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1 This is a photographic template your photograph should fit precisely within this rectangle. Eaton Corporation Sandy Cutler Credit Suisse Aerospace and Defense Conference December 3, Eaton Corporation. All rights reserved.

2 Forward Looking Statements and Non-GAAP Financial Information The information provided at our conference today will include forward-looking statements relating to our goals and estimates for future years, including statements about future sales, net income, net income per share, operating earnings, operating earnings per share, worldwide markets, income tax liability, and others. Those statements can be identified by the indication that they are for future periods and should be used with caution. They are subject to various risks and uncertainties, many of which are outside the Company s control. Factors that could cause actual results to differ materially from those in the forward-looking statements include: volatility 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; unexpected increases in the cost of material and other production costs that cannot be recouped in product pricing; introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; income tax liability; acquisitions and divestitures; our ability to integrate recent acquisitions; new laws and governmental regulations; interest rate changes; 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 your packet. 2 2

3 Eaton Corporation A Premier Diversified Industrial Balanced Power Management Company Eaton Aerospace Group 2009 Guidance 3 3

4 A global power management company Helping our global customers better utilize electrical, hydraulic and mechanical power by focusing on energy efficient solutions Delivering the power inside thousands of products and facilities, answering the demands of today's fast changing world 4 4

5 Eaton is uniquely positioned to serve many aspects of the power value chain Serving the Majority of Power Sources Electric Utilities Coal Nuclear Hydro Power Wind Solar Petroleum (Exploration & Refining) Coal Mining Natural Gas Trucks Cars Rail Residential Buildings Commercial Buildings Airplanes Infrastructure (Airports, Water) Data Center, Telecom Machines, Industrial Buildings 5 Serving Almost all Power Uses 5

6 Organizational synergies create an integrated power management company Related R&D Interests Advanced energy efforts such as fuel cells and energy storage materials for vehicles and buildings Shared Customers In energy production areas such as wind power generators and petroleum refining Common Standards and Interoperability Vehicle and facility infrastructure associated with plug in cars, trucks, and ships 6 6

7 An integrated operating company united by the Eaton Business System (EBS) EBS is the sum of the tools and processes developed across our businesses, aligned and integrated, into a single operating philosophy. Rapid Deployment of Best Practices Prescriptive Processes Growth & Operating Excellence Eaton University Continuous Assessment 7 7

8 Our new organizational structure better serves the power needs of our global markets Electrical Sector $6.9 B Sales Industrial Sector $8.5 B Sales Electrical Americas Aerospace Hydraulics Electrical Rest of World Truck Automotive Note: Electrical Sector revenue includes Moeller 8 and Phoenixtec from the time of acquisition 8

9 New Electrical sector accelerates growth and builds regional scale and focus Electrical Sector Americas Canada United States Latin America Rest of World Europe Middle East & Africa Asia Pacific $6.9 B global business positioned to lead regional markets Note: Electrical Sector revenue includes Moeller 9 and Phoenixtec from the time of acquisition 9

10 New Industrial sector improves execution and expands integrated customer solutions Industrial Sector Aerospace Hydraulics Truck Automotive Hydraulic Systems Controls Transmissions Valvetrain Conveyance Systems Electrical, Sensing & Controls Fuel Systems Fluid Conveyance Power Filtration Heavy Duty Light / Medium Duty Clutches Supercharger Fluid Connectors Fuel and Powertrain $8.5 B business positioned to lead in their respective markets 10 10

11 We have made substantial progress towards achieving our goals Eaton Corporation Premier Diversified Industrial 15% Income Growth 15% ROIC 10% Sales Growth 9% FCF to Sales 11 11

12 A balanced business growth model 12% 10% 8% 6% 4% 2% 0% 4% 2% 6% 4% Eaton Growth Model Focus acquisitions within Electrical, Aerospace and Hydraulics Organic growth target An assertive growth model today, and for the future 12 12

13 Our higher growth portfolio helps drive performance 26% 2003 Sales Mix % 15% 12% 45% 16% 12% 32% 10% 19% 23% Operating Profit Mix 17% 16% 3% 10% 16% 49% 21% 14% 15% Electrical Hydraulics Aerospace Truck Automotive Note: Operating profit excludes acquisition integration charges 13 13

14 Our business is balanced globally and through the cycle 2008 Sales By Final Destination Int l 55% US 45% 100% 80% 60% 40% 20% 0% 12% 27% 30% 31% 2008 Global Sales By Cycle Early Mid Late No Cycle $1.9 B in Revenues Electrical Service, Defense, Filtration, Aerospace Aftermarket $4.1 B in Revenues Commercial Aerospace, Nonresidential Construction, Power Quality (3-Phase) $4.6 B in Revenues Hydraulics, Industrial Controls, Medium Duty Truck $4.8 B in Revenues Residential Electric, Power Quality (single phase), Heavy Duty Truck, Automotive 14 14

15 We have doubled our exposure in higher growth emerging markets Sales by Destination Developing 10% Int l Developed 24% Developing 21% Int l Developed 34% U.S. 66% U.S. 45% Average growth ( 03-09) Developed 2% versus Developing 6% 15 15

16 Eaton Corporation A Premier Diversified Industrial Balanced Power Management Company Eaton Aerospace Group 2009 Guidance 16 16

17 Introduction to Eaton Aerospace Group Eaton has built an impressive Aerospace franchise A balanced portfolio of products across all segments Component excellence Superior systems and integration Positioned on the right platforms for growth We are making significant improvements across the business through execution of EBS Eaton Aerospace is one of our long cycle businesses, providing balance to the Eaton portfolio Aerospace a strategic growth platform for Eaton 17 17

18 Our Aerospace strategy responds to global market drivers Growth in emerging markets Airlines focused on improving financial performance Increase aircraft utilization Reduce operating cost Support Green commitment Partner with Aircraft OEMs Enhance global aftermarket support 18 18

19 Aerospace Group A Ten Year Look ( ) 1998 System Segments $180M 2008 System Segments $1.8B Hydraulics Electrical Power Fuel Systems Conveyance Systems Controls Electrical, Sensing & Controls Hydraulics Systems A well-balanced global portfolio 19 19

20 We serve a diverse set of end markets Commercial: 60% Military: 40% Business Jet OE Sales Mix Ground Defense Military Transport Regional Transport 60% OE and 40% Aftermarket Excellent share in high growth large transport market Military Fighters Strong position on Military Fighters and Rotorcraft Rotorcraft General Aviation Other Large Transport Positioned for growth in a dynamic market 20 20

21 A proud heritage of component excellence enabling world class systems Sterer Tedeco Mechanical Products Broaden component excellence, creating a systems capability 21 21

22 Powering Aerospace Worldwide Hydraulic Systems Pressure Switch Power Transfer Unit Engine-Driven Pump Ram Air Turbine Pump Maintenance Free Accumulator DC Electric Motor- Driven Pump Reservoir Filter Module Emergency Generator Motor Hydraulic Power Package Teflon and Kevlar Hoses Pressure Control Module 22 22

23 Powering Aerospace Worldwide Fuel Systems Fuel Pump Pedestal Mounted Ball Valve Check Valve Refuel Valve Engine Feed Tube Jettison Pump Engine Feed Pumps Twin Motor Actuator Override Jettison Pump Pressure Transducer Trim Transfer Pump Pressure Regulator 23 23

24 Powering Aerospace Worldwide Engine Sub-Systems Lube Oil Tank Main Shift Seal Carbon Seal Brush Seal Lubriclone Fuel Line Power Module Oil Tubing Pneumatic Ducting Carbon Seal for Gearbox World s Largest Main Engine Fuel Pump Chip Detectors Engine-Driven Pump 24 24

25 Powering Aerospace Worldwide Electrical Power And Control Slat Actuators High-Lift Motor Emergency Passenger Door Actuator Flap Actuators Power Drive Unit Flap Flexshafts Nose Wheel Steering Flap/Slat Electronic Control Unit Stab Trim Actuator Power Drive Unit 25 25

26 Powering Aerospace Worldwide Pilot Interface and Power Distribution Sealed Remote Control Circuit Breaker Throttle Control Master Caution and Warning Emergency Fire Control Dimmer 270 VDC Contactor Flap Selector Control Panel Assembly Power Distribution Box Landing Gear Control 26 26

27 Continued expansion of system capability and content on Commercial Transports Wide Body Jumbo Boeing 787 $90 M 4-x $90 M 5-x Airbus A330 Boeing 767 $30 M 2-x $8 M 1-x (Baseline) Airbus A380 Boeing 747 $8 M 1-x (Baseline) Note: Revenue numbers are at mature year production quantities; #x refers to multiple (growth) of content of 1-x platform

28 Continued expansion of system capability and content on Military platforms F-35 $345 M 15-x CH-53K $30 M 26-x F-22 $25 M 11-x V-22 $16 M 15-x Eurofighter $30 M 5-x UH-60M $40 M 5-x F-18 $20 M 4-x S-92 $4 M 4-x F-16 $25 M 1-x (Baseline) NH-90 $3 M 1-x (Baseline) Note: Revenue numbers are at mature 28 year production quantities; #x refers to multiple (growth) of content of 1-x platform. 28

29 Powering Aerospace Worldwide Attainment of Tier 1 supplier level Added hydraulic and fuel capabilities to create systems level supplier Targeting on-board power systems and fluid management Optimizing systems for weight, reliability, performance and value Dramatically increasing the value of our business to the customer Providing stellar Service and Support through the product life-cycle CH-53K Program Highlights USMC 156 aircraft requirement First Flight: 4Q 2011 First Squadron: 2015 Component excellence leads to systems solutions 29 29

30 Balance across the development timeline Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-7 Architecture and Functional Partition Design Freeze and Suppliers Selection Detailed Design and Development Product Build and Qualification Aircraft Flight Testing Production Ramp-Up MC-21 A350 Honda Jet A400M B787 F-35 C919 Embraer MLF Lear85 C Series ARJ 21 A380 Falcon SMS G650 CH-53K B747-8 V-22 G450 Phenom MC-21 C919 Falcon SMS Active pipeline assures significant growth for the long term 30 30

31 Eaton Corporation A Premier Diversified Industrial Balanced Power Management Company Eaton Aerospace Group 2009 Guidance 31 31

32 During 2009, our overall markets have weakened significantly E Electrical Americas Index 4% (19%) 9% Electrical ROW Index 4% (19%) Hydraulics Index 2% 2% (35%) Aerospace Index 5% 3% (8%) Truck Index (26%) 1% (28%) Automotive Index 2% (7%) (23%) Eaton Consolidated Index (2%) 2% (21%) to (22%) Updated October 19,

33 Our financial results reflect these market declines, but are rapidly improving ($ millions except per share data) First Quarter Second Quarter Third Quarter Net Sales Sequential Change Net Sales Sequential Change Net Sales Sequential Change Net Sales $2,813 (19%) $2,901 3% $3,028 4% Net Income (50) (131%) % % Fully $(0.30) (131%) $ % $ % Diluted EPS Operating Earnings (36) (120%) % % Operating EPS $(0.22) (120%) $ % $ % Note: Operating earnings excludes acquisition integration charges 33 33

34 Employment reductions are driving significant cost savings Pre-Tax (Millions) Q1 Q2 Q3 Q4 Total Cost (65) (69) (22) (2) (158) Benefit Net (12) Full year 2009 YTY Pretax income increase of $270M Full year 2010 YTY Pretax income increase of $220M Updated October 19,

35 In total we expect savings of $495 million in 2009 Millions Employment $270 Other Actions $225 Total $

36 2009 EPS guidance Operating Earnings Net Income Full Year $ $2.50 $ $2.15 Midpoint $2.45 $2.10 Q4 $ $1.25 $ $1.10 Midpoint $1.20 $1.05 Updated October 19,

37 Summary of 2009 guidance 2009 Guidance Market Outgrowth $150M Incremental Sales from Acquisitions $300M Operating EPS $ $2.50 Fully Diluted EPS $ $2.15 Operating Cash Flow $1.3B to $1.4B Free Cash Flow $1.1B to $1.2B Updated October 19, 2009 To be updated 37 37

38 2010 outlook Consensus global growth forecasts have improved GDP Industrial Production July 2.5% 4.5% 5.0% October 3.1% 6.0% Expect good incremental profits as sales rebound Cost savings versus 2009 likely to be neutral 38 38

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