CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

On November 20, 2012, Eaton Corporation issued senior notes (the Senior Notes) totaling $4,900 to finance part of the cash portion of the acquisition of Cooper. Eaton and certain other of Eaton's principal 100% owned subsidiaries (the Guarantors) fully and unconditionally guaranteed (subject, in the case of the Guarantors, other than Eaton, to customary release provisions as described below), on a joint and several basis, the Senior Notes. The following condensed consolidating financial statements are included so that separate financial statements of Eaton, Eaton Corporation and each of the Guarantors are not required to be filed with the Securities and Exchange Commission. The consolidating adjustments primarily relate to eliminations of investments in subsidiaries and intercompany balances and transactions. The condensed consolidating financial statements present investments in subsidiaries using the equity method of accounting.

The guarantee of a Guarantor that is not a parent of the issuer will be automatically and unconditionally released and discharged in the event of any sale of the Guarantor or of all or substantially all of its assets, or in connection with the release or termination of the Guarantor as a guarantor under all other U.S. debt securities or U.S. syndicated credit facilities, subject to limitations set forth in the indenture. The guarantee of a Guarantor that is a direct or indirect parent of the issuer will only be automatically and unconditionally released and discharged in connection with the release or termination of such Guarantor as a guarantor under all other debt securities or syndicated credit facilities (in both cases, U.S. or otherwise), subject to limitations set forth in the indenture.

During the third quarter of 2014, the Company undertook certain steps to restructure ownership of various subsidiaries. The transactions were entirely among wholly-owned subsidiaries under the common control of Eaton. This restructuring has been reflected as of the beginning of the earliest period presented below.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	1,814		$	1,738		$	3,416		$	(1,240	)	$	5,728

Cost of products sold	—			1,402			1,266			2,489			(1,241		)	3,916
Selling and administrative expense	2			354			209			396			—			961
Research and development expense	—			63			49			51			—			163
Interest expense (income) - net	—			58			7			(8		)	(1		)	56
Other expense (income) - net	—			3			11			(24		)	—			(10		)
Equity in earnings of subsidiaries, net of tax	(670		)	(253		)	(820		)	(234		)	1,977			—
Intercompany expense (income) - net	66			(59		)	293			(300		)	—			—
Income before income taxes	602			246			723			1,046			(1,975		)	642
Income tax expense	—			12			—			25			—			37
Net income	602			234			723			1,021			(1,975		)	605
Less net income for noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income attributable to Eaton ordinary shareholders	$	602		$	234		$	723		$	1,018		$	(1,975	)	$	602

Other comprehensive (loss) income	$	(567	)	$	7		$	(562	)	$	(696	)	$	1,251		$	(567	)
Total comprehensive income attributable to Eaton ordinary shareholders	$	35		$	241		$	161		$	322		$	(724	)	$	35

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	1,695		$	1,636		$	3,424		$	(1,148	)	$	5,607

Cost of products sold	—			1,319			1,214			2,500			(1,150		)	3,883
Selling and administrative expense	2			365			198			402			—			967
Research and development expense	—			66			50			50			—			166
Interest expense (income) - net	—			63			7			(7		)	—			63
Other expense (income) - net	—			2			(10		)	15			—			7
Equity in earnings of subsidiaries, net of tax	(563		)	(146		)	(687		)	(95		)	1,491			—
Intercompany expense (income) - net	63			(90		)	233			(206		)	—			—
Income before income taxes	498			116			631			765			(1,489		)	521
Income tax (benefit) expense	(12		)	(24		)	4			39			—			7
Net income	510			140			627			726			(1,489		)	514
Less net income for noncontrolling interests	—			—			—			(1		)	(3		)	(4		)
Net income attributable to Eaton ordinary shareholders	$	510		$	140		$	627		$	725		$	(1,492	)	$	510

Other comprehensive income	$	322		$	12		$	336		$	404		$	(752	)	$	322
Total comprehensive income attributable to Eaton ordinary shareholders	$	832		$	152		$	963		$	1,129		$	(2,244	)	$	832

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	5,231		$	5,158		$	10,061		$	(3,463	)	$	16,987

Cost of products sold	—			4,122			3,772			7,354			(3,449		)	11,799
Selling and administrative expense	2			1,085			602			1,218			—			2,907
Litigation settlements	—			644			—			—			—			644
Research and development expense	—			185			151			157			—			493
Interest expense (income) - net	—			172			20			(22		)	3			173
Other income - net	—			(42		)	(81		)	(58		)	—			(181		)
Equity in (earnings) loss of subsidiaries, net of tax	(1,370		)	(440		)	(1,567		)	25			3,352			—
Intercompany expense (income) - net	156			(176		)	571			(551		)	—			—
Income (loss) before income taxes	1,212			(319		)	1,690			1,938			(3,369		)	1,152
Income tax (benefit) expense	—			(257		)	71			126			(6		)	(66		)
Net income (loss)	1,212			(62		)	1,619			1,812			(3,363		)	1,218
Less net income for noncontrolling interests	—			—			—			(6		)	—			(6		)
Net income (loss) attributable to Eaton ordinary shareholders	$	1,212		$	(62	)	$	1,619		$	1,806		$	(3,363	)	$	1,212

Other comprehensive (loss) income	$	(481	)	$	74		$	(447	)	$	(626	)	$	999		$	(481	)
Total comprehensive income attributable to Eaton ordinary shareholders	$	731		$	12		$	1,172		$	1,180		$	(2,364	)	$	731

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	5,026		$	4,835		$	10,117		$	(3,459	)	$	16,519

Cost of products sold	—			3,911			3,588			7,450			(3,461		)	11,488
Selling and administrative expense	6			1,066			579			1,234			—			2,885
Research and development expense	—			188			148			143			—			479
Interest expense (income) - net	—			206			21			(18		)	—			209
Other expense (income) - net	—			16			13			(26		)	—			3
Equity in earnings of subsidiaries, net of tax	(1,576		)	(470		)	(893		)	(234		)	3,173			—
Intercompany expense (income) - net	188			(304		)	(428		)	544			—			—
Income before income taxes	1,382			413			1,807			1,024			(3,171		)	1,455
Income tax (benefit) expense	—			(77		)	25			116			—			64
Net income	1,382			490			1,782			908			(3,171		)	1,391
Less net income for noncontrolling interests	—			—			—			(6		)	(3		)	(9		)
Net income attributable to Eaton ordinary shareholders	$	1,382		$	490		$	1,782		$	902		$	(3,174	)	$	1,382

Other comprehensive income (loss)	$	16		$	(14	)	$	36		$	(117	)	$	95		$	16
Total comprehensive income attributable to Eaton ordinary shareholders	$	1,398		$	476		$	1,818		$	785		$	(3,079	)	$	1,398

CONDENSED CONSOLIDATING BALANCE SHEETS SEPTEMBER 30, 2014

	Eaton Corporation plc		Eaton Corporation		Guarantors		Other subsidiaries		Consolidating adjustments			Total
Assets
Current assets
Cash	$	1	$	110	$	33	$	511	$	—		$	655
Short-term investments	—		—		1		334		—			335
Accounts receivable - net	—		557		1,021		2,394		—			3,972
Intercompany accounts receivable	2		709		3,671		5,089		(9,471		)	—
Inventory	—		395		631		1,522		(50		)	2,498
Deferred income taxes	—		383		113		85		—			581
Prepaid expenses and other current assets	—		122		20		247		1			390
Total current assets	3		2,276		5,490		10,182		(9,520		)	8,431

Property, plant and equipment - net	—		955		717		2,030		—			3,702

Other noncurrent assets
Goodwill	—		1,355		6,246		6,487		—			14,088
Other intangible assets	—		199		3,858		2,682		—			6,739
Deferred income taxes	—		935		7		146		(847		)	241
Investment in subsidiaries	25,869		12,307		58,289		8,687		(105,152		)	—
Intercompany loans receivable	—		8,111		2,698		39,421		(50,230		)	—
Other assets	—		456		141		441		—			1,038
Total assets	$	25,872	$	26,594	$	77,446	$	70,076	$	(165,749	)	$	34,239

Liabilities and shareholders’ equity
Current liabilities
Short-term debt	$	—	$	—	$	—	$	1	$	—		$	1
Current portion of long-term debt	—		103		307		2		—			412
Accounts payable	—		488		396		1,154		—			2,038
Intercompany accounts payable	24		3,873		3,710		1,864		(9,471		)	—
Accrued compensation	—		88		61		275		—			424
Other current liabilities	59		736		327		1,005		(16		)	2,111
Total current liabilities	83		5,288		4,801		4,301		(9,487		)	4,986

Noncurrent liabilities
Long-term debt	—		7,638		938		14		(3		)	8,587
Pension liabilities	—		390		86		694		—			1,170
Other postretirement benefits liabilities	—		393		171		111		—			675
Deferred income taxes	—		—		1,227		655		(847		)	1,035
Intercompany loans payable	9,202		3,471		36,882		675		(50,230		)	—
Other noncurrent liabilities	—		507		152		482		—			1,141
Total noncurrent liabilities	9,202		12,399		39,456		2,631		(51,080		)	12,608

Shareholders’ equity
Eaton shareholders' equity	16,587		8,907		33,189		63,093		(105,189		)	16,587
Noncontrolling interests	—		—		—		51		7			58
Total equity	16,587		8,907		33,189		63,144		(105,182		)	16,645
Total liabilities and equity	$	25,872	$	26,594	$	77,446	$	70,076	$	(165,749	)	$	34,239

CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2013

	Eaton Corporation plc		Eaton Corporation		Guarantors		Other subsidiaries		Consolidating adjustments			Total
Assets
Current assets
Cash	$	3	$	51	$	10	$	851	$	—		$	915
Short-term investments	—		—		134		660		—			794
Accounts receivable - net	—		473		922		2,253		—			3,648
Intercompany accounts receivable	5		471		3,369		4,469		(8,314		)	—
Inventory	—		344		609		1,466		(37		)	2,382
Deferred income taxes	—		333		155		89		—			577
Prepaid expenses and other current assets	—		125		20		261		9			415
Total current assets	8		1,797		5,219		10,049		(8,342		)	8,731

Property, plant and equipment - net	—		982		761		2,090		—			3,833

Other noncurrent assets
Goodwill	—		1,382		6,294		6,819		—			14,495
Other intangible assets	—		211		3,996		2,979		—			7,186
Deferred income taxes	—		839		3		145		(747		)	240
Investment in subsidiaries	24,940		4,743		38,039		1,576		(69,298		)	—
Intercompany loans receivable	—		8,019		2,312		18,822		(29,153		)	—
Other assets	—		450		186		370		—			1,006
Total assets	$	24,948	$	18,423	$	56,810	$	42,850	$	(107,540	)	$	35,491

Liabilities and shareholders’ equity
Current liabilities
Short-term debt	$	—	$	—	$	—	$	13	$	—		$	13
Current portion of long-term debt	—		552		—		15		—			567
Accounts payable	—		440		380		1,140		—			1,960
Intercompany accounts payable	4		3,734		3,266		1,310		(8,314		)	—
Accrued compensation	—		140		37		284		—			461
Other current liabilities	5		547		400		965		(4		)	1,913
Total current liabilities	9		5,413		4,083		3,727		(8,318		)	4,914

Noncurrent liabilities
Long-term debt	—		7,693		1,266		16		(6		)	8,969
Pension liabilities	—		546		131		788		—			1,465
Other postretirement benefits liabilities	—		402		171		95		—			668
Deferred income taxes	—		—		1,303		757		(747		)	1,313
Intercompany loans payable	8,148		2,113		18,253		639		(29,153		)	—
Other noncurrent liabilities	—		652		161		486		—			1,299
Total noncurrent liabilities	8,148		11,406		21,285		2,781		(29,906		)	13,714

Shareholders’ equity
Eaton shareholders' equity	16,791		1,604		31,442		36,276		(69,322		)	16,791
Noncontrolling interests	—		—		—		66		6			72
Total equity	16,791		1,604		31,442		36,342		(69,316		)	16,863
Total liabilities and equity	$	24,948	$	18,423	$	56,810	$	42,850	$	(107,540	)	$	35,491

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net cash (used in) provided by operating activities	$	(4	)	$	(699	)	$	172		$	1,433		$	32		$	934

Investing activities
Capital expenditures for property, plant and equipment	—			(78		)	(94		)	(206		)	—			(378		)
Sales of short-term investments - net	—			—			132			313			—			445
Loans to affiliates	—			(151		)	—			(6,347		)	6,498			—
Repayments of loans from affiliates	—			176			213			5,133			(5,522		)	—
Proceeds from sale of business	—			93			175			14			—			282
Other - net	—			(40		)	46			(62		)	—			(56		)
Net cash provided by (used in) investing activities	—			—			472			(1,155		)	976			293

Financing activities
Payments on borrowings	—			(552		)	(1		)	(27		)	—			(580		)
Proceeds from borrowings from affiliates	726			5,510			254			8			(6,498		)	—
Payments on borrowings from affiliates	(25		)	(4,794		)	(320		)	(383		)	5,522			—
Other intercompany financing activities	218			574			(554		)	(238		)	—			—
Cash dividends paid	(700		)	—			—			—			—			(700		)
Cash dividends returned by (paid to) affiliates - net	—			—			—			32			(32		)	—
Exercise of employee stock options	50			—			—			—			—			50
Repurchase of shares	(267		)	—			—			—			—			(267		)
Excess tax benefit from equity-based compensation	—			20			—			—			—			20
Other - net	—			—			—			(3		)	—			(3		)
Net cash provided by (used in) financing activities	2			758			(621		)	(611		)	(1,008		)	(1,480		)

Effect of currency on cash	—			—			—			(7		)	—			(7		)
Total (decrease) increase in cash	(2		)	59			23			(340		)	—			(260		)
Cash at the beginning of the period	3			51			10			851			—			915
Cash at the end of the period	$	1		$	110		$	33		$	511		$	—		$	655

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net cash (used in) provided by operating activities	$	(10	)	$	640		$	313		$	523		$	(53	)	$	1,413

Investing activities
Capital expenditures for property, plant and equipment	—			(112		)	(66		)	(194		)	—			(372		)
(Purchases) sales of short-term investments - net	—			(115		)	18			(88		)	—			(185		)
Loans to affiliates	—			(219		)	(23		)	(4,267		)	4,509			—
Repayments of loans from affiliates	—			28			102			4,030			(4,160		)	—
Proceeds from sale of business	—			—			—			761			—			761
Other - net	—			(25		)	4			(40		)	—			(61		)
Net cash (used in) provided by investing activities	—			(443		)	35			202			349			143

Financing activities
Proceeds from borrowings	—			—			—			6			—			6
Payments on borrowings	—			(975		)	(35		)	(2		)	—			(1,012		)
Proceeds from borrowings from affiliates	—			1,975			2,436			98			(4,509		)	—
Payments on borrowings from affiliates	—			(2,391		)	(1,639		)	(130		)	4,160			—
Other intercompany financing activities	504			1,153			(1,107		)	(550		)	—			—
Cash dividends paid	(597		)	—			—			—			—			(597		)
Cash dividends paid to affiliates	—			—			—			(53		)	53			—
Exercise of employee stock options	98			—			—			—			—			98
Excess tax benefit from equity-based compensation	—			24			—			—			—			24
Other - net	—			—			—			(4		)	—			(4		)
Net cash provided by (used in) financing activities	5			(214		)	(345		)	(635		)	(296		)	(1,485		)

Effect of currency on cash	—			—			—			(6		)	—			(6		)
Total (decrease) increase in cash	(5		)	(17		)	3			84			—			65
Cash at the beginning of the period	7			54			14			502			—			577
Cash at the end of the period	$	2		$	37		$	17		$	586		$	—		$	642