Eaton Reports Fourth Quarter Net Income Of $0.46 Per Share

Financial Results

The company’s comparative financial results for the three months and year ended December 31, 2012 are available on the company’s website, www.eaton.com.

EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF INCOME
					Three months ended December 31							Year endedDecember 31
(In millions except for per share data)					2012			2011				2012			2011
Net sales					$	4,333		$	4,033			$	16,311		$	16,049
Cost of products sold					3,132			2,817					11,448		11,261
Selling and administrative expense					815			707				2,894			2,738
Research and development expense					126			101				439			417
Interest expense-net					108			26				208			118
Other expense (income)-net					64			(8)				71			(38)
Income before income taxes					88			390				1,251			1,553
Income tax (benefit) expense					(92)			29				31			201
Net income					180			361				1,220			1,352
Adjustment for net (income) loss for noncontrolling interests					(1)			1				(3)			(2)
Net income attributable to Eaton common shareholders					$	179		$	362			$	1,217		$	1,350
Net income per common share
Diluted					$	0.46		$	1.07			$	3.46		$	3.93
Basic						0.47			1.08				3.54			3.98
Weighted-average number of common shares outstanding
Diluted					384.4			338.1				350.9			342.8
Basic					381.3			334.2				347.8			338.3
Reconciliation of net income attributable to Eaton common shareholders to operating earnings
Net income attributable to Eaton common shareholders					$	179		$	362			$	1,217		$	1,350
Excluding acquisition integration charges and transaction costs (after-tax)					137			4					167		10
Operating earnings					$	316		$	366			$	1,384		$	1,360
Net income per common share - diluted					$	0.46		$	1.07			$	3.46		$	3.93
Excluding per share impact of acquisition integration charges and transaction costs (after-tax)					0.36			0.01				0.48				0.03
Operating earnings per common share					$	0.82		$	1.08			$	3.94		$	3.96
See accompanying notes.

EATON CORPORATION plc
BUSINESS SEGMENT INFORMATION
					Three months endedDecember 31							Year endedDecember 31
(In millions)					2012			2011				2012			2011
Net sales
Electrical Americas					$	1,154		$	1,121			$	4,517		$	4,192
Electrical Rest of World					711			699				2,731			2,984
Cooper					470			—				470			—
Hydraulics					693			705				2,960			2,835
Aerospace					434			430				1,719			1,648
Truck					504			680				2,309			2,644
Automotive					367			398				1,605			1,746
Total net sales					$	4,333		$	4,033			$	16,311		$	16,049
Segment operating profit
Electrical Americas					$	190		$	173			$	749		$	605
Electrical Rest of World					68			69				249			278
Cooper					66			—				66			—
Hydraulics					44			103				369			438
Aerospace					45			78				213			244
Truck					81			137				420			486
Automotive					17			42				150			209
Total segment operating profit					511			602				2,216			2,260
Corporate
Amortization of intangible assets					(66)			(47)				(195)			(190)
Interest expense-net					(108)			(26)				(208)			(118)
Pension and other postretirement benefits expense					(41)			(37)				(162)			(142)
Inventory step-up adjustment					(38)			—				(42)			(5)
Other corporate expense-net					(170)			(102)				(358)			(252)
Income before income taxes					88			390				1,251			1,553
Income tax (benefit) expense					(92)			29				31			201
Net income					180			361				1,220			1,352
Adjustment for net (income) loss for noncontrolling interests					(1)			1				(3)			(2)
Net income attributable to Eaton common shareholders					$	179		$	362			$	1,217		$	1,350
See accompanying notes.

EATON CORPORATION plc
CONDENSED CONSOLIDATED BALANCE SHEETS
					December 31,2012				December 31,2011
(In millions)
Assets
Current assets
Cash					$	577			$	385
Short-term investments					527				699
Accounts receivable-net					3,510				2,444
Inventory					2,349				1,701
Other current assets					945				597
Total current assets					7,908				5,826
Property, plant and equipment-net					3,877				2,602
Other noncurrent assets
Goodwill					14,396				5,537
Other intangible assets					6,779				2,192
Deferred income taxes					1,261				1,134
Other assets					1,615				582
Total assets					$	35,836			$	17,873
Liabilities and shareholders’ equity
Current liabilities
Short-term debt					$	757			$	86
Current portion of long-term debt					314				321
Accounts payable					1,879				1,491
Accrued compensation					463				420
Other current liabilities					2,006				1,319
Total current liabilities					5,419				3,637
Noncurrent liabilities
Long-term debt					9,762				3,366
Pension liabilities					1,997				1,793
Other postretirement benefits liabilities					732				642
Deferred income taxes					2,024				442
Other noncurrent liabilities					774				501
Total noncurrent liabilities					15,289				6,744
Shareholders’ equity
Eaton shareholders’ equity					15,086				7,469
Noncontrolling interests					42				23
Total equity					15,128				7,492
Total liabilities and equity					$	35,836			$	17,873
See accompanying notes.

EATON CORPORATION plc NOTES TO THE FOURTH QUARTER 2012 EARNINGS RELEASE

Amounts are in millions of dollars unless indicated otherwise (per share data assume dilution).

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