Eaton announces new Performance Power organization

PITTSBURGH - Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) announced today the formation of its Cutler-Hammer Performance PowerSM Solutions sales and marketing unit.

Every year, U.S. businesses lose as much as $120 billion because of power reliability problems, according to a recent study by Primen, an independent energy data firm1. An earlier study by Duke Power showed that businesses lost, on average, $11,000 per momentary power outage; losses were significantly greater for firms with critical applications such as data centers and e-commerce operations.

The creation of the Performance PowerSM Solutions organization is a result of Eaton's effort to expand its participation deeper into its customers' project life cycle. "With Performance Power, we have an opportunity to take a leading position in a rapidly expanding power quality and assurance market," said Randy Carson, Eaton senior vice-president and group executive.

"We're delivering more than products and more than services; we're providing broad solutions via our expertise as well as those of our alliance partners. This is a very logical next step in our strategy to expand our highly successful Cutler-Hammer Engineering Service and Systems offerings. We expect this new business will generate more than $300 million in new revenue over the next four years," Carson said.

The Performance Power Solutions unit will initially target the government, retail, telecommunications, commercial real estate, and healthcare markets. "These markets' reliance on affordable, reliable and high quality power makes them solid targets for such an offering," according to Carson.

Eaton's primary strategic partner in this new solutions offering is Johnson Controls, Inc., a global market leader in building controls systems, services and energy management. "This alliance supports Johnson Controls' mission to help our customers achieve their business goals," said Brian Stark, president, Controls Group of Johnson Controls.

"Our products and services complement each other to provide complete customer solutions in power management, energy management and building automation," said Dale Lueck, vice president and general manager of Systems Products Worldwide for Johnson Controls. "By working together we are not only streamlining the project for the customer, we are realizing greater opportunity for our respective businesses."

The Cutler-Hammer PowerNet system currently monitors, analyzes and operates buildings' electrical power systems, while the Johnson Controls Metasys® building automation system monitors, analyzes and controls the security/access, fire/safety and environmental systems. The two companies have integrated their products and systems to provide a comprehensive facility and power management system, which meets customers' needs for reduced operating costs and increased power availability and reliability.

By correlating information from the electrical and mechanical building systems, this integrated offering allows users to have better information on how facilities and devices are using energy, including total energy costs, power quality, and facility load profiles.

Eaton's Cutler-Hammer business is a worldwide leader in electrical control, power distribution, and industrial automation products and services. Through advanced product development, world-class manufacturing methods, and global engineering services and support, the Cutler-Hammer business provides customer-driven solutions that serve the changing needs of the industrial, utility, light commercial, residential, and OEM markets.

Eaton Corporation is a global $7.3 billion diversified industrial manufacturer that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent truck systems for fuel economy and safety. Eaton has 49,000 employees and sells products in more than 50 countries.

1 Primen Study: The Cost of Power Disturbances to Industrial and Digital Economy Companies, June 2001.



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Renald Romain


William Hartman, vice president, Investor Relations