Table Of ContentAnnual Investor Conference
Craig Arnold, President and Chief Operating Officer
February 26, 2016
© 2016 Eaton. All Rights Reserved..
Key themes for today
• Aligned and experienced leadership team with new 5 year goals
• Breadth and depth to lead and deliver results
• Track record of success
• Driving organic growth with a renewed focus
• Delivering superior value, building channel and services, and innovating
• Reducing structural costs in a slower growth environment
• $400M restructuring program in place with a robust pipeline of future opportunities
• Focus on operational excellence expected to deliver margin expansion
• Generating strong cash and efficiently allocating capital
• Providing 5% - 6% return to shareholders through dividends and share repurchases
• $3B repurchase plan from 2015 - 2018
• Optionality to re-enter M&A market
• Optimizing mix of served markets, product lines, and businesses
• We have discrete criteria against which we evaluate our businesses
© 2016 Eaton. All Rights Reserved.. 2
Delivering near-term results with significant upside
• 100+ year old company with strong values and well defined
management processes
1
• Led by an experienced and aligned management team
• A leader in power management serving diverse markets
2
• Our strategy has served us well and the company is
stronger than ever
• Introducing our 2015-2020 goals, an enhanced strategic
3
direction, and a clear set of priorities
© 2016 Eaton. All Rights Reserved.. 3
We are a company with a 100+ year history of
adapting to change…
1930 1958 1994 1999 2005-2008
Enter the engine Enter the Expand Grow fluid power Aerospace business
valve space medium- and electrical and aerospace doubles with acquisitions of
through purchase heavy-duty business by through Aeroquip- Cobham Aerospace Fluid &
of Wilcox-Rich transmission acquiring Vickers Air Division, PerkinElmer
market by Westinghouse acquisition Aerospace Division, and
acquiring Fuller DCBU Argo-Tech
Manufacturing
2016
A leading power
1911 management
Joseph Eaton company with strong
and Viggo businesses in
2008
Torbensen begin attractive global
Expand electrical
manufacturing 1978 1997 2000 markets
business through 2012
truck axles
Acquire Cutler- Divest Exit Moeller and
Hammer, establishing truck axle semiconductor Phoenixtec Acquire
1937
an electrical business business business with acquisitions Cooper
Open first
while also expanding Axcelis spin-off
international plant Industries
aerospace
in Canada
We have always been and will remain a values-based company
© 2016 Eaton. All Rights Reserved.. 4
…and have high standards for those we recruit,
develop, and promote
We recruit leaders who are… And accelerate their development by…
• Ethical…Play by the rules • Deploying a consistent Eaton
leadership model
• Passionate…Share our vision of being the
most admired, of being the best • Providing a diverse set of operational
and functional leadership experiences
• Accountable…Hold self and others
accountable for doing what they say • Delivering intensive training at key
stages of career progression
• Learners…Strong desire to improve and
help others • Managing functional colleges within
Eaton University
• Make good decisions…proven track
record of performance • Expecting leaders to teach leaders
© 2016 Eaton. All Rights Reserved.. 5
Which yields an experienced and effective
leadership team…
Craig Arnold Rick Fearon Revathi Advaithi Uday Yadav
Industrial COO
President and COO CFO Electrical COO
• 16 years at Eaton
• 15 years at Eaton • 13 years at Eaton • 14 years at Eaton
• President, Aerospace
• Member of Eaton board • Member of Eaton board • President, Electrical
• Director Medtronic plc • Lead Director PolyOne Americas • EVP, Eaton Business System
• President, Hydraulics APAC
• COO, Industrial Sector • 6 years at Transamerica • President, Electrical APAC
(based in China)
• CEO, Fluid Power Group as SVP Corporate (based in China)
• VP, Supply Chain, Fluid
Development • VP/GM, Electrical
• 17 years at General Electric
Power Group
• 5 years at NatSteel in Components Division
• President of Lighting, • Managing Director, Eaton India
Singapore as Chairman • 6 years at Honeywell
Europe
• 6 years at Lucas Engineering and
NatSteel Chemicals & VP • VP, Honeywell
• President of Appliances, Systems Consulting based
Corporate Development Field Solutions
Asia © 2016 Eaton. All Rights Reserved.. in Europe 6
…with depth in both the Electrical and
Industrial sectors
Jim McGill Frank Campbell Brian Brickhouse
President, President, President,
Electrical - Americas Electrical and Eaton - EMEA Electrical - APAC
• 38 years at Eaton(1) • 31 years at Eaton(1) • 30 years at Eaton(1)
• President, Electrical • President, Electrical EMEA • President, Power Quality Division
Products Americas • SVP, Electrical Sales • SVP/GM, Distributed PQ Division
• President, Electrical APAC and Marketing • SVP, Critical Power
• President, Eaton APAC • VP/GM, Electrical Assemblies Solutions Division
• EVP, Eaton Business System • VP/GM, Electrical • Powerware Commercial
• EVP, Human Resources Commercial Facilities integration leader
Curt Hutchins Nanda Kumar Ken Davis
President, Hydraulics President, Aerospace President, Vehicle
• 12 years at Eaton • 25 years at Eaton • 30 years at Eaton
• President, Heavy Duty • EVP, Eaton Business System • President, Vehicle Group Americas
Transmission business • President, Vehicle EMEA • President, Light and Medium-
• President, Eaton APAC • SVP/GM, Valvetrain Duty Transmission
• 16 years in consumer products • VP/GM, Specialty Controls and • VP/GM, Clutch Division
and aerospace industries Valve Actuation
These 10 leaders have over 200 years of combined Eaton experience
(1) Incudes tenure at companies acquired by Eaton © 2016 Eaton. All Rights Reserved.. 7
Our leaders drive deployment of the Eaton Business
System, the foundation of the company…
• Based on a belief in standard
processes and measurements
• Provides a teachable point of view
• Ensures the transfer of best
practices across the organization
• Encourages continuous learning
and improvement
• Engages all functions, regions,
and businesses
EBS is working and will continue to be integral to how we run the business
© 2016 Eaton. All Rights Reserved.. 8
…and the way we leverage our scale for a
competitive advantage
Plan
•Business strategy
•Annual goal setting
•People development
Execute
Learn
• ProLaunch
•Eaton University
• Lean and Six Sigma
•Eaton Resource Groups
• Value pricing tools
•Expert Locator
• Acquisition
•Transferable practices
Integration
Framework
Assess
•EBE business evaluation
•OpA plant evaluation
•MESH EHS assessment
•Customer surveys
© 2016 Eaton. All Rights Reserved.. 9
Delivering near-term results with significant upside
• 100+ year old company with strong values and well defined
management processes
1
• Led by an experienced and aligned management team
• A leader in power management serving diverse markets
2
• Our strategy has served us well and the company is
stronger than ever
• Introducing our 2015-2020 goals, an enhanced strategic
3
direction, and a clear set of priorities
© 2016 Eaton. All Rights Reserved.. 10
Description:A leader in power management serving diverse markets. • Our strategy has served us well and the company is stronger than ever Grow fluid power and aerospace .. cash flow margin. 2-4% annual revenue growth, excluding FX.
