26Goal


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2010

2.2

2011

1.9

2012

1.8

2013

1.7

2014

1.6

2015

1.5

1.8Goal

0.88

ToTal wasTe generaTionIndexed to sales, our total waste generateddecreased by 0.1 percent in 2012 comparedto 2011. On an absolute ba sis, we decreasedour generation by 2.2 percent rom 175,600metric tons in 2011 to 171,700 metric tons in2012, a total decrease o 3,900 metric tons.

Since 2010, total waste generated by ourplants has increased rom 159,200 metrictons in 2010 to 171,700 metric tons in 2012

or a total increase o 7.9 percent. However,indexed to sales, we reduced our generationby 3.6 percent over the period.

Waste Generation Data was compiled rom a majority o Eatons manu acturing plants worldwide. O the sites reporting,16 percent were in Asia Pacifc; 30 percent in Europe, the Middle East and A rica; 4 percent in South America; and 5 0 percentin North America. W hen we compare 2012 to 2 011, sales rom the manu acturing plants used to create Eatons waste profledecreased by 2.1 percent.

healTh anD safeTYWe continue to focus on our safetyperformance. Our performance showed aTotal Recordable Case Rate of 0.88 versusa goal of 0.85 and a Days Away Case Rateof 0.36 versus a goal of 0.30.During 2012, Eaton launched a global

Zero Incident Safety Culture to helpeliminate safety incidents at our facilities.

Health and Sa ety Recordabl e Cases are work-related injuries or illnesses as defned by the U.S. Occup ational Sa ety andHealth Administrati on (OSHA). Days Away Cases are injuries or illnesses involving one or more days away rom work asdefned by OSHA.

Energy, waste, water and sa ety data are collected and reported using company processes that are design ed to produce reliable in ormati on. These processes include manual steps that mayintroduce some variations in reported data. Our data were third-party verifed by EarthCon Consultants Inc. Verifcation statements are available on our website at www.eaton.com/sustainability.

Scorecard percent changes are based on actual values; rounde d values are shown in the charts.

TOTAL WASTE GENERATED

Thousand metric tons of wasteINDExED TOTAL WASTE GENERATED

Metric tons of waste per million dollars of salesTotal Waste

DAYS AWAY CASE RATE

Rate per 100 employeesTOTAL RECORDABLE CASE RATE

Rate per 100 employees

20112010

159

176

2012

172

2010

12.1

2011

11.7

2012

11.7

Total Waste

2.66

2.00

1.72

1.170.96 0.88 0.80

2006 2007 2008 2009 2010 2011 2012 2013

TRCR Actual RateTRCR Goal

1.00

0.840.79

0.480.44

0.35 0.36 0.28

2006 2007 2008 2009 2010 2011 2012 2013

DACR Actual RateDACR Goal


0.85Goal

0.30Goal

lanDfilleD wasTe Indexed to sales, our waste to land ll, whichincludes waste incinerated without heat

recovery, decreased by 7.5 percent in 2012compared to 2011. On an absolute ba sis, wedecreased our generation by 9.4 percent

rom 28,920 metric tons in 2011 to 26,198metric tons in 2012, a total decrease o 2,722metric tons.

Since 2010, we have reduced the waste sentto land ll by our operations rom 28,893metric tons to 26,198 metric tons, whichequals a 9.3 percent reduction. Indexed tosales, we lowered land lled waste by 19.0percent over the period, putting us on trackto achieve our 2015 target o 30 percentreduction versus the 2010 baseline. Waste Generation Data reported was compil ed rom a majority o Eatons manu acturing plants worldwi de. O the sites

reporting , 16 percent were in Asia Pacifc; 30 percent in Europe, the Middle East and A rica; 4 percent in South A merica; and50 percent in North Am erica. When we compare 2012 to 2011, sales rom the manu acturing plants used to create Eatonswaste profle decreased by 2.1 percent.

WASTE TO LANDFILL

Thousand metric tons of wasteINDExED WASTE TO LANDFILL

Metric tons of waste per million dollars of salesWaste to LandfllWaste to Landfll Goal

2010

29

2011

29

2012

26

2013

25

Indexed Waste to LandfllIndexed Waste to Landfll Goal


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to 3 percent on an absolute basis; and reduce water consumption by 5 percent, which is equivalent to 2 percent on an absolutebasis. We also aim to reduce our Total Recordable Case Rate to0.80 and Days Away Case Rate to 0.28 .

Our goals or 2015 (all indexed to sales): reduce GHG emissionsby 25 percent, reduce waste tolandfll by 30 percent and reducewater consumption by 20 percent.(Eaton defnes waste to landfll toinclude waste incinerated withoutenergy recovery.)

More than 200 regulatory inspectionswere conducted at our acilities during2012 . Collectively, our global opera-tions had two reportable spills o regu-lated industrial materials above thereportable quantity limits and 23 events that exceeded wastewater per-mit limits. Through urther tighteningo our controls, we aim to eliminate

uture exceedances.

During the year, we revised the wastegenerated data we report rom totalwaste generated to total waste to land-fll, which we believe is a truer measureo Eatons environmental impact. We also have simplifed ourSustainability Scorecard (pages 19 and 20 ) to make it easier orreaders to evaluate our long-term per ormance and uture goals.

EarthCon Consultants Inc., an independent environmental ser-vices company, examined our data collection and managementprocesses and verifed these data are both materially correctand airly represented. The approximately 180 global acilitiesthat compose our inventory meet the ollowing criteria:

1. Add value to products or hardware including manu acturing,assembling, integration and testing.

2. Have more than 50 employees or a high-risk profle (deter-mined by group or regional EHS teams).

3. Have been a fliated with Eaton or more than three years.

Our EHS data do not include the operations o Cooper, which weacquired in late 2012 . We aim to integrate Coopers operations

into our MESH (Management System o Environment, Secu-rity, Sa ety and Health) program in 2013 and in our 2014 Sus-tainability Report, published in 2015 . Cooper has a long historyo environmental, workplace and social responsibility and hasbeen recognized by numerous independent organizations

or its outstanding per ormance.Coopers most recent Corporate Responsibility Report was publishedin 2010 or the year 2009 .

n t b 2012 ehs p m cc t

We strengthened our commitment

to renewable energy during 2012 ,purchasing 15,000 metric tons oGreen-e carbon o set credits inGermany and North America, whichwe will expand to approximately25,000 metric tons in 2013 . We alsocommissioned a 288-kW solar powersystem at the new Eaton Center inBeachwood, Ohio, and working withan energy solutions company com-missioned new 1.3 -megawatt and172-kW solar systems at our acilities

in Moon Township and Beaver, Pennsylvania, respectively.

Eaton Center, which opened in Februar y 2013 , is designedto LEED certifcation standards. The innovative acility

eatures many Eaton and Cooper products, as well as anovel HVAC system, which will reduce the buildings energy use by 40 percent compared to a baseline building thatmeets minimum code.

We had two additional acilities achieve zero waste to landfllin 2012 , or a total o 20 Eaton acilities around the globe. We will apply the lessons learned rom these operations tocontinue to reduce our total waste to landfll and increase ournumber o zero waste acilities in uture years.

During 2012 , we launched a global Zero Incident Sa etyCulture to help eliminate sa ety incidents at our acilitiesand create an even sa er and more productive workplace.It included new programs to better identi y and mitigate

it t j t t d c ty c d t t

c t ; t m t t m. D

2012 , c d bZ i c d t s ty C t t c t t

d t c t d m p d ct

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manu acturing risks, helping us decrease severe injuries at ourglobal manu acturing acilities by 17 percent to 84 in 2012 , com-pared to 101 the prior year. We also expanded our global well-ness programs, including our Eat Healthy initiative and KnowYour Numbers health awareness campaign. For the secondyear in a row, we earned the American Heart Associations top-level platinum award as a Start! Fit-Friendly company or pro-moting worksite wellness.

Beyond our own walls, we strengthened our supplier evaluationand selection processes and increased environmental reportingamong our suppliers. Seventy-eight percent o the key suppli-ers we asked agreed to participate in the Carbon DisclosureProjects Supply Chain Program. Average CDP scores amongparticipating Eaton suppliers rose rom 40 in 2011 to 48 in 2012 ,

in line with global averages.

f t c d d k c d pp y cWe are committed to respecting, and developing, a culturallydiverse work orce that leverages the rich range o di erencesthat make each employee unique. We oster an inclusive environ-ment by rein orcing behaviors that recognize, value and leveragethe di erent perspectives and backgrounds o our employees.These unique perspectives help us generate more innovativeideas and make better decisions or our company and customers.

During 2012 , we created fve Inclusion and Diversity Councilsone global council, chaired by Eaton Chairman and CEO Alexander Cutler, and our regional councils (North America, South Amer-

ica, Asia Pacifc and Europe, Middle East and A rica). Thesecouncils will lead our inclusion and diversity e orts going or-ward and accelerate our ability to attract diverse talent, particu-larly in leadership roles. We improved in virtually all areas odiverse leadership, including the expansion o emale andminority representation on Eatons Board o Directors .

A diverse supplier base is equally vital to the continued growthand success o our company and communities. Through oursupplier diversity program we encourage small companies andcompanies owned by minorities, women and veterans to com-pete or our business. This includes o ering executive

mentoring to suppliers to help expand and improve the manage-ment o their businesses.

Collectively, we purchased more than $1.4 billion o goodsand services rom diversity suppliers in 2012 , a 10.6 percentincrease over the previous year (see Table 2 above). Spendingincreased across segments compared to 2011 : minority (up 8.8 percent), women (up 17.7 percent), veterans (up 2.8 percent)and small business (up 11.0 percent).

Eatons combined spending with minority- and women-ownedbusinesses was 11.0 percent in 2011 and 11.7 percent in 2012 ,compared to the July 2012 average o 9.7 percent or industrialcompanies, as reported by CAPS Research, a leading nonproftresearch organization.

P m t p d t c p cEaton is recognized as a global leader in ethical business prac-tices. For six straight years, the Ethisphere Institute has namedus among the Worlds Most Ethical Companiesa promi-nent list o frms that go beyond making statements aboutdoing business ethically and translate those words into action.

We require that all directors, o fcers and employees abide bythe Eaton Code o Ethics. In addition, we publish an EthicsGuide in 35 languages to help Eaton employees make ethicaldecisions and guide them to resources including our 24 -hourEthics and Financial Integrity Help Line when they need help.In our global survey o employees, 95 percent agreed that ourCode o Ethics had been clearly communicated to them (same

as in 2011 ); 94 percent reported that i they discovered a viola-tion o our code, they would know where to report it (up rom 93 percent the previous year).

During 2012 , we expanded the reach o our legal compliancetraining program. Eaton employees achieved nearly 26,000 course completions (up rom 19,000 in 2011 ) in anti-corruption,con icts o interest, export controls, global competition, govern-ment contracts, insider trading and intellectual property. We alsoincorporated our anticorruption due diligence e orts into our or-mal merger and acquisition process, enabling us to evaluate theagents and distributors o potential acquisitions. To ensure ourcompliance with growing regulations worldwide, we conduct anannual risk assessment to identi y and mitigate potential business,compliance, legislative and other risks across our company.

D s pp sp d Table 2

e t g b emp ym tTable 1

Number o Percentage oTotal Number o Percentage o Total Minorities Minorities

Global Women Women U.S. (U.S. only) (U.S. only)

(As o Decemb er 31, 2012)

Board o directors 11 2 18.2% 11 3 27.3%

Global leadership team 30 5 16.7% 30 8 26.7%Executives 699 112 16.0% 530 66 12.5%Managers 7,714 1,308 17.0% 4,403 655 14.9%All other employees 95,050 29,734 31.3% 28,834 7,932 27.5%

All employees 103,504 31,161 30.1% 33,808 8,664 25.6%

Percentage of Percentage o Percentage o

2012 2012 U.S. Spend 2011 2011 U.S. Spend 2010 2010 U.S. Spend

(In millions)

Minority-owned business $ 235 5.6% $ 216 5.3% $ 136 3.8%

Women-owned business 146 3.5% 124 3.1% 84 2.4%

Veteran-owned business 109 2.6% 106 2.6% 83 2.3%

Small business (other than classifed above) 915 21.7% 824 20.3% 615 17.3%



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Also in 2012 , we ormalized a third-party due diligence program toconduct compliance background screenings on all our third-party commissioned sales agents. The program will expand tocover all third-party distributors in 2013 and beyond.

Eatons O fce o the Ombuds provides employees with an inde-pendent, neutral and confdential resource or identi ying andresolving work-related issues and problems. During 2012 , weexpanded these Ombuds services to employees in Australia,New Zealand, Switzerland, Thailand and the United Arab Emir -ates. The O fce o the Ombuds managed 1,611 cases rom 25 countries during 2012 , compared to 1,630 inquiries the previousyear. We plan to expand these services to South Korea andJapan in 2013 , as well as to new employees rom Cooper incountries where Eaton provides Ombuds assistance.

st t mp y m t d d c tEatons global employee survey provides us with a structuredway to evaluate employee engagement and to solicit ideas orhow we can keep improving our workplaces. In 2012 , 96 percent o our employees participated in the survey worldwide, a slightdecline compared to 97 percent the year be ore. Employeeengagementa measure compiled rom employee reactionsto our statements, including I eel proud to work or Eatonremained stable, globally, at 75 percent. Results or employeesin both Asia Pacifc and Latin America showed strong gains inemployee engagement, manager e ectiveness and under-standing o Eatons Code o Ethics.

During the year, we created several new development opportu-nities or people in unctional and leadership roles. A new global program, Eaton Plant Manager Excellence, provides an enhanced series o learning experiences that meet the needs o plantmanagers. Similarly, a new global program was developed toaddress the technical requirements o our manu acturing ront-line leaders. To increase exibility in the deployment o our pop-ular M Power Leadership Development courses or middlemanagers, in-person classroom training is now o ered in addi-tion to the online web con erence ormat. Employees in unc-tional roles have new learning opportunities with the expansiono 15 new courses designed or environment, health and sa ety,human resources and sales.

s pp t t d t b c mm tEaton takes a di erent approach to corporate giving thanmany companies we let the people at our local acilitiesdetermine where we donate a large share o our contribu-tions, based on the needs in their communities and the inter-ests o local employees. These donations go to hundreds olocal organizations every year. Eaton people also donatecountless hours o their own time to local causes. Notableexamples in 2012 include:

In Farcasa, Romania, we donated $10,000 to the FarcasaHope Association to purchase medical supplies; Eatonemployees also have supported the organization with blood drives and personal undraising events.

In Shanghai, China, we donated $25,000 and electricalproducts to Habitat or Humanity China to support its reno -vation o housing or the elderly.

Our acility in Galesburg, Michigan, contributed $832,311 to the Greater Kalamazoo United Way over the past threeyears and won the Spirit o Michigan award in 2012 ormedium-sized businesses rom the Michigan Associationo United Ways.

We base our yearly contributions on a rolling average oour annual profts, so as we grow, so do our contributionsto the communities in which we live and work. In 2012 , thatexceeded $8.7 million, including $789,016 in corporatematches through our retiree and employee matching gi tprogram. Eaton employees donated $3.3 million to 95 localUnited Way campaigns during the year. We added $1.8 million in corporate matches or a total United Way contribu-tion o $5.1 million. During the year, we also contributedmore than $100,000 plus employee-matching donationsto Hurricane Sandy relie .

l m b t t b ty t tFor more in ormation about Eatons sustainability e orts,please visit our website: www.eaton.com/sustainability.There youll fnd additional metrics about our per ormance,including a table that con orms to and cross-re erences Global Reporting Initiative (GRI)reporting guidelines and our expanded per ormance indicators.

United Way Gi t Matching Domestic International Disaster Relie

e t C t b C t b t

2008

$6,784,000

$7,310,000

$7,948,000

2010

2011

2009

$8,051,000

2012


$8,739,000


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DeliveringsoliD resulTs


25 Reports on Financial Statements26 Reports on Internal Control Over Financial Reporting27 Consolidated Financial Statements32 Notes to Consolidated Financial Statements50 Managements Discussion and Analysis56 Quarterly Data57 Ten-Year Consolidated Financial Summary58 Directors and Leadership Team59 Shareholder In ormation



The Board o Directors a d Shareholders o Eato Corporatio plc

We have audited the accompa yi g co solidated bala ce sheets o EatoCorporatio plc ("the Compa y"), the successor registra t to Eato Corporatio ,as o December 31, 2012 a d 2011, a d the related co solidated stateme ts oi come, comprehe sive i come, shareholders' equity a d cash ows or eacho the three years i the period e ded December 31, 2012. These f a cial

stateme ts are the respo sibility o the Compa y's ma ageme t. Our respo si-bility is to express a opi io o these f a cial stateme ts based o our audits.

We co ducted our audits i accorda ce with the s ta dards o the Public Com-pa y Accou ti g Oversight Board (U ited States). Those sta dards requirethat we pla a d per orm the audit to obtai reaso able assura ce aboutwhether the f a cial stateme ts are ree o material misstateme t. A auditi cludes exami i g, o a test basis, evide ce supporti g the amou ts a d dis-closures i the f a cial stateme ts. A audit also i cludes assessi g theaccou ti g pri ciples used a d sig ifca t estimates made by ma ageme t,as well as evaluati g the overall f a cial st ateme t prese tatio . We believethat our audits provide a reaso able basis or our opi io .

I our opi io , the f a cial stateme ts re erred to above prese t airly, iall material respects, the co solidated f a cial positio o the Compa y atDecember 31, 2012 a d 2011, a d the co solidated results o its operatio s

a d its cash ows or each o the three years i the period e ded December31, 2012, i co ormity with U.S. ge erally accepted accou ti g pri ciples.

We also have audited, i accorda ce with the sta dards o the Public Com-pa y Accou ti g Oversight Board (U ited States), the Compa y's i ter alco trol over f a cial repor ti g as o December 31, 2012, based o criteriaestablished i Internal Control - Integrated Framework issued by the Commit-tee o Spo sori g Orga izatio s o the Treadway Commissio a d our reportdated February 28, 2013 expressed a u qualifed opi io thereo .

Ernst & Young LLP

Clevela d, OhioFebruary 28, 2013

Report of Independent RegisteredPublic Accounting Firm

We have prepared the accompa yi g co solidated f a cial stateme ts arelated i ormatio o Eato Corporatio plc, the successor registra t Corporat io , i cluded herei or the three years e ded December 31, 20primary respo sibility or the i tegrity o the f a cial i ormatio i ca ual report rests with ma ageme t. The f a cial i ormatio i cluda ual report has bee prepared i accorda ce with accou ti g pri cipally accepted i the U ited States based o our best estimates a d judgm

a d givi g due co sideratio to materiality. The opi io o Er st & YoEato 's i depe de t registered public accou ti g frm, o those f a ciame ts is i cluded herei .

Eato has high sta dards o ethical busi ess practices supported by the Code o Ethics a d corporate policies. Care ul atte tio is give to seletrai i g a d developi g perso el, to e sure that ma ageme t's objectestablishi g a d mai tai i g adequate i ter al co trols a d u biased, reporti g sta dards are attai ed. Our policies a d procedures provide reassura ce that operatio s are co ducted i co ormity with applicable with the Compa y's commitme t to a high sta dard o busi ess co duc

The Board o Directors pursues its respo sibility or the quality o Eatocial reporti g primarily through its Audit Committee, which is composedi depe de t directors. The Audit Committee meets regularly with ma athe i ter al auditors a d the i depe de t registered public accou ti g fe sure that they are meeti g their respo sibilities a d to discuss matterscer i g accou ti g, co trol, audits a d f a cial reporti g. The i ter aa d i depe de t registered public accou ti g frm have ull a d ree ase ior ma ageme t a d the Audit Committee.

Managements Report onFinancial Statements

Alexander M. Cutler

Pri cipal Executive O fcer

Richard H. FearonPri cipal Fi a cial O fcer

Billie K. Rawot

Pri cipal Accou ti g O fcer

February 28, 2013



Alexander M. Cutler

Pri cipal Executive O fcer

Richard H. FearonPri cipal Fi a cial O fcer

Billie K. Rawot

Pri cipal Accou ti g O fcer

February 28, 2013

The Board o Directors a d Shareholders o Eato Corporatio plc

We have audited Eato Corporatio plc's ("the Compa y"), successor registra tto Eato Corporatio , i ter al co trol over f a cial reporti g as o December31, 2012, based o criteria established iInternal Control - Integrated Framework issued by the Committee o Spo sori g Orga izatio s o the Treadway Commis-sio (the COSO criteria). The Compa y's ma ageme t is respo sible or mai -

tai i g e ective i ter al co trol over f a cial reporti g, a d or its assessme to the e ective ess o i ter al co trol over f a cial reporti g i cluded i theaccompa yi g Ma ageme t's Report o I ter al Co trol Over Fi a cial Report-i g. Our respo sibility is to express a opi io o the Compa y's i ter al co trolover f a cial reporti g based o our audit.

We co ducted our audit i accorda ce with the sta dards o the Public Compa yAccou ti g Oversight Board (U ited States). Those sta dards require that we plaa d per orm the audit to obtai reaso able assura ce about whether e ectivei ter al co trol over f a cial reporti g was mai tai ed i all material respects. Ouraudit i cluded obtai i g a u dersta di g o i ter al co trol over f a cial report-i g, assessi g the risk that a material weak ess exists, testi g a d evaluati g thedesig a d operati g e ective ess o i ter al co trol based o the assessed risk,a d per ormi g such other procedures as we co sidered ecessary i the circum-sta ces. We believe that our audit provides a reaso able basis or our opi io .

A compa y's i ter al co trol over f a cial reporti g is a process desig ed toprovide reaso able assura ce regardi g the reliability o f a cial report i g a dthe preparatio o f a cial stateme ts or exter al purposes i accorda ce withge erally accepted accou ti g pri ciples. A compa y's i ter al co trol overf a cial reporti g i cludes those policies a d procedures that (1) pertai to themai te a ce o records that, i reaso able detail, accurately a d airly re ectthe tra sactio s a d dispositio s o the assets o the compa y; (2) provide rea-so able assura ce that tra sactio s are recorded as ecessary to permit prepa-ratio o f a cial stateme ts i accorda ce with ge erally accepted accou ti gpri ciples, a d that receipts a d expe ditures o the compa y are bei g madeo ly i accorda ce with authorizatio s o ma ageme t a d directors o the com-pa y; a d (3) provide reaso able assura ce regardi g preve tio or timelydetectio o u authorized acquisitio , use, or dispositio o the compa y'sassets that could have a material e ect o the f a cial stateme ts.

Because o its i here t limitatio s, i ter al co trol over f a cial reporti g mayot preve t or detect misstateme ts. Also, projectio s o a y evaluatio o e ec-

tive ess to uture periods are subject to the risk that co trols may become i ade-quate because o cha ges i co ditio s, or that the degree o complia ce withthe policies or procedures may deteriorate.

As i dicated i the accompa yi g Ma ageme t's Report o I ter al Co trol overFi a cial Reporti g, ma ageme t's assessme t o a d co clusio o the e ec-tive ess o i ter al co trol over f a cial reporti g did ot i clude the i ter alco trols o e tities that were acquired duri g 2012, which are i cluded i the2012 co solidated f a cial stateme ts o the Compa y a d co stituted 50% ototal assets as o December 31, 2012 a d 4% o et sales or the year the e ded.Our audit o i ter al co trol over f a cial reporti g o the Compa y also did oti clude a evaluatio o i ter al co trol over f a cial reporti g o e tities thatwere acquired duri g 2012.

I our opi io , the Compa y mai tai ed, i all material respects, e ective i ter alco trol over f a cial reporti g as o December 31, 2012, based o the COSO criteria.

We also have audited, i accorda ce with the sta dards o the Public Compa yAccou ti g Oversight Board (U ited States), the co solidated bala ce sheets othe Compa y as o December 31, 2012 a d 2011, a d the related co solidatedstateme ts o i come, comprehe sive i come, shareholders' equity, a d cash

ows or each o the three years i the period e ded December 31, 2012 a d ourreport dated February 28, 2013 expressed a u qualifed opi io thereo .

Ernst & Young LLP

Clevela d, OhioFebruary 28, 2013

Report of Independent RegisteredPublic Accounting Firm

The ma ageme t o Eato Corporatio plc is respo sible or establishi g a dmai tai i g adequate i ter al co trol over f a cial repor ti g (as def ed iExcha ge Act rules 13a-15( )).

U der the supervisio a d with the participatio o Eato 's ma ageme t,i cludi g our pri cipal executive o fcer a d pri cipal f a cial o fcer, we co -ducted a evaluatio o the e ective ess o the Compa y's i ter al co trol

over f a cial reporti g as o December 31, 2012. Our evaluatio o i ter al co -trol over f a cial reporti g did ot i clude the i ter al co trols o e tities thatwere acquired duri g 2012, which are i cluded i the 2012 co solidated f a -cial stateme ts a d co stituted approximately 50% o total assets (i clusive oacquired i ta gible assets) as o December 31, 2012 a d 4% o et sales or theyear the e ded. I co ducti g this evaluatio , we used the ramework set

orth by the Committee o Spo sori g Orga izatio s o the Treadway Commis-sio i Internal Control - Integrated Framework.Based o this evaluatio u derthe ramework re erred to above, ma ageme t co cluded that the Compa y'si ter al co trol over f a cial reporti g was e ective as o December 31, 2012.

The i depe de t registered public accou ti g frm Er st & You g LLP has issueda audit report o the e ect ive ess o the Compa y's i ter al co trol over f acial reporti g as o December 31, 2012. This report is i cluded herei .

Managements Report on Internal ControlOver Financial Reporting



YEAR EnDED DECEMBER 31 2012 2011 2010

(I millio s except or per share data)

net sales $ 16,311 $ 16,049 $ 13,715

Cost o products sold 11,448 11,261 9,63Selli g a d admi istrative expe se 2,894 2,738 2,48Research a d developme t expe se 439 417 42I terest expe se- et 208 118 136Other expe se (i come)- et 71 (38) I come be ore i come taxes 1,251 1,553 1,036I come tax expe se 31 201 99

net i come 1,220 1,352 937Less et i come or o co trolli g i terests (3) (2)

net i come attributable to Eato ordi ary shareholders $ 1,217 $ 1,350 $ 929

net i come per ordi ary shareDiluted $ 3.46 $ 3.93 $ 2.73Basic 3.54 3.98 2.76

Weighted-average umber o ordi ary shares outsta di gDiluted 350.9 342.8 339.5

Basic 347.8 338.3 335.5

Cash divide ds declared per ordi ary share $ 1.52 $ 1.36 $ 1.08

The accompa yi g otes are a i tegral part o the co solidated f a cial stateme ts.

Consolidated Statements of Income



Consolidated Statements of Comprehensive Income


(I millio s)

net i come $ 1,220 $ 1,352 $ 937Less et i come or o co trolli g i terests (3) (2) (8)

net i come attributable to Eato ordi ary shareholders 1,217 1,350 929

Other comprehe sive loss, et o tax

Curre cy tra slatio a d related hedgi g i strume ts 109 (241) (78)Pe sio s a d other postretireme t be efts (152) (353) (62)Cash ow hedges 17 (22) -

Other comprehe sive loss attributable to Eato ordi ary shareholders (26) (616) (140)

Total comprehe sive i come attributable to Eato ordi ary shareholders $ 1,191 $ 734 $ 789




DECEMBER 31 2012 2011

(I millio s)

AssetsCurre t assets

Cash $ 577 $ 385Short-term i vestme ts 527 699Accou ts receivable- et 3,510 2,444

I ve tory 2,349 1,701De erred i come taxes 449 398Prepaid expe ses a d other curre t assets 432 199

Total curre t assets 7,844 5,826

Property, pla t a d equipme tLa d a d buildi gs 1,894 1,52Machi ery a d equipme t 5,814 4,66

Gross property, pla t a d equipme t 7,708 6,19Accumulated depreciatio (3,831) (3,59

net property, pla t a d equipme t 3,877 2,60

Other o curre t assetsGoodwill 14,396 5,537Other i ta gible assets 6,779 2,192

De erred i come taxes 1,254 1,13Other assets 1,698 582

Total assets $ 35,848 $ 17,873

Liabilities a d shareholders' equityCurre t liabilities

Short-term debt $ 757 $ 86Curre t portio o lo g-term debt 314 3Accou ts payable 1,879 1,491Accrued compe satio 463 420Other curre t liabilities 2,018 1,319

Total curre t liabilities 5,431 3,637

no curre t liabilities

Lo g-term debt 9,762 3,366Pe sio liabilities 1,997 1,793Other postretireme t be efts liabilities 732 642De erred i come taxes 2,024 44Other o curre t liabilities 774 50

Total o curre t liabilities 15,289 6,74

Shareholders' equityOrdi ary shares (470.7 millio outsta di g i 2012 a d 334.4 millio i 2011) 5 167Capital i excess o par value 11,271 4,16Retai ed ear i gs 5,805 5,103Accumulated other comprehe sive loss (1,990) (1,9Shares held i trust (5) (6

Total Eato shareholders equity 15,086 7,46no co trolli g i terests 42 23

Total equity 15,128 7,492

Total liabilities a d equity $ 35,848 $ 17,87


Consolidated Balance Sheets




(I millio s)

Operati g activitiesnet i come $ 1,220 $ 1,352 $ 937Adjustme ts to reco cile to et cash provided by operati g activities

Depreciatio a d amortizatio 598 556 551De erred i come taxes (155) (113) 26

Pe sio expe se 273 227 179Co tributio s to pe sio pla s (413) (372) (403)Co tributio s to other postretireme t be efts pla s (43) (223) (82)Excess tax be eft rom equity-based compe satio (21) (57) -Cha ges i worki g capital

Accou ts receivable- et 108 (219) (305)I ve tory 166 (113) (219)Accou ts payable (220) 92 322Accrued compe satio (52) (38) 203Accrued i come a d other taxes (86) 123 (11)Other curre t assets 117 11 (46)Other curre t liabilities 30 (30) 22

Other- et 142 52 108

net cash provided by operati g activities 1,664 1,248 1,282

I vesti g activitiesCapital expe ditures or property, pla t a d equipme t (593) (568) (394)Cash paid or acquisitio s o busi esses, et o cash acquired (6,936) (325) (222)Sales (purchases) o short-term i vestme ts- et 603 103 (392)Other- et (46) (10) (4)

net cash used i i vesti g activities (6,972) (800) (1,012)

Fi a ci g activitiesProceeds rom borrowi gs 7,156 381 55Payme ts o borrowi gs (1,324) (78) (102)Payme ts o f a ci g costs (117) (3) -Cash divide ds paid (512) (462) (363)Exercise o employee stock optio s 95 71 157

Issua ce (repurchase) o shares 159 (343) -Excess tax be eft rom equity-based compe satio 21 57 -Other- et 2 (4) (8)

net cash provided by (used i ) f a ci g activities 5,480 (381) (261)

E ect o curre cy o cash 20 (15) (16)

Total i crease (decrease) i cash 192 52 (7)Cash at the begi i g o the period 385 333 340

Cash at the e d o the period $ 577 $ 385 $ 333


Consolidated Statements of Cash Flows



Consolidated Statements of Shareholders Equity

AccumulatedCapital other Total Eato

Ordi ary shares i excess o Retai edcomprehe sive Shares held shareholders no co trolli g Shares Dollars par value ear i gs loss i trust equity i terests

(I millio s)

Bala ce at Ja uary 1, 2010 332.3 $ 166 $ 3,947 $ 3,893 $ (1,208) $ (21) $ 6,777 $ 41 net i come - - - 929 - - 929 8

Other comprehe sive loss, et o tax (140) (140) - Cash divide ds paid - - - (363) - - (363) (8) Issua ce o shares u der equity-based compe satio

pla s- et ( et o i come tax expe se o $3) 7.6 4 146 (4) - 13 159 -

Bala ce at December 31, 2010 339.9 170 4,093 4,455 (1,348) (8) 7,362 41 net i come - - - 1,350 - - 1,350 2

Other comprehe sive loss, et o tax (616) (616) - Cash divide ds paid - - - (462) - - (462) (4) Issua ce o shares u der equity-based compe satio

pla s- et ( et o i come tax be eft o $72) 2.8 1 177 (2) - 2 178 - Busi ess divestiture - - - - - - - (16) Repurchase o shares (8.3) (4) (101) (238) - - (343) -

Bala ce at December 31, 2011 334.4 167 4,169 5,103 (1,964) (6) 7,469 23 net i come - - - 1,217 - - 1,217 3

Other comprehe sive loss, et o tax (26) (26) - Cash divide ds paid - - - (512) - - (512) (3) Excha ge o Eato Corporatio shares (par value $0.50

per share) or Eato shares (par value $0.01 per share) - (166) 166 - - - - - Issua ce o shares u der equity-based compe satio

pla s- et ( et o i come tax be eft o $23) 5.0 2 129 (2) - 1 130 - Issua ce o shares u der employee be eft pla s 3.2 - 166 - - - 166 - Issua ce o shares rom acquisitio o busi ess 128.1 2 6,648 (1) - - 6,649 19Registratio o ordi ary shares - - (7) - - - (7) -

Balance at December 31, 2012 470.7 $ 5 $ 11,271 $ 5,805 $ (1,990) $ (5) $ 15,086 $ 42




Amou ts are i millio s u less i dicated otherwise (per share data assume dilutio ).

Note 1. Summary o Signi icant Accounting PoliciesGeneral In ormationEato Corporatio plc (Eato or the Compa y) was i corporated u der the laws o Ire-la d o May 10, 2012, a d became the successor registra t to Eato Corporatio onovember 30, 2012 i co ectio with the co summatio o the acquisitio o CooperI dustries plc (Cooper), which is urther described below. Eato is a diver sifed powerma ageme t compa y providi g e ergy-e fcie t solutio s that help its customerse ectively ma age electrical, hydraulic a d mecha ical power, with 2012 et sales o$16.3 billio . The Compa y is a global tech ology leader i electrical produc ts, sys-tems a d services or power quality, distributio a d co trol, power tra smissio ,lighti g a d wiri g products; hydraulics compo e ts, systems a d ser vices or i dus-trial a d mobile equipme t; aerospace uel, hydraulics a d p eumatic systems orcommercial a d military use; a d truck a d automotive drivetrai a d powertrai sys-tems

eaton report 12

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