Date: January 22, 2008

Eaton Increases Dividend 16 Percent To $.50 Per Share

CLEVELAND … As announced today in the company’s fourth quarter 2007 earnings news release, the Board of Directors of diversified industrial manufacturer Eaton Corporation (NYSE:ETN) has declared a first quarter dividend of $.50 per share. This represents a 16 percent increase over the previous quarterly dividend of $.43 per share.

The dividend is payable on February 22, 2008 to shareholders of record at the close of business on February 4, 2008. Eaton has paid dividends on common shares every year since 1923.

Eaton Corporation is a diversified industrial manufacturer with 2007 sales of $13.0 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 64,000 employees and sells products to customers in more than 140 countries.

Contact:

Kelly Jasko (216) 523-5304 (Media Relations)

William C. Hartman (216) 523-4501 (Investor Relations)