Edgar Filing: EATON CORP

425

2012 Citi Global Industrials Conference

Alexander M. Cutler –

Chairman and Chief Executive Officer

September 19, 2012

Filed

Eaton

Corporation

pursuant

Rule

425

under

the

Securities

Act

1933

and

deemed

filed

pursuant

Rule

14a-6

under

the

Securities

Exchange

Act

1934

Subject

Company:

Cooper

Industries

plc;

Eaton

Corporation

Filer’s

SEC

File

No.:

1-1396

Date:

September

19,

2012

OFFER

SOLICITATION

This

communication

not

intended

and

does

not

constitute

offer

sell

the

solicitation

offer

for

buy

invitation

purchase

subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the acquisition or otherwise, nor shall there be any sale,

issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus

meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

IMPORTANT

ADDITIONAL

INFORMATION

WILL

FILED

WITH

THE

SEC

A registration statement on Form S-4 has been filed with the SEC, which includes the Joint Proxy Statement of Eaton Corporation (“Eaton”) and Cooper

Industries

plc

(“Cooper”)

that

also

constitutes

Prospectus

Eaton

Corporation

plc

(1)

The

registration

statement

was

declared

effective

September

2012.

Eaton

and

Cooper

are commencing sending to

their

respective

shareholders

(and

Cooper

equity

award

holders

for

information

only)

the

definitive

Joint Proxy

Statement/Prospectus (including the Scheme) in connection with the transaction. Investors and shareholders are urged to read the definitive Joint Proxy

Statement/Prospectus (including the Scheme) and other relevant documents filed or to be filed with the SEC carefully because they contain or will

contain

important

information

about

Eaton,

Cooper,

Eaton

Corporation

plc,

the

transaction

and

matters.

Investors

and

security

holders

may

obtain free copies of the definitive Joint Proxy Statement/Prospectus (including the Scheme) and other documents filed with the SEC by Eaton Corporation plc,

Eaton

and

Cooper

through

the

website

maintained

the

SEC

www.sec.gov.

addition,

investors

and

shareholders

may

obtain

free

copies

the

definitive

Joint Proxy Statement/Prospectus (including the Scheme) and other documents filed by Eaton and Eaton Corporation plc with the SEC by contacting Eaton

Investor Relations at Eaton Corporation, 1111 Superior Avenue, Cleveland, OH 44114 or by calling (888) 328-6647, and may obtain free copies of the definitive

Joint Proxy Statement/Prospectus (including the Scheme) and other documents filed by Cooper by contacting Cooper Investor Relations at c/o Cooper US, Inc.,

P.O. Box 4446, Houston, Texas 77210 or by calling (713) 209-8400.

PARTICIPANTS

THE

SOLICITATION

Cooper, Eaton and Eaton Corporation plc and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies

from the respective shareholders of Cooper and Eaton in respect of the transaction contemplated by the Joint Proxy Statement/Prospectus. Information

regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the respective shareholders of Cooper and Eaton in

connection

with

the

proposed

transaction,

including

description

their

direct

indirect

interests,

security

holdings

otherwise,

set

forth

the

definitive

Joint Proxy Statement/Prospectus filed with the SEC. Information

regarding Cooper’s directors and executive officers is contained in Cooper’s Annual Report on

Form 10-K for the year ended December 31, 2011 and its Proxy Statement on Schedule 14A, dated March 13, 2012, which are filed with the SEC. Information

regarding Eaton’s directors and executive officers is contained in Eaton’s Annual Report on Form 10-K for the year ended December 31, 2011 and

its

Proxy

Statement

Schedule

14A,

dated

March

16,

2012,

which

are

filed

with

the

SEC.

STATEMENT

REQUIRED

THE

IRISH

TAKEOVER

RULES

The

directors

Eaton

responsibility

for

the

information

contained

this

communication.

the

best

the

knowledge

and

belief

the directors of Eaton

(who have taken all reasonable care to ensure such is the case),

the information contained in this communication is in accordance with the facts and does not

omit anything likely to affect the import of such information.

Persons interested in 1% or more of any relevant securities in Eaton or Cooper may from the date of this communication have disclosure obligations under Rule

8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2007 (as amended).

(1)

Currently

named

Eaton

Corporation

Limited

but

expected

re-registered

Eaton

Corporation

plc

prior

the

consummation

the

transaction.

Forward Looking Statements

This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning

Eaton, Eaton Global plc, the acquisition and other transactions contemplated by the Transaction Agreement, our acquisition financing, our long-term

credit rating and our revenues and operating earnings. These statements or disclosures may discuss goals, intentions and expectations as to future

trends, plans, events, results of operations or financial condition, or state other information relating to Eaton or Eaton Global plc, based on current

beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally

will

accompanied

words

such

“anticipate,”

“believe,”

“plan,”

“could,”

“estimate,”

“expect,”

“forecast,”

“guidance,”

“intend,”

“may,”

“possible,”

“potential,”

“predict,”

“project”

or other similar words, phrases or expressions. These forward-looking statements are subject to various risks and

uncertainties, many of which are outside of our control. Therefore, you should not place undue reliance on such statements. Factors that could cause

actual

results

differ

materially

from

those

the

forward-looking

statements

include

adverse

regulatory

decisions;

failure

satisfy

other

closing

conditions with respect to the Acquisition; the risks that the new businesses will not be integrated successfully or that we will not realize estimated

cost savings and synergies; our ability to refinance the bridge loan on favorable terms and maintain our current long-term credit rating; unanticipated

changes in the markets for our business segments; unanticipated downturns in business relationships with customers or their purchases from Eaton;

competitive

pressures

our

sales

and

pricing;

increases

the

cost

material,

energy

and

other

production

costs,

unexpected

costs

that

cannot

be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims,

charges, litigation or dispute resolutions; new laws and governmental regulations. The foregoing list of factors is not exhaustive. You should carefully

consider the foregoing factors and the other risks and uncertainties that affect our business described in our Annual Report on Form 10-K, Quarterly

Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the SEC. We do not assume any obligation to

update these forward-looking statements.

No statement in this presentation is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that

earnings

per

will

necessarily

greater

lesser

than

those

for

the

relevant

preceding

financial

periods

for

Eaton.

Eaton Corporation –

A Premier Diversified Power

Management Company

•

A balanced power management company

•

Eaton’s acquisition of Cooper Industries

•

2012 outlook

Eaton provides energy efficient solutions using

electrical, mechanical, and fluid technologies

Cities &

Buildings

Transportation

Industrial &

Machinery

Information

Technology

Energy &

Utilities

Infrastructure

Our products & services deliver reliability, efficiency, and safety for:

…helping to bridge the gap between rapidly rising demand for energy

and naturally constrained sources of supply with sustainable solutions

Hydraulics

Electrical

Aerospace

Truck

Automotive

International Developed

U.S.

International Emerging

Today we have a global footprint across the five

business segments…

2011 Sales by Region

2011 Sales by Business

…and our businesses are balanced across the

economic cycle

$2.2B in Revenues

Electrical Service, Defense,

Filtration, Aerospace Aftermarket

$3.6B in Revenues

Commercial Aerospace,

Nonresidential Construction,

Large Data Centers

$4.7B in Revenues

Hydraulics, Industrial Controls,

Medium Duty Truck,

Mid-sized Data Centers

$5.5B in Revenues

Residential Electric,

Single Phase Power Quality,

Heavy Duty Truck, Automotive

2011 Global Sales by Cycle

34%

29%

23%

14%

20%

40%

60%

80%

100%

2011

EBS embodies the values and processes that bind

the company and have enabled our success

•

Growth

•

Robust strategic planning

process for growth and

profitability

•

Outgrowing end markets

through innovation

•

Identifying higher growth markets

•

Established acquisition strategy

and processes

•

Profitability

•

Operational excellence

•

Global scale

•

Efficient functional support

•

Capital Efficiency

•

Effective working capital

management

•

Capital expenditures

targeted to support

growth

•

Foundation

•

Doing business right

•

Employee development

•

Customer focus

•

Supplier partnerships

A powerful combination of proven

foundation elements, tools, and processes,

EBS is at the heart of our strategy for being

a premier diversified industrial

Executing our strategy has resulted in an

upward shift in profitability

Innovative new products

Margin accretive acquisitions

Leveraging the Eaton Business System

Targeted restructuring

Profitability Drivers

11.9%

12.7%

14.2%

14.5%-15%

10%

15%

20%

25%

2002

-2008

Average

2010

2011

2012E

+ 260 to 310 bps

Cumulative Shareholder Returns

100

150

200

250

300

350

400

450

500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Aug-

Eaton

S&P 500

PDI Group

2000 –

Aug 2012

CAGR*

Return

Index

11.8%

2.5%

6.6%

Note –

DI Group represents an equal weighted index of ABB, DHR, DOV, EMR, GE, HON, IR, ITW, MMM, PH, SI, SPW, TXT, UTX;

*CAGR = Calculated using the End Point Methodology

Source Data: Capital IQ

Our shareholder returns have far outpaced

the broader market

Powerful megatrends will help drive our markets

to grow at a multiple of global GDP

Electrical

Hydraulics

Aerospace

Truck

Automotive

By the numbers:

…Percentage decrease in electricity demand possible

through the application of energy efficient equipment and

demand management services

100

…Percentage increase in agricultural output by 2050

necessary in developing countries to feed the global

population

…Percentage decrease in fuel consumption of next

generation single-aisle aircraft planned by 2020

Source: United Nations, IATA, NHTSA, Eaton analysis

…Percentage decrease in fuel consumption by model year

2018 resulting from the first ever U.S. emissions standards

for heavy-duty trucks

…Percentage increase in proposed Corporate Average Fuel

Economy (CAFE) standards by 2025 for passenger cars

Eaton Corporation –

A Premier Diversified Power

Management Company

•

A balanced power management company

•

Eaton’s acquisition of Cooper Industries

•

2012 outlook

Acquisitions have played a large role in growing

our electrical business

Electrical Group

Acquisitions

Year

Acq’d

Sales

Market Participation

Regional Strength

Power Control

& Distribution

Power

Quality

Lighting &

Safety

Americas

EMEA

Asia-

Pacific

Cutler Hammer

1978

$0.6B

Westinghouse DCBU

1994

$1.0 B

Delta Electrical

2003

$0.3 B

Powerware

2004

$0.8 B

MGE Small Systems

2007

$0.2 B

Moeller

2008

$1.5 B

Phoenixtec

2008

$0.5 B

Cooper

2012

$5.4 B

other

Electrical

acquisitions

since

1990

Transaction overview for Eaton’s acquisition of

Cooper Industries

Combined

company

•

Premier power management company with 2011 sales of $21.5B

•

Under the leadership of Eaton management

•

Named Eaton Corporation Plc and will continue to trade on NYSE as ETN

•

Incorporated in Ireland

Consideration

•

Cooper shareholders will receive $39.15 in cash and 0.77479 ETN Plc

shares, reflecting a 29% equity premium to the closing price on May 18

•

Eaton shareholders will receive 1 ETN Plc share

Financing

•

Fully committed bridge financing in place

Financial

benefits

•

$375M operating synergies, with >80% realized by year 3, and $160M

global

cash

management

and

resultant

tax

benefits

the

mature

year

(1)

•

Significantly accretive to Eaton’s earnings

Timing

•

Expect closing 2

half of 2012

•

Conditional on customary regulatory and shareholder approvals

(1)

The financial benefits statements have been reported on in accordance with the Irish Takeover

Code. Please see the offer announcement dated May 21, 2012 for further details.

Cooper has a wide range of complementary

electrical businesses

•

Cooper Power Systems

•

$1.3 B sales

•

Market leader in

distribution grid

protection

•

Crouse-Hinds

•

$1.0 B sales

•

Global leader in electrical

solutions for harsh and

hazardous environments

•

Safety

•

$600 M sales

•

Leading European

provider of emergency

lighting and video

security

Electrical Products ($2.5 B sales)

•

Lighting

•

$1.1 B sales

•

Strong LED platform

driving growth

•

Bussmann:

•

$650 M sales

•

Global leader in

circuit protection

•

B-Line Support structures

•

$400 M sales

•

Global provider of

structural systems and

wire management solutions

•

Wiring devices

•

$350 M sales

•

Electrical devices for

commercial and residential power distribution

Energy and Safety Solutions ($2.9 B sales)

Adding Cooper expands Eaton’s market

participation

Moving Upstream

Utility power

distribution network

Historic Eaton Core

Facilities

Power Distribution

Moving Downstream

Load management

& lighting control

•

Broad portfolio of complementary products

•

Market segment expansion:

•

Upstream into power solutions encompassing primary and

secondary distribution, grid automation, and smart grid

•

Downstream into lighting, lighting controls, and wiring devices

•

Expands our solutions with all channels

•

Well positioned to address long-term global requirements

•

Aging grid

•

Increased spending on energy & infrastructure

•

Protecting people, equipment and data

The strategic rationale for this acquisition is

compelling -

•

Aligns with our customer segment focus in oil & gas, mining,

energy efficiency and alternative energy

•

Adds breadth to our global geographic exposure

•

Attractive business in EMEA

•

Strong oil & gas industry positioning globally

•

Complementary component and utility business in APAC

•

Offers improved cash management flexibility for the

corporation

The strategic rationale for this acquisition is

compelling -

Our integrated operating company capabilities

(EBS)

will

drive

significant

synergies

(1)

($M)

2013

2014

2015

2016

Pre-tax operating synergies

Sales synergies

115

Cost-out synergies

140

240

260

Total operating synergies

175

310

375

Global cash management and resultant tax benefits

160

Acquisition integration costs, pre-tax

•

$260M in cost out synergies with over 90% complete by 2015

•

$200M in acquisition integration charges with ~80% incurred through 2014

Integration plans

Synergies

(1)

The financial benefits statements have been reported on in accordance with the Irish

Takeover Code. Please see the offer announcement dated May 21, 2012 for further details.

The

acquisition

accretive

earnings

(1)

($)

2013

2014

2015

2016

Operating EPS Accretion

(1)

(0.10)

0.35

0.45

0.55

Cash Operating EPS Accretion

(1,2)

0.40

0.65

0.75

0.85

Accretion

(1)

EPS accretion numbers do not represent a profit forecast as defined in the Irish Takeover Code

(2)

Cash Operating EPS excludes incremental amortization of intangibles arising from purchase

accounting

Eaton Corporation –

A Premier Diversified Power

Management Company

•

A balanced power management company

•

Eaton’s acquisition of Cooper Industries

•

2012 outlook

We project growth of 3% -

4% in our markets in 2012…

2012E

Total

2012E

U.S.

Non

U.S.

Electrical Americas Index

Electrical ROW Index

(3)

n/a

(3)

Hydraulics Index

(1)

Aerospace Index

Truck Index

(4)

Automotive Index

Eaton Consolidated Index

3.5%

(1)%

…leading to another year of record margins

2011

2012E

2015 Target

Electrical Americas

14.6%

16.5%

17%

Electrical ROW

9.4%

9.0%

14%

Hydraulics

15.6%

16.0%

17%

Aerospace

14.8%

15.0%

17%

Truck

18.4%

19.0%

20%

Automotive

12.0%

13%

Eaton Consolidated

14.2%

14.5% -

15.0%

16% -

17%

2012 Guidance

January

Guidance

February

Guidance

April

Guidance

July

Guidance

Market Growth of 3.5%

$800M

$560M

Market Outgrowth of 40%

$320M

$225M

Net Acquisition Revenue

$90M

$315M

$365M

Sales Decrease from FOREX

$(550)M

$(300)M

$(500)M

Incremental Margin

28%

29%

Tax Rate

17% -

19%

17% -

19%

16% -

18%

14% -

16%

Operating EPS

$4.15 -

$4.55

$4.20 -

$4.60

$4.30 -

$4.70

$4.20 -

$4.50

Fully Diluted EPS

$4.10 -

$4.50

$4.13 -

$4.53

$4.23 -

$4.63

$4.09 -

$4.39

Operating Cash Flow

$1.7B to $1.8B

Free Cash Flow

$1.1B to $1.2B

The operating EPS and Fully Diluted EPS guidance provided in July constitute a profit forecast for the purposes of the Irish

Takeover Code and reports on those forecasts as required by the Irish Takeover Code will be mailed to Cooper shareholders

with the joint proxy statement / prospectus.

Our acquisition of Cooper Industries

remains on track

•

Proxy filed with SEC and mailing underway

•

U.S. HSR approval in early July and Canadian

Competition Bureau approval received in

September

•

Revolving finance facilities upsized to $2B, and

$600 million of term debt issued

Eaton Corporation

Reconciliation of Non-GAAP Financial Information

2012

All numbers $M except per share numbers

Reconciliation of net income to operating earnings

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Low

High

Net income from continuing operations

356

626

783

897

959

1,055

383

929

1,350

311

382

Net income from discontinued operations

Net Income

386

648

805

950

994

1,058

383

929

1,350

311

382

Acquisition integration charges (after-tax)

Operating earnings

410

675

829

977

1,036

1,109

437

956

1,360

313

392

Net income per share - diluted

1.28

2.07

2.62

3.11

3.31

3.26

1.14

2.73

3.93

0.91

1.12

4.09

4.39

Per share impact of unusual items (after tax)

0.08

0.07

0.09

0.14

0.16

0.08

0.03

0.01

0.03

0.11

Operating earnings per common share

1.36

2.15

2.69

3.20

3.45

3.42

1.30

2.81

3.96

0.92

1.15

4.20

4.50

Reconciliation of segment operating profit to segment operating profit excluding restructuring charges

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Segment operating profit

763

1,123

1,374

1,468

1,668

1,805

950

1,700

2,260

544

592

Acquisition integration charges (pre-tax)

Segment operating profit excluding restructuring

799

1,164

1,410

1,508

1,732

1,881

1,030

1,740

2,274

547

600

Reconciliation of segment operating margin to segment operating margin excluding restructuring charges

Segment operating margin

9.8%

11.8%

12.7%

12.0%

12.8%

11.7%

8.0%

12.4%

14.1%

13.7%

14.6%

Acquisition integration charges

0.4%

0.3%

0.5%

0.7%

0.3%

0.1%

Segment operating margin excluding restructuring

10.2%

12.2%

13.0%

12.3%

13.3%

12.2%

8.7%

12.7%

14.2%

13.8%

14.7%

Reconciliation of net income margin to after tax operating margin

Net income margin

5.0%

6.8%

7.4%

7.8%

7.6%

6.9%

3.2%

6.8%

8.4%

7.9%

9.4%

Acquisition integration charges

0.3%

0.2%

0.3%

0.5%

0.2%

0.1%

0.2%

After tax operating margin

5.3%

7.1%

7.6%

8.0%

7.9%

7.2%

3.7%

7.0%

8.5%

8.0%

9.6%

2012 Guidance

Reconciliation of net income to EBIT and EBITDA

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Net income from continuing operations

356

626

783

897

959

1,055

383

929

1,350

311

382

Net income from discontinued operations

Net income

386

648

805

950

994

1,058

383

929

1,350

311

382

Income tax

122

133

191

(82)

201

Net interest expense

104

146

157

150

136

118

Other expense (income)

(5)

(27)

(72)

(43)

(30)

(9)

(1)

(38)

EBIT (including acquisition integration)

590

887

1,059

1,194

1,258

442

1,163

1,631

399

457

Depreciation & amortization

394

400

409

434

439

571

573

551

556

140

138

EBITDA (including acquisition integration)

984

1,287

1,468

1,493

1,633

1,829

1,015

1,714

2,187

539

595

Reconciliation of EBIT and EBITDA to EBIT excluding restructuring and EBITDA excluding restructuring

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

EBIT (including acquisition integration)

590

887

1,059

1,194

1,258

442

1,163

1,631

399

457

Acquisition integration charges (pre-tax)

EBIT (excluding restructuring)

627

928

1,095

1,099

1,258

1,335

524

1,203

1,645

402

465

EBITDA (including acquisition integration)

984

1,287

1,468

1,493

1,633

1,829

1,015

1,714

2,187

539

595

Acquisition integration charges (pre-tax)

EBITDA (excluding restructuring)

1,021

1,328

1,504

1,533

1,697

1,906

1,097

1,754

2,201

542

603

Reconciliation of operating cash flow to free cash flow

2003

2004

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Operating cash flow

874

838

1,135

1,431

1,158

1,441

1,408

1,282

1,248

(98)

469

1,700

1,800

Capital expenditures

273

330

363

360

354

448

195

394

568

105

126

600

Free cash flow

601

508

772

1,071

804

993

1,213

888

680

(203)

343

1,100

1,200

2012 Guidance

Reconciliation of Eaton Electrical Americas operating profit to operating profit excluding restructuring

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Electrical operating profit (including restructuring)

448

534

630

518

529

605

162

190

Acquisition integration charges (pre-tax)

Electrical operating profit (excluding restructuring)

450

534

634

522

531

613

163

192

Reconciliation of Eaton Electrical Rest of World operating profit to operating profit excluding restructuring

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Electrical operating profit (including restructuring)

233

107

264

278

Acquisition integration charges (pre-tax)

Electrical operating profit (excluding restructuring)

276

167

297

280

Reconciliation of Eaton Hydraulics operating profit to operating profit excluding restructuring

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Hydraulic operating profit (including restructuring)

153

221

265

285

279

438

109

123

Acquisition integration charges (pre-tax)

Hydraulic operating profit (excluding restructuring)

159

232

277

291

280

442

110

126

Reconciliation of Eaton Aerospace operating profit to operating profit excluding restructuring

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Aerospace operating profit (including restructuring)

157

182

233

283

245

220

244

Acquisition integration charges (pre-tax)

Aerospace operating profit (excluding restructuring)

158

194

272

303

257

224

244

Reconciliation of Eaton Truck operating profit to operating profit excluding restructuring

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Truck operating profit (including restructuring)

453

448

357

315

245

486

116

120

Acquisition integration charges (pre-tax)

Truck operating profit (excluding restructuring)

457

453

357

315

245

486

116

120

Reconciliation of Eaton Automotive operating profit to operating profit excluding restructuring

2005

2006

2007

2008

2009

2010

2011

1Q 2012

2Q 2012

Automotive operating profit (including restructuring)

236

143

234

(10)

163

209

Acquisition integration charges (pre-tax)

Automotive operating profit (excluding restructuring)

240

148

235

(9)

163

209

Methodology for calculations used in the presentations

Return on equity = trailing 4 quarters net income / average trailing 5 quarters shareholder's equity

Return on invested capital = (EBIT - taxes) / average (total debt + equity)

Return on sales = net income / sales

Total return = stock price appreciation + dividend yield

Net debt to total capital = (total debt - cash & equivalents) / (total debt - cash & equivalents + equity)

Cash flow coverage ratio = (pre-tax income + depreciation + amortization + interest expense) / interest expense

Segment net working capital (including acquisitions) = accounts receivable + inventory - accounts payable. All amounts average over the year.

DSO = average of quarterly DSO; quarterly DSO = quarter end accounts receivable / quarter sales * 90 days

DOH = average of quarterly DOH; quarterly DOH = quarter end inventory / quarter COGS * 90 days

DPO = average of quarterly DPO; quarterly DPO = quarter end accounts payable / quarter COGS * 90days

Cash conversion cycle = DSO + DOH - DPO

Free cash flow = cash flow from operations - capital expenditures