Date: February 2, 2007

Beijing … Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) today announced a sales goal of $1 billion in China by the end of 2010, more than doubling its current revenue in the country.

“China will be an important part of our goal to be an $18 billion company in 2010,” Alexander M. Cutler, Eaton chairman and chief executive officer, said today in meetings with Chinese media. “We are excited about participating in the development of China’s infrastructure and in its manufacturing, transportation and power industries.”

Cutler said the company’s goal is to increase sales in the Asia Pacific region to $2.5 billion and in China to $1 billion by the end of 2010. Currently, Eaton has 20 manufacturing locations in China, all of which serve the country’s expanding domestic market.

“China is critical to our growth,” Cutler said. “We see our participation in China first and foremost as an opportunity to support our customers in the fast-growing Chinese domestic economy, and secondly as an opportunity to meet the needs of our global customers.”

China has proven to be a major growth market for Eaton. In 2002, Eaton had five manufacturing locations and less than 1,000 employees in China. Today, Eaton has more than 5,000 employees in China and its electrical, fluid power, truck and automotive businesses all have a significant and expanding presence in the country.

Cutler outlined Eaton’s blueprint for growth in China and detailed a series of major initiatives to utilize Eaton’s global expertise and capabilities to support China’s ongoing development of its infrastructure.

Cutler noted that Eaton initiated the following actions in China in 2006:

• Launched a new plant in Jining, Shandong, producing steering pumps and hydraulic motors. It will be Eaton’s largest manufacturing operation for hydraulics products in Asia Pacific;

• Opened a fuel vapor systems production facility in Shanghai that will assemble automotive components for customers in Europe and Asia;

• Acquired Senyuan International Holdings in Changzhou, Jiangsu, which strengthens Eaton’s medium-voltage electrical business with a widely recognized and well-respected name in the Chinese marketplace;

• Supplied the hybrid power system for two prototype buses for Beiqi Foton AUV Bus Company. The buses are part of the Clean Bus Competition for the 2008 Beijing Olympic Games and 2010 Shanghai World Expo.

Also, Eaton has established an Electrical Research and Development Center in Suzhou, Jiangsu. The center expands upon the acquisition of Senyuan by strengthening its product offerings in the China market and growing its global product development capabilities for electrical products. Eaton will expand the design center by doubling the number of engineers to 200 during the next two years to strengthen its design capabilities in low and medium voltage components, systems, and solutions.

“We are committed to increasing our research and development initiatives locally,” Cutler said, “as well as investing in our people and our communities in China.”

Eaton began operations in China in 1993 through a joint venture agreement to manufacture steering control units and hydraulic motors in Jining. Its presence has grown significantly in China through acquisitions, joint ventures and wholly owned subsidiaries.

Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 billion. Eaton is a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. Eaton has 60,000 employees and sells products to customers in more than 125 countries.