Eaton Corp. Business Report FY ended Dec. 2012

Business Highlights

Financial Overview

 (in million dollars) 
  FY ended Dec. 31, 2012 FY ended Dec. 3, 2011 Rate of
change (%)
Sales 16,311 16,049 1.6 -
Operating profit 2,216 2,260 (1.9) -
Sales 1,605 1,746 (8.1) 1)
Operating profit 150 209


Sales 2,309 2,644 (12.7) 2)
Operating profit 420 486 (13.6) -

-In 2012, net sales decreased 8% compared to 2011 due to a decrease of 4% from the impact of currency exchange, a 3% decrease related to a business divestiture in 2011, and a decrease in core sales of 1%. The decrease in core sales in 2012 is primarily due to lower sales volumes from continued weakness in Europe.

-In 2012, net sales decreased 13% compared to 2011 due to a decrease in core sales of 7% and a decrease of 6% from the impact of currency exchange. The decrease in core sales in 2012 was primarily due to lower sales volumes in the NAFTA Class 8 market related to the uncertain economic outlook in the U.S., as well as lower sales in the Brazil truck and bus markets.


-In 2012, the Company and electrical equipment supplier Cooper Industries plc announced that Eaton has completed its acquisition of Cooper. The 13 billion USD acquisition was announced on May 21, 2012 and combines Eaton and Cooper into a new power management company named Eaton Corporation plc. The companies anticipate the entire integration process will take 24 to 36 months. Combining the results of Eaton and Cooper for the four quarters ending September 30, 2012, Eaton Corporation plc had pro forma revenues of 21.8 billion USD. (From a press release on November 30, 2012)

-In 2012, the Company and electrical equipment supplier Cooper Industries plc announced that they have entered into a definitive agreement under which Eaton will acquire Cooper in a transaction that will significantly increase the capabilities and geographic breadth of the combined company's power management portfolio and electrical business. At the close of the transaction, which is expected in the second half of 2012, Eaton and Cooper will be combined under a new company incorporated in Ireland, where Cooper is incorporated today. The newly created company, which will be called Eaton Global Corporation Plc, is expected to generate approximately 535 million USD annually by 2016. Eaton will own approximately 73 percent of the combined company while Cooper will hold approximately 27 percent. (From a press release on May 21, 2012)

Business Partnership

-In 2012, the Company and Mitsubishi Motors North America, Inc. announced that they will collaboratively install Eaton electric vehicle (EV) charging stations in the state of Hawaii, the U.S. Eaton will soon have an ultra-fast DC electric vehicle (EV) quick charger at Ko Olina Resort in the island of O'ahu. The Eaton DC Quick Charger at Ko Olina will be free-to-use by anyone with an electric vehicle equipped with the CHAdeMO compliant quick charging port. The Eaton DC Quick Charger can replenish an empty 2012 Mitsubishi i main lithium-ion battery pack to 80% full in under 30 minutes. Volta Industries, which will install the Eaton DC Quick Charger, has unveiled a plan that includes an initial rollout of four (4) Level 2 EV charging stations at two shopping destinations in the island of O'ahu. The company plans on installing several dozen free-to-use Eaton powered Level 2 EV charging stations across the island of O'ahu over the next year. (From a press release on March 29, 2012)

-In 2012, the Company and Coulomb Technologies, a U.S.-based electric vehicle infrastructure company, announced plans to expand the North American footprint of charging stations for electric vehicles (EVs). Through an agreement between the two companies, Eaton's Level II and DC quick charging Pow-R-Station charging stations can now connect to Coulomb's EV charging services network ChargePoint(R) Network. Eaton Pow-R-Station charging stations will now have the capability to access all the functionality of the ChargePoint Network and ChargePoint service plans, including a centralized management infrastructure to set up services; automated billing; 24/7 driver support; and driver services that show real-time station availability. (From a press release on January 9, 2012)


-In 2012, the Company has received Nissan Motor Co.'s "Global Innovation Award". Eaton supplies its TVS supercharger to the Nissan Micra car. (From a press release on August 21, 2012)


-In 2012, the Company's UltraShift PLUS automated heavy-duty transmissions have been certified for use with the Westport HD 15-liter high pressure direct injection liquefied natural gas engine (made by Westport Innovations, Inc.). The engines and transmissions, with gross vehicle weight (GVW) ratings up to in excess of 110,000 pounds, are currently available on Kenworth T800 and Peterbilt 367, 386 and 387 chassis. UltraShift PLUS transmissions are currently certified with major diesel engine manufacturers in North America, including Cummins, Detroit Diesel, Caterpillar, International/Navistar and Volvo. (From a press release on August 24, 2012)

-In 2012, the Company announced that it has signed a distributor agreement with the Cosworth Group, Northampton, UK, to supply Eaton’s TVS(R) Supercharger (Twin Vortices Series) and other Roots-type Superchargers to the European automotive market. The agreement will focus on supplying Eaton TVS(R) Superchargers to automakers for low volume OEM applications and performance kits for aftermarket customers in both the UK and Europe. Eaton's Supercharger technology has been selected by numerous automakers and can be found on these vehicles: Audi A6, S4 and S5, Chevrolet Corvette ZR1, Cadillac CTS-V, Volkswagen Touareg Hybrid, Porsche Cayenne S Hybrid SUV, Jaguar XKR, XFR, XJR and Range Rover Sport and Nissan Micra. (From a press release on June 14, 2012)


R&D Expenditures

 (in million dollars)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 FY ended Dec. 31, 2010
Overall 439 417 425


R&D Facilities

-The Company has nine global research and development centers in seven countries.

-In 2012, the Company announced that the Eaton China Innovation Center in Shanghai has opened a new laboratory to drive development of energy-efficient power management technologies for the local market. The new laboratory covers an area of more than 300 square meters. Established in September 2010, Eaton's China Innovation Center is focused on developing advanced technologies and solutions, such as next generation power converters, safe solutions for alternative energy, vacuum switching, vehicle powertrains, electrical vehicle and charging technology. In February 2012, Eaton announced the expansion of the Innovation Center by adding a team in Shenzhen, Guangdong Province to focus on power conversion technology. Today, Eaton owns approximately 9,000 patents throughout the world, and was granted over 900 patents during 2011 alone. (From a press release on July 25, 2012)

-In 2012, the Company joined with its partners at Czech Invest, an investment agency, and the Czech Technical University in Prague (CVUT) to announce the opening in Prague of Eaton's new Innovation Center. The new facility at Roztoky Science & Technology Center will be Eaton's first innovation center in Europe and fifth in the company's global network of innovation centers, also located in the U.S., India and China. The Innovation Center will conduct research focused on the development of more energy-efficient power systems and the electrification of transportation, vehicle and aircraft applications. The European Innovation Center will serve Eaton's customers such as Skoda Auto and VW Group. Eaton plans to recruit up to 50 engineers within the first year of the facility's opening and to increase the total workforce to about 300 in the next four to five years. (From a press release on January 19, 2012)

Product Development

-In 2012, the Company announced a number of enhancements that will increase the fuel economy and performance of its hybrid power system for commercial vehicles including a new high-capacity battery, a new single-phase 115-volt AC Auxiliary Power Generator (APG), and a higher capacity clutch. At the heart of the high-capacity lithium-ion battery is new technology that employs the latest battery cell architecture. The new design increases the fuel savings of Eaton's hybrid power system an additional 5 to 10 percent. Eaton is also introducing a new single-phase 5-kilowatt Auxiliary Power Generator this fall. The APG unit is more compact and 25 pounds lighter than Eaton's previous offering. Both the new high capacity battery and APG will be rolled out during the fourth quarter of this year to serve utility applications. The high capacity battery will be available for city delivery and beverage tractor applications in the third quarter of 2012. In addition, Eaton is now offering higher capacity clutches that can handle engines up to 860 lb-ft of torque and 300 HP. (From a press release on May 31, 2012)

Investment Activities

Capital Expenditure

 (in million dollars) 
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 FY ended Dec. 31, 2010
Overall 593 568 394
Automotive 79 92 61
Truck 69 80 59

Investment Outside USA

-In 2012, the Company announced that it will significantly expand its production capacities for hollow valves in Nordhausen, Germany. In April 2012, new machines will be installed in the Nordhausen production facility, allowing the plant to nearly double its annual capacity for internally cooled engine valves. Furthermore, the Nordhausen plant develops the final design and manufacturing process for hollow valves and therefore forms "Eaton's Center of Excellence for Hollow Valve Production". (From a press release on April 13, 2012)