BUSINESS SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance.

During the first quarter of 2018, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable business segment is eMobility (which includes certain legacy Electrical Products and Vehicle product lines).

The eMobility segment designs, manufactures, markets, and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. Products include high voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution, fuel tank isolation valves, and commercial vehicle hybrid systems. The principal markets for the eMobility segment are original equipment manufacturers and aftermarket customers of passenger cars, commercial vehicles, and construction, agriculture, and mining equipment.

Eaton’s operating segments are Electrical Products, Electrical Systems and Services, Hydraulics, Aerospace, Vehicle, and eMobility. Operating profit includes the operating profit from intersegment sales. For additional information regarding Eaton’s business segments, see Note 15 to the Consolidated Financial Statements contained in the 2017 Form 10-K.



	Three months ended March 31
	2018			2017
Net sales
Electrical Products	$	1,732		$	1,651
Electrical Systems and Services	1,381			1,333
Hydraulics	710			587
Aerospace	458			428
Vehicle	893			786
eMobility	77			63
Total net sales	$	5,251		$	4,848

Segment operating profit
Electrical Products	$	307		$	286
Electrical Systems and Services	167			155
Hydraulics	90			60
Aerospace	89			79
Vehicle	132			108
eMobility	11			11
Total segment operating profit	796			699

Corporate
Amortization of intangible assets	(98		)	(94		)
Interest expense - net	(70		)	(61		)
Pension and other postretirement benefits expense	(2		)	(11		)
Other corporate expense - net	(61		)	(66		)
Income before income taxes	565			467
Income tax expense	78			33
Net income	487			434
Less net loss for noncontrolling interests	1			—
Net income attributable to Eaton ordinary shareholders	$	488		$	434

New Business Segments - Results of Operations

For the reportable segments that were re-segmented, previously reported segment financial information has been updated for all periods reported in 2016 and 2017. The re-segmentation did not impact previously reported consolidated results of operations.

Electrical Products



	Year ended December 31, 2017			Quarter ended in 2017												Year ended December 31, 2016			Quarter ended in 2016
	Year ended December 31, 2017			Dec. 31			Sept. 30			June 30			Mar. 31			Year ended December 31, 2016			Dec. 31			Sept. 30			June 30			Mar. 31
Net sales	$	6,917		$	1,750		$	1,785		$	1,731		$	1,651		$	6,703		$	1,665		$	1,705		$	1,717		$	1,616

Operating profit	$	1,233		$	318		$	330		$	299		$	286		$	1,186		$	305		$	317		$	304		$	260
Operating margin	17.8		%	18.2		%	18.5		%	17.3		%	17.3		%	17.7		%	18.3		%	18.6		%	17.7		%	16.1		%

Acquisition integration charges	$	4		$	1		$	1		$	1		$	1		$	3		$	1		$	1		$	1		$	—

Before acquisition integration charges
Operating profit	$	1,237		$	319		$	331		$	300		$	287		$	1,189		$	306		$	318		$	305		$	260
Operating margin	17.9		%	18.2		%	18.5		%	17.3		%	17.4		%	17.7		%	18.4		%	18.7		%	17.8		%	16.1		%

Vehicle



	Year ended December 31, 2017			Quarter ended in 2017												Year ended December 31, 2016			Quarter ended in 2016
	Year ended December 31, 2017			Dec. 31			Sept. 30			June 30			Mar. 31			Year ended December 31, 2016			Dec. 31			Sept. 30			June 30			Mar. 31
Net sales	$	3,326		$	837		$	858		$	845		$	786		$	3,141		$	739		$	784		$	825		$	793

Operating profit	$	541		$	142		$	150		$	141		$	108		$	471		$	97		$	122		$	135		$	117
Operating margin	16.3		%	17.0		%	17.5		%	16.7		%	13.7		%	15.0		%	13.1		%	15.6		%	16.4		%	14.8		%

eMobility



	Year ended December 31, 2017			Quarter ended in 2017												Year ended December 31, 2016			Quarter ended in 2016
	Year ended December 31, 2017			Dec. 31			Sept. 30			June 30			Mar. 31			Year ended December 31, 2016			Dec. 31			Sept. 30			June 30			Mar. 31
Net sales	$	283		$	73		$	75		$	72		$	63		$	266		$	63		$	64		$	73		$	66

Operating profit	$	50		$	10		$	16		$	13		$	11		$	57		$	11		$	14		$	20		$	12
Operating margin	17.7		%	13.7		%	21.3		%	18.1		%	17.5		%	21.4		%	17.5		%	21.9		%	27.4		%	18.2		%