Eaton

2023 Annual Report

We make  
  the future work.

Today, the world is in the midst of 

an acceleration in technological 

innovation, and Eaton’s solutions are 

enabling that revolution.

Whether we’re facilitating data center 

expansion, electrifying mobility 

and aviation, or digitalizing power 

management – we make what matters 

work, and we power what matters next.

2

EATON 2023 Annual Report Boldly accelerating the future 
of Eaton and society 

To our shareholders:  
Welcome to the new Eaton – a growth company with expanding margins, a company that 
consistently does what it says, a company that delivers for all of its stakeholders.   

While our journey began more than 100 years ago, the last eight years have been especially 
transformative. And it began by getting the mission of the company right: to improve the quality of 
life and the environment through the work we do as a power management company. It’s true what 
they say, employees want to work for a mission-driven company, and our mission has helped us 

recruit and retain an outstanding team.       

But a great team isn’t enough. You must build a culture that allows your teams to do their 
best work. This has been an important part of how we’ve transformed the company, and 
it begins with high performance standards for everyone. An Eaton leader knows what 
good looks like and isn’t satisfied with the status quo. They also know and embrace 
what’s expected of them – they are ethical, passionate, accountable, transparent, 
efficient and learners.   

This is a landmark moment for our company. Eaton is at the epicenter of society’s 
transition to renewable energy sources. We’re delivering the products and solutions 
the world needs to make our power grid safer and more resilient. We’re enabling the 

electrification of vehicles, airplanes and communities around the globe, and 

developing new digital solutions that help communities produce, store and 
manage power. Our vision of what Eaton can be – and the powerful 
role we can play in the world – has carried us to this point. 

We’re proud of all we’ve achieved. But we’re not satisfied. 

So, in recent months, we’ve been talking to our teams 

across the enterprise about how we intend to accelerate 
our momentum – how we’ll continue to differentiate 
Eaton from our peers while making good on our mission 
and our promises to our stakeholders. And this is what 
we concluded: now is the time to fully embrace the 
opportunities in front of us, to once again raise our 
expectations for what good looks like, to collaborate more, 
and to embrace operational excellence.  

In many ways, we’ve laid the foundation for this next 
phase over the last few years. We’ve invested in 
our facilities to expand our manufacturing capacity, 
positioning Eaton to meet the world’s demand for 
sustainable power management solutions. We’ve made 
solid progress reducing our environmental footprint 
while helping our customers and governments around 
the world do the same. We’ve stayed focused on 
living our values-driven culture and building a team of 
highly engaged employees, while also doing our part to 
contribute to a more inclusive and equitable society. We’ve 
assembled an outstanding leadership team and a deep 
bench to guide our enterprise today, tomorrow and in the 

years to follow.  

3

EATON 2023 Annual Report We’re accelerating our growth.
° 

 We invested in our operations, committing more than $1 
billion in investments to expand our production capacity at 
sites across the enterprise. These capital investments will 
enable Eaton to meet surging global demand for electrical 
solutions that support the energy transition and the 
electrification of vehicles and buildings. These investments 
will also allow us to participate in the growing number of 
mega projects underway in North America. 
 We launched a program to transform supply chain planning 
across the enterprise, a new technology that will allow us 
to modernize how we manage our internal and external 
supply chain, respond to disruptions with agility and speed, 
optimize our inventory levels, reduce our spend on freight, 
and improve on-time delivery to our customers. 
 We established a clear strategy for leveraging AI in our 
functions and operations to strengthen our ability to 
compete in the rapidly evolving digital landscape and bring 
more value to our stakeholders.

° 

° 

We’re accelerating our work to build a 
sustainable society.
° 

 We made steady progress toward achieving our 2030 
targets, certifying 12 Eaton sites zero-waste to landfill 
facilities in the year and bringing us to 79% of our 2030 
goal. We saw 16% of our manufacturing facilities certified 
zero-water discharge sites, exceeding our 2030 target 
by 10% and seven years ahead of plan. We launched our 
new Energy Efficiency Certification program to reduce the 

We’ve assembled 
an outstanding 
leadership team 
and a deep bench to 
guide our enterprise 
today, tomorrow and 
in the years to follow.

We’ve continued to transform our operations to be in the right 
markets and to better serve our customers. And we’ve delivered 
outstanding financial results for our investors, including record 
earnings and industry-leading total shareholder returns. 

The following recent highlights show the progress we’ve made 
and how we’re investing for the next phase of our transformation: 

We’re accelerating our impact through our  
financial results.
° 

 For the full year, 2023 sales were a record $23.2 billion, 
up 12% from 2022 and driven entirely by organic  
sales growth.
 Earnings per share for 2023 were a record $8.02. 
Excluding charges of $0.89 per share related to intangible 
amortization, $0.11 per share related to a multi-year 
restructuring program, and $0.10 per share related to 
acquisitions and divestitures, adjusted earnings per share 
were a record $9.12, up 20% over 2022.
 Segment margins of 22.0% for 2023 were a record and at 
the high end of our latest guidance range. 
 Operating cash flow for 2023 was $3.6 billion and free cash 
flow was $2.9 billion, both records and up 43% and 48%, 
respectively, over the same period in 2022.1

° 

° 
° 

While we delivered strong financial performance and met our 
commitments, we will not grow complacent. We’re continuing to 
position Eaton for sustained growth and better efficiency, and we 
expect to deliver strong shareholder returns for years to come.

From left: Paulo Ruiz, President and Chief Operating Officer, Industrial Sector;  
Heath B. Monesmith, President and Chief Operating Officer, Electrical Sector;  
Olivier Leonetti, Executive Vice President and Chief Financial Officer

4

EATON 2023 Annual Report 

 
° 

carbon emissions generated at all our plants and granted the first certification to our 
facility in Riom, France.
 We collaborated with governments to broaden their impact on the energy transition, 
working with U.S. state and federal officials to establish future-proof clean energy 
infrastructure programs, modernize the power grid, and enable the electrification of 
homes. In Europe, we were part of the effort to phase out use of one of the most 
harmful greenhouse gases, SF6, a move that will help the EU reach its emissions 
reduction target of at least 55% by 2030 and become climate neutral by 2050.

We’re accelerating our commitments to our people.
° 

 We welcomed Olivier Leonetti as our new EVP and Chief Financial Officer in early 
2024, further strengthening our team of senior leaders who lead by our values and 
share our commitment to operational excellence. 
 We maintained our focus on keeping our teams safe, exceeding both our total 
recordable case rate and severe injury goals, delivering decreases of 7% and 12%, 
respectively, over 2022. 
 We continued to improve the employee experience at Eaton, as shown in the results 
of our global employee survey. We picked up a 7% increase in participation over 2021 
and saw an increase in engagement across the company – now at 84%, exceeding 
our 2030 goal of 80% – and an increase in inclusion, now at 77% and reflecting solid 
progress toward our 2030 target of 80%. 
 We deepened our commitment to our ethical culture, launching our updated Code of 
Ethics, which we revamped to better respond to the shifting ethical concerns of our 
teams, and published our annual Ethics and Compliance Integrity Report. 
 We developed a new community impact and charitable giving strategy to enable 
Eaton to intensify the impact of our support around the world, and continued to 
support communities in crisis, including those devastated by the Turkey-Syria and 
Morocco earthquakes and the Maui wildfires. 

° 

° 

° 

° 

We’re accelerating our path forward.
As we look to the future, we know we’re at the very beginning of what we expect will be 
a historic growth period for the company. The powerful megatrends of energy transition, 
electrification and digitalization, new regulations to protect the environment, infrastructure 
spending and reindustrialization will drive increasingly higher growth to our end markets. 

Inside of Eaton, we’ll stay focused on improving the way we run our company to expand 
our margins, strengthening our operational execution and leveraging our scale to reduce 
costs. This will allow us to invest in our company like never before – in training and 
developing our people, in expanding our facilities, in new technology, and in new digital 
solutions to strengthen connectivity around the world. Our best days are still to come – 
and there has never been a better time to be an investor in Eaton.

In closing
At Eaton, our goal is to set ourselves apart from our peers. To be the best. And we know 
that being the best requires humility – understanding that “better” does exist, and it’s our 
job to find it, every day. This is how we’ll build the future of our company and ensure that 
Eaton remains one of your best investments. This is how we’ll power the world forward 
during one of the most significant transitions that society has known. And with your 
sustained confidence in our company and our people, we’ll continue to accelerate our 
impact on the world, and build a more electrified, sustainable society for all. 

7%

decrease in total 
recordable case rate

84%

engagement rate in  
global employee survey

More than

$1B

committed in investments  
to expand our  
production capacity 

Craig Arnold
Chairman & CEO

1 In 2023, free cash flow of $2.9 billion was operating cash flow of $3.6 billion, less capital expenditures of $0.8 billion.  
In 2022, free cash flow of $1.9 billion was operating cash flow of $2.5 billion, less capital expenditures of $0.6 billion.

EATON 2023 Annual Report 

5

In 2023, Eaton celebrated 100 years on the New York Stock Exchange. Members of Eaton’s senior leadership team commemorated this historic milestone by ringing the 
opening bell on March 7, 2023. Photo credit NYSE.

$9.12

Adjusted earnings per
ordinary share
(Dollars per share)

$3.44

$3.6

Dividends per ordinary share  
(Dollars per share)

Cash flow from operations
(Billions of dollars)

12%

Organic sales growth

$23.2

Net sales
(Billions of dollars)

Company stock performance

Net income per share attributable to  
Eaton ordinary shareholders – diluted

$8.02 

$6.14 

$5.34

  2023 

2022 

2021

Adjustments

Acquisition and divestiture charges

Restructuring program charges

Intangible asset amortization expense

0.10 

0.11 

0.89 

0.37 

0.07 

0.99 

0.23

0.15

0.90

Adjusted earnings per ordinary share

  $9.12 

$7.57 

$6.62

Eaton

S&P 500 Index

S&P 500 Industrials Index

$ 4 0 0

$ 3 5 0

$ 3 0 0

$ 2 5 0

$ 2 0 0

$ 1 5 0

$ 10 0 

$ 5 0    

$ 0

2 019

2 0 2 0

2 0 2 1

2 0 2 2

2 0 2 3

This graph compares the cumulative total return to shareholders for Eaton, the S&P 500 Index and the S&P 500 Industrials Index. The shareholder returns reflected on the graph assume dividends 

were reinvested as of the ex-dividend date. Source: Bloomberg

6

EATON 2023 Annual Report  
 
 
 
 
 
 
 
 
 
Making the future work – sustainably. 

At Eaton, we stand firm in our commitment to hold 
sustainability at the core of everything we do. Extracting 
the most out of materials and resources, running 
equipment at peak efficiency, leveraging renewable energy 
to power our facilities – it’s not just the right thing to do, 
it’s also smart business. And it’s this focus that drives us 
to create new solutions so our customers can also work 
smarter, more efficiently and more sustainably.  

At Eaton, we’re supplying products and technology for 
a rapidly changing world that requires smarter, more 
efficient, and more sustainable power management 
solutions. We’re helping to advance the world’s transition 
from fossil fuels to renewable sources of energy. Our 
solutions are accelerating the electrification of vehicles, 
airplanes, buildings, and communities, and enabling 
our customers to achieve their ambitious sustainability 
goals. We’re meeting the exponential growth in society’s 

demand for software, data and intelligent insights with 
our digital solutions. And internally, we’re doing our  
part to reduce greenhouse gas emissions, in line with 
climate science. 

Our collective future depends on this critical work. And we 
know that no one person or single company can advance 
sustainability initiatives alone. It will take a cultural shift 
of awareness, inclusion and engagement from all of us to 
get it done. That is why we’re doing our part by prioritizing 
building an environment where people learn, grow and feel 
passionate about the work they do, while operating with 
the highest standards of ethics and integrity. 

This foundation powers us to make a sustainable future 
work – and allows us to deliver on our commitments while 
keeping our promise to improve the lives of people today 
and the generations that follow. 

We’ve made significant progress in achieving our 2030 Sustainability Targets.  
In our latest Sustainability Report, we reported:

$900M

71%

27%

invested in research and 
development for products 
and solutions aligned with our 
Positive Impact Framework 

of net sales from solutions 
that enable a more 
sustainable future

reduction in our 
greenhouse gas emissions 
since 2018 

7

EATON 2023 Annual Report Shareholder information (This content was not included in our 10-K SEC filing.)
Annual general meeting of shareholders
The company’s 2024 Annual General Meeting of Shareholders will be held at 9:00 a.m., Dublin time, on Wednesday, April 24, 2024, 
at Eaton House, 30 Pembroke Road, Dublin 4, Ireland. Formal notice of the meeting will be made available on or about March 15, 
2024, to each shareholder of record as of February 26, 2024.

Most Eaton shareholders will not receive a mailed copy of the Proxy Statement and Annual Report to Shareholders, but rather a  
notice that these materials are available online. Eaton shareholders who currently receive paper copies, due to a prior election or due  
to participation in an employee benefit plan, can register for electronic delivery of these materials as well as online proxy voting,  
at http://enroll.icsdelivery.com/etn. 

Annual report to shareholders 
This 2023 Annual Report to Shareholders is available online at Eaton.com. Any shareholder may obtain at no charge a printed copy of  
this Annual Report upon written request to the address shown below. Other public financial reports are also available on Eaton’s 
website at Eaton.com.

Annual certifications 
The most recent certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 were filed as Exhibits 31.1, 31.2, 
32.1 and 32.2 to Eaton’s Annual Report on Form 10-K for 2023. Additionally, Eaton submitted to the New York Stock Exchange its 2023 
Chief Executive Officer Certification regarding Eaton’s compliance with the corporate governance listing standards of the Exchange. 

Dividend reinvestment plan 
Our dividend reinvestment plan is available to shareholders of record of Eaton Ordinary Shares. Through the plan, shareholders of 
record may buy additional shares by reinvesting their cash dividends. Shareholders should refer to the Eaton DRIP Prospectus for 
more information and associated fees.  

Direct deposit of dividends 
Shareholders of record may have their dividends directly deposited into their bank accounts. Interested shareholders of record should 
contact Broadridge, as shown below. 

Forward-looking statements 
This Annual Report to Shareholders, including the Chairman’s letter, contains forward-looking statements concerning expectations 
for the future and our corporate strategy, in addition to the forward-looking statements made in the Form 10-K included in this Annual 
Report. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside 
of Eaton’s control. Please see the factors described in the paragraph under the heading “Forward-Looking Statements” on page 95 
of the Form 10-K included in this Annual Report to Shareholders for a discussion of the factors that could cause actual results to differ 
materially from these forward-looking statements. 

Broadridge Corporate Issuer Solutions
Regular Mail: P.O. Box 1342, Brentwood, NY 11717
Registered/Overnight Packages: ATTN: IWS, 1155 Long Island Ave., Edgewood, NY 11717  
Phone: +1 888.597.8625 (U.S. & Canada) +1 303.562.9631 (Toll)
TDD: +1 855.627.5080 (hearing impaired inside the U.S.)  |  TDD: +1 720.399.2074 (hearing impaired outside the U.S.)
Email: shareholder@broadridge.com  |  Website: https://shareholder.broadridge.com/eaton-corp/

Eaton shareholder contact information 
Investor Relations, Eaton, 1000 Eaton Boulevard, Cleveland, OH 44122 USA +1 440.523.3634. Eaton.com

Quarterly financial releases 
Eaton’s financial results are available approximately four weeks after the end of each quarter.  
Releases are available on Eaton’s website at Eaton.com. Copies may also be obtained by calling +1 440.523.3634. 

Common shares 
Listed for trading: New York Stock Exchange (Ticker Symbol: ETN) 

8

EATON 2023 Annual Report    
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K 

Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the year ended December 31, 2023 

Commission file number 000-54863 

EATON CORPORATION plc

(Exact name of registrant as specified in its charter)

Ireland
(State or other jurisdiction of incorporation or organization)

98-1059235
(IRS Employer Identification Number)

Eaton House,  30 Pembroke Road, Dublin 4, Ireland

(Address of principal executive offices)

D04 Y0C2
(Zip Code)

+353 1637 2900

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Ordinary shares ($0.01 par value)

Trading Symbol
ETN

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.            Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.        Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and 
(2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to 
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was 
required to submit such files).      Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting 
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting 
company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Smaller reporting company

☑  
☐  

Accelerated filer

Emerging growth company

☐  
☐  

Non-accelerated filer 

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for 
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of 
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public 
accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant 
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based 
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of Ordinary Shares held by non-affiliates of the registrant as of June 30, 2023 was $80.2 billion.
As of January 31, 2024, there were 399.5 million Ordinary Shares outstanding.

Portions of the Proxy Statement for the 2024 annual shareholders meeting are incorporated by reference into Part III.

Documents Incorporated By Reference

Part I

Item 1.

Item 1A.

Item 1B.

Item 1C. 

Item 2.

Item 3.

Item 4.

Item 4A.

Part II

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Item 9B.
Item 9C.

Part III

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Part IV

Item 15.

Item 16.

TABLE OF CONTENTS

Business   ..................................................................................................................................................................................................

Risk Factors  ............................................................................................................................................................................................

Unresolved Staff Comments    ..................................................................................................................................................................

Cybersecurity   ..........................................................................................................................................................................................

Properties    ................................................................................................................................................................................................

Legal Proceedings     ..................................................................................................................................................................................

Mine Safety Disclosures    .........................................................................................................................................................................

Information about our Executive Officers   ..............................................................................................................................................

Market for the Registrant's Ordinary Equity, Related Stockholder Matters and Issuer 
Purchases of Equity Securities   ...............................................................................................................................................................

[Reserved]  ..............................................................................................................................................................................................

Management's Discussion and Analysis of Financial Condition and Results of Operations   .................................................................

Quantitative and Qualitative Disclosures about Market Risk     ................................................................................................................

Financial Statements and Supplementary Data      ......................................................................................................................................

Change in and Disagreements with Accountants on Accounting and Financial Disclosure    ..................................................................

Controls and Procedures   .........................................................................................................................................................................

Other Information    ...................................................................................................................................................................................
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.   ..................................................................................................

Directors, Executive Officers and Corporate Governance      .....................................................................................................................

Executive Compensation   ........................................................................................................................................................................

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   ..............................................

Certain Relationships and Related Transactions, and Director Independence   .......................................................................................

Principal Accounting Fees and Services    ................................................................................................................................................

Exhibits, Financial Statement Schedules  ................................................................................................................................................

Form 10-K Summary    ..............................................................................................................................................................................

SIGNATURES     ....................................................................................................................................................................................................................

2

2

5

7

8

8

8

8

9

10

10

10

10

10

10

10

11

11
11

12

12

12

12

12

12

13

13

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Part I

Item 1. Business.

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to protecting the 
environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, 
commercial, machine building, residential, aerospace and mobility markets. We are well positioned to capitalize on the 
megatrends of electrification, energy transition and digitalization. The reindustrialization of North America and Europe, growth 
in North American megaprojects, and increased global infrastructure spending focused on clean energy programs are expanding 
our end markets and positioning Eaton for growth for years to come. We are strengthening our participation across the entire 
electrical power value chain and benefiting from momentum in the data center and utility end markets as well as a growth cycle 
in the commercial aerospace and defense markets. We are guided by our commitment to operate sustainably and with the 
highest ethical standards. Our work is accelerating the planet’s transition to renewable energy sources, helping to solve the 
world’s most urgent power management challenges, and building a more sustainable society for people today and for future 
generations.

Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century. We reported 

revenues of $23.2 billion in 2023 and serve customers in more than 160 countries.

Eaton electronically files or furnishes reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 
(Exchange Act) to the United States Securities and Exchange Commission (SEC), including annual reports on Form 10-K, 
quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy and information statements, as well as any 
amendments to those reports. As soon as reasonably practicable, these reports are available free of charge through the 
Company's website at www.eaton.com. These filings are also accessible on the SEC's website at www.sec.gov.

Acquisitions and Divestitures of Businesses

Information regarding the Company's acquisitions and divestitures is presented in Note 2 of the Notes to the consolidated 

financial statements.

Business Segment Information

Information by business segment regarding principal products, principal markets, methods of distribution and net sales is 
presented in Note 18 of the Notes to the consolidated financial statements. Additional information regarding Eaton's segments 
and business is presented below.

Electrical Americas and Electrical Global

Principal methods of competition in these segments are performance of products and systems, technology, customer service 

and support, and price. Eaton has a strong competitive position in these segments and, with respect to many products, is 
considered among the market leaders. In normal economic cycles, sales of these segments are historically lower in the first 
quarter and higher in the third and fourth quarters of a year. In 2023, 25% of these segments' sales were made to seven large 
customers of electrical products and electrical systems and services.

Aerospace

Principal methods of competition in this segment are total cost of ownership, product and system performance, quality, 

design engineering capabilities, and timely delivery. Eaton has a strong competitive position in this segment and, with respect to 
many products and platforms, is considered among the market leaders. In 2023, 21% of this segment's sales were made to three 
large original equipment manufacturers of aircraft.

Vehicle

Principal methods of competition in this segment are product performance, technology, global service, and price. Eaton has 

a strong competitive position in this segment and, with respect to many products, is considered among the market leaders. In 
2023, 33% of this segment's sales were made to three large original equipment manufacturers of vehicles and related 
components.

eMobility

Principal methods of competition in this segment are product performance, technology, global service, and price. Eaton has 
a strong competitive position in this segment. In 2023, 14% of this segment's sales were made to three large original equipment 
manufacturers of vehicles, construction equipment and related components.

2

Hydraulics

On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S, a Danish industrial company. Prior 

to the sale, the Hydraulics business was a reportable operating segment. 

Information Concerning Eaton's Business in General 

Raw Materials

Eaton's major requirements for raw materials include iron, steel, copper, nickel, aluminum, lead, silver, gold, titanium, 
rubber, plastic, electronic components, chemicals, and fluids. Materials are purchased in various forms, such as coils, sheets, 
strips, ingots, bars, extrusions, castings, forgings, stampings, powder metal, plastic resins, and pellets. Raw materials, as well as 
parts and other components, are purchased from many suppliers. Under normal circumstances, the Company has no difficulty 
obtaining its raw materials. However, as global economies continued to recover from the COVID-19 pandemic and supply 
chains adjusted to the Russia Ukraine war, some of our businesses were impacted by inflation and supply chain constraints, 
including limited availability of select materials and delivery delays. During this time, we worked closely with our suppliers to 
manage and minimize the impact on our supply chain.

Patents and Trademarks

Eaton considers its intellectual property, including without limitation patents, trade names, domain names, trademarks, 
confidential information, and trade secrets to be of significant value to its business as a whole. The Company's products may be 
manufactured, marketed and sold using a portfolio of patents, trademarks, licenses, and other forms of intellectual property, 
some of which expire in the future. Eaton develops and acquires new intellectual property on an ongoing basis and considers all 
of its intellectual property to be valuable. Based on the broad scope of the Company's product lines, management believes that 
the loss or expiration of any single intellectual property right would not have a material effect on Eaton's consolidated financial 
statements or its business segments. The Company's policy is to file applications and obtain patents for the majority of its novel 
and innovative new products including product modifications and improvements.

Environmental Contingencies

Our comprehensive sustainability strategy is driven by our mission to improve the quality of life and the environment. We 

are committed to reducing our footprint, eliminating waste, and making the best use of natural resources. Operations of the 
Company involve the use and disposal of certain substances regulated under environmental protection laws. Eaton continues to 
modify processes on an ongoing, regular basis in order to reduce the impact on the environment, including the reduction or 
elimination of certain chemicals used in, and wastes generated from, operations. Compliance with laws that have been enacted 
or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the 
environment, are not expected to have a material adverse effect upon capital expenditures, including expenditures for 
environmental control facilities, earnings or the competitive position of the Company. Compliance with future environmental 
protection laws may require an increase in capital expenditures. Information regarding the Company's liabilities related to 
environmental matters is presented in Note 11 of the Notes to the consolidated financial statements.

Human Capital Management

Eaton has approximately 94,000 employees globally. The number of persons employed by our reportable segments and 

corporate at December 31, 2023 are as follows:

(In thousands)

Electrical Americas

Electrical Global

Aerospace

Vehicle

eMobility

Corporate

Total number of persons employed 

2023

32 

26 

14 

12 

2 

8 

94 

3

 
 
 
 
 
 
 
Eaton uses and monitors a variety of metrics to ensure our objectives related to employee attraction, development, and 

retention are met. Most notably, Eaton tracks the following:

Inclusion and Diversity

Eaton is committed to having a workforce that is diverse and inclusive at all levels, reflecting the diversity of our customers 

and communities. Our success depends on our ability to attract and retain the best employees without regard to race, color, 
social or economic status, religion, national origin, marital status, age, veteran status, sexual orientation, gender identity, or any 
protected status. It is the policy of the Company to make all decisions regarding employment based on the principle of equal 
employment opportunity and without discrimination. 

At December 31, 2023, Eaton’s distribution by gender, and United States distribution by minority status, is as follows: 

Total 
Global

Number 
of women
(Global)

Percentage 
of women
(Global)

10 

25 

671 

8,754 

3 

4 

161 

2,192 

84,331 

  29,794 

93,781 

  32,151 

 30.0 %

 16.0 %

 24.0 %

 25.0 %

 35.3 %

 34.3 %

Number of 
minorities 
(U.S. only)1
4 

11 

102 

984 

8,658 

9,755 

U.S. total

8 

23 

480 

4,568 

23,668 

28,739 

Percentage of 
minorities 
(U.S. only)1

 50.0 %

 47.8 %

 21.3 %

 21.5 %

 36.6 %

 33.9 %

Board of directors

Global leadership team

Executives

Managers

All other employees

All employees
1 Excluding Puerto Rico

At Eaton, one of our aspirational goals is to be a model of inclusion and diversity among our peers. Our plan to achieve this 

goal encompasses a number of actions, including an examination into our programs, practices, processes, and policies to look 
for opportunities to strengthen our support of underrepresented individuals, groups and businesses across our operations. 

Compensation

A key component of Eaton’s attraction and retention strategy is competitive compensation. Eaton regularly benchmarks its 

compensation practices with industry peers to maintain a top performing workforce. Eaton’s 2023 total employee costs was 
$6.1 billion including salaries, wages, equity-based compensation, pension and other benefits. The total compensation of our 
median employee on October 1, 2022, as reported in our 2023 Proxy Statement filed on March 17, 2023, and as calculated in 
accordance with Item 402(u) of Regulation S-K, was $59,064.

Safety

Throughout our operations, our goal is to have no safety incidents and we continue to make progress towards that goal. Our 
2022 Total Recordable Case Rate (TRCR) was 0.40 and our Days Away Case Rate (DACR) was 0.16. We have improved our 
TRCR 38% since 2018 and consider our 2030 target of 0.25 to be a world-leading safety rating. Our 2023 TRCR will be 
provided in our annual Sustainability Report to be issued in 2024.

Achieving work-life balance

Achieving work-life balance is a common concern of today's employees. Flexible work solutions and inclusive programs 
will help us remain competitive in attracting and retaining the best talent and make it possible for employees in varied situations 
to be able to remain at Eaton. Flexible solutions include compressed work weeks, remote working, job sharing, part-time work, 
flextime, and telework. 

Engagement

Fully engaged employees are more productive, innovative, and satisfied in their work. Examples of how we engage our 
employees include enterprise-wide town halls, hosting informal listening meetings and surveying groups of employees on 
specific subjects. In addition, we have programs focused on career development of employees at all levels and we are 
committed to a wide range of strategies designed to improve and sustain employee engagement over the long-term. Our most 
recent engagement survey of all employees was completed in 2023. Of those who responded to the survey, 84% had favorable 
engagement indicating they were proud to work at Eaton, felt personal accomplishment from their work, and would recommend 
Eaton as a place to work. We plan to perform another survey of all employees in 2025. 

4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 1A. Risk Factors.

Among the risks that could materially adversely affect Eaton's businesses, financial condition or results of operations are the 

following:

Operational Risks

Impacts related to, and recovery from, the COVID-19 pandemic could have an adverse effect on our business and results of 
operations.

The global outbreak of COVID-19 disrupted economic activity around the world. As a result, we and our employees, 

suppliers, customers and others were, at times, restricted or prevented from conducting normal business activities, as a result of 
shutdowns, travel restrictions and other actions that were requested or mandated by governmental authorities. These impacts 
were partially mitigated for us, given that a substantial portion of our businesses and facilities were classified as essential in 
jurisdictions in which facility closures were mandated, and most of these disruptions have subsided. Nonetheless, we can give 
no assurance that there will not be additional closures in the future or that our businesses and facilities will be classified as 
essential in each of the jurisdictions in which we operate, should future outbreaks and/or additional strains of the virus impact 
global economic activity. Further, the pandemic has, and could further disrupt our supply chain. The duration of and extent to 
which the COVID-19 pandemic continues to impact our results of operations and financial condition will depend on future 
developments that are highly uncertain and cannot be predicted. The impact of COVID-19 may also continue to exacerbate 
other risks discussed in Item 1A of this Annual Report on Form 10-K, any of which could have a material effect on our results 
of operations.

If Eaton is unable to protect its information technology infrastructure against service interruptions, data corruption, cyber-
based attacks or network security breaches, product or service offerings could be compromised or operations could be 
disrupted or data confidentiality impaired.

Eaton relies on information technology networks and systems, including the Internet, to process, transmit and store 
electronic information, and to manage or support a variety of business processes and activities, including procurement, 
manufacturing, distribution, invoicing and collection. Additionally, many of our products and services include integrated 
software and information technology that collects data or connects to external and internal systems. Because of this, 
cybersecurity threats pose a material risk to our business operations.

Global cybersecurity threats range from widespread vulnerabilities, sophisticated and targeted measures known as advanced 

persistent threats, or uncoordinated individual attempts to gain unauthorized access to IT/OT systems. These threats may be 
directed at Eaton, its products, software embedded in Eaton’s products, or its third-party service providers. The risk is amplified 
by the increasingly connected nature of our products and systems. These threats may originate from anywhere in the connected 
world and take the form of phishing, malware, bots, or human-centric attacks. Eaton continually seeks to deploy comprehensive 
measures to deter, prevent, detect, respond to and mitigate these threats. 

As a result of our worldwide operations, we are subject to laws and regulations, including data protection/privacy and 

cybersecurity laws and regulations, in many jurisdictions. In addition, we operate in an environment in which there are different 
and potentially conflicting data privacy laws in effect in the various U.S. states and foreign jurisdictions in which we operate 
and we must understand and comply with each law and standard in each of these jurisdictions while ensuring the data is secure. 
For example, the Global Data Protection Regulation (GDPR) prefers that we manage personal data in the E.U. and may impose 
fines of up to four percent of our global revenue in the event of certain violations.

Eaton’s customers, including Governmental Agencies, are increasingly requiring cybersecurity protections and mandating 
cybersecurity standards which may result in additional operating or production costs. Our cybersecurity program aligns with 
well-known industry-wide security control frameworks. Despite these efforts, cybersecurity incidents could potentially result in 
the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information and 
the disruption of business operations. The potential consequences of a material cybersecurity incident include theft of 
intellectual property, disruption of operations, reputational damage, adverse health and safety consequences, the loss or misuse 
of confidential information, product failure, as well as exposure to fines, legal claims or enforcement actions.

The effects of climate change, including weather disruptions and regulatory/market reactions, create uncertainties that 
could negatively impact our business.

Global increases in greenhouse gas emissions are linked to climate change, and there is a growing consensus that dramatic 
emissions reductions are needed to avoid severe climate impacts. Extreme weather events linked to climate change, including 
hurricanes, flooding, wildfires, and high heat/water scarcity, create physical risks to Eaton’s operating locations and supply 
chains. While Eaton is working to make its own operations carbon neutral by 2030, a global failure to achieve commitments 
could cause increases in these extreme weather events, political instability, and workforce migration, ultimately increasing 
Eaton’s cost of doing business. 

5

Regulatory reactions to climate change may pose more stringent obligations on Eaton’s operations and change customer 
demands. While Eaton is already gearing its portfolio towards products that will reduce carbon and combat climate change, 
there is a risk that Eaton may not innovate quickly enough to meet changing regulatory or market demands. Increasing demands 
for metals as the world electrifies may lead to scarcity and increased costs, as may uncertainty over carbon taxes and grid 
stability during a renewables transition. Despite these uncertainties, we believe Eaton is well positioned to capitalize on secular 
trends and market opportunities arising from these risks.

Eaton's operations depend on production facilities throughout the world, which subjects them to varying degrees of risk of 
disrupted production.

Eaton manages businesses with manufacturing facilities worldwide. The Company's manufacturing facilities and operations 
could be disrupted by a natural disaster, labor strike, war, political unrest, terrorist activity, economic upheaval, or public health 
concerns such as the spread of COVID-19. Any such disruption could cause delays in shipments of products and the loss of 
sales and customers, and insurance proceeds may not adequately compensate for losses.

Eaton uses a variety of raw materials, components and services in its businesses, and significant inflation could increase 
operating costs that may not be fully recouped in product pricing.

Eaton's major requirements for raw materials are described above in Item 1 Raw Materials. Global shortages have continued 

to affect the prices Eaton's businesses are charged for raw materials, particularly commodities. Further, Eaton has been 
impacted by logistics and wage inflation. If this trend continues and we are unable to fully recoup these price increases in 
product pricing, the competitive position of our products and services may be impacted, which could have a material adverse 
impact on operating results.

Further, some of Eaton's suppliers of component parts have increased their prices in response to increased costs of raw 
materials that they use to manufacture component parts. Should this trend continue or become more prevalent, the Company 
may not be able to increase its prices commensurately with its increased costs, adversely affecting operating results.

Significant shortages of raw materials, energy, components, and/or labor, or similar challenges for our customers could 
continue to adversely impact our results of operations.

Eaton has been impacted by supply chain disruptions. Further, labor shortages persist broadly in select markets. Some of our 
suppliers have experienced the same conditions and in response, have continued to increase their prices in response to increases 
in their costs of raw materials, energy and/or labor. While we strive to recoup these increased costs through our pricing, if we 
are unable to do so without compromising the competitive position of our products and services, our results could continue to 
be impacted by this trend. Further, should these trends continue or worsen, the impact could have a material adverse impact on 
our operating results.

Industry and Market Risks

Volatility of end markets that Eaton serves. 

Eaton's segment revenues, operating results, and profitability have varied in the past and may vary from quarter to quarter in 

the future. Profitability can be negatively impacted by volatility in the end markets that Eaton serves. The Company has 
undertaken measures to reduce the impact of this volatility through diversification of the markets it serves and expansion of the 
geographic regions in which it operates. Future downturns in any of the markets could adversely affect revenues, operating 
results, and profitability.

Eaton's operating results depend in part on continued successful research, development, and marketing of new and/or 
improved products and services, and there can be no assurance that Eaton will continue to successfully introduce new 
products and services or maintain its present market positions.

The success of new and improved products and services depends on their initial and continued acceptance by Eaton's 
customers. The Company's businesses are affected, to varying degrees, by technological change and corresponding shifts in 
customer demand, which could result in unpredictable product transitions or shortened life cycles. Eaton may experience 
difficulties or delays in the research, development, production, or marketing of new products and services which may prevent 
Eaton from recouping or realizing a return on the investments required to bring new products and services to market. The 
Company's market positions may also be impacted by new entrants into Eaton's product or regional markets.

6

Legal and Regulatory Risks

Eaton's global operations subject it to economic risk as Eaton's results of operations may be adversely affected by changes 
in government legislation, regulations and policies, or currency fluctuations.

Operating globally subjects Eaton to changes in government regulations and policies in a large number of jurisdictions 
around the world, including those related to tariffs and trade barriers, investments, property ownership rights, taxation, data 
privacy, and exchange controls. Changes in the relative values of currencies occur from time to time and could affect Eaton's 
operating results. While the Company monitors exchange rate exposures and attempts to reduce these exposures through 
hedging activities, these risks could adversely affect operating results.

Further, existing free trade laws and regulations provide certain beneficial duties and tariffs for qualifying imports and 
exports, subject to compliance with applicable classification and other requirements. Changes in laws or policies governing the 
terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we 
manufacture products, could have an impact on our business and financial results.

Eaton may be subject to risks relating to changes in its tax rates, changes in global tax laws and regulations, or exposure to 
additional income tax liabilities.

Eaton is subject to income taxes in many jurisdictions around the world. Income tax liabilities are subject to the allocation of 

income among various tax jurisdictions. The Company's effective tax rate could be affected materially by changes in the mix 
among earnings in countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, or 
changes in tax legislation, regulations, and policies. The amount of income taxes paid is subject to ongoing audits by tax 
authorities in the countries in which Eaton operates. If these audits result in assessments different from amounts reserved, future 
financial results may include material unfavorable adjustments to the Company's tax liabilities.

Eaton may be unable to adequately protect its intellectual property rights, which could affect the Company's ability to 
compete.

Protecting Eaton's intellectual property rights is critical to its ability to compete and succeed. The Company owns a large 
number of patents and patent applications worldwide, as well as trademark and copyright registrations that are necessary, and 
contribute significantly, to the preservation of Eaton's competitive position in various markets. Although management believes 
that the loss or expiration of any single intellectual property right would not have a material effect on the results of operations 
or financial position of Eaton or its business segments, there can be no assurance that any one, or more, of these patents and 
other intellectual property will not be challenged, invalidated, or circumvented by third parties. Eaton enters into confidentiality 
and invention assignment agreements with the Company's employees, and into non-disclosure agreements with suppliers and 
appropriate customers, so as to limit access to and disclosure of proprietary information. These measures may not suffice to 
deter misappropriation or independent third party development of similar technologies. 

Eaton is subject to litigation and environmental regulations that could adversely impact Eaton's businesses.

At any given time, Eaton may be subject to litigation, the disposition of which may have a material adverse effect on the 
Company's businesses, financial condition or results of operations. Information regarding current legal proceedings is presented 
in Note 11 and Note 12 of the Notes to the consolidated financial statements.

Item 1B. Unresolved Staff Comments. 

None.

7

Item 1C. Cybersecurity.

Risk Management and Strategy.

Eaton follows the U.S. National Institute of Standards and Technology (NIST) Cyber Security Framework to structure 
protocols for identifying, assessing and managing cybersecurity risks. In accordance with NIST guidance, Eaton maintains 
documented information security policies and standards to protect operations, assets, data and services and to defend against, 
respond to and recover from potential cyberattacks. These policies and standards include both preventive measures and reactive 
processes. Preventive measures include, but are not limited to, protective and detective cybersecurity systems, security 
monitoring, threat hunting and mandatory, enterprise-wide employee training. Eaton’s reactive processes are captured primarily 
by a cyber incident response plan (the IRP), which is comprised of an evolving set of procedures developed by cross-functional 
experts, and external consultants, who draw upon technical proficiency and learnings from past experiences. All of these 
procedures and practices are tailored to Eaton’s technology environment and are refined iteratively. Further, Eaton has an 
information risk management program that includes a vendor risk assessment process, whereby Eaton systematically oversees 
and identifies risks from cybersecurity threats related to its use of third-party service providers.

The IRP is executed by an Incident Response Team (IRT), led by our Chief Information Security Officer (CISO). The exact 

composition of the IRT varies depending on the severity and potential impact of an incident, and will typically include 
stakeholders across corporate and business functions. The team collaborates with internal experts and may engage external 
resources to assess and contain a threat if deemed necessary. Such external resources may potentially include forensic 
investigation and response firms, law firms, external auditors, forensic accountants, and consultants who are on retainer 
contracts for expedited availability. 

While cybersecurity threats remain a risk to the Company’s business operations (see discussion in Item 1A. Risk Factors.), 
our robust risk mitigation strategies have been effective. Accordingly, no such threats have materially affected or are reasonably 
likely to materially affect the company, our business strategy, results of operations or our financial condition.

Governance. 

While our Board of Directors as a whole has oversight of risk management generally, cybersecurity risks fall to the Board’s 
Audit Committee. The Company’s Chief Information Officer (CIO) and CISO report quarterly to the Audit Committee on any 
significant cybersecurity incidents, threats, mitigation strategies and controls at each Audit Committee meeting. The Audit 
Committee then updates the full board on significant matters raised and discussed during these sessions.    

The Audit Committee delegates day-to-day management of cybersecurity risks to the Company’s senior management, which 

includes our CISO, who reports to the Company’s CIO. Our CIO reports directly to the Chief Executive Officer. Our CISO 
leads a robust team of dedicated professionals that are responsible for a wide range of risk assessment and management and 
leads at least ten specialized teams of internal and external experts focusing on distinct categories of threats.

Item 2. Properties.

Eaton's principal executive offices are located at Eaton House, 30 Pembroke Road, Dublin 4, Ireland D04 Y0C2. The 
Company maintains manufacturing facilities at approximately 208 locations in 35 countries. The Company is a lessee under a 
number of operating and finance leases for certain real properties and equipment, none of which is individually material to its 
operations. Management believes that the existing manufacturing facilities are adequate for its operations and that the facilities 
are maintained in good condition.

Item 3. Legal Proceedings.

Information regarding the Company's current legal proceedings is presented in Note 11 and Note 12 of the Notes to the 

consolidated financial statements.

Item 4. Mine Safety Disclosures. 

Not applicable. 

8

Item 4A. Information about our Executive Officers

A listing of executive officers, their ages, positions and offices held over the past five years, as of February 5, 2024, is as 

follows:

Name

Craig Arnold

Age Position (Date elected to position)
63 Chairman of Eaton Corporation plc (June 1, 2016 - present)

Chief Executive Officer of Eaton Corporation (June 1, 2016 - present)
Director of Eaton Corporation plc (September 1, 2015 - present)

Olivier Leonetti

59 Executive Vice President and Chief Financial Officer of Eaton Corporation

(February 2024 - present)
Executive Vice President and Chief Financial Officer of Johnson Controls
International, plc (September 2020 - January 2024)
Senior Vice President and Chief Financial Officer of Zebra Technologies Corporation
(November 2016 - August 2020)

Heath B. Monesmith

53

President and Chief Operating Officer - Electrical Sector of Eaton Corporation

(July 5, 2022 - present)

President and Chief Operating Officer - Industrial Sector of Eaton Corporation

(July 1, 2019 - July 4, 2022)

Executive Vice President and General Counsel of Eaton Corporation

(March 1, 2017 - January 6, 2020)

Paulo Ruiz

49

President and Chief Operating Officer - Industrial Sector of Eaton Corporation
(July 5, 2022 - present)

President Energy Solutions and Services of Eaton Corporation
(August 2, 2021 - July 5, 2022)
Hydraulics Group President of Eaton Corporation (April 1, 2019 - August 2, 2021)
Chief Executive Officer of Dresser-Rand, a Siemens Business
(October 9, 2017 - April 1, 2019)

Taras G. Szmagala, Jr.

57 Executive Vice President, Chief Legal Officer of Eaton Corporation

(June 24, 2022 - present)

Senior Vice President, Public and Community Affairs and Corporate Communications
of Eaton Corporation (March 20, 2017 - June 24, 2022)

Ernest W. Marshall, Jr.

55 Executive Vice President and Chief Human Resources Officer of Eaton Corporation

(July 1, 2018 - present)

Daniel R. Hopgood

52

Senior Vice President and Controller of Eaton Corporation (April 1, 2021 - present)

Senior Vice President Global Financial Services and Systems of Eaton Corporation

(September 2017 - March 30, 2021)

Peter Denk

49

President - Mobility Group of Eaton Corporation (April 1, 2023 - present)

President - Vehicle Group, North America of Eaton Corporation

(June 4, 2018 - March 31, 2023)

Nandakumar Cheruvatath

62

President - Aerospace Group of Eaton Corporation (September 1, 2015 - present)

9

Mike Yelton

54

President - Americas Region, Electrical Sector of Eaton Corporation 

(April 1, 2023 - present)

President - Assemblies and Residential Solutions, Electrical Sector, America Region

(January 1, 2023 - April 1, 2023)

President - Commercial and Residential Distribution Solutions Business

(July 1, 2019 - January 1, 2023)

President and General Manager - Commercial Distribution Products & Assemblies
Business (April 1, 2015 - July 1, 2019)

There are no family relationships among the officers listed, and there are no arrangements or understandings pursuant to 

which any of them were elected as officers. All officers hold office for one year and until their successors are elected and 
qualified, unless otherwise specified by the Board of Directors; provided, however, that any officer is subject to removal with or 
without cause, at any time, by a vote of a majority of the Board of Directors.

Part II

Item 5. Market for the Registrant's Ordinary Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities.

The Company's ordinary shares are listed for trading on the New York Stock Exchange under the symbol ETN. At 
December 31, 2023, there were 9,579 holders of record of the Company's ordinary shares. Additionally, 13,994 current and 
former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, and 
The Eaton Puerto Rico Retirement Savings Plan.

Information regarding equity-based compensation plans required by Regulation S-K Item 201(d) is provided in Item 12 of 

this Form 10-K Report.

Irish Taxes Applicable to Dividends

Irish income tax may arise with respect to dividends paid on Eaton shares. Eaton may be required to deduct Irish dividend 
withholding tax (“IDWT”, currently at a rate of 25%) from dividends paid to shareholders who are not tax residents of Ireland 
even though they are not subject to this tax. To claim exemption from IDWT, shareholders can complete certain Irish dividend 
withholding tax exemption forms or hold their shares in an account through the Depository Trust Company and have on file 
with their broker or qualifying agent a valid U.S. address on the record date of the dividend.

Eaton shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further 

liability for Irish income tax on the dividends unless they are otherwise subject to Irish income tax.

Issuer’s Purchases of Equity Securities

During the fourth quarter of 2023, there were no shares repurchased.

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Information required by this Item is presented in “Management's Discussion and Analysis of Financial Condition and 

Results of Operations” of this Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk. 

Information regarding market risk is presented in “Market Risk Disclosure” of this Form 10-K.

Item 8. Financial Statements and Supplementary Data.

The reports of the independent registered public accounting firm, consolidated financial statements, and notes to 

consolidated financial statements are presented in Item 15 of this Form 10-K.

Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure.

None. 

10

Item 9A. Controls and Procedures. 

Evaluation of Disclosure Controls and Procedures - Pursuant to SEC Rule 13a-15, an evaluation was performed under the 

supervision and with the participation of Eaton's management, including Craig Arnold - Principal Executive Officer; and 
Olivier Leonetti - Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure 
controls and procedures. Based on that evaluation, Eaton's management concluded that the Company's disclosure controls and 
procedures were effective as of December 31, 2023.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company's reports 

filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified 
in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, 
controls and procedures designed to ensure that information required to be disclosed in the Company's reports filed under the 
Exchange Act is accumulated and communicated to management, including the Company's Principal Executive Officer and 
Principal Financial Officer, to allow timely decisions regarding required disclosure.

Pursuant to Section 404 of the Sarbanes Oxley Act of 2002 and the rules and regulations adopted pursuant thereto, Eaton has 
included a report of management's assessment of the effectiveness of internal control over financial reporting, which is included 
in Item 15 of this Form 10-K.

“Report of Independent Registered Public Accounting Firm” relating to internal control over financial reporting as of 

December 31, 2023 is included in Item 15 of this Form 10-K.

During the fourth quarter of 2023, there was no change in Eaton's internal control over financial reporting that materially 

affected, or is reasonably likely to materially affect, internal control over financial reporting.

Item 9B. Other Information. 

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not Applicable. 

11

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

Information required with respect to the directors of the Company is set forth under the caption “Election of Directors” in 

the Company's definitive Proxy Statement to be filed on or about March 15, 2024, and is incorporated by reference.

The Company has adopted a Code of Ethics, which applies to the directors, officers and employees worldwide. This 

document is available on the Company's website at https://www.eaton.com/us/en-us/company/ethics-compliance/policies/code-
of-ethics.html.

There were no changes during the fourth quarter 2023 to the procedures by which security holders may recommend 

nominees to the Company's Board of Directors.

Information related to the Audit Committee, and members of the Committee who are financial experts, is set forth under the 
caption “Board Committees - Audit Committee” in the definitive Proxy Statement to be filed on or about March 15, 2024, and 
is incorporated by reference.

Item 11. Executive Compensation.

Information required with respect to executive compensation is set forth under the caption “Compensation Discussion and 

Analysis” in the Company's definitive Proxy Statement to be filed on or about March 15, 2024, and is incorporated by 
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information required with respect to securities authorized for issuance under equity-based compensation plans is set forth 
under the caption “Equity Compensation Plans” in the Company's definitive Proxy Statement to be filed on or about March 15, 
2024, and is incorporated by reference.

Information required with respect to security ownership of certain beneficial owners, is set forth under the caption “Share 
Ownership Tables” in the Company's definitive Proxy Statement to be filed on or about March 15, 2024, and is incorporated by 
reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information required with respect to certain relationships and related transactions, as well as director independence, is set 
forth under the caption “Director Independence” in the Company's definitive Proxy Statement to be filed on or about March 15, 
2024, and is incorporated by reference.

Item 14. Principal Accounting Fees and Services.

Information required with respect to principal accountant fees and services is set forth under the caption “Audit Committee 
Report” in the Company's definitive Proxy Statement to be filed on or about March 15, 2024, and is incorporated by reference.

12

Part IV

Item 15. Exhibits, Financial Statement Schedules.

(a)  (1) The reports of the independent registered public accounting firm, consolidated financial statements and notes to 

consolidated financial statements are included in Item 8 above: 

Reports of Ernst & Young LLP Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Statements of Income - Years ended December 31, 2023, 2022 and 2021 

Consolidated Statements of Comprehensive Income - Years ended December 31, 2023, 2022 and 2021 

Consolidated Balance Sheets - December 31, 2023 and 2022

Consolidated Statements of Cash Flows - Years ended December 31, 2023, 2022 and 2021 

Consolidated Statements of Shareholders' Equity - Years ended December 31, 2023, 2022 and 2021 

Notes to consolidated financial statements  

(2) All other schedules for which provision is made in Regulation S-X of the SEC are not required under the related 
instructions or are inapplicable and, therefore, have been omitted. 

(b)   Exhibits incorporated by reference to or filed in conjunction with this form 10-K are listed below.

3 (i)

3 (ii)

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

Certificate of Incorporation - Incorporated by reference to the Form S-8 filed November 30, 2012

Amended and restated Memorandum and Articles of Incorporation - Incorporated by reference to the Form 8-
K Report filed on May 1, 2017

Description of Eaton Corporation plc’s Securities registered pursuant to Section 12 of the Securities Exchange 
Act of 1934 (incorporated by reference to Exhibit 4.1 of the registrant's Form 10-K filed on February 26, 
2020)

Indenture dated as of November 20, 2012, among Turlock Corporation, the guarantors named therein and The 
Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of Eaton 
Corporation plc's Form 8-K Current Report filed on November 26, 2012 (Commission File No. 333-182303))

Supplemental Indenture No. 1, dated as of November 30, 2012, among Eaton Corporation, the guarantors 
named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference 
to Exhibit 4.2 of the registrant's Form S-4 filed on September 6, 2013)

Supplemental Indenture No. 2, dated as of January 8, 2013, among Eaton Corporation, the guarantors named 
therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to 
Exhibit 4.3 of the registrant's Form S-4 filed on September 6, 2013)

Supplemental Indenture No. 3, dated as of December 20, 2013, among Eaton Corporation, the guarantors 
named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference 
to Exhibit 4.4 of the registrant's Form 10-K filed on February 28, 2018)

Supplemental Indenture No. 4, dated as of December 20, 2017 and effective as of January 1, 2018, among 
Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as 
trustee (incorporated by reference to Exhibit 4.5 of the registrant's Form 10-K filed on February 28, 2018)

Supplemental Indenture No. 5, dated as of February 16, 2018, among Eaton Corporation, the guarantors 
named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference 
to Exhibit 4.6 of the registrant's Form 10-K filed on February 28, 2018)

Indenture dated as of August 23, 2022, among Eaton Corporation, the guarantors named therein and The Bank 
of New York Mellon Trust Company, N.A., as Trustee

First Supplemental Indenture dated as of August 23, 2022, among Eaton Corporation, the guarantors named 
therein and The Bank of New York Mellon Trust Company, N.A., as Trustee

Second Supplemental Indenture dated as of August 23, 2022, among Eaton Corporation, the guarantors named 
therein and The Bank of New York Mellon Trust Company, N.A., as Trustee

Pursuant to Regulation S-K Item 601(b)(4), Eaton agrees to furnish to the SEC, upon request, a copy of the 
instruments defining the rights of holders of its long-term debt other than those set forth in Exhibits (4.2 - 
4.10) hereto

13

10

Material contracts

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

Senior Executive Incentive Compensation Plan (effective February 27, 2013) - Incorporated by 
reference to the Form 10-K Report for the year ended December 31, 2012

Deferred Incentive Compensation Plan II - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2007

First Amendment to Deferred Incentive Compensation Plan II - Incorporated by reference to the 
Form S-8 filed November 30, 2012

Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2007

First Amendment to Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2012

Incentive Compensation Deferral Plan II - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2007

First Amendment to Incentive Compensation Deferral Plan II - Incorporated by reference to the 
Form S-8 filed November 30, 2012

Limited Eaton Service Supplemental Retirement Income Plan II - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2007

First Amendment to Limited Eaton Service Supplemental Retirement Income Plan II - Incorporated 
by reference to the Form 10-K Report for the year ended December 31, 2012

Supplemental Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2007

First Amendment to Supplemental Benefits Plan II (2008 restatement) - Incorporated by reference 
to the Form 10-K Report for the year ended December 31, 2012

Form of Restricted Share Unit Agreement - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2015

(m)

Form of Restricted Share Award Agreement - Incorporated by reference to the Form 10-K Report 
for the year ended December 31, 2015

(n)

(o)

(p)

(q)

(r)

(s)

(t)

(u)

(v)

(w)

(x)

Form of Restricted Share Agreement (Non-Employee Directors) - Incorporated by reference to the 
Form 8-K Report filed February 1, 2010

Form of Directors' Restricted Share Unit Agreement - Incorporated by reference to the Form 10-K 
report for the year ended December 31, 2012

Form of Stock Option Agreement for Executives - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2015

Form of Stock Option Agreement for Non-Employee Directors (2008) - Incorporated by reference 
to the Form 10-K Report for the year ended December 31, 2007

Amended and Restated 2002 Stock Plan - Incorporated by reference to the Form S-8 filed 
November 30, 2012

Amended and Restated 2004 Stock Plan - Incorporated by reference to the Form S-8 filed 
November 30, 2012

Amended and Restated 2008 Stock Plan - Incorporated by reference to the Form S-8 filed 
November 30, 2012

Second Amended and Restated 2009 Stock Plan - Incorporated by reference to Form S-8 filed 
November 30, 2012

Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form S-8 filed 
November 30, 2012

Amendment to Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form 
10-K Report for the year ended December 31, 2012

First Amendment to 2005 Non-Employee Director Fee Deferral Plan - Incorporated by reference to 
the Form S-8 filed November 30, 2012

14

(y)

(z)

(aa)

(bb)

(cc)

(dd)

(ee)

(ff)

(gg)

(hh)

(ii)

(jj)

(kk)

(ll)

2013 Non-Employee Director Fee Deferral Plan - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2012

2015 Stock Plan - Incorporated by reference to the Form S-8 filed on October 30, 2015

Form of Change of Control Agreement entered into with officers of Eaton Corporation - 
Incorporated by reference to the Form 8-K Report filed on December 17, 2015

Form of Indemnification Agreement entered into with directors - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2012

Form of Indemnification Agreement II entered into with directors - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2012

Amended and Restated Executive Strategic Incentive Plan (amended and restated February 27, 
2013) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012

Executive Strategic Incentive Plan II (effective January 1, 2001) - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2002

Amended and Restated Supplemental Executive Strategic Incentive Plan (amended and restated 
February 27, 2013) - Incorporated by reference to the Form 10-K Report for the year ended 
December 31, 2012

Deferred Incentive Compensation Plan (amended and restated effective November 1, 2007) - 
Incorporated by reference to the Form 10-K Report for the year ended December 31, 2009

Excess Benefits Plan (amended and restated effective January 1, 1989) - Incorporated by reference 
to the Form 10-K Report for the year ended December 31, 2002

Amendment to Excess Benefits Plan I - Incorporated by reference to the Form 10-K Report for the 
year ended December 31, 2012

Supplemental Benefits Plan (amended and restated January 1, 1989) - Incorporated by reference to 
the Form 10-K Report for the year ended December 31, 2002

Amendment to Supplemental Benefits Plan I - Incorporated by reference to the Form 10-K Report 
for the year ended December 31, 2012

Eaton Corporation Board of Directors Policy on Incentive Compensation, Stock Options and Other 
Equity Grants upon the Restatement of Financial Results - Incorporated by reference to the Form 
10-K Report for the year ended December 31, 2015

(mm)

Amended and Restated Grantor Trust Agreement for Non-Employee Directors’ Deferred Fees 
Plans - effective January 1, 2010 - Incorporated by reference to the Form 10-K Report for the year 
ended December 31, 2010

(nn)

(oo)

(pp)

(qq)

(rr)

(ss)

(tt)

(uu)

Amended and Restated Grantor Trust Agreement for Employees’ Deferred Compensation Plans - 
effective January 1, 2010 - Incorporated by reference to the Form 10-K Report for the year ended 
December 31, 2010

Eaton Savings Plan 2016 Restatement - Incorporated by reference to the Form 10-K Report for the 
year ended December 31, 2015

First Amendment to Eaton Savings Plan - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2016

Second Amendment to Eaton Savings Plan - Incorporated by reference to the Form 10-K Report 
for the year ended December 31, 2016

Seventh Amendment to Eaton Savings Plan 2016 Restatement - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2020

Eaton Personal Investment Plan 2015 Restatement - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2015

First Amendment to Eaton Personal Investment Plan - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2016

Second Amendment to Eaton Personal Investment Plan - Incorporated by reference to the Form 10-
K Report for the year ended December 31, 2016

15

(vv)

(ww)

(xx)

(yy)

(zz)

(aaa)

(bbb)

(ccc)

(ddd)

(eee)

(fff)

(ggg)

(hhh)

(iii)

Performance Share Award Agreement - Incorporated by reference to the Form 10-K Report for the 
year ended December 31, 2015

Form of Indemnification Agreement entered into with officers of Eaton Corporation - Incorporated 
by reference to the Form 10-K Report for the year ended December 31, 2015

Amendment to Limited Eaton Service Supplemental Retirement Income Plan I- Incorporated by 
reference to the Form 10-K Report for the year ended December 31, 2015

Amendment to Eaton Corporation Excess Benefits Plan - Incorporated by reference to the Form 
10-K Report for the year ended December 31, 2016

Amendment to Eaton Corporation Supplemental Benefits Plan - Incorporated by reference to the 
Form 10-K Report for the year ended December 31, 2016

Second Amendment to Eaton Corporation Excess Benefits Plan II - Incorporated by reference to 
the Form 10-K Report for the year ended December 31, 2016

Second Amendment to Limited Eaton Service Supplemental Retirement Income Plan II - 
Incorporated by reference to the Form 10-K Report for the year ended December 31, 2016

Second Amendment to Eaton Corporation Supplemental Benefits Plan II - Incorporated by 
reference to the Form 10-K Report for the year ended December 31, 2016

2016 RSU Grant Agreement - Incorporated by reference to the Form 10-K Report for the year 
ended December 31, 2016

2016 Performance Share Grant Agreement - Incorporated by reference to the Form 10-K Report for 
the year ended December 31, 2016

Special 2016 Performance Share Grant Agreement - Incorporated by reference to the Form 10-K 
Report for the year ended December 31, 2016

2020 Stock Plan - Incorporated by reference to the Form S-8 filed on November 3, 2020

5-Year Revolving Credit Agreement, dated as of October 3, 2022, among Eaton Corporation, the 
guarantors from time to time party thereto, the several lenders from time to time parties thereto, 
Citibank, N.A., as Administrative Agent, Citibank, N.A., JPMorgan Chase Bank, N.A. and BofA 
Securities, Inc. as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as 
syndication agent and Bank of America, N.A. as documentation agent.

364-Day Revolving Credit Agreement, dated as of October 2, 2023, among Eaton Corporation, the 
guarantors from time to time party thereto, the several lenders from time to time parties thereto, 
Citibank, N.A., as Administrative Agent, Citibank, N.A., JPMorgan Chase Bank, N.A. and BofA 
Securities, Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as 
syndication agent and Bank of America, N.A. as documentation agent. - Filed in conjunction with 
this Form 10-K Report *

Subsidiaries of Eaton Corporation plc - Filed in conjunction with this Form 10-K Report *

Table of Senior Notes, Issuer and Guarantors - Incorporated by reference to the Form 10-K Report 
filed on February 23, 2023

Consent of Independent Registered Public Accounting Firm - Filed in conjunction with this Form 
10-K Report *

Power of Attorney - Filed in conjunction with this Form 10-K Report *

Certification of Principal Executive Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 
302) - Filed in conjunction with this Form 10-K Report *

Certification of Principal Financial Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 
302) - Filed in conjunction with this Form 10-K Report *

Certification of Principal Executive Officer (Pursuant to the Sarbanes-Oxley Act of 2002, 
Section 906) - Filed in conjunction with this Form 10-K Report *

Certification of Principal Financial Officer (Pursuant to the Sarbanes-Oxley Act of 2002, 
Section 906) - Filed in conjunction with this Form 10-K Report *

Recoupment policy of Eaton Corporation plc - Filed in conjunction with this Form 10-K Report *

21

22

23

24

31.1

31.2

32.1

32.2

97

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File 
because its XBRL tags are embedded within the Inline XBRL document. *

16

 
 
 
 
 
101.SCH  

101.CAL  

101.DEF  

101.LAB  

101.PRE  

104

XBRL Taxonomy Extension Schema Document *

XBRL Taxonomy Extension Calculation Linkbase Document *

XBRL Taxonomy Extension Definition Linkbase Document *

XBRL Taxonomy Extension Label Linkbase Document *

XBRL Taxonomy Extension Presentation Linkbase Document *

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*

Submitted electronically herewith.

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) 

Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021, (ii) Consolidated Statements of 
Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 (iii) Consolidated Balance Sheets at 
December 31, 2023 and 2022, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 
2021, (v) Consolidated Statements of Shareholders' Equity for the years ended December 31, 2023, 2022 and 2021 and (vi) 
Notes to consolidated financial statements for the year ended December 31, 2023.

Item 16. Form 10-K Summary.

Not applicable.

17

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused 

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date: February 29, 2024

EATON CORPORATION plc
Registrant

By:

/s/ Olivier Leonetti
Olivier Leonetti
(On behalf of the registrant and as Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the date indicated.

Date: February 29, 2024 

Signature

Title

/s/ Craig Arnold
Craig Arnold

/s/ Daniel R. Hopgood
Daniel R. Hopgood

*

Chairman, Principal Executive 
Officer; Director

/s/ Olivier Leonetti
Olivier Leonetti

*

Principal Financial Officer

Principal Accounting Officer

Silvio Napoli

Director

*

Gregory R. Page

Director

Sandra Pianalto

Director

*

*

Robert V. Pragada

Director

Lori J. Ryerkerk

Director

*

*

Gerald B. Smith

Director

Dorothy C. Thompson

Director

*

Darryl L. Wilson

Director

*By

/s/ Olivier Leonetti
Olivier Leonetti, Attorney-in-Fact for the officers
and directors signing in the capacities indicated

18

 
 
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Eaton Corporation plc 

Opinion on the Financial Statements 

We have audited the accompanying consolidated balance sheets of Eaton Corporation plc (“the Company”) as of December 31, 
2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for 
each  of  the  three  years  in  the  period  ended  December  31,  2023,  and  the  related  notes  (collectively  referred  to  as  the 
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, 
the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for 
each  of  the  three  years  in  the  period  ended  December  31,  2023,  in  conformity  with  U.S.  generally  accepted  accounting 
principles. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB),  the  Company's  internal  control  over  financial  reporting  as  of  December  31,  2023,  based  on  criteria  established  in 
Internal  Control-Integrated  Framework  issued  by  the  Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission 
(2013 framework) and our report dated February 29, 2024 expressed an unqualified opinion thereon. 

Basis for Opinion 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on 
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB. 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to 
error  or  fraud.  Our  audits  included  performing  procedures  to  assess  the  risks  of  material  misstatement  of  the  financial 
statements,  whether  due  to  error  or  fraud,  and  performing  procedures  that  respond  to  those  risks.  Such  procedures  included 
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included 
evaluating  the  accounting  principles  used  and  significant  estimates  made  by  management,  as  well  as  evaluating  the  overall 
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The  critical  audit  matter  communicated  below  is  a  matter  arising  from  the  current  period  audit  of  the  consolidated  financial 
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or 
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or 
complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated 
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate 
opinion on the critical audit matter or on the account or disclosure to which it relates.

19

Description of the Matter

How We Addressed the Matter in 
Our Audit

Unrecognized Income Tax Benefits

As discussed in Note 12 to the consolidated financial statements, the Company had 
gross unrecognized income tax benefits of $1,300 million related to its uncertain tax 
positions at December 31, 2023. Unrecognized income tax benefits are recorded under 
the two-step recognition and measurement principles when a tax position does not meet 
the more likely than not standard, or if a tax position meets the more likely than not 
standard, but the financial statement tax benefit is reduced as part of the measurement 
step. 

The balance of unrecognized income tax benefits is comprised of uncertain tax positions 
which meet the more likely than not standard, but the financial statement tax benefit has 
been reduced as part of measuring the tax position.

Auditing management’s analysis of its uncertain tax positions and resulting 
unrecognized income tax benefits is complex as each tax position carries unique facts 
and circumstances that must be evaluated and ultimate resolution is dependent on 
uncontrollable factors such as the timing of finalizing resolutions of audit disputes 
through reaching settlement agreements or concluding litigation, or changes in law, and 
other factors.

We obtained an understanding, evaluated the design and tested the operating 
effectiveness of management’s controls related to uncertain tax positions. For example, 
we tested controls over management’s application of the two-step recognition and 
measurement principles and management’s review of the inputs and resultant 
calculations of unrecognized income tax benefits, as well as the identification of new 
factors affecting existing uncertain tax positions. 

We also evaluated the Company’s assessment of its uncertain tax positions. Our audit 
procedures included, among others, evaluating management’s accounting policies and 
documentation to assess the appropriateness and consistency of the methods and 
assumptions used to develop its uncertain tax positions and related unrecognized income 
tax benefit amounts by jurisdiction. We also tested the completeness and accuracy of the 
underlying data used by the Company. For example, we compared the unrecognized 
income tax benefits recorded with similar positions in prior periods and assessed 
management’s consideration of current tax controversy and litigation, including current 
year developments with respect to the Company's ongoing litigation and examinations 
with respect to certain open tax years in the United States. We also assessed the 
historical accuracy of management’s estimates of its unrecognized income tax benefits 
with the resolution of those positions. In addition, we involved tax subject matter 
professionals to evaluate the application of relevant tax laws, regulations, case law, and 
Company-specific controversy developments in the Company’s recognition 
determination. We have also evaluated the Company’s income tax disclosures in 
relation to these matters.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1923.

Cleveland, Ohio
February 29, 2024

20

MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS

We have prepared the accompanying consolidated financial statements and related information of Eaton Corporation plc 

("Eaton") included herein for the three years ended December 31, 2023. The primary responsibility for the integrity of the 
financial information included in this annual report rests with management. The financial information included in this annual 
report has been prepared in accordance with accounting principles generally accepted in the United States based on our best 
estimates and judgments and giving due consideration to materiality. The opinion of Ernst & Young LLP, Eaton's independent 
registered public accounting firm, on those consolidated financial statements is included herein.

Eaton has high standards of ethical business practices supported by the Eaton Code of Ethics and corporate policies. Careful 

attention is given to selecting, training and developing personnel, to ensure that management's objectives of establishing and 
maintaining adequate internal controls and unbiased, uniform reporting standards are attained. Our policies and procedures 
provide reasonable assurance that operations are conducted in conformity with applicable laws and with the Company's 
commitment to a high standard of business conduct.

The Board of Directors pursues its responsibility for the quality of Eaton's financial reporting primarily through its Audit 
Committee, which is composed of four independent directors. The Audit Committee meets regularly with management, the 
internal auditors and the independent registered public accounting firm to ensure that they are meeting their responsibilities and 
to discuss matters concerning accounting, internal control, audits and financial reporting. The internal auditors and independent 
registered public accounting firm have full and free access to senior management and the Audit Committee.

/s/ Craig Arnold
Principal Executive Officer

/s/ Olivier Leonetti
Principal Financial Officer

/s/ Daniel R. Hopgood
Principal Accounting Officer

February 29, 2024

21

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Eaton Corporation plc 

Opinion on Internal Control Over Financial Reporting 

We have audited Eaton Corporation plc’s (“the Company”) internal control over financial reporting as of December 31, 2023, 
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of 
the  Treadway  Commission  (2013  framework)  (the  COSO  criteria).  In  our  opinion,  the  Company  maintained,  in  all  material 
respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB),  the  consolidated  balance  sheets  of  the  Company  as  of  December  31,  2023  and  2022,  the  related  consolidated 
statements  of  income,  comprehensive  income,  shareholders’  equity  and  cash  flows  for  each  of  the  three  years  in  the  period 
ended  December  31,  2023,  and  the  related  notes  and  our  report  dated  February  29,  2024  expressed  an  unqualified  opinion 
thereon.

Basis for Opinion

The  Company’s  management  is  responsible  for  maintaining  effective  internal  control  over  financial  reporting  and  for  its 
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report 
on  Internal  Control  Over  Financial  Reporting.  Our  responsibility  is  to  express  an  opinion  on  the  Company’s  internal  control 
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be 
independent  with  respect  to  the  Company  in  accordance  with  the  U.S.  federal  securities  laws  and  the  applicable  rules  and 
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audit  to  obtain  reasonable  assurance  about  whether  effective  internal  control  over  financial  reporting  was  maintained  in  all 
material respects.

Our  audit  included  obtaining  an  understanding  of  internal  control  over  financial  reporting,  assessing  the  risk  that  a  material 
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and 
performing  such  other  procedures  as  we  considered  necessary  in  the  circumstances.  We  believe  that  our  audit  provides  a 
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting 

A  company’s  internal  control  over  financial  reporting  is  a  process  designed  to  provide  reasonable  assurance  regarding  the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted  accounting  principles.  A  company’s  internal  control  over  financial  reporting  includes  those  policies  and  procedures 
that  (1)  pertain  to  the  maintenance  of  records  that,  in  reasonable  detail,  accurately  and  fairly  reflect  the  transactions  and 
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit 
preparation  of  financial  statements  in  accordance  with  generally  accepted  accounting  principles,  and  that  receipts  and 
expenditures  of  the  company  are  being  made  only  in  accordance  with  authorizations  of  management  and  directors  of  the 
company;  and  (3)  provide  reasonable  assurance  regarding  prevention  or  timely  detection  of  unauthorized  acquisition,  use,  or 
disposition of the company’s assets that could have a material effect on the financial statements. 

Because  of  its  inherent  limitations,  internal  control  over  financial  reporting  may  not  prevent  or  detect  misstatements.  Also, 
projections  of  any  evaluation  of  effectiveness  to  future  periods  are  subject  to  the  risk  that  controls  may  become  inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

/s/ Ernst & Young LLP

Cleveland, Ohio
February 29, 2024 

22

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 

The management of Eaton Corporation plc ("Eaton") is responsible for establishing and maintaining adequate internal 

control over financial reporting (as defined in Exchange Act rules 13a-15(f)).

Under the supervision and with the participation of Eaton's management, including our principal executive officer and 
principal financial officer, we conducted an evaluation of the effectiveness of the Company's internal control over financial 
reporting as of December 31, 2023. In conducting this evaluation, we used the framework set forth by the Committee of 
Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 Framework). Based 
on this evaluation under the framework referred to above, management concluded that the Company's internal control over 
financial reporting was effective as of December 31, 2023.

The independent registered public accounting firm Ernst & Young LLP has issued an audit report on the effectiveness of the 

Company's internal control over financial reporting as of December 31, 2023. This report is included herein.

/s/ Craig Arnold
Principal Executive Officer

/s/ Olivier Leonetti
Principal Financial Officer

/s/ Daniel R. Hopgood
Principal Accounting Officer

February 29, 2024

23

EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF INCOME

(In millions except for per share data)

Net sales

Cost of products sold

Selling and administrative expense

Research and development expense

Interest expense - net

Gain on sale of business

Other expense (income) - net

Income before income taxes

Income tax expense

Net income

Year ended December 31

2023

2022

2021

$ 

23,196  $ 

20,752  $ 

19,628 

14,762 

3,795 

754 

151 

— 

13,865 

3,227 

665 

144 

24 

(93)   

(36)   

3,827 

604 

3,223 

2,911 

445 

2,465 

13,293 

3,256 

616 

144 

617 

40 

2,896 

750 

2,146 

Less net income for noncontrolling interests

(5)   

(4)   

(2) 

Net income attributable to Eaton ordinary shareholders

$ 

3,218  $ 

2,462  $ 

2,144 

Net income per share attributable to Eaton ordinary shareholders

Diluted

Basic

Weighted-average number of ordinary shares outstanding

Diluted

Basic

$ 

8.02  $ 

6.14  $ 

8.06 

6.17 

5.34 

5.38 

401.1 

399.1 

400.8 

398.7 

401.6 

398.7 

Cash dividends declared per ordinary share

$ 

3.44  $ 

3.24  $ 

3.04 

The accompanying notes are an integral part of the consolidated financial statements.

24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Net income

Less net income for noncontrolling interests

Net income attributable to Eaton ordinary shareholders

Other comprehensive income (loss), net of tax

Currency translation and related hedging instruments

Pensions and other postretirement benefits

Cash flow hedges

Other comprehensive income (loss) attributable to Eaton 
   ordinary shareholders

Year ended December 31

2023

2022

2021

$ 

3,223  $ 

2,465  $ 

2,146 

(5)   

(4)   

(2) 

3,218 

2,462 

2,144 

235 

(185)   

(11)   

(647)   

175 

159 

39 

(313)   

30 

495 

37 

562 

Total comprehensive income attributable to Eaton ordinary shareholders

$ 

3,257  $ 

2,149  $ 

2,706 

The accompanying notes are an integral part of the consolidated financial statements.

25

 
 
 
 
 
 
 
 
 
 
 
 
EATON CORPORATION plc
CONSOLIDATED BALANCE SHEETS

(In millions)
Assets
Current assets

Cash
Short-term investments
Accounts receivable - net
Inventory
Prepaid expenses and other current assets
Total current assets

Property, plant and equipment

Land and buildings
Machinery and equipment
Gross property, plant and equipment
Accumulated depreciation
Net property, plant and equipment

Other noncurrent assets

Goodwill
Other intangible assets
Operating lease assets
Deferred income taxes
Other assets
Total assets

Liabilities and shareholders’ equity
Current liabilities
Short-term debt
Current portion of long-term debt
Accounts payable
Accrued compensation
Other current liabilities
Total current liabilities

Noncurrent liabilities
Long-term debt
Pension liabilities
Other postretirement benefits liabilities
Operating lease liabilities
Deferred income taxes
Other noncurrent liabilities
Total noncurrent liabilities

Shareholders’ equity

Ordinary shares (399.4 million outstanding in 2023 and 397.8 million in 2022)
Capital in excess of par value
Retained earnings
Accumulated other comprehensive loss
Shares held in trust
Total Eaton shareholders’ equity
Noncontrolling interests
Total equity

Total liabilities and equity

The accompanying notes are an integral part of the consolidated financial statements.

26

December 31

2023

2022

$ 

488  $ 

2,121 
4,475 
3,739 
851 
11,675 

2,241 
6,497 
8,738 
(5,208) 
3,530 

14,977 
5,091 
648 
458 
2,052 
38,432  $ 

8  $ 

1,017 
3,365 
676 
2,680 
7,747 

8,244 
768 
180 
533 
402 
1,489 
11,616 

4 
12,634 
10,305 
(3,906) 
(1) 
19,036 
33 
19,069 
38,432  $ 

$ 

$ 

$ 

294 
261 
4,076 
3,430 
685 
8,746 

2,129 
5,885 
8,013 
(4,867) 
3,146 

14,796 
5,485 
570 
330 
1,940 
35,014 

324 
10 
3,072 
467 
2,488 
6,360 

8,321 
649 
177 
459 
530 
1,444 
11,580 

4 
12,512 
8,468 
(3,946) 
(1) 
17,038 
38 
17,075 
35,014 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)
Operating activities
Net income
Adjustments to reconcile to net cash provided by operating activities

Depreciation and amortization
Deferred income taxes
Pension and other postretirement benefits expense
Contributions to pension plans
Contributions to other postretirement benefits plans
Gain on sale of business
Changes in working capital
Accounts receivable - net
Inventory
Accounts payable
Accrued compensation
Accrued income and other taxes
Other current assets
Other current liabilities
Other - net
Net cash provided by operating activities

Investing activities
Capital expenditures for property, plant and equipment
Cash paid for acquisitions of businesses, net of cash acquired
Proceeds from (payments for) sales of businesses, net of cash sold
Proceeds from sales of property, plant and equipment
Investments in associate companies
Sales (purchases) of short-term investments - net
Proceeds from (payments for) settlement of currency exchange contracts not 
designated as hedges - net
Other - net

Net cash used in investing activities

Financing activities
Proceeds from borrowings
Payments on borrowings
Short-term debt, net
Cash dividends paid
Exercise of employee stock options
Repurchase of shares
Employee taxes paid from shares withheld 
Other - net

Net cash used in financing activities

Effect of currency on cash
Total increase (decrease) in cash
Cash at the beginning of the period
Cash at the end of the period

The accompanying notes are an integral part of the consolidated financial statements.

27

Year ended December 31
2022

2023

2021

$ 

3,223  $ 

2,465  $ 

2,146 

926 
(182)   
15 
(113)   
(20)   
— 

(341)   
(282)   
256 
197 
61 
(112)   
72 
(76)   

3,624 

(757)   
— 
(2)   
76 
(68)   
(1,861)   

92 
(54)   
(2,575)   

818 
(19)   
(311)   
(1,379)   
78 
— 
(49)   
(9)   
(871)   

954 
(128)   
54 
(116)   
(24)   
(24)   

(743)   
(490)   
334 
(16)   
170 
(179)   
236 
40 
2,533 

(598)   
(610)   
31 
163 
(42)   
(19)   

(47)   
(79)   
(1,200)   

1,995 
(2,012)   
317 
(1,299)   
28 
(286)   
(60)   
(23)   
(1,340)   

16 
194 
294 
488  $ 

4 
(3)   

297 
294  $ 

$ 

922 
(111) 
53 
(343) 
(20) 
(197) 

(271) 
(629) 
832 
154 
(317) 
(116) 
38 
22 
2,163 

(575) 
(4,500) 
3,129 
44 
(124) 
379 

(27) 
(90) 
(1,764) 

1,798 
(1,013) 
20 
(1,219) 
63 
(122) 
(47) 
(15) 
(535) 

(5) 
(141) 
438 
297 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions)

Shares Dollars

Ordinary shares

Capital 
in excess 
of par 
value

Retained 
earnings

Accumulated 
other 
comprehensive 
loss

Shares 
held in 
trust

Total Eaton 
shareholders' 
equity

Noncontrolling 
interests

Total 
equity

Balance at January 1, 2021

  398.1  $ 

4  $  12,329  $  6,794  $ 

(4,195)  $ 

(2)  $ 

14,930  $ 

Net income

  — 

  — 

— 

2,144 

— 

  — 

2,144 

Other comprehensive income, net of 

tax

562 

Cash dividends paid

  — 

  — 

— 

(1,219) 

— 

  — 

43  $ 14,973 

2 

  2,146 

562 

(1) 

  (1,220) 

— 

(6) 

— 

38 

118 

(6) 

(122) 

  16,451 

4 

  2,465 

(313) 

(2) 

  (1,301) 

— 

(2) 

— 

38 

63 

(3) 

(286) 

  17,075 

5 

  3,223 

39 

562 

(1,219) 

118 

— 

(122) 

16,413 

2,462 

(313) 

(1,299) 

63 

(1) 

(286) 

17,038 

3,218 

39 

Issuance of shares under equity-based 

compensation plans

Changes in noncontrolling interest of 

consolidated subsidiaries - net

Repurchase of shares

1.6 

  — 

120 

  — 

  — 

(0.9) 

  — 

— 

— 

Balance at December 31, 2021

  398.8 

4 

  12,449 

Net income

  — 

  — 

Other comprehensive loss, net of tax

Cash dividends paid

  — 

  — 

Issuance of shares under equity-based 

compensation plans

1.1 

  — 

Changes in noncontrolling interest of 

consolidated subsidiaries - net

Repurchase of shares

  — 

  — 

(2.0) 

  — 

— 

— 

65 

(1) 

— 

Balance at December 31, 2022

  397.8 

4 

  12,512 

Net income

  — 

  — 

— 

Other comprehensive income, net of 

tax

(3) 

— 

(122) 

7,594 

2,462 

— 

— 

— 

1 

  — 

  — 

(3,633) 

(1) 

— 

  — 

(313) 

(1,299) 

— 

  — 

(2) 

— 

  — 

— 

(286) 

8,468 

3,218 

— 

— 

  — 

  — 

(3,946) 

(1) 

— 

  — 

39 

— 

Cash dividends paid

  — 

  — 

— 

(1,379) 

  — 

(1,379) 

(9) 

  (1,388) 

Issuance of shares under equity-based 

compensation plans

Changes in noncontrolling interest of 

consolidated subsidiaries - net

1.5 

  — 

122 

  — 

  — 

— 

(2) 

— 

— 

  — 

— 

  — 

120 

— 

Balance at December 31, 2023

  399.4  $ 

4  $  12,634  $  10,305  $ 

(3,906)  $ 

(1)  $ 

19,036  $ 

— 

120 

(1) 

(1) 

33  $ 19,069 

The accompanying notes are an integral part of the consolidated financial statements.

28

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EATON CORPORATION plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts are in millions unless indicated otherwise (per share data assume dilution). Columns and rows may not add and the 

sum of components may not equal total amounts reported due to rounding.

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Information and Basis of Presentation

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to protecting the 
environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, 
commercial, machine building, residential, aerospace and mobility markets. We are guided by our commitment to operate 
sustainably and with the highest ethical standards. Our work is accelerating the planet’s transition to renewable energy sources, 
helping to solve the world’s most urgent power management challenges, and building a more sustainable society for people 
today and for future generations.

Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century. We reported 

revenues of $23.2 billion in 2023 and serve customers in more than 160 countries.

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting 
principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and 
assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from 
these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed 
with the Securities Exchange Commission.

The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. 
Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in 
associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity 
investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds 
fair value. An impairment would exist if there is an other-than-temporary decline in value. Investments in associate companies 
included in Other assets were $860 million and $788 million as of December 31, 2023 and December 31, 2022, respectively, 
and income from these investments is reported in Other expense (income) - net. Eaton does not have off-balance sheet 
arrangements with unconsolidated entities. 

Eaton's reporting currency is United States Dollars (USD). The functional currency for most subsidiaries is their local 
currency. Financial statements for these subsidiaries are translated at exchange rates in effect at the balance sheet date as to 
assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments 
are recognized in Accumulated other comprehensive loss. For subsidiaries operating in highly inflationary economies, non-
monetary assets and liabilities such as inventory and property, plant and equipment and their related expenses are remeasured at 
historical exchange rates, while monetary assets and liabilities are remeasured at exchange rates in effect at the balance sheet 
date. Remeasurement adjustments for these subsidiaries are recognized in income.

Adoption of New Accounting Standard

Eaton adopted Accounting Standards Update 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): 

Disclosure of Supplier Finance Program Obligations, in the first quarter of 2023. The standard requires disclosure of certain 
information about the Company's supply chain finance program, including key terms and a rollforward of confirmed amounts 
payable. The adoption of the standard did not have a material impact on the consolidated financial statements.

Goodwill and Indefinite Life Intangible Assets

Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Additionally, 

goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more 
likely than not that the fair value of a reporting unit is less than its carrying amount. Goodwill is tested for impairment at the 
reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The 
Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has 
two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business 
and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis 
using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis.

29

The annual goodwill impairment test was performed using a qualitative analysis in 2023 and 2022, except for the Vehicle 

and eMobility reporting units which used a quantitative analysis in 2023 and 2022, respectively. A qualitative analysis is 
performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual 
sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors 
are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. 
The results of the qualitative analyses did not indicate a need to perform quantitative analysis. 

Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. 

The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-
average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-
term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the 
operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and 
debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about 
appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were 
performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting 
estimated fair values. 

Based on these analyses performed in 2023 and 2022, the fair value of Eaton's reporting units continue to substantially 

exceed their respective carrying amounts and thus, no impairment exists.

Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using 

either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. 
Indefinite life intangible asset impairment testing for 2023 and 2022 was performed using a quantitative analysis. The Company 
determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets 
were acquired, but using updated estimates of future sales, cash flows, and profitability. Additionally, indefinite life intangible 
assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely 
than not that the asset is impaired. For 2023 and 2022, the fair value of indefinite lived intangible assets exceeded the respective 
carrying value.

For additional information about goodwill and other intangible assets, see Note 6.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the 

commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the 
Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make 
lease payments arising from the lease. As most leases do not provide an implicit interest rate, Eaton uses its incremental 
borrowing rate based on the information available at the lease commencement date in determining the present value of lease 
payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the 
Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or 
liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines 
payments for leased assets, related services and other components of a lease.

Other Long-Lived Assets

Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally 

computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research 
and development expense, as appropriate. The Company uses the following depreciation and amortization periods:

Category

Buildings

Machinery and equipment

Software

Estimated useful life or amortization period

Generally 40 years

3 - 10 years

5 - 15 years

Customer relationships, certain trademarks, and patents and technology

Weighted-average of 18 years

Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying 
amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which 
identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be 
considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its 
carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment.

30

Retirement Benefits Plans

For the principal pension plans in the United States, Canada, Puerto Rico, and the United Kingdom, the Company uses a 
market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The 
market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year 
period. All other plans use fair value of plan assets.

Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. 

The Company’s corridors are set at either 8% or 10%, depending on the plan, of the greater of the plan assets or benefit 
obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period 
that differs by plan. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy 
is used. The amortization periods on a weighted average basis for United States and Non-United States pension plans are 
approximately 22 years and 10 years, respectively. The amortization period for other postretirement benefits plans is 8 years.

Asset Retirement Obligations

A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be 
reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would 
be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of 
its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company 
may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient 
information is available to estimate fair value.

Income Taxes

Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax 
basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to 
reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. 
Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax 
assets. Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the tax 
position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates 
and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to 
unrecognized income tax benefits in the provision for income tax expense. Eaton's policy is to recognize income tax effects 
from accumulated other comprehensive income when individual units of account are sold, terminated, or extinguished. For 
additional information about income taxes, see Note 12.

Derivative Financial Instruments and Hedging Activities

Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and 
interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. 
Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of 
hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge 
accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value 
hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for 
hedge accounting are recognized immediately in net income. See Note 16 for additional information about hedges and 
derivative financial instruments.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-07, 
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). This accounting standard 
requires additional segment disclosures on an annual and interim basis, including significant segment expenses that are 
regularly provided to the chief operating decision maker. The standard does not change how operating segments and reportable 
segments are determined. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and 
interim reporting periods beginning after December 15, 2024. The standard is required to be applied retrospectively to all 
periods presented in the consolidated financial statements. Eaton plans to adopt the standard for the year ended December 31, 
2024. The Company is evaluating the impact of ASU 2023-07 and expects the standard will only impact its segment disclosures 
with no material impact to the consolidated financial statements.

31

In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to 
Income Tax Disclosures (ASU 2023-09). This accounting standard requires disaggregated income tax disclosures on an annual 
basis, including information on the Company’s effective income tax rate reconciliation and income taxes paid. ASU 2023-09 is 
effective for annual reporting periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. 
The Company is evaluating the impact of ASU 2023-09 and expects the standard will only impact its income taxes disclosures 
with no material impact to the consolidated financial statements.

Note 2. ACQUISITIONS AND DIVESTITURE OF BUSINESSES

Acquisition of Tripp Lite

On March 17, 2021, Eaton acquired Tripp Lite for $1.65 billion, net of cash received. Tripp Lite is a leading supplier of 
power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power 
distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the 
Americas. Tripp Lite is reported within the Electrical Americas business segment.

The acquisition of Tripp Lite has been accounted for using the acquisition method of accounting which requires the assets 
acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final allocation as of 
the date of acquisition follows:

(In millions)
Short-term investments
Accounts receivable 
Inventory
Prepaid expenses and other current assets
Property, plant and equipment
Other intangible assets
Other assets
Accounts payable
Other current liabilities
Other noncurrent liabilities

Total identifiable net assets

Goodwill

Total consideration, net of cash received

Final Allocation
5 
$ 
93 
179 
5 
1 
604 
2 
(13) 
(34) 

(167) 
675 

976 
1,651 

$ 

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the 
anticipated synergies of acquiring Tripp Lite. Goodwill recognized as a result of the acquisition is not deductible for tax 
purposes. The estimated fair values of the customer relationships, trademarks and technology intangible assets of $539 million, 
$33 million, and $32 million, respectively, were determined using either the relief-from-royalty model or the multi-period 
excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require 
judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount 
those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by 
equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, trademarks and 
technology intangible assets were 20 years, 15 years, and 5 years, respectively. See Note 6 for additional information about 
goodwill and other intangible assets.

Eaton's 2021 consolidated financial statements include Tripp Lite’s results of operations, including segment operating profit 

of $139 million on sales of $419 million, from the date of acquisition through December 31, 2021.

32

 
 
 
 
 
 
 
 
 
 
 
Acquisition of Green Motion SA

On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging 
hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of 
cash paid at closing and an initial estimate of $57 million for the fair value of contingent future consideration based on 2023 
and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent 
payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a 
maximum possible undiscounted value of $122 million. As of December 31, 2023, the fair value of the contingent future 
payments has been reduced to $18 million based primarily on lower revenue in 2023 and anticipated reductions in projected 
2024 revenue compared to the initial estimates at closing. This reduction is presented in Other expense (income) - net on the 
Consolidated Statements of Income.

Acquisition of a 50% stake in HuanYu High Tech

On March 29, 2021, Eaton acquired a 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that 
manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. 
HuanYu High Tech has production operations in Wenzhou, China. Eaton accounts for this investment on the equity method of 
accounting and is reported within the Electrical Global business segment.

Acquisition of Mission Systems

On June 1, 2021, Eaton acquired Mission Systems for $2.8 billion, net of cash received. Mission Systems is a leading 
manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission 
Systems is reported within the Aerospace business segment.

The acquisition of Mission Systems has been accounted for using the acquisition method of accounting which requires the 
assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final allocation 
as of the date of acquisition follows:

(In millions)
Accounts receivable 
Inventory
Prepaid expenses and other current assets
Property, plant and equipment
Other intangible assets
Other assets
Accounts payable
Other current liabilities
Other noncurrent liabilities

Total identifiable net assets

Goodwill

Total consideration, net of cash received

Final Allocation
84 
$ 
178 
50 
97 
1,462 
15 
(40) 
(202) 

(108) 
1,536 

1,264 
2,800 

$ 

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the 
anticipated synergies of acquiring Mission Systems. As a result of the acquisition, goodwill of $572 million recognized in the 
United States is deductible for tax purposes. The estimated fair values of the customer relationships, technology, and backlog 
intangible assets of $764 million, $612 million, and $86 million, respectively, were determined using either the relief-from-
royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's 
estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-
average cost of capital used to discount those estimated cash flows. The estimated fair value of technology intangibles is also 
based on the selection of royalty rates used in the valuation model. The weighted-average cost of capital is an estimate of the 
overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for 
customer relationships, technology, and backlog intangible assets were 22 years, 21 years, and 2 years, respectively. See Note 6 
for additional information about goodwill and other intangible assets.

Eaton's 2021 consolidated financial statements include Mission Systems’ results of operations, including segment operating 

profit of $128 million on sales of $450 million, from the date of acquisition through December 31, 2021.

33

 
 
 
 
 
 
 
 
 
 
Acquisition of a 50% stake in Jiangsu YiNeng Electric's busway business 

On June 25, 2021, Eaton acquired a 50 percent stake in Jiangsu YiNeng Electric's busway business, which manufactures and 

markets busway products in China. Eaton accounts for this investment on the equity method of accounting and is reported 
within the Electrical Global business segment.

Sale of Hydraulics business 

On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the 

Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. The Company finalized 
negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022 and recognized an additional pre-tax 
gain of $24 million and received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments. The business 
had sales of $1.3 billion in 2021 through the date of the sale. 

Acquisition of Royal Power Solutions

On January 5, 2022, Eaton acquired Royal Power Solutions for $610 million, net of cash received. Royal Power Solutions is 

a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, 
industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment.

The acquisition of Royal Power Solutions has been accounted for using the acquisition method of accounting which requires 

the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final 
allocation as of the date of acquisition follows:

(In millions)
Accounts receivable 
Inventory
Prepaid expenses and other current assets
Property, plant and equipment
Other intangible assets
Other assets
Accounts payable
Other current liabilities
Other noncurrent liabilities

Total identifiable net assets

Goodwill

Total consideration, net of cash received

Final Allocation
35 
$ 
46 
1 
31 
341 
8 
(25) 
(14) 
(68) 
355 
255 

$ 

610 

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the 
anticipated synergies of acquiring Royal Power Solutions. Goodwill recognized as a result of the acquisition is not deductible 
for tax purposes. The estimated fair values of the customer relationships, technology, trademarks, and other intangible assets of 
$230 million, $90 million, $16 million, and $5 million, respectively, were determined using either the relief-from-royalty 
model, the multi-period excess earnings model, or the lost income model, which are discounted cash flow models that rely on 
the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable 
weighted-average cost of capital used to discount those estimated cash flows. The estimated fair value of technology and 
trademark intangibles are also based on the selection of royalty rates used in the valuation model. The weighted-average cost of 
capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. 
The estimated useful lives for customer relationships, technology, trademarks, and other intangible assets were 17 years, 16 
years, 15 years, and 2 years, respectively. See Note 6 for additional information about goodwill and other intangible assets.

Eaton's 2022 consolidated financial statements include Royal Power Solutions' results of operations, including segment 

operating profit of $21 million on sales of $158 million, from the date of acquisition through December 31, 2022.

Russia

During the second quarter of 2022, in light of the ongoing war with Ukraine, the Company decided to exit its business 

operations in Russia and recorded charges of $29 million presented in Other expense (income) - net on the Consolidated 
Statements of Income. The charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and 
accruals for severance.

34

 
 
 
 
 
 
 
 
 
 
Acquisition of a 50% stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business

On July 1, 2022, Eaton acquired a 50 percent stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business, which 
manufactures and markets low-voltage circuit breakers in China. Eaton accounts for this investment on the equity method of 
accounting and is reported within the Electrical Global business segment.

Acquisition of a 49% stake in Jiangsu Ryan Electrical Co. Ltd.

On April 23, 2023, Eaton acquired a 49 percent stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power 

distribution and sub-transmission transformers in China. Eaton accounts for this investment on the equity method of accounting 
and is reported within the Electrical Global business segment.

Note 3. REVENUE RECOGNITION

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services 

have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain 
benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in 
exchange for these products or services. 

The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when title and 

risk and rewards of ownership have transferred to the customer. Sales recognized over time are less than 5% of Eaton’s 
consolidated Net sales. Sales recognized over time are generally accounted for using an input measure to determine progress 
completed at the end of the period. Sales for service contracts generally are recognized as the services are provided. For 
agreements with multiple performance obligations, judgment is required to determine whether performance obligations 
specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. 
In these types of agreements, we generally allocate sales price to each distinct obligation based on the price of each item sold in 
separate transactions.

Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by 
contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the 
extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to 
account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales 
price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a 
cumulative catch-up basis.

Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time 
between when revenue is recognized and when payment is due is not significant. Eaton does not evaluate whether the selling 
price includes a financing interest component for contracts that are less than a year. Sales, value added, and other taxes 
collected concurrent with revenue are excluded from Net sales. Shipping and handling costs are treated as fulfillment costs and 
are included in Cost of products sold.

Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the 

time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market 
conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets 
Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume 
levels. Accrued rebates of $402 million and $400 million as of December 31, 2023 and December 31, 2022, respectively, are 
generally paid annually and are included in Other current liabilities. Returns are estimated at the time of the sale primarily based 
on historical experience and are recorded gross on the Consolidated Balance Sheet. 

Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they 

are typically earned at the completion of the contract when the customer is invoiced or when the customer pays Eaton.

Sales of products and services varies by segment and are discussed in Note 18.

In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power 
distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring 
devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and 
sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point 
in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power 
distribution and power quality services are recognized over time.

35

In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power 
distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold 
outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, 
intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The 
majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship 
the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power 
quality services are recognized over time.

In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for 

commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based 
on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this 
segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or 
when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to 
performance-based payments or progress payments from the customer.

Many of the products and services in power distribution and power quality services in the Electrical Americas and Electrical 

Global business segments and contracts to develop new products that are fully funded by customers in the Aerospace business 
segment meet the definition of continuous transfer of control to customers and are recognized over time. These products are 
engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as 
evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date 
plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards 
completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded 
proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, 
the transfer of control to the customer.

In the Hydraulics segment, sales contracts were primarily for hydraulic components and systems for industrial and mobile 

equipment. These sales contracts were primarily based on a customer’s purchase order. In this segment, performance 
obligations were generally satisfied at a point in time when we ship the product from our facility.

In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce 

emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. These 
sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, 
frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations 
are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s 
facility.

In the eMobility segment, sales contracts are primarily for mechanical, electrical, and electronic components and systems 
that improve the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily 
based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either 
when we ship the product from our facility, or when it arrives at the customer’s facility.

In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that 
extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced 
warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty 
period.

36

The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end 

market, as applicable, for the Company's operating segments:

(In millions)

Electrical Americas

Products

Systems

Total

Electrical Global
Products

Systems

Total

Hydraulics

United States

Rest of World

Total

Aerospace

Original Equipment Manufacturers

Aftermarket

Industrial and Other

Total

Vehicle

Commercial

Passenger and Light Duty

Total

eMobility

Total net sales

2023

2022

2021

$ 

2,949  $ 

2,732  $ 

7,149 

5,765 

$  10,098  $ 

8,497  $ 

$ 

3,462  $ 

3,424  $ 

2,622 

2,424 

$ 

6,084  $ 

5,848  $ 

2,255 

4,987 

7,242 

3,283 

2,233 

5,516 

$ 

$ 

—  $ 

—  $ 

— 

— 

534 

766 

—  $ 

—  $ 

1,300 

$ 

1,350  $ 

1,209  $ 

1,018 

1,183 

878 

977 

854 

823 

807 

$ 

3,413  $ 

3,039  $ 

2,648 

$ 

1,784  $ 

1,736  $ 

1,180 

1,094 

$ 

2,965  $ 

2,830  $ 

1,438 

1,141 

2,579 

$ 

636  $ 

538  $ 

343 

$  23,196  $  20,752  $  19,628 

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables 
(revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of 
revenue recognized). Accounts receivable from customers were $3,966 million and $3,581 million at December 31, 2023 and 
December 31, 2022, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, 
either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the 
Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were 
$289 million and $233 million at December 31, 2023 and December 31, 2022, respectively, and are recorded in Prepaid 
expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased 
business activity in 2023.

37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in the deferred revenue liabilities are as follows:

(In millions)

Balance at January 1, 2022

Customer deposits and billings

Revenue recognized in the period

Translation and other

Balance at December 31, 2022

Customer deposits and billings

Revenue recognized in the period

Translation

Balance at December 31, 2023

Deferred Revenue

$ 

$ 

$ 

422 

1,656 

(1,541) 

(29) 

508 

2,368 

(2,256) 

6 

626 

Deferred revenue liabilities of $610 million and $489 million as of December 31, 2023 and 2022, respectively, were 

included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities.

A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open 

orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of 
unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. 
Using this criterion, total backlog at December 31, 2023 was approximately $13 billion. At December 31, 2023, approximately 
76% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.

Note 4. CREDIT LOSSES FOR RECEIVABLES

Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, 
their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 
days.

Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. 

The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any 
anticipated future write-off based on historic experience adjusted for market conditions. The Company's segments, supported by 
our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The 
process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The 
process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit 
limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit 
risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has 
been made. 

Accounts receivable are net of an allowance for credit losses of $38 million and $31 million at December 31, 2023 and 
December 31, 2022, respectively. The change in the allowance for credit losses includes expense and net write-offs, none of 
which are significant.

Note 5. INVENTORY

Inventory is carried at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Cost components 

include raw materials, purchased components, direct labor, indirect labor, utilities, depreciation, inbound freight charges, 
purchasing and receiving costs, inspection costs, warehousing costs, and costs of the distribution network.

The components of inventory are as follows:

(In millions)

Raw materials

Work-in-process

Finished goods

Total inventory

December 31

2023

2022

$ 

$ 

1,515  $ 

870 

1,354 

3,739  $ 

1,275 

781 

1,375 

3,430 

38

 
 
 
 
 
 
 
 
 
 
Note 6. GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by segment are as follows:

(In millions)

January 1, 2022 Additions

Translation December 31, 2022 Translation December 31, 2023

Electrical Americas

$ 

7,417  $ 

5  $ 

(19)  $ 

7,402  $ 

13  $ 

4,183 

2,781 

290 

80 

2 

184 

— 

255 

(255)   

(122)   

(2)   

(1)   

3,929 

2,844 

287 

334 

109 

57 

2 

1 

7,415 

4,038 

2,901 

289 

334 

Electrical Global

Aerospace

Vehicle

eMobility

Total

$ 

14,751  $ 

445  $ 

(400)  $ 

14,796  $ 

181  $ 

14,977 

The 2022 additions to goodwill relate primarily to the anticipated synergies of acquiring Royal Power Solutions and Mission 

Systems.

A summary of other intangible assets is as follows:

(In millions)

Intangible assets not subject to amortization

Trademarks

Intangible assets subject to amortization

Customer relationships

Patents and technology

Trademarks

Other

$ 

$ 

December 31

2023

2022

Historical
cost

Accumulated
amortization

Historical
cost

Accumulated
amortization

1,207 

$ 

1,201 

4,742  $ 

2,423  $ 

4,677  $ 

2,156 

1,990 

1,123 

176 

948 

642 

133 

1,987 

1,113 

175 

830 

570 

111 

Total intangible assets subject to amortization

$ 

8,031  $ 

4,146  $ 

7,952  $ 

3,667 

Amortization expense related to intangible assets subject to amortization in 2023, and estimated amortization expense for 

each of the next five years, is as follows:

(In millions)

2023

2024
2025

2026
2027

2028

$ 

432 

406 
401 

385 
376 

315 

39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 7. SUPPLY CHAIN FINANCE PROGRAM

The Company negotiates payment terms directly with its suppliers for the purchase of goods and services. In addition, a 
third-party financial institution offers a voluntary supply chain finance (SCF) program that enables certain of the Company’s 
suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institution on terms directly 
negotiated with the financial institution. If a supplier elects to participate in the SCF program, the supplier decides which 
invoices are sold to the financial institution and the Company has no economic interest in a supplier’s decision to sell an 
invoice. Payments by the Company to participating suppliers are paid to the financial institution on the invoice due date, 
regardless of whether an individual invoice is sold by the supplier to the financial institution. The amounts due to the financial 
institution for suppliers that participate in the SCF program are included in Accounts payable on the Consolidated Balance 
Sheets, and the associated payments are included in operating activities on the Consolidated Statements of Cash Flows. 

The changes in SCF obligations are as follows:

(In millions)

Balance at January 1, 2023

Invoices confirmed during the period

Invoices paid during the period

Translation

Balance at December 31, 2023

Note 8. LEASES

SCF Obligations

$ 

$ 

219 

1,339 

(1,185) 

(4) 

369 

Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most 

real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The 
Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or 
restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate.

The components of lease expense are as follows:

(In millions)

Operating lease cost

Finance lease cost:

Amortization of lease assets

Interest on lease liabilities

Short-term lease cost

Variable lease cost

Sublease income
Total lease cost

2023

2022

2021

$ 

200  $ 

179  $ 

164 

15 

1 

18 

28 

11 

1 

17 

27 

12 

2 

15 

16 

(1)   
261  $ 

(1)   
234  $ 

(2) 
207 

$ 

During 2023 and 2022, Eaton entered into sale leaseback transactions primarily for certain non-production facilities and 
recorded gains of $53 million and $81 million, respectively, in Other expense (income) - net. The terms of the new operating 
leases ranged from 5 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021.

Supplemental cash flow information related to leases is as follows:

(In millions)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows - payments on operating leases

Operating cash outflows - interest payments on finance leases

Financing cash outflows - payments on finance lease obligations

Lease assets obtained in exchange for new lease obligations, including leases acquired:

Operating leases

Finance leases

2023

2022

2021

$  (180)  $  (159)  $  (158) 

(1)   

(2)   

(18)   

(11)   

(2) 

(11) 

$  183  $  245  $  145 

38 

10 

14 

40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental balance sheet information related to leases is as follows:

(In millions)

Operating Leases

Operating lease assets

Other current liabilities

Operating lease liabilities

Total operating lease liabilities

Finance Leases

Land and buildings

Machinery and equipment

Accumulated depreciation

Net property, plant and equipment

Current portion of long-term debt

Long-term debt

Total finance lease liabilities

Weighted-average remaining lease term

Operating leases

Finance leases

Weighted-average discount rate

Operating leases

Finance leases

Maturities of lease liabilities at December 31, 2023 are as follows:

(In millions)

2024
2025

2026

2027

2028

Thereafter

Total lease payments

Less imputed interest

$ 

$ 

$ 

$ 

$ 

$ 

December 31

2023

2022

648  $ 

135 

533 

668  $ 

13  $ 

62 

(36)   

39  $ 

13  $ 

22 

35  $ 

570 

127 

459 

586 

6 

40 

(20) 

26 

10 

18 

28 

December 31

2023

2022

7.6 years

4.4 years

7.6 years

4.9 years

 4.0 %

 3.6 %

 3.3 %

 3.0 %

Operating Leases
$ 

Finance Leases
14 
8 

156  $ 
126 

106 

85 

63 

259 

795 

127 

6 

4 

2 

4 

38 

3 

35 

Total present value of lease liabilities

$ 

668  $ 

41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 9. DEBT

A summary of long-term debt, including the current portion, is as follows: 

(In millions)
0.75% Euro notes due 2024
Floating rate Euro notes due 2024
6.50% debentures due 2025
0.70% Euro notes due 2025
0.128% Euro notes due 2026
3.10% senior notes due 2027
4.35% senior notes due 2028
7.65% debentures due 2029
0.577% Euro notes due 2030
4.00% senior notes due 2032
4.15% sustainability-linked senior notes due 2033
5.45% debentures due 2034
5.80% notes due 2037
4.15% senior notes due 2042
3.92% senior notes due 2047
4.70% senior notes due 2052
5.25% to 7.875% notes (maturities ranging from 2024 to 2035)
Other

Total long-term debt

Less current portion of long-term debt
Long-term debt less current portion

December 31

2023

2022

$ 

$ 

608  $ 
332 
145 
553 
995 
700 
500 
200 
663 
700 
1,300 
137 
240 
1,000 
300 
700 
165 
25 
9,261 
(1,017)   
8,244  $ 

587 
— 
145 
534 
960 
700 
— 
200 
640 
700 
1,300 
137 
240 
1,000 
300 
700 
165 
23 
8,331 
(10) 
8,321 

Substantially all these long-term debt instruments are fully and unconditionally guaranteed on an unsubordinated, unsecured 

basis by Eaton and certain of its direct and indirect subsidiaries (the Senior Notes). Further, as of December 31, 2023, all of 
these long-term debt instruments, except the floating rate Euro notes due 2024, 0.75% Euro notes due 2024, the 0.70% Euro 
notes due 2025, the 0.128% Euro notes due 2026, and the 0.577% Euro notes due 2030, are registered by Eaton Corporation 
under the Securities Act of 1933, as amended (the Registered Senior Notes).

On March 3, 2023, a subsidiary of Eaton issued Euro denominated notes (2023 Euro Notes) in a private issuance with a face 

value of €300 million ($318 million). The floating rate notes are due June 3, 2024 with interest payable quarterly based on the 
three-month Euro Interbank Offered Rate plus 25 basis points. The 2023 Euro Notes are fully and unconditionally guaranteed 
on an unsubordinated, unsecured basis by Eaton. The 2023 Euro Notes contain a change of control provision which requires the 
Company to make an offer to purchase all or any part of the 2023 Euro Notes at a purchase price of 100.5% of the principal 
amount plus accrued and unpaid interest. The 2023 Euro Notes are subject to customary non-financial covenants.

On May 18, 2023, Eaton issued senior notes (2023 Notes) with a face amount of $500 million. The 2023 Notes mature in 
2028 with interest payable semi-annually at a rate of 4.35% per annum. The issuer received proceeds totaling $497 million from 
the issuance, net of financing costs. The 2023 Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured 
basis by Eaton and certain of its direct and indirect subsidiaries. The 2023 Notes contain customary optional redemption and par 
call provisions. The 2023 Notes also contain a provision which upon a change of control requires the Company to make an offer 
to purchase all or any part of the 2023 Notes at a purchase price of 101% of the principal amount plus accrued and unpaid 
interest. The 2023 Notes are subject to customary non-financial covenants.

On October 2, 2023, the Company replaced its existing $500 million 364-day revolving credit facility with a new 

$500 million 364-day revolving credit facility that will expire on September 30, 2024. The Company also has a $2,500 million 
five-year revolving credit facility that will expire on October 1, 2027. The revolving credit facilities totaling $3,000 million are 
used to support commercial paper borrowings and are fully and unconditionally guaranteed by Eaton and certain of its direct 
and indirect subsidiaries on an unsubordinated, unsecured basis. There were no borrowings outstanding under Eaton’s revolving 
credit facilities at December 31, 2023. The Company maintains access to the commercial paper markets through its 
$3,000 million commercial paper program, of which none was outstanding on December 31, 2023.

42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In addition to the revolving credit facilities, the Company also had available lines of credit of $1,070 million from various 

banks primarily for the issuance of letters of credit, of which there was $451 million outstanding at December 31, 2023. 
Borrowings outside the United States are generally denominated in local currencies.

Short-term debt of $8 million at December 31, 2023 was entirely comprised of short-term debt outside the United States. 
Short-term debt of $324 million at December 31, 2022 included $300 million of short-term commercial paper in the United 
States, which had a weighted average interest rate of 4.67%, and $24 million of short-term debt outside the United States. 

Eaton is in compliance with each of its debt covenants for all periods presented. 

Maturities of long-term debt for each of the next five years are as follows:

(In millions)

2024

2025

2026

2027

2028

Interest paid on debt is as follows:

(In millions)

2023

2022

2021

$ 

$ 

1,017 

706 

1,073 

704 

502 

319 

250 

207 

43

 
 
 
 
 
 
Note 10. RETIREMENT BENEFITS PLANS

Eaton has defined benefits pension plans and other postretirement benefits plans.

Obligations and Funded Status

(In millions)

Funded status

Fair value of plan assets

Benefit obligations

Funded status

Amounts recognized in the Consolidated
   Balance Sheets

Other assets

Other current liabilities
Pension liabilities and Other postretirement
  benefits liabilities

Total

Amounts recognized in Accumulated other
   comprehensive loss (pre-tax)

Net actuarial loss (gain)

Prior service cost (credit)

Total

Change in Benefit Obligations

(In millions)

Balance at January 1

Service cost

Interest cost

Actuarial loss (gain) 
Gross benefits paid
Currency translation

Plan amendments

Other

United States
pension liabilities

Non-United States
pension liabilities

Other postretirement
liabilities

2023

2022

2023

2022

2023

2022

$  2,604  $  2,635  $  1,633  $  1,486  $ 

17  $ 

16 

(2,824)   

(2,807)   

(2,022)   

(1,813)   

(212)   

$ 

(220)  $ 

(172)  $ 

(389)  $ 

(327)  $ 

(195)  $ 

$ 

—  $ 

—  $ 

210  $ 

199  $ 

—  $ 

(18)   

(19)   

(33)   

(30)   

(15)   

(202)   

(153)   

(566)   

(496)   

(180)   

$ 

(220)  $ 

(172)  $ 

(389)  $ 

(327)  $ 

(195)  $ 

(209) 

(194) 

— 

(17) 

(177) 

(194) 

$ 

$ 

867  $ 

807  $ 

649  $ 

491  $ 

(92)  $ 

(119) 

4 

5 

12 

14 

(1)   

(2) 

871  $ 

811  $ 

661  $ 

505  $ 

(93)  $ 

(120) 

United States
pension liabilities

Non-United States
pension liabilities

Other postretirement
liabilities

2023

2022

2023

2022

2023

2022

$  2,807  $  3,760  $  1,813  $  2,837  $ 

209  $ 

304 

19 

142 

104 
(250)   
— 

1 

— 

27 

117 

(713)   
(386)   
— 

1 

— 

43 

85 

104 
(110)   
85 

(1)   

3 

59 

47 

(817)   
(99)   
(218)   

1 

3 

1 

10 

11 
(31)   
1 

— 

11 

1 

7 

(73) 
(38) 
(3) 

(2) 

13 

Balance at December 31

$  2,824  $  2,807  $  2,022  $  1,813  $ 

212  $ 

209 

Accumulated benefit obligation

$  2,807  $  2,784  $  1,922  $  1,737 

During 2020, the Company announced it was freezing its United States pension plans for its non-union employees. The 
freeze was effective January 1, 2021 for non-union U.S. employees whose retirement benefit was determined under a cash 
balance formula and is effective January 1, 2026 for non-union U.S. employees whose retirement benefit is determined under a 
final average pay formula.

44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actuarial losses related to changes in the United States and Non-United States benefit obligations in 2023 of $104 million 
and $104 million, respectively, were primarily due to decreases in the discount rates used to measure the obligations. Actuarial 
gains related to changes in the United States and Non-United States benefit obligations in 2022 of $713 million and 
$817 million, respectively, were primarily due to increases in the discount rates used to measure the obligations.

Change in Plan Assets

(In millions)

Balance at January 1

Actual return on plan assets

Employer contributions

Gross benefits paid

Currency translation

Other

Balance at December 31

United States
pension liabilities

Non-United States
pension liabilities

Other postretirement
liabilities

2023

2022

2023

2022

2023

2022

$  2,635  $  3,672  $  1,486  $  2,247  $ 

16  $ 

203 

16 

(682)   

30 

86 

97 

(250)   

(386)   

(110)   

— 

— 

— 

— 

71 

3 

(554)   

85 

(99)   

(197)   

3 

1 

20 

— 

11 

(31)   

(38) 

$  2,604  $  2,635  $  1,633  $  1,486  $ 

17  $ 

19 

(2) 

24 

— 

13 

16 

The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as 

follows:

(In millions)

Accumulated benefit obligation

Fair value of plan assets

United States
pension liabilities

Non-United States
pension liabilities

2023

2022

2023

2022

$ 

2,807  $ 

2,784  $ 

2,604 

2,635 

742  $ 

203 

654 

173 

The components of pension plans with a projected benefit obligation in excess of plan assets at December 31 are as follows:

(In millions)

Projected benefit obligation

Fair value of plan assets

United States
pension liabilities

Non-United States
pension liabilities

2023

2022

2023

2022

$ 

2,824  $ 

2,807  $ 

2,604 

2,635 

827  $ 

228 

722 

195 

Other postretirement benefit plans with accumulated postretirement benefit obligations in excess of plan assets have been 

disclosed in the Obligations and Funded Status table.

Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss are as 

follows:

(In millions)

Balance at January 1

Prior service cost arising during the year

Net loss (gain) arising during the year

Currency translation

Net change for the year

Balance at December 31

Less amounts included in expense during the year

(38)   

(76)   

(11)   

United States
pension liabilities

Non-United States
pension liabilities

Other postretirement
liabilities

2023

2022

2023

2022

2023

2022

$ 

811  $ 

713  $ 

505  $ 

763  $ 

(120)  $ 

1 

97 

— 

1 

173 

— 

(1)   

1 

139 

29 

(149)   

(64)   

(47)   

— 

10 

— 

17 

27 

(55) 

(2) 

(69) 

(1) 

7 

(65) 

60 

98 

156 

(259)   

$ 

871  $ 

811  $ 

661  $ 

505  $ 

(93)  $ 

(120) 

45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits Expense

The components of retirement benefits expense (income) are as follows:

(In millions)

Service cost

Interest cost

United States pension 
benefit expense (income)

Non-United States pension 
benefit expense (income)

Other postretirement
benefits expense (income)

2023

2022

2021

2023

2022

2021

2023

2022

2021

$ 

19  $ 

27  $ 

37  $ 

43  $ 

59  $ 

72  $ 

1  $ 

1  $ 

142 

117 

70 

85 

47 

40 

Expected return on plan assets

(195)   

(204)   

(223)   

(121)   

(115)   

(120)   

(1)    — 

Amortization

Settlements, curtailments, and 
special termination benefits

4 

15 

36 

(30)   

(46)   

(80)   

34 

61 

65 

7 

14 

4 

45 

37 

2 

71 

63 

17 

  — 

  — 

Total expense (income)

$ 

4  $ 

15  $ 

(15)  $ 

18  $ 

39  $ 

80  $ 

(7)  $  —  $ 

10 

(1)   

(17)   

7 

(7)   

(7)    — 

1 

6 

(5) 

2 

(1) 

1 

Total retirement benefits expense for 2021 of $66 million included $13 million of settlement and curtailment expense related 

to the sale of the Hydraulics business discussed in Note 2.

The components of retirement benefits expense (income) other than service costs are included in Other expense (income) - 

net.

Retirement Benefits Plans Assumptions

In 2023 and 2022, for purposes of determining liabilities related to the majority of its plans in the United States, the 
Company used the Pri-2012 mortality tables as well as mortality tables that are based on the Company's own experience and 
generational improvement scales that are based on MP-2021. In 2021, the Company used mortality tables that are based on the 
Company's own experience and generational improvement scales that are based on MP-2021.

To estimate the service and interest cost components of net periodic benefit cost for the vast majority of its defined benefits 

pension and other postretirement benefits plans, the Company used a spot rate approach by applying the specific spot rates 
along the yield curve used to measure the benefit obligation at the beginning of the period to the relevant projected cash flows.

Pension Plans

United States
pension plans
2022

2023

2021

Non-United States
pension plans
2022

2021

2023

Assumptions used to determine benefit obligation at year-end

Discount rate
Rate of compensation increase
Interest rate used to credit cash balance plans

 5.14 %  5.47 %  2.81 %  4.52 %  4.83 %  2.01 %
 3.40 %  3.33 %  3.12 %  3.17 %  3.12 %  3.01 %
 4.01 %  3.67 %  1.99 %  1.59 %  2.32 %  0.56 %

Assumptions used to determine expense

Discount rate used to determine benefit obligation
Discount rate used to determine service cost
Discount rate used to determine interest cost
Expected long-term return on plan assets
Rate of compensation increase
Interest rate used to credit cash balance plans

 5.47 %  4.30 %  2.61 %  4.83 %  2.01 %  1.63 %
 5.54 %  4.41 %  2.92 %  5.90 %  2.98 %  2.52 %
 5.33 %  3.94 %  1.83 %  4.80 %  1.84 %  1.36 %
 6.50 %  6.50 %  6.75 %  6.32 %  5.70 %  5.62 %
 3.33 %  3.12 %  3.12 %  3.12 %  3.01 %  3.02 %
 3.67 %  2.62 %  2.14 %  2.32 %  0.56 %  0.52 %

The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical 
data taking into account each plan's target asset allocation. The expected long-term rates of return on pension assets for United 
States pension plans and Non-United States pension plans for 2024 are 6.50% and 6.79%, respectively. The discount rates were 
determined using appropriate bond data for each country.

46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Postretirement Benefits Plans

Substantially all of the obligation for other postretirement benefits plans relates to United States plans. Assumptions used to 

determine other postretirement benefits obligations and expense are as follows:

Other postretirement
benefits plans
2022

2021

2023

Assumptions used to determine benefit obligation at year-end

Discount rate
Health care cost trend rate assumed for next year
Ultimate health care cost trend rate
Year ultimate health care cost trend rate is achieved

Assumptions used to determine expense

Discount rate used to determine benefit obligation
Discount rate used to determine service cost
Discount rate used to determine interest cost
Initial health care cost trend rate
Ultimate health care cost trend rate
Year ultimate health care cost trend rate is achieved

Employer Contributions to Retirement Benefits Plans

 5.11 %  5.46 %  2.79 %
 7.70 %  7.10 %  7.45 %
 4.75 %  4.75 %  4.75 %
2031
2031

2033

 5.46 %  2.79 %  2.44 %
 5.53 %  3.03 %  2.76 %
 5.32 %  2.24 %  1.70 %
 7.10 %  7.45 %  7.38 %
 4.75 %  4.75 %  4.75 %
2030
2031

2031

Contributions to pension plans that Eaton expects to make in 2024, and made in 2023, 2022 and 2021, are as follows:

(In millions)

United States plans

Non-United States plans

Total contributions

Expected in 2024

2023

2022

2021

$ 

$ 

19  $ 

96 

115  $ 

16  $ 

97 

113  $ 

30  $ 

85 

116  $ 

237 

106 

343 

The following table provides the estimated pension and other postretirement benefit payments for each of the next five 
years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts 
related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments 
listed below.

(In millions)

2024

2025

2026

2027

2028

2029 - 2033

Estimated other postretirement
benefit payments

Estimated
non-United States
pension payments

Gross

Medicare 
prescription
drug subsidy

286  $ 

111  $ 

18  $ 

Estimated
United States
pension payments
$ 

267 

257 

246 

236 

1,061 

113 

116 

121 

123 

669 

17 

16 

19 

18 

82 

47

— 

— 

— 

— 

— 

(1) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension Plan Assets

Investment policies and strategies are developed on a country and plan specific basis. The United States plan, representing 
61% of worldwide pension assets, and the United Kingdom plans representing 26% of worldwide pension assets, are invested 
primarily in debt securities largely for liability hedging, as the majority of the assets are in plans that are well-funded. In 
general, the plans are primarily allocated to diversified high-quality publicly traded debt, primarily through separately managed 
accounts and commingled funds in the form of common collective and other trusts. The United States plan's target allocation is 
15% United States equities, 7% non-United States equities, 3% public real estate (primarily equity of real estate investment 
trusts), 64% debt securities and 11% other, including private equity, private debt and cash equivalents. The United Kingdom 
plans' target asset allocations are 31% equities and the remainder in debt securities, cash equivalents and real estate investments. 
The equity risk for the plans is managed through broad diversification across industries, geographies, and levels of market 
capitalization. The majority of debt allocations for these plans are longer duration government and corporate debt. The United 
States, United Kingdom and Canada pension plans are authorized to use derivatives, including the use of futures, swaps and 
options, to achieve more economically desired market exposures.

Fair Value Measurements

Financial instruments included in pension and other postretirement benefits plan assets are categorized into a fair value 

hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology are as follows:

Level 1  -

Quoted prices (unadjusted) for identical assets in active markets. 

Level 2  -

Quoted prices for similar assets in active markets, and inputs that are observable for the asset, either 
directly or indirectly, for substantially the full term of the financial instrument.

Level 3  -

Unobservable prices or inputs.

Certain investments that are measured at fair value using the net asset value per share practical expedient have not been 

categorized in the fair value hierarchy and are being presented in the tables to permit a reconciliation to total plan assets.

Pension Plans

A summary of the fair value of pension plan assets at December 31, 2023 and 2022, is as follows:

(In millions)

2023

Common collective trusts

Quoted prices
in active
markets for
identical 
assets
(Level 1)

Total

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)1

Non-United States equity and global equities

$ 

154  $ 

—  $ 

154  $ 

United States equity
Fixed income

Fixed income securities
United States treasuries

Real estate

Cash equivalents

Exchange traded funds

Other
Common collective and other trusts measured at net asset 

value

Money market funds measured at net asset value

Pending purchases and sales of plan assets, and interest 
    receivable

— 
— 

— 
566 

65 

14 

84 

— 

76 
115 

1,607 
— 

27 

22 

— 

35 

76 
115 

1,607 
566 

291 

36 

84 

405 

968 

2 

(67) 

— 

— 
— 

— 
— 

199 

— 

— 

370 

Total pension plan assets

569 
$ 
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of 
six months or longer and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has 
unfunded commitments to these funds of approximately $154 million at December 31, 2023, which will be satisfied by a reallocation of 
pension plan assets.

4,237  $ 

2,036  $ 

729  $ 

48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)

2022

Common collective trusts

Quoted prices
in active
markets for
identical 
assets
(Level 1)

Total

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)1

Non-United States equity and global equities

$ 

173  $ 

—  $ 

173  $ 

United States equity

Fixed income

Fixed income securities

United States treasuries

Real estate

Cash equivalents

Exchange traded funds

Other
Common collective and other trusts measured at net asset 

value

Money market funds measured at net asset value
Pending purchases and sales of plan assets, and interest 
    receivable

— 

— 

— 

660 

76 

21 

77 

— 

54 

620 

744 

— 

20 

56 

— 

27 

54 

620 

744 

660 

295 

77 

77 

387 

1,100 

3 

(69) 

— 

— 

— 

— 

— 

199 

— 

— 

360 

Total pension plan assets

559 
$ 
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of 
six months or longer, and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has 
unfunded commitments to these funds of approximately $180 million at December 31, 2022, which will be satisfied by a reallocation of 
pension plan assets.

4,121  $ 

1,694  $ 

834  $ 

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2023 and 2022 

due to the following:

(In millions)

Balance at January 1, 2022

Actual return on plan assets:

Gains (losses) relating to assets still held at year-end

Purchases, sales, settlements - net

Transfers into or out of Level 3

Balance at December 31, 2022

Actual return on plan assets:

Gains (losses) relating to assets still held at year-end

Purchases, sales, settlements - net

Transfers into or out of Level 3

Balance at December 31, 2023

Real estate

Other

Total

$ 

216  $ 

319  $ 

535 

1 

(18)   

— 

199 

7 

(7)   

— 

$ 

199  $ 

(3)   

44 

— 

360 

19 

— 

(9)   

370  $ 

(2) 

26 

— 

559 

26 

(7) 

(9) 

569 

49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Postretirement Benefits Plans

A summary of the fair value of other postretirement benefits plan assets at December 31, 2023 and 2022, is as follows:

(In millions)

2023

Cash equivalents
Common collective and other trusts measured at net asset 

value
Total other postretirement benefits plan assets

(In millions)

2022

Cash equivalents
Common collective and other trusts measured at net asset 

value
Total other postretirement benefits plan assets

Valuation Methodologies

Quoted prices
in active
markets for
identical 
assets
(Level 1)

Total

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

2  $ 

2  $ 

—  $ 

15 
17  $ 

2  $ 

—  $ 

— 

— 

Quoted prices
in active
markets for
identical 
assets
(Level 1)

Total

Other
observable
inputs
(Level 2)

Unobservable
inputs
(Level 3)

3  $ 

3  $ 

—  $ 

13 
16  $ 

3  $ 

—  $ 

— 

— 

$ 

$ 

$ 

$ 

Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets 

measured at fair value. There have been no changes in the methodologies used at December 31, 2023 and 2022.

Common collective and other trusts - Valued at the net unit value of units held by the trust at year end. The unit value is 
determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments 
in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets 
based upon readily measurable prices. The investments in other trusts are predominantly in exchange traded funds for which 
the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective and 
other trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the 
fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the 
total plan assets.

Fixed income securities - These securities consist of publicly traded United States and non-United States fixed interest 
obligations (principally corporate and government bonds and debentures). The fair value of corporate and government debt 
securities is determined through third-party pricing models that consider various assumptions, including time value, yield 
curves, credit ratings, and current market prices. The Company verifies the results of trustees or custodians and evaluates the 
pricing classification of these securities by performing analyses using other third-party sources. 

United States treasuries - Valued at the closing price of each security. 

Real estate - Consists of direct investments in the stock of publicly traded companies and investments in pooled funds that 
invest directly in real estate. The publicly traded companies are valued based on the closing price reported in an active 
market on which the individual securities are traded and as such are classified as Level 1. The pooled funds rely on 
appraisal-based valuations and as such are classified as Level 3. 

Cash equivalents - Primarily certificates of deposit, commercial paper, and repurchase agreements.

Exchange traded funds - Valued at the closing price of the exchange traded fund's shares.

Money market funds - Money market funds measured at fair value using the net asset value per share practical expedient 
have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of 
the fair value hierarchy to the total plan assets.

50

 
 
 
 
 
 
 
 
 
 
Other - These assets consist of private equity, private debt, insurance contracts primarily for international plans, futures 
contracts, and over-the-counter options. Investments in private equity and private debt are valued at net asset value or 
estimated fair value based on quarterly financial information received from the investment advisor, third party appraisal or 
general partner. These estimates incorporate factors such as contributions and distributions, market transactions, market 
comparables and performance multiples. Futures contracts and options are valued based on the closing prices of contracts or 
indices as available using third-party sources.

For additional information regarding fair value measurements, see Note 15.

Defined Contribution Plans

The Company has various defined contribution benefit plans, primarily consisting of the plans in the United States. The total 

contributions related to these plans are charged to expense and are as follows:

(In millions)

2023

2022

2021

$ 

201 

182 

171 

51

 
 
Note 11. COMMITMENTS AND CONTINGENCIES

Legal Contingencies

Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual 
allegations and indemnity claims, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related 
matters. Eaton is also subject to legal claims from historic products which may have contained asbestos. Insurance may cover 
some of the costs associated with these claims and proceedings. Although it is not possible to predict with certainty the outcome 
or cost of these matters, the Company believes they will not have a material adverse effect on the consolidated financial 
statements.

Environmental Contingencies

Eaton has established policies to ensure that its operations are conducted in keeping with good corporate citizenship and 

with a positive commitment to the protection of the natural and workplace environments. The Company requires that its 
businesses be certified to ISO 14001, an international standard for environmental management systems. The Company routinely 
reviews EHS performance at each of its manufacturing facilities and continuously strives to improve its environmental 
footprint, including carbon, waste, water and related operational profiles consistent with our sustainability goals.

Eaton is involved in remedial response and voluntary environmental remediation at a number of sites, including certain of its 
currently-owned or formerly-owned plants. The Company has also been named a potentially responsible party under the United 
States federal Superfund law, or the state equivalents thereof, at a number of disposal sites. The Company became involved in 
these sites as a result of government action or in connection with business acquisitions. At the end of 2023, the Company was 
involved with a total of 110 sites worldwide, including the Superfund sites mentioned above, with none of these sites being 
individually significant to the Company.

Remediation activities, generally involving soil and/or groundwater contamination, include pre-cleanup activities such as 
fact finding and investigation, risk assessment, feasibility study, design and action planning, performance (where actions may 
range from monitoring, to removal of contaminants, to installation of longer-term remediation systems), and operation and 
maintenance of a remediation system. The extent of expected remediation activities and costs varies by site. A number of 
factors affect the cost of environmental remediation, including the number of parties involved at a particular site, the 
determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental 
regulations, and the continuing advancement of remediation technology. Taking these factors into account, Eaton has estimated 
the costs of remediation, which will be paid over a period of years. The Company accrues an amount on an undiscounted basis, 
consistent with the estimates of these costs, when it is probable that a liability has been incurred. Actual results may differ from 
these estimates. At December 31, 2023 and 2022, the Company had an accrual totaling $71 million and $73 million, 
respectively, for these costs.

Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum 

it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability 
by an amount that would have a material effect on its financial position, results of operations or cash flows.

Warranty Accruals

Product warranty accruals are established at the time the related sale is recognized through a charge to Cost of products sold. 

Warranty accrual estimates are based primarily on historical warranty claim experience and specific customer contracts. 
Provisions for warranty accruals are comprised of basic warranties for products sold, as well as accruals for product recalls and 
other events when they are known and estimable. A summary of the current and long-term warranty accruals is as follows: 

(In millions)

Balance at January 1

Provision

Settled

Warranty accruals from business acquisitions and other

2023

2022

2021

$ 

125  $ 

100 

(91)   

2 

125  $ 

83 

(81)   

(2)   

Balance at December 31

$ 

136  $ 

125  $ 

151 

65 

(112) 

21 

125 

52

 
 
 
 
 
 
Note 12. INCOME TAXES

Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax expense (benefit) are 
summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable.

(In millions)
Ireland
Foreign

Total income before income taxes

(In millions)
Current
Ireland
Foreign
Total current income tax expense

Deferred
Ireland
Foreign
Total deferred income tax expense (benefit)

Total income tax expense

Income (loss) before income taxes
2022

2021

2023

$ 

$ 

$ 

$ 

(3)  $ 

3,830 
3,827  $ 

198  $ 

2,713 
2,911  $ 

153 
2,743 
2,896 

Income tax expense (benefit)

2023

2022

2021

42  $ 
744 
786 

1 
(183)   
(182)   
604  $ 

3  $ 

570 
573 

13 
(141)   
(128)   
445  $ 

50 
730 
780 

(2) 
(28) 
(30) 
750 

Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate 

are as follows: 

Income taxes at the applicable statutory rate

Ireland operations

Ireland tax on trading income

Nondeductible interest expense

Ireland Other - net

Foreign operations

Tax impact on sale of businesses
Earnings taxed at other than the applicable statutory tax rate

Other items

Worldwide operations

Adjustments to tax liabilities

Adjustments to valuation allowances

Effective income tax expense rate

2023

2022

2021

 25.0 %

 25.0 %

 25.0 %

 (1.3) %

 2.6 %

 (0.2) %

 — %
 (9.9) %

 2.2 %

 (0.2) %

 (2.4) %

 15.8 %

 (1.3) %

 1.0 %

 (0.5) %

 — %
 (10.2) %

 1.6 %

 (0.4) %

 0.1 %

 15.3 %

 (0.7) %

 0.6 %

 (0.2) %

 9.1 %
 (8.0) %

 (0.1) %

 0.2 %

 — %

 25.9 %

During 2023, income tax expense of $604 million was recognized (an effective tax rate of 15.8%) compared to income tax 
expense of $445 million in 2022 (an effective tax rate of 15.3%) and income tax expense of $750 million in 2021 (an effective 
tax rate of 25.9%). The increase in the effective tax rate from 15.3% in 2022 to 15.8% in 2023 was primarily due to greater 
levels of income earned in higher tax jurisdictions, partially offset by the reduction of valuation allowances on foreign tax 
attributes. The decrease in the effective tax rate from 25.9% in 2021 to 15.3% in 2022, was primarily due to the one-time tax 
expense on the gain from the sale of the Hydraulics business in 2021 discussed in Note 2.

53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
No provision has been made for income taxes on undistributed earnings of foreign subsidiaries of approximately $29.9 
billion at December 31, 2023, since it is the Company's intention to indefinitely reinvest undistributed earnings of its foreign 
subsidiaries. The Company expects to deploy capital to those markets which offer particularly attractive growth opportunities. 
The cash that is permanently reinvested is typically used to expand operations either organically or through acquisitions. It is 
not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the 
remittance of such undistributed earnings.

Worldwide income tax payments, net of tax refunds, are as follows:

(In millions)

2023

2022

2021

Deferred Income Tax Assets and Liabilities

Components of noncurrent deferred income taxes are as follows: 

(In millions)

Accruals and other adjustments

Employee benefits

Depreciation and amortization

Other accruals and adjustments

Ireland income tax loss carryforwards

Foreign income tax loss carryforwards

Foreign income tax credit carryforwards
Valuation allowance for income tax loss and income tax credit carryforwards

Other valuation allowances

Total deferred income taxes

$ 

727 

393 

753 

December 31

2023

2022

Noncurrent assets and liabilities

$ 

$ 

328  $ 

(929)   

408 

2 

3,878 

247 
(3,828)   

(50)   

56  $ 

266 

(1,067) 

397 

1 

4,151 

280 
(4,184) 

(44) 

(200) 

In 2023, the Company recorded corresponding decreases in its deferred tax assets and valuation allowances for foreign 
income tax loss carryforwards related to currency revaluation resulting in no change to the net balance of deferred taxes. The 
Company also recorded a decrease of $90 million in its valuation allowance for income tax loss carryforwards in Hungary and 
Switzerland.

54

 
 
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2023, Eaton Corporation plc and its foreign subsidiaries had income tax loss carryforwards and income tax 

credit carryforwards that are available to reduce future taxable income or tax liabilities. These carryforwards and their 
respective expiration dates are summarized below:

(In millions)
Ireland income tax loss carryforwards
Ireland deferred income tax assets for income tax loss
   carryforwards

Foreign income tax loss carryforwards
Foreign deferred income tax assets for income tax loss 

carryforwards

Foreign deferred income tax assets for income tax loss 

carryforwards after ASU 2013-11

Foreign income tax credit carryforwards
Foreign income tax credit carryforwards after ASU 

2013-11

Recoverability of Deferred Income Tax Assets

2024
through
2028

2029
through
2033

2034
through
2038

2039
through
2048

Not
subject to
expiration

$  —  $  —  $  —  $  —  $ 

10  $ 

Valuation
allowance
— 

— 

42 

14 

9 

208 

153 

— 

— 

6 

  11,605 

3 

2 

26 

16 

2,898 

2,897 

45 

43 

— 

111 

30 

30 

— 

— 

2 

6,619 

(1) 

— 

942 

(3,683) 

940 

35 

35 

(3,683) 

(145) 

(145) 

Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine its income tax 

provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations 
in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities 
that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and 
income tax loss carryforwards and income tax credit carryforwards.

Management evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If the 

Company experiences cumulative pre-tax income in a particular jurisdiction in the three-year period including the current and 
prior two years, management normally concludes that the deferred income tax assets will more likely than not be realizable and 
no valuation allowance is recognized, unless known or planned operating developments, or changes in tax laws, would lead 
management to conclude otherwise. However, if the Company experiences cumulative pre-tax losses in a particular jurisdiction 
in the three-year period including the current and prior two years, management then considers a series of factors in the 
determination of whether the deferred income tax assets can be realized. These factors include historical operating results, 
known or planned operating developments, the period of time over which certain temporary differences will reverse, 
consideration of the utilization of certain deferred income tax liabilities, carryback capability under the tax law in the particular 
country, prudent and feasible tax planning strategies, changes in tax laws, and estimates of future earnings and taxable income 
using the same assumptions as those used for the Company's goodwill and other impairment testing. After evaluation of these 
factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific 
country, management would conclude that no valuation allowance would be required. To the extent that the deferred income tax 
assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, 
management would establish a valuation allowance.

Applying the above methodology, valuation allowances have been established for certain deferred income tax assets to the 

extent they are not expected to be realized within the particular tax carryforward period.

55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized Income Tax Benefits

A summary of gross unrecognized income tax benefits is as follows: 

(In millions)

Balance at January 1

2023

2022

2021

$ 

1,235  $ 

1,120  $ 

1,036 

Increases and decreases as a result of positions taken during prior years

Transfers from valuation allowances

Other increases, including currency translation

Other decreases, including currency translation

Increases related to acquired businesses

Increases as a result of positions taken during the current year

Decreases relating to settlements with tax authorities

Decreases as a result of a lapse of the applicable statute of limitations

— 

42 

(5)   

— 

86 

(6)   

(52)   

— 

36 

(16)   

10 

97 

— 

(12)   

6 

22 

(10) 

12 

75 

(11) 

(10) 

Balance at December 31

$ 

1,300  $ 

1,235  $ 

1,120 

Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the benefit would 

be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company evaluates and 
adjusts the amount of unrecognized income tax benefits based on changes in facts and circumstances. The Company does not 
enter into any of the United States Internal Revenue Service (IRS) Listed Transactions as set forth in Treasury Regulation 
1.6011-4.

If all unrecognized income tax benefits were recognized, the net impact on the provision for income tax expense would be 

$889 million.

As of December 31, 2023 and 2022, Eaton had accrued approximately $188 million and $137 million, respectively, for the 

payment of worldwide interest and penalties, which are not included in the table of unrecognized income tax benefits above. 
Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. 

The resolution of the majority of Eaton's unrecognized income tax benefits is dependent upon uncontrollable factors such as 

the timing of finalizing resolutions of audit disputes through reaching settlement agreements or concluding litigation, or 
changes in law. Therefore, for the majority of Eaton’s unrecognized income tax benefits, it is not reasonably possible to 
estimate the increase or decrease in the next 12 months. For each of the unrecognized income tax benefits where it is possible to 
estimate the increase or decrease in the balance within the next 12 months, the Company does not anticipate any significant 
change.

The Company believes that the final resolution of all the assessments discussed below will not have a material impact on its 
consolidated financial statements. The ultimate outcome of these matters cannot be predicted with certainty given the complex 
nature of tax controversies. Should the ultimate outcome of any one of these matters deviate from our reasonable expectations, 
final resolution may have a material adverse impact on the Company’s consolidated financial statements. However, Eaton 
believes that its interpretations of tax laws and application of tax laws to its facts are correct, and that its accrual of 
unrecognized income tax benefits is appropriate with respect to these matters.

Eaton or its subsidiaries file income tax returns in Ireland and many countries around the world. With only a few exceptions, 

Eaton and its subsidiaries are no longer subject to examinations for years before 2014.

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brazil Tax Years 2005-2012

The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the 
acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the 
other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the 
Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an 
unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $29 million plus 
$122 million of interest and penalties (translated at the December 31, 2023 exchange rate). The Company is challenging this 
assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 
27, 2022, the Company filed a motion for clarification relating to that decision. On May 20, 2022, the court largely upheld its 
prior decision without further clarification. On June 9, 2022, the Company filed its notice of appeal to the second level court. 
The Company intends to continue its challenge of this assessment in the judicial system.   

As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $34 million 

plus $121 million of interest and penalties (translated at the December 31, 2023 exchange rate), which the Company is 
challenging in the judicial system. This case is still pending resolution at the first judicial level.

Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of 
certain assets as security for the alleged deficiencies. As of December 31, 2023, the Company pledged Brazilian real estate 
assets with net book value of $20 million and provided additional security in the form of bank secured bonds and insurance 
bonds totaling $138 million and a cash deposit of $26 million (translated at the December 31, 2023 exchange rate).

United States Tax Disputes

The IRS typically audits large corporate taxpayers on a continuous basis, generally resulting in many open tax years if there 
are disputed tax positions upon completion of the audits. The IRS has completed its examination of the consolidated income tax 
returns of the Company’s United States subsidiaries (Eaton US) for 2005 through 2016 and the statuses of the various tax years 
are discussed below. The IRS has challenged certain tax positions of Eaton US, and the Company is attempting to resolve those 
issues in litigation and the IRS administrative process, as described in more detail below. The IRS is currently examining tax 
years 2017 through 2019, and the statute of limitations for those years is open until June 30, 2026. Tax years 2020 and later are 
subject to future examination by the IRS. Income tax returns of states and localities within the United States will be reopened to 
the extent of United States federal income tax adjustments. For some states and localities, the statute of limitations is open as 
early as the 2005 tax year. The Eaton US tax positions challenged by the IRS are items that recur beyond the tax years for 
which the IRS has proposed adjustments. Eaton believes that its interpretations of tax laws and application of tax laws to its 
facts are correct. However, if there is a final unfavorable resolution of any of the issues discussed below, it may have a material 
adverse impact on the Company’s consolidated financial statements.

U.S. Tax Years 2005-2006

In 2011, the United States Internal Revenue Service (IRS) issued a Statutory Notice of Deficiency for the Company’s United 

States subsidiaries (Eaton US) for the 2005 and 2006 tax years (the 2005-06 Notice), which Eaton US contested in United 
States Tax Court. The 2005-06 Notice proposed assessments of $75 million in additional taxes plus $52 million in penalties 
related primarily to transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the 
Dominican Republic and sold to affiliated companies located in the United States. Eaton US has set its transfer prices for 
products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two 
successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. 
Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. Immediately 
prior to the 2005-06 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs. The case in 
Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which 
it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. The Tax Court’s ruling 
on the APAs did not have a material impact on Eaton’s consolidated financial statements. On May 24, 2021, the IRS filed a 
notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals. In July 2022, the Sixth Circuit panel 
heard oral arguments, and on August 25, 2022, issued a ruling in favor of Eaton US, confirming that the IRS must abide by the 
terms of the APAs. On February 3, 2023, the Tax Court issued a final stipulated decision for the tax years 2005-2006, based on 
the Sixth Circuit's decision. This action formally ended the litigation between the parties for the 2005-2006 tax years and did 
not have a material impact on the Company's consolidated financial statements.

57

U.S. Tax Years 2007-2010

In 2014, the IRS issued a Statutory Notice of Deficiency for Eaton US for the 2007 through 2010 tax years (the 2007-10 
Notice), which Eaton US contested in Tax Court. The 2007-10 Notice proposed assessments of $190 million in additional taxes 
plus $72 million in penalties, net of agreed credits and deductions. The proposed assessments pertain to: (i) the same transfer 
pricing issues and APA for which the Tax Court and Sixth Circuit have issued favorable rulings to Eaton as noted above; and 
(ii) the separate proposed assessment noted below. The Company believes that the Sixth Circuit Court of Appeals ruling 
discussed above for tax years 2005-2006 should also resolve the APA cancellation issue for the 2007-2010 years. Eaton and the 
IRS have recognized that the ruling on the enforceability of the APA did not address a secondary issue regarding the transfer 
pricing for a certain royalty paid from 2006-2010. Eaton US reported a consistent royalty rate for 2006-2010. The IRS 
previously agreed to the royalty rate as reported by Eaton US for the 2006 tax year. On November 15, 2023, the IRS also agreed 
to use the royalty rate reported by Eaton for the 2007-2010 tax years.

The 2007-10 Notice also includes a separate proposed assessment involving the recognition of income for several of Eaton 
US’s controlled foreign corporations. The Company believes that the proposed assessment is without merit and contested the 
matter in Tax Court. In October 2017, Eaton and the IRS both moved for partial summary judgment on this issue. On February 
25, 2019, the Tax Court granted the IRS’s motion for partial summary judgment and denied Eaton’s. The Company intends to 
appeal the Tax Court’s partial summary judgment decision to the United States Sixth Circuit Court of Appeals. The total 
potential impact of the Tax Court's partial summary judgment decision on the controlled foreign corporation income recognition 
issue is not estimable until all matters in the open tax years have been resolved.

U.S. Tax Years 2011-2013

In 2018, the IRS completed its examination of Eaton US for tax years 2011 through 2013 and proposed adjustments. Those 
adjustments were the subject of administrative appeals, which concluded without resolution. As a result, on December 21, 2022, 
the IRS issued Statutory Notices of Deficiency for Eaton US for these tax years (the 2011-2013 Notice) proposing assessments 
of $749 million in additional taxes plus $110 million in penalties, net of agreed credits and deductions. The proposed 
assessments pertain to: (i) transfer pricing adjustments similar to those proposed in the 2005-06 and 2007-10 Notices for 
products manufactured in the Company’s facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies 
located in the U.S.; (ii) adjustments involving the recognition of income for several of Eaton US’s controlled foreign 
corporations; (iii) transfer pricing adjustments for products manufactured in one of the Company’s facilities in Mexico and sold 
to affiliated companies located in the U.S.; and (iv) adjustments challenging the appropriate interest rate on intercompany debt 
and amount of intercompany fees charged for financial guarantees on external debt. On March 3, 2023, the Company filed its 
petition to the U.S. Tax Court. The Company will vigorously defend its positions through litigation, which will take several 
years for final resolution.

U.S. Tax Years 2014-2016

In 2021, the IRS completed its examination of Eaton US for tax years 2014 through 2016 and has proposed adjustments, 

including: (i) transfer pricing adjustments similar to those proposed in the 2005-06, 2007-10, and 2011-2013 Notices for 
products manufactured in the Company’s facilities in Puerto Rico, and the Dominican Republic and sold to affiliated companies 
located in the U.S.; (ii) transfer pricing adjustments similar to those proposed in the 2011-2013 Notice for products 
manufactured in one of the Company’s facilities in Mexico and sold to affiliated companies located in the U.S.; and (iii) 
adjustments similar to those proposed in the 2011-2013 Notice challenging the appropriate interest rate on intercompany debt 
and amount of intercompany fees charged for financial guarantees on external debt. On November 29, 2021, the case was 
formally assigned to administrative appeals, and the Company will attempt to resolve certain of the issues in this administrative 
forum. However, if acceptable resolutions are not achieved, the Company will vigorously defend its positions through litigation, 
which if undertaken will likely take several years for final resolution. The statute of limitations on these tax years currently 
remains open until December 31, 2024.

58

Note 13. EATON SHAREHOLDERS' EQUITY

There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 399.4 million and 397.8 million of 

which were issued and outstanding at December 31, 2023 and 2022, respectively. Eaton's Memorandum and Articles of 
Association authorized 40 thousand deferred ordinary shares (€1.00 par value per share) and 10 thousand preferred A shares 
($1.00 par value per share), all of which were issued and outstanding at December 31, 2023 and 2022, and 10 million serial 
preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2023 and 2022. At December 31, 
2023, there were 9,579 holders of record of Eaton ordinary shares. Additionally, 13,994 current and former employees were 
shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, or the Eaton Puerto Rico 
Retirement Savings Plan.

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of 

ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to 
$5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 
Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of 
ordinary shares, capital levels, and other considerations. During 2023, no ordinary shares were repurchased. During 2022, 2.0 
million ordinary shares were repurchased under the 2022 program in the open market at a total cost of $286 million. 

Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust 
contains $3 million of ordinary shares and marketable securities at December 31, 2023 and 2022 to fund a portion of these 
liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' 
equity at historical cost.

On February 29, 2024, Eaton's Board of Directors declared a quarterly dividend of $0.94 per ordinary share, a 9% increase 
over the dividend paid in the fourth quarter of 2023. The dividend is payable on March 29, 2024 to shareholders of record on 
March 11, 2024.

Comprehensive Income (Loss)

Comprehensive income (loss) consists primarily of net income, currency translation and related hedging instruments, 
changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open 
derivative contracts designated as cash flow hedges. The following table summarizes the pre-tax and after-tax amounts 
recognized in Comprehensive income (loss):

(In millions)
Currency translation and related hedging instruments

2023

2022

2021

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Gain (loss) from currency translation and related hedging
   instruments
Translation reclassified to earnings
Amortization of gains on net investment hedges (amount
   excluded from effectiveness testing) reclassified to earnings  

$  252  $  247  $  (632)  $  (647)  $  (335)  $  (339) 
369 
  — 

  — 

  — 

  — 

369 

(12)   
241 

(12)    — 
235 

(632)   

  — 

  — 
34 

  — 
30 

(647)   

Pensions and other postretirement benefits

Prior service credit (cost) arising during the year

  — 

  — 

  — 

  — 

(1)   

(1) 

Net gain (loss) arising during the year

Currency translation
Amortization of actuarial loss and prior service cost
   reclassified to earnings

(246)   

(189)   

(29)   

(21)   

32 

24 

(243)   

(185)   

45 

65 

116 

226 

31 

56 

89 

175 

448 

24 

183 

654 

337 

19 

140 

495 

Cash flow hedges

Gain on derivatives designated as cash flow hedges

Changes in cash flow hedges reclassified to earnings

63 

(78)   

(14)   

50 

210 

166 

50 

(61)   

(11)   

(9)   

(7)   

(3)   

201 

159 

47 

39 

(2) 

37 

Other comprehensive income (loss) attributable to Eaton 
ordinary shareholders

$ 

(17)  $ 

39  $  (205)  $  (313)  $  735  $  562 

59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The changes in Accumulated other comprehensive loss are as follows:

(In millions)
Balance at January 1, 2023

Other comprehensive income (loss) before
    reclassifications
Amounts reclassified from Accumulated other 
   comprehensive loss (income)
Net current-period Other comprehensive 
   income (loss)

Balance at December 31, 2023

Currency 
translation and 
related hedging 
instruments

Pensions and 
other 
postretirement 
benefits

Cash flow 
hedges

Total

$ 

(3,264)  $ 

(810)  $ 

129  $ 

(3,946) 

247 

(12)   

235 
(3,029)  $ 

$ 

(209)   

24 

(185)   
(995)  $ 

50 

(61)   

(11)   
118  $ 

88 

(49) 

39 
(3,906) 

The reclassifications out of Accumulated other comprehensive loss are as follows:

(In millions)
Gains and (losses) on net investment hedges (amount excluded
  from effectiveness testing)

December 31, 2023

Consolidated Statements 
of Income classification

Currency exchange contracts
Tax expense
Total, net of tax

$ 

Amortization of defined benefits pensions and other 
   postretirement benefits items

Actuarial loss and prior service cost
Tax benefit
Total, net of tax

Gains and (losses) on cash flow hedges
Floating-to-fixed interest rate swaps
Currency exchange contracts
Commodity contracts
Tax expense
Total, net of tax

Interest expense - net

12 
— 
12 

(32)  1
8 
(24) 

Interest expense - net

13 
64  Net sales and Cost of products sold
1  Cost of products sold

(16) 
61 

Total reclassifications for the period
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 10 for 
additional information about pension and other postretirement benefits items.

49 

$ 

60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Per Share Attributable to Eaton Ordinary Shareholders

A summary of the calculation of net income per share attributable to Eaton ordinary shareholders is as follows:

(In millions except for per share data)
Net income attributable to Eaton ordinary shareholders

2023

2022

2021

$ 

3,218  $ 

2,462  $ 

2,144 

Weighted-average number of ordinary shares outstanding - diluted
Less dilutive effect of equity-based compensation

Weighted-average number of ordinary shares outstanding - basic

401.1 
2.0 
399.1 

400.8 
2.1 
398.7 

401.6 
2.9 
398.7 

Net income per share attributable to Eaton ordinary shareholders

Diluted
Basic

$ 

8.02  $ 
8.06 

6.14  $ 
6.17 

5.34 
5.38 

In 2023 and 2021, all stock options were included in the calculation of diluted net income per share attributable to Eaton 
ordinary shareholders because they were all dilutive. In 2022, 0.1 million of stock options were excluded from the calculation 
of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded 
the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive.

Note 14. EQUITY-BASED COMPENSATION

Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service 
conditions or both service and market conditions are expensed over the period during which an employee is required to provide 
service in exchange for the award. Awards with both service and performance conditions are expensed over the period an 
employee is required to provide service based on the number of units for which achievement of the performance objective is 
probable. The Company estimates forfeitures as part of recording equity-based compensation expense. 

Restricted Stock Units and Awards

Restricted stock units (RSUs) and restricted stock awards (RSAs) have been issued to certain employees and directors. The 
fair value of RSUs and RSAs are determined based on the closing market price of the Company’s ordinary shares at the date of 
grant. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three years. RSAs 
are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over ten years. A 
summary of the RSU and RSA activity for 2023 is as follows:

(Restricted stock units and awards in millions)

Non-vested at January 1

Granted
Vested
Forfeited

Non-vested at December 31

Information related to RSUs and RSAs is as follows: 

(In millions)

Pre-tax expense for RSUs and RSAs

After-tax expense for RSUs and RSAs

Fair value of vested RSUs and RSAs 

Number of restricted
stock units and awards

Weighted-average fair
value per unit and award

1.0  $ 

0.4 
(0.5)   
— 

0.9  $ 

127.33 

173.72 
123.84 
157.61 

150.55 

2023

2022

2021

$ 

65  $ 

65  $ 

51 

84 

51 

98 

61 

48 

92 

As of December 31, 2023, total compensation expense not yet recognized related to non-vested RSUs and RSAs was $84 
million, and the weighted-average period in which the expense is expected to be recognized is 2.6 years. Excess tax benefit for 
RSUs and RSAs totaled $4 million, $5 million and $5 million for 2023, 2022, and 2021, respectively. 

61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Share Units

Performance share units (PSUs) have been issued to certain employees that vest based on the satisfaction of a three-year 

service period and total shareholder return relative to that of a group of peers. Awards earned at the end of the three-year 
vesting period range from 0% to 200% of the targeted number of PSUs granted based on the ranking of total shareholder return 
of the Company, assuming reinvestment of all dividends, relative to a defined peer group of companies. Equity-based 
compensation expense for these PSUs is recognized over the period during which an employee is required to provide service in 
exchange for the award. Upon vesting, dividends that have accumulated during the vesting period are paid on earned awards. 

The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions. The principal 
assumptions utilized in valuing these PSUs include the expected stock price volatility (based on the most recent 3-year period 
as of the grant date) and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon bonds 
with a three-year maturity as of the grant date). A summary of the assumptions used in determining fair value of these PSUs is 
as follows:

Expected volatility

Risk-free interest rate

2023

2022

2021

 27 %

 4.35 %

 35 %

 1.71 %

 35 %

 0.20 %

Weighted-average fair value of PSUs granted

$ 

203.18 

$ 

171.63 

$ 

159.74 

A summary of these PSUs that vested is as follows:

(Performance share units in millions)

Percent payout

Shares vested

A summary of the 2023 activity for these PSUs is as follows:

(Performance share units in millions)

Non-vested at January 1

Granted1
Adjusted for performance results achieved2
Vested

2023

2022

2021

 187 %

0.3 

 178 %

0.4 

 189 %

0.5 

Number of 
performance
share units

Weighted-average fair
value per unit

0.3  $ 

0.2 

0.1 

(0.3)   

141.88 

203.18 

159.74 

159.74 

Non-vested at December 31
1 Performance shares granted assuming the Company will perform at target relative to peers. 
2 Adjustments for the number of shares vested under the 2021 awards at the end of the three-year performance period ended December 31, 
2023, being higher than the target number of shares.

0.3  $ 

162.67 

Information related to PSUs is as follows:

(In millions)

Pre-tax expense for PSUs

After-tax expense for PSUs

2023

2022

2021

$ 

22  $ 

17 

21  $ 

17 

26 

21 

As of December 31, 2023, total compensation expense not yet recognized related to non-vested PSUs was $28 million and 

the weighted-average period in which the expense is to be recognized is 1.7 years. Excess tax benefit for PSUs totaled $7 
million, $10 million and $6 million for 2023, 2022, and 2021, respectively.

62

 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Options

Under various plans, stock options have been granted to certain employees and directors to purchase ordinary shares at 
prices equal to fair market value on the date of grant. Substantially all of these options vest ratably during the three-year period 
following the date of grant and expire 10 years from the date of grant. Compensation expense is recognized for stock options 
based on the fair value of the options at the date of grant and amortized on a straight-line basis over the period the employee or 
director is required to provide service.

The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The principal 

assumptions utilized in valuing stock options include the expected stock price volatility (based on the most recent historical 
period equal to the expected life of the option); the expected option life (an estimate based on historical experience); the 
expected dividend yield; and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon 
with a maturity equal to the expected life of the option). A summary of the assumptions used in determining the fair value of 
stock options is as follows:

Expected volatility

Expected option life in years

Expected dividend yield

Risk-free interest rate

2023

2022

2021

 27 %

6.3

 2.0 %

 27 %

6.6

 2.0 %

 28 %

6.5

 3.0 %

4.1 to 4.3% 

0.3 to 3.0% 

0.0 to 1.5%

Weighted-average fair value of stock options granted

$ 

48.79 

$ 

36.56 

$ 

26.11 

A summary of stock option activity is as follows: 

(Options in millions)

Outstanding at January 1, 2023

Granted

Exercised

Outstanding at December 31, 2023

Exercisable at December 31, 2023

Reserved for future grants at December 31, 2023

Weighted-average
exercise price per 
option

Options

Weighted-average
remaining
contractual life
in years

Aggregate
intrinsic
value

$ 

$ 

$ 

91.15 

173.26 

80.23 

103.76 

88.53 

3.0 

0.2 

(1.0) 

2.2 

1.7 

19.3 

5.6 $ 

303.6 

4.7 $ 

260.6 

The aggregate intrinsic value in the table above represents the total excess of the $240.82 closing price of Eaton ordinary 
shares on the last trading day of 2023 over the exercise price of the stock option, multiplied by the related number of options 
outstanding and exercisable. The aggregate intrinsic value is not recognized for financial accounting purposes and the value 
changes based on the daily changes in the fair market value of the Company's ordinary shares.

Information related to stock options is as follows: 

(In millions)

Pre-tax expense for stock options

After-tax expense for stock options

Proceeds from stock options exercised

Income tax benefit related to stock options exercised

Tax benefit classified in operating activities in the Consolidated 
   Statements of Cash Flows

Intrinsic value of stock options exercised

Total fair value of stock options vested

2023

2022

2021

$ 

10  $ 

11  $ 

8 

78 

22 

116 

9 

28 

6 

29 

$ 

10  $ 

11  $ 

14 

11 

63 

13 

69 

14 

Stock options exercised

1.0 

0.4 

0.9 

As of December 31, 2023, total compensation expense not yet recognized related to non-vested stock options was $9.7 

million, and the weighted-average period in which the expense is expected to be recognized is 1.9 years.

63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 15.  FAIR VALUE MEASUREMENTS

Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to 
satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should 
be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for 
considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as 
follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in 
active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no 
market data, which require the reporting entity to develop its own assumptions.

A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements 

used, is as follows:

Quoted prices 
in active 
markets for 
identical 
assets 
(Level 1)

Total

Other 
observable 
inputs 
(Level 2)

Unobservable 
inputs 
(Level 3)

(In millions)
December 31, 2023
Cash
Short-term investments
Net derivative contracts
Contingent future payments from acquisition of Green 
Motion (Note 2)

$ 

488  $ 

488  $ 

2,121 
11 

(18)   

2,121 
— 

— 

December 31, 2022
Cash
Short-term investments
Net derivative contracts
Contingent future payments from acquisition of Green 
Motion (Note 2)

$ 

294  $ 
261 
29 

294  $ 
261 
— 

(44)   

— 

—  $ 
— 
11 

— 

—  $ 
— 
29 

— 

— 
— 
— 

(18) 

— 
— 
— 

(44) 

Eaton values its financial instruments using an industry standard market approach, in which prices and other relevant 

information is generated by market transactions involving identical or comparable assets or liabilities.

Other Fair Value Measurements

Long-term debt and the current portion of long-term debt had a carrying value of $9,261 million and fair value of $8,924 
million at December 31, 2023 compared to $8,331 million and $7,625 million, respectively, at December 31, 2022. The fair 
value of Eaton's debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, 
terms and maturities and is considered a Level 2 fair value measurement.

Short-Term Investments 

Eaton invests excess cash generated from operations in short-term marketable investments. Short-term investments are 
recorded at carrying value, which approximates the fair value due to the short-term maturities of these investments. A summary 
of short-term investments is as follows:

(In millions)

Time deposits and certificates of deposit with banks

Money market investments

Total short-term investments

December 31

2023

2022

$ 

$ 

299  $ 

1,822 

2,121  $ 

248 

13 

261 

64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 16. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange 

rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest 
rate swaps, currency forward exchange contracts, currency swaps and commodity contracts to manage risks from these market 
fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these 
instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into 
with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and 
sold for trading purposes.

Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated 
Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument 
depends on whether it has been designated as part of a hedging relationship, is effective and the nature of the hedging activity. 
Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the 
hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes 
linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or 
net investment in a foreign operation. These financial instruments can be designated as:

•

•

•

Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire 
such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial 
instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in 
income during the period of change in fair value.

Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such 
an asset or liability (a cash flow hedge); for these hedges, the gain or loss from the derivative financial instrument is 
recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain 
or loss on the hedged item is included in income.

Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these 
hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive 
income and reclassified to income in the same period when the gain or loss related to the net investment in the foreign 
operation is included in income.

The gain or loss from a derivative financial instrument designated as a hedge is classified in the same line of the 
Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these 
financial instruments are classified in operating activities on the Consolidated Statements of Cash Flows. 

For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of 
derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain 
commodity contracts that arise in the normal course of business. 

Eaton uses currency exchange contracts and certain of its debt denominated in foreign currency to hedge portions of its net 
investments in foreign operations against foreign currency exposure (net investment hedges). The Company uses the spot rate 
method to assess hedge effectiveness when currency exchange contracts are used in net investment hedges. Under this method, 
changes in the spot exchange rate are recognized in Accumulated other comprehensive loss. Changes related to the forward rate 
are excluded from the hedging relationship and the forward points are amortized to Interest expense - net on a straight-line basis 
over the term of the contract. The cash flows resulting from these currency exchange contracts are classified in investing 
activities on the Consolidated Statements of Cash Flows.

65

Interest Rate Risk

Eaton enters into fixed-to-floating interest rate swaps to manage interest rate risk of certain long-term debt. These interest 
rate swaps are accounted for as fair value hedges of certain long-term debt. Eaton also enters into forward starting floating-to-
fixed interest rate swaps to manage interest rate risk on future anticipated debt issuances.

A summary of interest rate swaps outstanding at December 31, 2023, is as follows:

Forward Starting Floating-to-Fixed Interest Rate Swaps

(Notional amount in millions)

Notional 
amount

Floating interest
rate to be received

Fixed interest
rate to be paid

$ 

55 

55 

55 

—%

—%

—%

3.01%

2.54%

2.32%

Derivative Financial Statement Impacts

Basis for contracted floating interest rate received

6 month Euribor

6 month Euribor

6 month Euribor

The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:

(In millions)
December 31, 2023
Derivatives designated as hedges

Forward starting floating-to-fixed 
interest rate swaps
Currency exchange contracts
Commodity contracts
Currency exchange contracts

Total

Notional
amount

Other
 current
assets

Other 
noncurrent
assets

Other
current
liabilities

Other
noncurrent
liabilities

Type of
hedge

Term

$  165  $  —  $ 

505 
54 
564 

17 
1 
  — 
$ 

17  $ 

—  $  —  $ 
3 
— 
— 
3  $ 

7 
1 
1 
9  $ 

Cash flow
Cash flow
Cash flow

3 
1 
— 
—  Net investment
4 

8 years
1 to 25 months
1 to 12 months
3 months

Derivatives not designated as hedges  

Currency exchange contracts

$  4,797  $ 

12 

$ 

8 

1 to 7 months

December 31, 2022
Derivatives designated as hedges

Currency exchange contracts
Commodity contracts

Total

$  1,240  $ 
64 

$ 

35  $ 
4 
39  $ 

2  $ 
— 
2  $ 

17  $ 
2 
19  $ 

9 
— 
9 

Cash flow
Cash flow

1 to 36 months
1 to 12 months

Derivatives not designated as hedges  

Currency exchange contracts

$  4,683  $ 

30 

$ 

14 

1 to 12 months

The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts 
entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not 
elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet 
exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its 
operations. This activity represents the great majority of these currency exchange contracts. The cash flows resulting from the 
settlement of these derivatives have been classified in investing activities in the Consolidated Statements of Cash Flows. 

Foreign currency denominated debt designated as non-derivative net investment hedging instruments had a carrying value 

on an after-tax basis of $3,140 million at December 31, 2023 and $2,711 million at December 31, 2022.

66

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2023, the volume of outstanding commodity contracts that were entered into to hedge forecasted 

transactions:

Aluminum

Copper

Gold

Silver

Commodity

December 31, 2023

Term

4  Millions of pounds

1 to 11 months

11  Millions of pounds

1 to 12 months

1,611 

67,285 

Troy ounces

Troy ounces

1 to 12 months

1 to 10 months 

The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:

(In millions)

Carrying amount of the hedged 
assets (liabilities)

Cumulative amount of fair value 
hedging adjustment included in the 
carrying amount of the hedged asset 
(liabilities)1

Location on Consolidated Balance Sheets

December 31, 
2023

December 31, 
2022

December 31, 
2023

December 31, 
2022

Long-term debt
(713)  $ 
1 At December 31, 2023 and December 31, 2022, these amounts include the cumulative liability amount of fair value hedging adjustments 
remaining for which the hedge accounting has been discontinued of $42 million and $48 million, respectively.

(713)  $ 

(42)  $ 

$ 

(48) 

The impact of cash flow and fair value hedging activities to the Consolidated Statements of Income is as follows:

(In millions)

Net sales

Cost of products sold Interest expense - net

Amounts from Consolidated Statements of Income

$ 

23,196  $ 

14,762  $ 

151 

2023

Gain (loss) on derivatives designated as cash flow hedges

Forward starting floating-to-fixed interest rate swaps

Hedged item

Derivative designated as hedging instrument

Currency exchange contracts

Hedged item

Derivative designated as hedging instrument

Commodity contracts

Hedged item
Derivative designated as hedging instrument

$ 

$ 

$ 

—  $ 

— 

(2)  $ 

2 

—  $ 
— 

—  $ 

— 

(58)  $ 

58 

(1)  $ 
1 

(13) 

13 

— 

— 

— 
— 

67

 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)

Net sales

Cost of products sold Interest expense - net

Amounts from Consolidated Statements of Income

$ 

20,752  $ 

13,865  $ 

144 

2022

Gain (loss) on derivatives designated as cash flow hedges

Forward starting floating-to-fixed interest rate swaps

Hedged item

Derivative designated as hedging instrument

Currency exchange contracts

Hedged item

Derivative designated as hedging instrument

Commodity contracts

Hedged item

Derivative designated as hedging instrument

Gain (loss) on derivatives designated as fair value hedges

Fixed-to-floating interest rate swaps

Hedged item

Derivative designated as hedging instrument

$ 

$ 

$ 

$ 

—  $ 

— 

17  $ 

(17)   

—  $ 

— 

—  $ 

— 

—  $ 

— 

(26)  $ 

26 

4  $ 

(4)   

—  $ 

— 

2021

(4) 

4 

— 

— 

— 

— 

8 

(8) 

(In millions)

Net sales

Cost of products sold Interest expense - net

Amounts from Consolidated Statements of Income

$ 

19,628  $ 

13,293  $ 

144 

6  $ 

(6)   

—  $ 
— 

—  $ 

— 

—  $ 

— 

(9)  $ 
9 

—  $ 

— 

— 

— 

— 
— 

51 

(51) 

Gain (loss) on derivatives designated as cash flow hedges

Currency exchange contracts

Hedged item

Derivative designated as hedging instrument

Commodity contracts

Hedged item
Derivative designated as hedging instrument

Gain (loss) on derivatives designated as fair value hedges

Fixed-to-floating interest rate swaps

Hedged item

Derivative designated as hedging instrument

$ 

$ 

$ 

68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:

(In millions)
Gain (loss) on derivatives not 
designated as hedges

Gain (loss) recognized in Consolidated Statements of 
Income

Consolidated Statements of 
Income classification

2023

2022

2021

Currency exchange contracts

$ 

57  $ 

Commodity contracts

— 

(56)  $ 

(15)   

— 

11 

Interest expense - net
Other expense (income) - net 
and Cost of products sold1

Total
1 In 2022, Eaton changed the presentation of gains and losses associated with derivative contracts for commodities that are not designated as 
hedges from Cost of product sold to Other expense (income) - net on the Consolidated Statements of Income. Prior period amounts have not 
been reclassified as they are not material.  

(71)  $ 

57  $ 

11 

$ 

The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and 

Comprehensive Income is as follows:

(In millions)

Derivatives designated as cash flow hedges

Forward starting floating-to-fixed interest rate swaps
Currency exchange contracts

Commodity contracts

Derivatives designated as net investment hedges

Currency exchange contracts

Effective portion
Amount excluded from effectiveness testing

Non-derivative designated as net investment hedges

Foreign currency denominated debt

Total

Gain (loss) recognized in other
 comprehensive (loss) income

2023

2022

2021

$ 

(2)  $ 
66 

— 

202  $ 
13 

(5)   

50 
(6) 

6 

8 
15 

— 
— 

(110)   

171 

$ 

(24)  $ 

381  $ 

— 
— 

240 

290 

69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)

Derivatives designated as cash flow hedges

Forward starting floating-to-fixed interest rate swaps

Currency exchange contracts

Commodity contracts

Derivatives designated as net investment hedges

Currency exchange contracts

Effective portion
Amount excluded from effectiveness testing

Non-derivative designated as net investment hedges

Foreign currency denominated debt

Total

Location of gain (loss)
reclassified from
Accumulated other
comprehensive loss

Interest expense - net
Net sales and Cost of 
products sold

Cost of products sold

Gain (loss) on sale of 
business
Interest expense - net

Gain (loss) on sale of 
business

Gain (loss) reclassified
from Accumulated other
comprehensive loss

2023

2022

2021

$ 

13  $ 

4  $ 

— 

64 

1 

— 
12 

9 

(4)   

(6) 

9 

— 
— 

— 
— 

— 

3 

— 

— 

$ 

89  $ 

9  $ 

The pre-tax portion of the fair value of currency exchange contracts designated as net investment hedges included in 

Accumulated other comprehensive loss were net gains of $8 million at December 31, 2023. The pre-tax portion of the fair value 
of the forward points included in Accumulated other comprehensive loss were net gains of $15 million at December 31, 2023. 

At December 31, 2023, a gain of $9 million of estimated unrealized net gains or losses associated with our cash flow hedges 

were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These 
reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next twelve months.

70

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 17. RESTRUCTURING CHARGES

In the second quarter of 2020, Eaton initiated a multi-year restructuring program to reduce its cost structure and gain 

efficiencies in its business segments and at corporate in order to initially respond to declining market conditions brought on by 
the COVID-19 pandemic. Since the inception of the program, the Company incurred charges of $382 million. The multi-year 
program was substantially complete at the end of 2023.

A summary of restructuring program charges (income) is as follows:

(In millions except for per share data)

Workforce reductions

Plant closing and other

Total before income taxes

Income tax benefit

Total after income taxes

Per ordinary share - diluted

2023

2022

2021

19  $ 

(13)  $ 

38 

57 

11 

46  $ 

0.11  $ 

47 

33 

4 

29  $ 

0.07  $ 

$ 

$ 

$ 

Restructuring program charges (income) related to the following segments:

(In millions)

Electrical Americas

Electrical Global

Aerospace

Vehicle

eMobility

Corporate

Total

2023

2022

2021

2020

$ 

5  $ 

26 

5 

6 

7 

8 

17  $ 

14 

8 

(15)   

1 

8 

14  $ 

18 

8 

21 

1 

16 

$ 

57  $ 

33  $ 

78  $ 

A summary of liabilities related to workforce reductions, plant closing, and other associated costs is as follows:

(In millions)

Balance at January 1, 2020

Liability recognized

Payments, utilization and translation

Balance at December 31, 2020

Liability recognized
Payments, utilization and translation

Balance at December 31, 2021
Liability recognized, net1
Payments, utilization and translation

Balance at December 31, 2022

Liability recognized, net

Payments, utilization and translation

Workforce reductions

Plant closing and other

Total

$ 

$ 

$ 

$ 

—  $ 

172 

(33)   

139  $ 

21 
(64)   

96  $ 
(13)   

(45)   

38  $ 

19 

(21)   

—  $ 

42 

(39)   

3  $ 

57 
(52)   

8  $ 
47 

(51)   

4  $ 

38 

(36)   

21 

57 

78 

18 

60 

0.15 

18 

55 

34 

102 

1 

4 

214 

— 

214 

(72) 

142 

78 
(116) 

104 
33 

(96) 

41 

57 

(57) 

41 

Balance at December 31, 2023
1 The restructuring program liability was adjusted by $30 million in 2022 related to true-ups for completed workforce reductions and the 
decision not to close a facility in the Vehicle segment that was previously included in the program.

35  $ 

6  $ 

$ 

These restructuring program charges (income) were included in Cost of products sold, Selling and administrative expense, 
Research and development expense, or Other expense (income) – net, as appropriate. In Business Segment Information, these 
restructuring program charges are treated as Corporate items. See Note 18 for additional information about business segments.

71

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On February 1, 2024, the Company announced a new multi-year restructuring program to accelerate opportunities to 
optimize its operations and global support structure. These actions will better align the Company's functions to support 
anticipated growth and drive greater effectiveness throughout the Company. This restructuring program is expected to be 
completed in 2026, with anticipated workforce reductions of $275 million and plant closing and other costs of $100 million, 
resulting in total estimated charges of $375 million for the entire program.

Note 18. BUSINESS SEGMENT AND GEOGRAPHIC REGION 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. Eaton’s segments are as follows:

Electrical Americas and Electrical Global

The Electrical Americas segment consists of electrical components, industrial components, power distribution and 

assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit 
protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North 
and South America. The Electrical Global segment consists of electrical components, industrial components, power distribution 
and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North 
and South America; as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe 
explosion-proof instrumentation, and structural support systems that are produced and sold globally. The principal markets for 
these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These 
products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment 
and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share certain common 
global customers, but a large number of customers are located regionally. Sales are made through distributors, resellers, and 
manufacturers’ representatives, as well as directly to original equipment manufacturers, utilities, and certain other end users.

Hydraulics

On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. The Hydraulics business sold 
hydraulics components, systems and services for industrial and mobile equipment. The Hydraulics business offered a wide 
range of power products including pumps, motors and hydraulic power units; a broad range of controls and sensing products 
including valves, cylinders and electronic controls; a full range of fluid conveyance products including industrial and hydraulic 
hose, fittings, and assemblies, thermoplastic hose and tubing, couplings, connectors, and assembly equipment; industrial drum 
and disc brakes. Historically, the principal markets for the Hydraulics business included renewable energy, marine, agriculture, 
oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, 
and power generation. Key manufacturing customers in these markets and other customers were located globally. Products were 
sold and serviced through a variety of channels.

Aerospace

The Aerospace segment is a leading global supplier of aerospace fuel, hydraulics, and pneumatic systems for commercial 
and military use, as well as filtration systems for industrial applications. Products include hydraulic power generation systems 
for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls 
and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat 
systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, 
couplings, sealing and ducting; fuel systems including air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, 
valves, adapters and regulators; mission systems including oxygen generation system, payload carriages, and thermal 
management products; high performance interconnect products including wiring connectors and cables. The Aerospace segment 
also includes filtration systems including hydraulic filters, bag filters, strainers and cartridges; and golf grips. The principal 
markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers, as 
well as industrial applications. These manufacturers and other customers operate globally. Products are sold and serviced 
through a variety of channels.

Vehicle

The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and 
critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, 
and commercial vehicles. Products include transmissions and transmission components, clutches, hybrid power systems, 
superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel 
vapor components for the global vehicle industry. The principal markets for the Vehicle segment are original equipment 
manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars, 
construction, and agricultural equipment. 

72

eMobility

The eMobility segment designs, manufactures, markets, and supplies mechanical, 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, 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 heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars, construction, agriculture, 
material handling and mining equipment.

Other Information

No single customer represented greater than 10% of net sales in 2023, 2022 or 2021, respectively.

The accounting policies of the business segments are generally the same as the policies described in Note 1, except that, as 
described further in the following paragraph, certain items are not allocated to the businesses. Intersegment sales and transfers 
are accounted for at the same prices as if the sales and transfers were made to third parties. These intersegment sales are 
eliminated in consolidation. Operating profit (loss) includes the operating profit from intersegment sales.

Corporate includes all the Company's amortization of intangible assets, interest expense - net and restructuring program 
charges (Note 17) and the non-service cost portion of pension and other postretirement benefits income. Other expense - net 
includes all the Company's costs associated with acquisitions, divestitures, and gains and losses on the sale of certain businesses 
and other items that are of a corporate or functional governance nature. For purposes of business segment performance 
measurement, a portion of corporate costs, excluding amortization of intangibles assets, acquisition integration and divestiture 
costs, and restructuring program charges, are allocated to the businesses. These allocations are periodically adjusted to pass on 
year-over-year cost savings or increases to the businesses in a manner that is consistent with how the chief operating decision 
maker assesses performance. Identifiable assets of the business segments exclude goodwill, other intangible assets, and general 
corporate assets, which principally consist of certain cash, short-term investments, deferred income taxes, certain accounts 
receivable, certain property, plant and equipment, and certain other assets.

73

Business Segment Information

(In millions)
Net sales

Electrical Americas

Electrical Global

Hydraulics

Aerospace

Vehicle

eMobility

Total net sales

Segment operating profit (loss)

Electrical Americas

Electrical Global

Hydraulics

Aerospace

Vehicle

eMobility

Total segment operating profit

Corporate

Intangible asset amortization expense

Interest expense - net

Pension and other postretirement benefits income

Restructuring program charges

Other expense - net

Income before income taxes

Income tax expense

Net income

2023

2022

2021

$ 

10,098  $ 

8,497  $ 

6,084 

— 

3,413 

2,965 

636 

5,848 

— 

3,039 

2,830 

538 

7,242 

5,516 

1,300 

2,648 

2,579 

343 

$ 

23,196  $ 

20,752  $ 

19,628 

$ 

2,675  $ 

1,913  $ 

1,176 

— 

780 

482 

(21)   

5,093 

(450)   

(151)   

46 

(57)   

(654)   

3,827 

604 

3,223 

1,134 

— 

705 

453 

(9)   

4,196 

(499)   

(144)   

43 

(33)   

(653)   

2,911 

445 

2,465 

1,495 

1,034 

177 

580 

449 

(29) 

3,706 

(444) 

(144) 

65 

(78) 

(209) 

2,896 

750 

2,146 

(2) 

Less net income for noncontrolling interests

(5)   

(4)   

Net income attributable to Eaton ordinary shareholders

$ 

3,218  $ 

2,462  $ 

2,144 

74

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)

Identifiable assets

Electrical Americas

Electrical Global

Aerospace

Vehicle

eMobility

Total identifiable assets

Goodwill

Other intangible assets

Corporate

Total assets

Capital expenditures for property, plant and equipment

Electrical Americas

Electrical Global

Hydraulics

Aerospace

Vehicle

eMobility

Total

Corporate

Total expenditures for property, plant and equipment

Depreciation of property, plant and equipment

Electrical Americas

Electrical Global

Aerospace

Vehicle

eMobility

Total
Corporate

2023

2022

2021

$ 

4,163  $ 

3,655  $ 

2,868 

2,276 

2,251 

563 

12,121 

14,977 

5,091 

6,243 

2,658 

1,859 

2,230 

402 

10,804 

14,796 

5,485 

3,929 

3,002 

2,579 

1,729 

1,985 

220 

9,515 

14,751 

5,855 

3,906 

$ 

38,432  $ 

35,014  $ 

34,027 

$ 

$ 

$ 

309  $ 

142 

181  $ 

151 

— 

97 

96 

76 

721 

36 

— 

92 

95 

52 

571 

28 

757  $ 

598  $ 

180 

120 

34 

78 

112 

27 

551 

24 

575 

108  $ 

101  $ 

105 

96 

69 

92 

21 

386 
43 

94 

64 

89 

16 

364 
44 

97 

69 

95 

8 

374 
52 

426 

Total depreciation of property, plant and equipment

$ 

429  $ 

408  $ 

75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Geographic Region Information

Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and 

equipment - net.

(In millions)
Net sales

United States

Canada

Latin America

Europe

Asia Pacific

Total

Long-lived assets

United States

Canada

Latin America

Europe

Asia Pacific

Total

2023

2022

2021

$ 

14,071  $ 

12,353  $ 

10,868 

949 

1,549 

4,339 

2,288 

754 

1,504 

3,957 

2,185 

797 

1,160 

4,276 

2,527 

$ 

23,196  $ 

20,752  $ 

19,628 

$ 

1,773  $ 

1,567  $ 

1,593 

31 

476 

797 

453 

25 

383 

711 

460 

25 

277 

701 

468 

$ 

3,530  $ 

3,146  $ 

3,064 

76

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS.

Amounts are in millions of dollars or shares unless indicated otherwise (per share data assume dilution). Columns and rows 

may not add and the sum of components may not equal total amounts reported due to rounding.

COMPANY OVERVIEW

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to protecting the 
environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, 
commercial, machine building, residential, aerospace and mobility markets. We are well positioned to capitalize on the 
megatrends of electrification, energy transition and digitalization. The reindustrialization of North America and Europe, growth 
in North American megaprojects, and increased global infrastructure spending focused on clean energy programs are expanding 
our end markets and positioning Eaton for growth for years to come. We are strengthening our participation across the entire 
electrical power value chain and benefiting from momentum in the data center and utility end markets as well as a growth cycle 
in the commercial aerospace and defense markets. We are guided by our commitment to operate sustainably and with the 
highest ethical standards. Our work is accelerating the planet’s transition to renewable energy sources, helping to solve the 
world’s most urgent power management challenges, and building a more sustainable society for people today and for future 
generations.

Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century. We reported 

revenues of $23.2 billion in 2023 and serve customers in more than 160 countries.

77

Portfolio Changes

The Company continues to actively manage its portfolio of businesses to deliver on its strategic objectives. The Company is 
focused on deploying its capital toward businesses that provide opportunities for above-market growth, strong returns, and align 
with secular trends and its power management strategies. Over the last three years, Eaton continued to selectively add 
businesses to strengthen its portfolio.

Acquisitions of businesses and investments in associate companies
Tripp Lite

Date of acquisition
March 17, 2021

Business segment
Electrical Americas

A leading supplier of power quality products and connectivity solutions including 
single-phase uninterruptible power supply systems, rack power distribution units, 
surge protectors, and enclosures for data centers, industrial, medical, and 
communications markets in the Americas.

Green Motion SA

March 22, 2021

Electrical Global

A leading designer and manufacturer of electric vehicle charging hardware and 
related software.

HuanYu High Tech

March 29, 2021

Electrical Global

A 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that 
manufactures and markets low-voltage circuit breakers and contactors in China, 
and throughout the Asia-Pacific region.

Mission Systems

June 1, 2021

Aerospace

A leading manufacturer of air-to-air refueling systems, environmental systems, 
and actuation primarily for defense markets.

Jiangsu YiNeng Electric's busway business

June 25, 2021

Electrical Global

A 50 percent stake in Jiangsu YiNeng Electric's busway business which 
manufactures and markets busway products in China.

Royal Power Solutions

January 5, 2022

eMobility

A manufacturer of high-precision electrical connectivity components used in 
electric vehicle, energy management, industrial and mobility markets.

Jiangsu Huineng Electric Co., Ltd’s circuit breaker business

July 1, 2022

Electrical Global

A 50 percent stake in Jiangsu Huineng Electric Co., Ltd's circuit breaker business 
which manufactures and markets low-voltage circuit breakers in China.

Jiangsu Ryan Electrical Co. Ltd.

April 23, 2023

Electrical Global

A 49 percent stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power 
distribution and sub-transmission transformers in China.

Divestiture of business
Hydraulics business

Date of divestiture
August 2, 2021

Business segment
Hydraulics

Additional information related to acquisitions and divestiture of businesses is presented in Note 2.

78

Summary of Results of Operations

A summary of Eaton’s Net sales, Net income attributable to Eaton ordinary shareholders, and Net income per share 

attributable to Eaton ordinary shareholders - diluted is as follows:

(In millions except for per share data)

Net sales

2023

2022

2021

$ 

23,196  $ 

20,752  $ 

19,628 

Net income attributable to Eaton ordinary shareholders

3,218 

2,462 

Net income per share attributable to Eaton ordinary shareholders - diluted

$ 

8.02  $ 

6.14  $ 

2,144 

5.34 

2021: Organic sales increased 10% in 2021 as end-markets and regions served by our business segments experienced broad 

recovery from the negative impact of the COVID-19 pandemic. Our Electrical Global, Vehicle and eMobility business 
segments all realized organic growth greater than 10% during the year, despite supply chain constraints limiting the availability 
of materials in select businesses, travel restrictions continuing to impact commercial aviation, and reduced production levels at 
our customers leading to historic low vehicle inventory. 

2022: Organic sales increased 13% in 2022 due to broad-based strength in end-markets and pricing actions in response to 
inflationary pressures. Each of our business segments realized organic growth greater than 10% during the year, despite being 
impacted by operating inefficiencies due to supply chain constraints or shortages, inflation, and selective labor shortages. 

2023: Organic sales increased 12% in 2023 due to higher sales volumes including net price realization in most of our 

business segments. Our Electrical Americas, Aerospace, and eMobility business segments each realized organic growth greater 
than 10%, driving a 31% increase in net income from 2022, despite certain business segments being impacted by higher costs to 
support growth initiatives, unfavorable product mix, and operating inefficiencies.

Additionally, over the past several years, Eaton has completed a number of transactions to add higher growth, better margin 

businesses to its portfolio. These portfolio updates have the Company better aligned with secular growth trends and well 
positioned for expected further growth. These changes to our portfolio of businesses along with double digit organic sales 
growth and operational performance over the past three years have led to 50% growth in our net income per share since 2021.

RESULTS OF OPERATIONS

Non-GAAP Financial Measures

The following discussion of Consolidated Financial Results includes certain non-GAAP financial measures. These financial 

measures include adjusted earnings and adjusted earnings per ordinary share, each of which differs from the most directly 
comparable measure calculated in accordance with generally accepted accounting principles (GAAP). A reconciliation of 
adjusted earnings and adjusted earnings per ordinary share to the most directly comparable GAAP measure is included in the 
Consolidated Financial Results table below. Management believes that these financial measures are useful to investors because 
they provide additional meaningful financial information that should be considered when assessing our business performance 
and trends, and they allow investors to more easily compare Eaton’s financial performance period to period. Management uses 
this information in monitoring and evaluating the on-going performance of Eaton. 

Acquisition and Divestiture Charges

Eaton incurs integration charges and transaction costs to acquire and integrate businesses, and transaction, separation and 
other costs to divest and exit businesses. Eaton also recognizes gains and losses on the sale of businesses. A summary of these 
Corporate items is as follows: 

(In millions except for per share data)

2023

2022

2021

Acquisition integration, divestiture charges and transaction costs

Gain on the sale of the Hydraulics business

Total charges (income) before income taxes

Income tax expense (benefit)

Total after income taxes

Per ordinary share - diluted

$ 

$ 

$ 

54  $ 

— 

54 

(15)   

39  $ 

0.10  $ 

194  $ 

(24)   

170 

(23)   

147  $ 

0.37  $ 

349 

(617) 

(268) 

362 

94 

0.23 

79

 
 
 
 
 
 
 
 
 
Acquisition integration, divestiture charges and transaction costs in 2023 and 2022 are related to the acquisition of Royal 

Power Solutions and other acquisitions completed prior to 2022, including other charges and income to acquire and exit 
businesses. Costs in 2023 and 2022 also included certain indemnity claims associated with the sale of 50% interest in the 
commercial vehicle automated transmission business in 2017. 2023 and 2022 also included reductions in the fair value of 
contingent future consideration from the Green Motion SA acquisition. Costs in 2022 also included charges of $29 million 
presented in Other expense (income) - net on the Consolidated Statements of Income related to the decision in the second 
quarter of 2022 to exit the Company's business operations in Russia. These charges consisted primarily of write-downs of 
accounts receivable, inventory and other assets, and accruals for severance. Charges in 2021 are primarily related to the 
divestiture of the Hydraulics business, the acquisitions of Tripp Lite, Mission Systems, Souriau-Sunbank Connection 
Technologies, and Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S., and other charges to acquire and exit businesses including 
certain indemnity claims associated with the sale of 50% interest in the commercial vehicle automated transmission business in 
2017. These charges were included in Cost of products sold, Selling and administrative expense, Research and development 
expense, or Other expense (income) - net. In Business Segment Information in Note 18, the charges were included in Other 
expense - net.

Restructuring Programs

In the second quarter of 2020, Eaton initiated a multi-year restructuring program to reduce its cost structure and gain 

efficiencies in its business segments and at corporate in order to initially respond to declining market conditions brought on by 
the COVID-19 pandemic. Since the inception of the program, the Company incurred charges of $382 million related to 
workforce reductions, plant closing, and other costs. The multi-year program was substantially complete at the end of 2023 and 
mature year benefits from the program are estimated to be $265 million and will be largely realized by the end of 2024. 
Additional information related to this restructuring is presented in Note 17.

On February 1, 2024, the Company announced a new multi-year restructuring program to accelerate opportunities to 
optimize its operations and global support structure. These actions will better align the Company's functions to support 
anticipated growth and drive greater effectiveness throughout the Company. This restructuring program is expected to be 
completed in 2026, with anticipated workforce reductions of $275 million and plant closing and other costs of $100 million, 
resulting in total estimated charges of $375 million for the entire program. The Company expects mature year benefits of 
$325 million when the multi-year program is fully implemented.

Intangible Asset Amortization Expense

Intangible asset amortization expense is as follows:

(In millions except for per share data)

Intangible asset amortization expense

Income tax benefit

Total after income taxes

Per ordinary share - diluted

2023

2022

2021

$ 

$ 

$ 

450  $ 

98 

353  $ 

0.89  $ 

499  $ 

105 

394  $ 

0.99  $ 

444 

83 

361 

0.90 

80

 
 
 
Consolidated Financial Results

(In millions except for per share data)

Net sales

Gross profit

Percent of net sales

Income before income taxes

Net income

Less net income for noncontrolling interests

Net income attributable to Eaton ordinary shareholders

Excluding acquisition and divestiture charges, after-tax

Excluding restructuring program charges, after-tax

Excluding intangible asset amortization expense, after-tax  

2023

$ 23,196 

8,434 

 36.4 %

3,827 

3,223 

(5) 

3,218 
39 

46 

353 

Change 
from 2022

2022

Change 
from 2021

2021

 12 % $ 20,752 

 22 %  

6,887 

 6 % $ 19,628 

 9 %  

6,335 

 33.2 %

 32.3 %

 31 %  

2,911 

 31 %  

2,465 

 1 %  

2,896 

 15 %  

2,146 

 31 %  

(4) 

2,462 
147 

29 

394 

 15 %  

(2) 

2,144 
94 

60 

361 

Adjusted earnings

$  3,657 

 21 % $  3,032 

 14 % $  2,659 

Net income per share attributable to Eaton ordinary 

shareholders - diluted
Excluding per share impact of acquisition and divestiture 

charges, after-tax

Excluding per share impact of restructuring program 

charges, after-tax

Excluding per share impact of intangible asset 

amortization expense, after-tax

Adjusted earnings per ordinary share

$ 

Net Sales

$ 

8.02 

 31 % $ 

6.14 

 15 % $ 

5.34 

0.10 

0.11 

0.89 

9.12 

0.37 

0.07 

0.99 

7.57 

 20 % $ 

0.23 

0.15 

0.90 

6.62 

 14 % $ 

Changes in Net sales are summarized as follows:

2023

2022

Organic growth
Acquisitions of businesses

Divestiture of business

Foreign currency

Total increase in Net sales

 12 %
 — %

 — %

 — %

 12 %

 13 %
 3 %

 (7) %

 (3) %

 6 %

2023: Organic sales increased 12% in 2023 due to strength in commercial & institutional, utility, industrial, and data center 

end-markets in the Electrical Americas and Electrical Global business segments, strength in sales to commercial OEM and 
aftermarket in the Aerospace business segment, strength in the North American, European, and Asia Pacific regions in the 
Vehicle business segment, and the ramp up of key programs in the eMobility business segment due to robust demand for 
electric vehicles.

2022: Organic sales increased 13% in 2022 due to broad-based strength in end-markets of the Electrical Americas and 
Electrical Global business segments, strength in sales to commercial OEM and aftermarket in the Aerospace business segment, 
and higher sales volumes including inflationary recovery in the Vehicle business segment. Despite strong growth, many of our 
businesses were impacted by operating inefficiencies due to supply chain constraints or shortages, inflation, and selective labor 
shortages. 

The acquisitions of Tripp Lite, Mission Systems, and Royal Power Solutions increased sales in 2022, while the divestiture of 

the Hydraulics business reduced sales.

81

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit

2023: Gross profit margin increased from 33.2% in 2022 to 36.4% in 2023 primarily due to higher sales volumes and net 
price realization, partially offset by higher costs to support growth initiatives in the Electrical Americas and Aerospace business 
segments, unfavorable product mix in the Electrical Global, Aerospace, and eMobility business segments, and operating 
inefficiencies in the Electrical Global and Vehicle business segments. 

2022: Gross profit margin increased from 32.3% in 2021 to 33.2% in 2022 primarily due to higher organic sales, including 
inflationary pricing recovery. Gross profit also improved due to the net impact of the acquisition of Royal Power Solutions and 
the divestiture of the Hydraulics business. Conversely, commodity and logistics inflation and operating inefficiencies due to 
supply chain constraints had an unfavorable impact on gross margin during 2022, despite offsetting pricing actions. 

Income Taxes

During 2023, income tax expense of $604 million was recognized (an effective tax rate of 15.8%) compared to income tax 
expense of $445 million in 2022 (an effective tax rate of 15.3%) and income tax expense of $750 million in 2021 (an effective 
tax rate of 25.9%). Excluding the one-time tax expense associated with the sale of the Hydraulics business in 2021 as discussed 
in Note 2, the effective tax rate was between 15.0% and 17.0% for 2023, 2022, and 2021.

Effective tax rate

Tax impact on sale of the Hydraulics business

2023

2022

2021

 15.8 %

 — %

 15.8 %

 15.3 %

 — %

 15.3 %

 25.9 %

 9.1 %

 16.8 %

Additionally, see Note 12 for income tax rate reconciliations from Ireland's national statutory rate to the consolidated 

effective rate.

In December 2023, Ireland enacted legislation to implement a 15% global minimum effective tax rate by country as 

established by the Organization for Economic Co-operation and Development (OECD), with effective dates of January 1, 2024, 
and January 1, 2025, for different aspects of the rules. The Company will continue to evaluate the impact of global minimum 
tax legislation as enacted by Ireland and other countries in which we operate and expects its effective tax rate for 2024 to be 
near the high end of the 15.0% to 17.0% range in the table above.

Net Income

Changes in Net income attributable to Eaton ordinary shareholders and Net income per share attributable to Eaton ordinary 

shareholders - diluted are summarized as follows:

(In millions except for per share data)
Prior year
  Business segment results of operations
    Operational performance
    Foreign currency
  Corporate
    Intangible asset amortization expense
    Restructuring program charges
    Acquisition and divestiture charges
    Other corporate items
  Tax rate impact
  Share repurchases
Current year

2023

2022

Dollars

Per share

Dollars

Per share

$ 

2,462  $ 

6.14  $ 

2,144  $ 

5.34 

762 
(11)   

1.89 
(0.03)   

41 
(17)   
108 
(102)   
(25)   

$ 

3,218  $ 

0.10 
(0.04)   
0.27 
(0.25)   
(0.06)   
— 
8.02  $ 

492 
(79)   

(33)   
31 
(53)   
(23)   
(17)   

2,462  $ 

1.24 
(0.20) 

(0.09) 
0.08 
(0.14) 
(0.06) 
(0.04) 
0.01 
6.14 

82

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Segment Results of Operations

The following is a discussion of Net sales, operating profit (loss) and operating margin by business segment.

Electrical Americas

(In millions)

Net sales

Operating profit

Operating margin

2023

$ 10,098 

Change 
from 2022

2022

Change 
from 2021

2021

 19 % $  8,497 

 17 % $  7,242 

$  2,675 

 40 % $  1,913 

 28 % $  1,495 

 26.5 %

 22.5 %

 20.6 %

Changes in Net sales are summarized as follows:

Organic growth
Acquisition of Tripp Lite

Total increase in Net sales

2023

 19 %
 — %

 19 %

2022

 16 %
 1 %

 17 %

The increase in organic sales in 2023 reflects strength in commercial & institutional, utility, industrial, machine OEM, and 

data center end-markets. The increase in organic sales in 2022 reflects broad-based strength in end-markets, with particular 
strength in residential, industrial, and data center end-markets.

The operating margin increased from 22.5% in 2022 to 26.5% in 2023 primarily due to higher sales volumes and net price 

realization, partially offset by higher costs to support growth initiatives, and higher gains from the sale of non-production 
facilities in 2022. The operating margin increased from 20.6% in 2021 to 22.5% in 2022 primarily due to higher sales volumes 
including inflationary pricing recovery, while headwinds from commodity and logistics inflation and operating inefficiencies 
due to supply chain constraints were offset by gains from the sale of certain non-production facilities.

Electrical Global

(In millions)

Net sales

Operating profit

Operating margin

2023

$  6,084 

Change 
from 2022

2022

Change 
from 2021

2021

 4 % $  5,848 

 6 % $  5,516 

$  1,176 

 4 % $  1,134 

 10 % $  1,034 

 19.3 %

 19.4 %

 18.7 %

Changes in Net sales are summarized as follows:

2023

2022

Organic growth
Divestiture

Foreign currency
Total increase in Net sales

 5 %
 (1) %

 — %
 4 %

 13 %
 — %

 (7) %
 6 %

The increase in organic sales in 2023 was primarily due to strength in commercial & institutional, industrial, utility, and data 

center end-markets. The increase in organic sales in 2022 was primarily due to broad-based strength in end-markets, with 
particular strength in commercial & institutional and industrial end-markets.

The operating margin decreased from 19.4% in 2022 to 19.3% in 2023 primarily due to operating inefficiencies from 

ongoing supply chain constraints and unfavorable product mix, partially offset by higher sales volumes and net price 
realization, and a net gain on the sale of a non-production facility in 2023. The operating margin increased from 18.7% in 2021 
to 19.4% in 2022 primarily due to higher sales volumes including inflationary pricing recovery, partially offset by commodity 
and logistics inflation and operating inefficiencies due to supply chain constraints.

83

Hydraulics

On August 2, 2021, Eaton completed the sale of the Hydraulics business segment. For 2021, the Hydraulics segment 

generated net sales of $1,300 million and operating profit of $177 million.

Aerospace

(In millions)

Net sales

Operating profit

Operating margin

2023

$  3,413 

Change 
from 2022

2022

Change 
from 2021

2021

 12 % $  3,039 

 15 % $  2,648 

$ 

780 

 11 % $ 

705 

 22 % $ 

580 

 22.9 %

 23.2 %

 21.9 %

Changes in Net sales are summarized as follows:
Organic growth
Acquisition of Mission Systems
Foreign currency
Total increase in Net sales

2023

2022 

 11 %
 — %
 1 %
 12 %

 11 %
 8 %
 (4) %
 15 %

The increase in organic sales in 2023 was primarily due to broad-based strength across all markets with particular strength in 

commercial OEM and aftermarket. The increase in organic sales in 2022 was primarily due to strength in sales to commercial 
OEM and aftermarket.

The operating margin decreased from 23.2% in 2022 to 22.9% in 2023 primarily due to commodity and wage inflation, 
unfavorable product mix, and higher costs to support growth initiatives, partially offset by higher sales volumes including 
inflationary pricing recovery. The operating margin increased from 21.9% in 2021 to 23.2% in 2022 primarily due to higher 
organic sales volumes.

Vehicle

(In millions)

Net sales

Operating profit

Operating margin

2023

$  2,965 

Change 
from 2022

2022

Change 
from 2021

2021

 5 % $  2,830 

 10 % $  2,579 

$ 

482 

 6 % $ 

453 

 1 % $ 

449 

 16.3 %

 16.0 %

 17.4 %

Changes in Net sales are summarized as follows:
Organic growth
Foreign currency
Total increase in Net sales

2023

 4 %
 1 %
 5 %

2022 

 12 %
 (2) %
 10 %

The increase in organic sales in 2023 was primarily due to strength in the North American, European, and Asia Pacific 
regions, partially offset by weakness in the South American truck, bus and agriculture markets. The increase in organic sales in 
2022 was primarily due to strength in the North American truck and light vehicle markets, and South American truck, bus and 
agriculture markets.

The operating margin increased from 16.0% in 2022 to 16.3% in 2023 primarily due to higher sales volumes including net 
price realization, partially offset by operating inefficiencies. The operating margin decreased from 17.4% in 2021 to 16.0% in 
2022 primarily due to commodity and logistics inflation and operating inefficiencies due to supply chain constraints, partially 
offset by higher sales volumes including inflationary recovery.

84

eMobility

(In millions)

Net sales

Operating loss

Operating margin

2023

$ 

636 

Change 
from 2022

2022

Change 
from 2021

2021

 18 % $ 

538 

 57 % $ 

343 

$ 

(21) 

 (133) % $ 

(9) 

 69 % $ 

(29) 

 (3.2) %

 (1.6) %

 (8.5) %

Changes in Net sales are summarized as follows:
Organic growth
Acquisition of Royal Power Solutions
Foreign currency
Total increase in Net sales

2023

2022

 18 %
 — %
 — %
 18 %

 13 %
 46 %
 (2) %
 57 %

The increase in organic sales in 2023 reflects the ramp up of key programs due to robust demand for electric vehicles in the 
North American and European markets. The increase in organic sales in 2022 was due to strength in all regions primarily due to 
robust demand for electric vehicles. 

The operating margin decreased from negative 1.6% in 2022 to negative 3.2% in 2023 primarily due to commodity and 

wage inflation, manufacturing start-up costs associated with new electric vehicle programs, and unfavorable product mix, 
partially offset by higher sales volumes including inflationary pricing recovery. The operating margin increased from negative 
8.5% in 2021 to negative 1.6% in 2022 primarily due to higher organic sales volumes and the acquisition of Royal Power 
Solutions.

Corporate Expense

(In millions)

Intangible asset amortization expense

$ 

Interest expense - net

Pension and other postretirement benefits income

Restructuring program charges

Other expense - net

Total corporate expense

2023

Change 
from 2022

2022

Change 
from 2021

2021

450 

151 

(46) 

57 

654 

 (10) % $ 

 5 %  

 7 %  

 73 %  

 — %  

499 

144 

(43) 

33 

653 

 12 % $ 

 — %  

 34 %  

 (58) %  

 212 %  

$ 

1,266 

 (2) % $ 

1,286 

 59 % $ 

444 

144 

(65) 

78 

209 

810 

The decrease in Total corporate expense in 2023 was primarily due to lower Intangible asset amortization expense, partially 

offset by higher Restructuring program charges. The increase in Total corporate expense in 2022 was primarily due to higher 
Other expense — net and Intangible asset amortization expense, partially offset by lower Restructuring program charges. The 
increase in Other expense — net is primarily due to the 2021 gain on sale of the Hydraulics business discussed in Note 2, 
partially offset by lower acquisition and divestiture charges.

85

 
 
 
 
LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

Liquidity and Financial Condition

Eaton’s objective is to finance its business through operating cash flow and an appropriate mix of equity and long-term and 

short-term debt. By diversifying its debt maturity structure, Eaton reduces liquidity risk. 

On March 3, 2023, a subsidiary of Eaton issued Euro denominated notes (2023 Euro Notes) in a private issuance with a face 

value of €300 million ($318 million). The floating rate notes are due June 3, 2024 with interest payable quarterly based on the 
three-month Euro Interbank Offered Rate plus 25 basis points. Proceeds from the Euro Notes were used to pay down 
outstanding U.S. dollar commercial paper. The 2023 Euro Notes are fully and unconditionally guaranteed on an 
unsubordinated, unsecured basis by Eaton. The 2023 Euro Notes contain a change of control provision which requires the 
Company to make an offer to purchase all or any part of the 2023 Euro Notes at a purchase price of 100.5% of the principal 
amount plus accrued and unpaid interest. The 2023 Euro Notes are subject to customary non-financial covenants.

On May 18, 2023, Eaton issued senior notes (2023 Notes) with a face amount of $500 million. The 2023 Notes mature in 
2028 with interest payable semi-annually at a rate of 4.35% per annum. The issuer received proceeds totaling $497 million from 
the issuance, net of financing costs. Proceeds from the 2023 Notes were used primarily to pay down outstanding U.S. dollar 
commercial paper. The 2023 Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton 
and certain of its direct and indirect subsidiaries. The 2023 Notes contain customary optional redemption and par call 
provisions. The 2023 Notes also contain a provision which upon a change of control requires the Company to make an offer to 
purchase all or any part of the 2023 Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. 
The 2023 Notes are subject to customary non-financial covenants.

On October 2, 2023, the Company replaced its existing $500 million 364-day revolving credit facility with a new 
$500 million 364-day revolving credit facility that will expire on September 30, 2024 on substantially similar terms. The 
Company also has a $2,500 million five-year revolving credit facility that will expire on October 1, 2027. The revolving credit 
facilities totaling $3,000 million are used to support commercial paper borrowings and are fully and unconditionally guaranteed 
by Eaton and certain of its direct and indirect subsidiaries on an unsubordinated, unsecured basis. There were no borrowings 
outstanding under Eaton’s revolving credit facilities at December 31, 2023. The Company maintains access to the commercial 
paper markets through its $3,000 million commercial paper program, of which none was outstanding on December 31, 2023. In 
addition to the revolving credit facilities, the Company also had available lines of credit of $1,070 million from various banks 
primarily for the issuance of letters of credit, of which there was $451 million outstanding at December 31, 2023.

In 2021, Eaton received proceeds of $3.1 billion from the sale of its Hydraulics business and paid $4.45 billion to acquire 
Tripp Lite and Mission Systems. In 2022, the Company paid $610 million to acquire Royal Power Solutions and received cash 
of $22 million from Danfoss A/S to fully settle all post-closing adjustments from the sale of the Hydraulics business.

Over the course of a year, cash, short-term investments, and short-term debt may fluctuate in order to manage global 
liquidity. As of December 31, 2023 and December 31, 2022, Eaton had cash of $488 million and $294 million, short-term 
investments of $2,121 million and $261 million, and short-term debt of $8 million and $324 million, respectively. Eaton has 
investment grade credit ratings from the two major rating agencies as reflected in the following ratings assigned to its debt:

Credit Rating Agency (long- /short-term rating)
Standard & Poor's

Moody's

Rating
A-/A-2

A3

Outlook
Stable outlook

Stable outlook

Eaton believes it has the operating flexibility, cash flow, cash and short-term investment balances, availability under existing 
revolving credit facilities, and access to capital markets in excess of the liquidity necessary to meet future operating needs of the 
business, fund capital expenditures and acquisitions of businesses, as well as scheduled payments of long-term debt.

For additional information on financing transactions and debt, see Note 9.

Eaton’s credit facilities and indentures governing certain long-term debt contain various covenants, the violation of which 

would limit or preclude the use of the credit facilities for future borrowings, or might accelerate the maturity of the related 
outstanding borrowings covered by the indentures. At Eaton’s present credit rating level, the most restrictive financial covenant 
provides that the ratio of secured debt (or lease payments due under a sale and leaseback transaction) to adjusted consolidated 
net worth (or consolidated net tangible assets, in each case as defined in the relevant credit agreement or indenture) may not 
exceed 10%. Eaton's actual ratios are substantially below the required threshold. In addition, Eaton is in compliance with each 
of its debt covenants for all periods presented.

86

Cash Flows

A summary of cash flows is as follows:

(In millions)

2023

Change 
from 2022

2022

Change 
from 2021

2021

Net cash provided by operating activities

$ 

3,624  $ 

1,091  $ 

2,533  $ 

370  $ 

2,163 

Net cash used in investing activities

Net cash used in financing activities

Effect of currency on cash

Total increase (decrease) in cash

Operating Cash Flow

(2,575)   

(1,375)   

(1,200)   

564 

(1,764) 

(871)   

16 

194 

$ 

469 

12 

(1,340)   

(805)   

4 

(3) 

$ 

9 

(535) 

(5) 

$ 

(141) 

Net cash provided by operating activities increased by $1,091 million in 2023 compared to 2022 primarily due to lower 

investment in working capital and higher net income in 2023.

Net cash provided by operating activities increased by $370 million in 2022 compared to 2021. The increase in net cash 
provided by operating activities in 2022 was primarily due to taxes paid on the sale of the Hydraulics business in 2021, cash 
received from the termination of interest rate swaps in 2022, lower pension contributions in 2022 due to a $200 million 
contribution to Eaton's U.S. qualified pension plan in 2021, and higher net income in 2022, partially offset by higher working 
capital balances to support the Company’s organic growth.

Investing Cash Flow

Net cash used in investing activities increased by $1,375 million in 2023 compared to 2022. The increase in the use of cash 

was primarily driven by an increase in net purchases of short-term investments to $1,861 million in 2023 from $19 million in 
2022, and an increase in capital expenditures for property, plant and equipment to $757 million in 2023 from $598 million in 
2022, partially offset by no cash paid for business acquisitions in 2023 compared to cash paid of $610 million in 2022. 

Net cash used in investing activities decreased by $564 million in 2022 compared to 2021. The decrease in the use of cash 
was primarily driven by the decrease in cash paid in 2022 for business acquisitions to $610 million in 2022 compared to $4,500 
million in 2021, proceeds from the sale of certain office and distribution facilities in 2022, and the decrease in cash paid for 
investments in associate companies to $42 million in 2022 from $124 million in 2021, partially offset by proceeds received in 
2021 from the sale of Hydraulics business of $3,129 million and net purchases of short-term investments of $19 million in 2022 
compared to net sales of $379 million in 2021. Capital expenditures were $598 million in 2022 compared to $575 million in 
2021.

Financing Cash Flow

Net cash used in financing activities decreased by $469 million in 2023 compared to 2022. The decrease in the use of cash 

was primarily due to lower payments on borrowings of $19 million in 2023 compared to $2,012 million in 2022, and no 
repurchase of shares in 2023 compared to repurchase of shares of $286 million in 2022, partially offset by net payments of 
short-term debt of $311 million in 2023 compared to net proceeds of short-term debt of $317 million in 2022 and lower 
proceeds from borrowings of $818 million in 2023 compared to $1,995 million in 2022.

Net cash used in financing activities increased by $805 million in 2022 compared to 2021. The increase in the use of cash 

was primarily due to higher payments on borrowings of $2,012 million in 2022 compared to $1,013 million in 2021, higher 
share repurchases of $286 million in 2022 compared to $122 million in 2021, and higher dividends paid of $1,299 million in 
2022 compared to $1,219 million in 2021, partially offset by an increase in net proceeds of short-term debt $317 million in 
2022 from $20 million in 2021 and higher proceeds from borrowings of $1,995 million in 2022 compared to $1,798 million in 
2021.

87

 
 
 
 
 
 
 
 
 
Uses of Cash

Purchases of Goods and Services

The Company purchases goods and services in the normal course of business based on expected usage. For certain 
purchases, the Company enters into purchase obligations with various vendors, which include short-term and long-term 
commitments for purchases of raw materials, outstanding non-cancelable purchase orders, releases under blanket purchase 
orders, and commitments under ongoing service arrangements. As of December 31, 2023, the Company has purchase 
obligations to support the operation of its business similar to those included in historical cash flow trends.

Capital Expenditures

Capital expenditures were $757 million, $598 million, and $575 million in 2023, 2022, and 2021, respectively. The 

Company plans to increase capital expenditures over the next five years to expand production capacity across various markets 
to support anticipated growth. As a result, Eaton expects approximately $800 million in capital expenditures in 2024. 

Dividends

Cash dividend payments were $1,379 million, $1,299 million, and $1,219 million for 2023, 2022, and 2021, respectively. 
On February 29, 2024, Eaton's Board of Directors declared a quarterly dividend of $0.94 per ordinary share, a 9% increase over 
the dividend paid in the fourth quarter of 2023. The dividend is payable on March 29, 2024 to shareholders of record on 
March 11, 2024. Payment of quarterly dividends in the future depends upon the Company’s ability to generate net income and 
operating cash flows, among other factors, and is subject to declaration by the Eaton Board of Directors. The Company intends 
to continue to pay quarterly dividends in 2024.

Share Repurchases

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of 

ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to 
$5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 
Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of 
ordinary shares, capital levels, and other considerations. During 2023, no ordinary shares were repurchased. During 2022, 2.0 
million ordinary shares were repurchased under the 2022 Program in the open market at a total cost of $286 million. During 
2021, 0.9 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $122 million. 
At December 31, 2023, there is $4,714 million still available for share repurchases under the 2022 Program. The Company will 
continue to pursue share repurchases in 2024 depending on market conditions and capital levels.

Acquisition of Businesses

The Company paid cash of $610 million and $4,500 million to acquire businesses in 2022 and 2021, respectively. There 
were no business acquisitions in 2023. The Company will continue to focus on deploying its capital toward businesses that 
provide opportunities for higher growth and strong returns, and align with secular trends and its power management strategies.

Debt

The Company manages a number of short-term and long-term debt instruments, including commercial paper. At 

December 31, 2023, the Company had Short-term debt of $8 million, Current portion of long-term debt of $1,017 million, and 
Long-term debt of $8,244 million. The Company believes it has the operating flexibility, cash flow, and access to capital 
markets to meet scheduled payments of long-term debt. For additional information on financing transactions and debt see Note 
9. 

Leases

See Note 8 for maturities of lease liabilities.

Unrecognized Income Tax Benefits

At December 31, 2023, the gross unrecognized income tax benefits totaled $1,300 million and interest and penalties were 

$188 million. Eaton cannot predict with reasonable certainty the timing of cash settlements with the respective taxing 
authorities. For additional information about income taxes see Note 12.

88

Defined Benefits Plans

Pension Plans

During 2023, the fair value of plan assets in the Company’s employee pension plans increased $116 million to $4,237 
million at December 31, 2023. The increase in plan assets was primarily due to favorable return on plan assets, employer 
contributions and the impact of positive currency translation. At December 31, 2023, the net unfunded position of $609 million 
in pension liabilities consisted of $616 million in plans that have no funding requirements and $203 million in plans that require 
funding, offset by $210 million in plans that are overfunded. 

Funding requirements are a major consideration in making contributions to Eaton’s pension plans. With respect to the 
Company’s pension plans worldwide, the Company intends to contribute annually not less than the minimum required by 
applicable law and regulations. In 2023, $113 million was contributed to the pension plans. The Company anticipates making 
$115 million of contributions to certain pension plans during 2024. The funded status of the Company’s pension plans at the 
end of 2024, and future contributions, will depend primarily on the actual return on assets during the year and the discount rate 
used to calculate certain benefits at the end of the year. For additional information about pension plans see Note 10.

Supply Chain Finance Program

A third-party financial institution offers a voluntary supply chain finance (SCF) program that enables certain of the 

Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institution on 
terms directly negotiated with the financial institution. The SCF program does not have a significant impact on the Company’s 
liquidity as payments by the Company to participating suppliers are paid to the financial institution on the invoice due date, 
regardless of whether an individual invoice is sold by the supplier to the financial institution. For additional information on the 
SCF program, see Note 7. 

Guaranteed Debt

Issuers, Guarantors and Guarantor Structure 

Eaton Corporation has issued senior notes pursuant to indentures dated April 1, 1994 (the 1994 Indenture), November 20, 
2012 (the 2012 Indenture), September 15, 2017 (the 2017 Indenture) and August 23, 2022 (as supplemented by the First and 
Second Supplemental Indentures of the same date and the Third Supplemental Indenture dated May 18, 2023, the 2022 
Indenture). The senior notes of Eaton Corporation are registered under the Securities Act of 1933, as amended (the Registered 
Senior Notes). Eaton Capital Unlimited Company, a subsidiary of Eaton, is the issuer of five outstanding series of debt 
securities sold in offshore transactions under Regulation S promulgated under the Securities Act (the Eurobonds). The 
Eurobonds and the Registered Senior Notes (together, the Senior Notes) comprise substantially all of Eaton’s long-term 
indebtedness.

Substantially all of the Senior Notes (with limited exceptions, for example, see Note 9 of the Financial Statements included 
herewith), together with the credit facilities described above under Liquidity and Financial Condition (the Credit Facilities), are 
guaranteed by Eaton and 17 of its subsidiaries. Accordingly, they rank equally with each other. However, because these 
obligations are not secured, they would be effectively subordinated to any existing or future secured indebtedness of Eaton and 
its subsidiaries. As of December 31, 2023, Eaton has no material, long-term secured debt. The guaranteed Registered Senior 
Notes are also structurally subordinated to the liabilities of Eaton's subsidiaries that are not guarantors. Except as described 
below under Future Guarantors, Eaton is not obligated to cause its subsidiaries to guarantee the Registered Senior Notes. 

The table set forth in Exhibit 22 filed with the Form 10-K on February 23, 2023 (10-K Exhibit 22) details the primary 

obligors and guarantors with respect to the guaranteed Registered Senior Notes.

89

Terms of Guarantees of Registered Securities

Payment of principal and interest on the Registered Senior Notes is guaranteed, on an unsecured, unsubordinated basis by 
the subsidiaries of Eaton set forth in the table referenced in the 10-K Exhibit 22. Each guarantee is full and unconditional, and 
joint and several. Each guarantor’s guarantee is an unsecured obligation that ranks equally with all its other unsecured and 
unsubordinated indebtedness. The obligations of each guarantor under its guarantee of the Registered Senior Notes are subject 
to a customary savings clause or similar provision designed to prevent such guarantee from constituting a fraudulent 
conveyance or otherwise legally impermissible or voidable obligation.

Though the terms of the indentures vary slightly, generally, each guarantee of the Registered Senior Notes by a guarantor 

that is a subsidiary of Eaton Corporation provides that it will be automatically and unconditionally released and discharged 
under certain circumstances, including, but not limited to:

(a)

the consummation of certain types of transactions permitted under the applicable indenture, including one that results in 
such guarantor ceasing to be a subsidiary; and 

(b) for Registered Senior Notes issued under the 2022 Indenture, when such guarantor is a guarantor or issuer of indebtedness 

in an aggregate outstanding principal amount of less than 25% of our total outstanding indebtedness.

Further, each guarantee by a direct or indirect parent of Eaton Corporation (other than Eaton) provides that it will also be 

released if:

(c) such guarantee (so long as the guarantor is not obligated under any other U.S. debt obligations), becomes prohibited by any 

applicable law, rule or regulation or by any contractual obligation; or 

(d) such guarantee results in material adverse tax consequences to Eaton or any of its subsidiaries (so long as the applicable 

guarantor is not obligated under any other U.S. debt obligation).

The guarantee of Eaton does not contain any release provisions.

Future Guarantors

The 2012 and 2017 Indentures generally provide that, with certain limited exceptions, any subsidiary of Eaton must become 

a guarantor if it becomes obligated as borrower or guarantor under any series of debt securities or a syndicated credit facility. 
Further, the 2012 and 2017 Indentures provide that any entity that becomes a direct or indirect parent entity of Eaton 
Corporation and holds any material assets, with certain limited exceptions, or owes any material liabilities must become a 
guarantor. The 2022 Indenture provides only that, with certain limited exceptions, any subsidiary of Eaton must become a 
guarantor if it becomes obligated as borrower or guarantor under indebtedness with an aggregate outstanding principal amount 
in excess of 25% of the Parent and its Subsidiaries’ then-outstanding indebtedness.

The 1994 Indenture does not contain provisions with respect to future guarantors.

Summarized Financial Information of Guarantors and Issuers

(In millions)

Current assets
Noncurrent assets

Current liabilities
Noncurrent liabilities

Amounts due to subsidiaries that are non-issuers and non-guarantors — net

(In millions)

Net sales

Sales to subsidiaries that are non-issuers and non-guarantors

Cost of products sold

Expense from subsidiaries that are non-issuers and non-guarantors — net

Net income

$ 

$ 

December 31, 2023

5,006 
13,004 

3,927 
10,012 

8,178 

13,335 

1,073 

10,033 

1,125 

180 

2023

The financial information presented is that of Eaton Corporation and the Guarantors, which includes Eaton Corporation plc, 

on a combined basis and the financial information of non-issuer and non-guarantor subsidiaries has been excluded. 
Intercompany balances and transactions between Eaton Corporation and Guarantors have been eliminated, and amounts due 
from, amounts due to, and transactions with non-issuer and non-guarantor subsidiaries have been presented separately. 

90

 
 
 
 
 
 
 
 
CRITICAL ACCOUNTING POLICIES 

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in the United 
States requires management to make certain estimates and assumptions that may involve the exercise of significant judgment. 
For any estimate or assumption used, there may be other reasonable estimates or assumptions that could have been used. 
However, based on facts and circumstances inherent in developing estimates and assumptions, management believes it is 
unlikely that applying other such estimates and assumptions would have caused materially different amounts to have been 
reported. Actual results may differ from these estimates. 

Revenue Recognition

Sales are recognized when control of promised goods or services are transferred to customers in an amount that reflects the 

consideration the Company expects to be entitled to in exchange for those goods or services. Control is transferred when the 
customer has the ability to direct the use of and obtain benefits from the goods or services. The majority of the Company’s sales 
agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. Sales 
recognized over time are generally accounted for using an input measure to determine progress completed at the end of the 
period. Sales for service contracts generally are recognized as the services are provided. For agreements with multiple 
performance obligations, judgment is required to determine whether performance obligations specified in these agreements are 
distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, we 
generally allocate sales price to each distinct obligation based on the price of each item sold in separate transactions.

Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by 
contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the 
extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to 
account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales 
price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a 
cumulative catch-up basis.

Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the 

time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market 
conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets 
Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume 
levels. Returns are estimated at the time of the sale primarily based on historical experience and recorded gross on the 
Consolidated Balance Sheet. See Note 3 for additional information.

91

Impairment of Goodwill and Indefinite Life Intangible Assets

Goodwill

Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Goodwill is 
tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and 
intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace 
segment which has two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that 
constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a 
quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative 
analysis. 

Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate 
that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Events or circumstances that 
may result in an impairment review include changes in macroeconomic conditions, industry and market considerations, cost 
factors, overall financial performance, other relevant entity-specific events, specific events affecting the reporting unit or 
sustained decrease in share price.

The annual goodwill impairment test was performed using a qualitative analysis in 2023 and 2022, except for the Vehicle 

and eMobility reporting units which used a quantitative analysis in 2023 and 2022, respectively. A qualitative analysis is 
performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual 
sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors 
are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. 
The results of the qualitative analyses did not indicate a need to perform quantitative analysis. 

Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. 

The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-
average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-
term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the 
operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and 
debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about 
appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were 
performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting 
estimated fair values. 

Based on these analyses performed in 2023 and 2022, the fair value of Eaton's reporting units continue to substantially 

exceed their respective carrying amounts and thus, no impairment exists.

Indefinite Life Intangible Assets

Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using 

either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. 
Indefinite life intangible asset impairment testing for 2023 and 2022 was performed using a quantitative analysis. Determining 
the fair value of these assets requires significant judgment and the Company uses a royalty relief methodology similar to that 
employed when the associated assets were acquired, but using updated estimates of future sales, cash flows and profitability. 
Sensitivity analyses were performed around certain of these assumptions in order to assess the reasonableness of the 
assumptions and the resulting estimated fair values. 

Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances 

change that would indicate that it is more likely than not that the asset is impaired. Events or circumstances that may result in an 
impairment review include changes in industry and market considerations, cost factors, financial performance, and other 
relevant entity-specific events that could affect inputs used to determine the respective fair values of the indefinite-lived 
intangible assets.

For 2023 and 2022, the fair value of indefinite lived intangible assets exceeded the respective carrying value.

For additional information about goodwill and other intangible assets see Note 6.

92

Acquisitions of Businesses

The acquisition of a business is accounted for using the acquisition method of accounting which requires assets and 
liabilities to be recognized at their fair values on the acquisition date. The initial fair value of assets acquired and liabilities 
assumed may be revised based on the final determination of fair value during the measurement period of up to 12 months from 
the acquisition date. The Company generally determines the fair value of intangible assets acquired using third-party valuations 
that are prepared using discounted cash flow models that rely on the Company's estimates. These estimates require judgement 
of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those 
estimated cash flows. Sensitivity analyses are performed around certain of these assumptions in order to assess the 
reasonableness of the assumptions and the resulting estimated fair values. For additional information about the acquisitions of 
businesses see Note 2.

Recoverability of Deferred Income Tax Assets

Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine the income tax 

provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations 
in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities 
that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and 
income tax loss carryforwards and income tax credit carryforwards.

Management evaluates the realizability of deferred income tax assets for each jurisdiction in which it operates. If the 
Company experiences cumulative pre-tax income in a particular jurisdiction in a three-year period including the current and 
prior two years, management normally concludes that the deferred income tax assets will more likely than not be realizable and 
no valuation allowance is recognized, unless known or planned operating developments, or changes in tax laws, would lead 
management to conclude otherwise. However, if the Company experiences cumulative pre-tax losses in a particular jurisdiction 
in a three-year period including the current and prior two years, management then considers a series of factors in the 
determination of whether the deferred income tax assets can be realized. These factors include historical operating results, 
known or planned operating developments, the period of time over which certain temporary differences will reverse, 
consideration of the utilization of certain deferred income tax liabilities, carryback capability under the tax law in a particular 
country, prudent and feasible tax planning strategies, changes in tax laws, and estimates of future earnings and taxable income 
using the same assumptions as those used for the Company’s goodwill and other impairment testing. After evaluation of these 
factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific 
country, management would conclude that no valuation allowance would be required. To the extent that the deferred income tax 
assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, 
management would establish a valuation allowance. For additional information about income taxes see Note 12.

Unrecognized Income Tax Benefits

Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the benefit would 

be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company evaluates and 
adjusts the amount of unrecognized income tax benefits based on changes in law, facts and circumstances. Eaton also estimates, 
where reasonably possible, the increase or decrease in the amount of unrecognized income tax benefits in the next 12 months.

The evaluation and determination of the amount of unrecognized income tax benefits related to uncertain tax positions is 
complex and involves both the exercise of judgement and the utilization of certain estimates and assumptions. Each tax position 
carries unique facts and circumstances that must be evaluated in light of current tax laws, regulations, and judicial decisions. 
Additionally, the ultimate resolution of the majority of Eaton’s unrecognized income tax benefits is dependent upon 
uncontrollable factors such as the timing of finalizing resolutions of audit disputes through reaching settlement agreements or 
concluding litigation, or changes in law.

Pension and Other Postretirement Benefits Plans

The measurement of liabilities related to pension plans and other postretirement benefits plans is based on assumptions 
related to future events including interest rates, return on plan assets, rate of compensation increases, and health care cost trend 
rates. Actual plan asset performance will either reduce or increase losses included in accumulated other comprehensive loss, 
which ultimately affects net income. 

The discount rate for United States plans was determined by discounting the expected future benefit payments using a 
theoretical zero-coupon spot yield curve derived from a universe of high-quality bonds as of the measurement date and solving 
for the single rate that would generate the same benefit obligation. Only corporate bonds with a rating of Aa, determined by 
averaging the ratings by Moody’s, Standard & Poor's, and Fitch, were included. Callable bonds that are not make-whole bonds 
and certain other non-comparable bonds were eliminated. Finally, a subset of bonds was selected by grouping the universe of 
bonds by duration and retaining 50% of the bonds that had the highest yields. 

93

The discount rates for non-United States plans were determined by region and are based on high quality long-term corporate 

and government bonds. Consideration has been given to the duration of the liabilities in each plan when selecting the bonds to 
be used in determining the discount rate.

To estimate the service and interest cost components of net periodic benefit cost for the vast majority of its defined benefits 

pension and other postretirement benefits plans, the Company used a spot rate approach by applying the specific spot rates 
along the yield curve used to measure the benefit obligation at the beginning of the period to the relevant projected cash flows.

 Key assumptions used to calculate pension and other postretirement benefits expense are adjusted at each year-end. A 1-
percentage point change in the assumed rate of return on pension plan assets is estimated to have approximately a $49 million 
effect on pension expense. Likewise, a 1-percentage point change in the discount rate is estimated to have approximately a $10 
million effect on pension expense. A 1-percentage point change in the assumed rate of return on other postretirement benefits 
assets is estimated to have less than $1 million effect on other postretirement benefits expense. A 1-percentage point change in 
the discount rate is estimated to have a $2 million effect on expense for other postretirement benefits plans.

Additional information related to changes in key assumptions used to recognize expense for other postretirement benefits 

plans is found in Note 10.

MARKET RISK DISCLOSURE 

On a regular basis, Eaton monitors third-party depository institutions that hold its cash and short-term investments, primarily 

for safety of principal and secondarily for maximizing yield on those funds. The Company diversifies its cash and short-term 
investments among counterparties to minimize exposure to any one of these entities. Eaton also monitors the creditworthiness 
of its customers and suppliers to mitigate any adverse impact. 

Eaton uses derivative instruments to manage exposure to volatility in raw material costs, currency, and interest rates on 
certain debt instruments. Derivative financial instruments used by the Company are straightforward and non-leveraged. The 
counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of 
positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. See Note 16 for 
additional information about hedges and derivative financial instruments. 

Eaton’s ability to access the commercial paper market, and the related cost of these borrowings, is based on the strength of 

its credit rating and overall market conditions. During 2023, the Company has not experienced any material limitations in its 
ability to access these sources of liquidity. At December 31, 2023, Eaton had $3,000 million of long-term revolving credit 
facilities with banks in support of its commercial paper program. There were no borrowings outstanding under these revolving 
credit facilities. 

Interest rate risk can be measured by calculating the short-term earnings impact that would result from adverse changes in 
interest rates. This exposure results from short-term debt, which includes commercial paper at a floating interest rate, floating 
rate long-term debt, long-term debt that has been swapped to floating rates, and money market investments that have not been 
swapped to fixed rates. Based upon the balances of investments and floating rate debt at year end 2023, a 100 basis point 
increase in short-term interest rates would have decreased the Company’s net, pre-tax interest expense by $23 million. 

Eaton also measures interest rate risk by estimating the net amount by which the fair value of the Company’s financial 
liabilities would change as a result of movements in interest rates. Based on Eaton’s best estimate for a hypothetical, 100 basis 
point increase in interest rates at December 31, 2023, the market value of the Company’s debt, in aggregate, would decrease by 
$609 million.

The Company is exposed to fluctuations in commodity prices due to volatility in raw material costs and contractual 

agreements with suppliers. To partially mitigate this exposure, Eaton enters into commodity contracts for certain raw material 
purchases with the objective of minimizing changes in inventory cost due to market price fluctuations. These commodity 
contracts are designated for hedge accounting and are generally less than one year in duration. Based on Eaton’s best estimate 
for a hypothetical 10% fluctuation in commodity prices the gain or loss would be $5 million. The sensitivity analysis of the 
effects of changes in commodity prices assumes the notional value to remain constant for the next 12 months. Any change in 
the value of the contracts would be offset by an inverse change in the value of the underlying hedged transactions.

The Company is exposed to currency risk associated with translating its functional currency financial statements into its 
reporting currency, which is the U.S. dollar. As a result, the Company is exposed to movements in the exchange rates of various 
currencies against the U.S. dollar. Eaton also monitors exposure to transactions denominated in currencies other than the 
functional currency of each country in which the Company operates, and regularly enters into forward contracts to mitigate that 
exposure. In the aggregate, Eaton’s portfolio of forward contracts related to such transactions was not material to its 
consolidated financial statements.

94

FORWARD-LOOKING STATEMENTS

This Annual Report to Shareholders contains forward-looking statements concerning litigation, expected capital 

expenditures, future dividend payments, anticipated share repurchases, expected restructuring program charges and benefits, 
and the anticipated impact of the global minimum tax regulation. These statements 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, based on current beliefs of management as well as assumptions made by, and information currently available to, 
management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” 
“estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar 
words, phrases or expressions. These statements should be used with caution and are subject to various risks and uncertainties, 
many of which are outside Eaton’s control. The following factors could cause actual results to differ materially from those in 
the forward-looking statements: global pandemics such as COVID-19; unanticipated changes in the markets for the Company’s 
business segments; unanticipated downturns in business relationships with customers or their purchases from us; the availability 
of credit to customers and suppliers; supply chain disruptions, competitive pressures on sales and pricing; unanticipated 
changes in the cost of material, labor and other production costs, or 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; strikes or other labor unrest at Eaton or at our customers or suppliers; the impact of acquisitions 
and divestitures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; interest rate 
changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; war, 
geopolitical tensions, natural disasters, civil or political unrest or terrorism; and unanticipated deterioration of economic and 
financial conditions in the United States and around the world. Eaton does not assume any obligation to update these forward-
looking statements.

95

Eaton Corporation plc
2023 Annual Report on Form 10-K
Exhibit 31.1
Certification

I, Craig Arnold, certify that:

1.

I have reviewed this quarterly report on Form 10-K of Eaton Corporation plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact 

necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in 
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods 
presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and 

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as 
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed 
under our supervision, to ensure that material information relating to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is 
being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be 

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the 
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by 
this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the 
registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the 
registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over 
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons 
performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial 

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and 
report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the 

registrant’s internal control over financial reporting.

Date: February 29, 2024

/s/ Craig Arnold

Craig Arnold
Principal Executive Officer

 
 
Eaton Corporation plc
2023 Annual Report on Form 10-K
Exhibit 31.2
Certification

I, Olivier Leonetti, certify that:

1.

I have reviewed this quarterly report on Form 10-K of Eaton Corporation plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact 

necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in 
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods 
presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and 

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as 
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed 
under our supervision, to ensure that material information relating to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is 
being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be 

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the 
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by 
this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the 
registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the 
registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over 
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons 
performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial 

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and 
report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the 

registrant’s internal control over financial reporting.

Date: February 29, 2024

/s/ Olivier Leonetti

Olivier Leonetti
Principal Financial Officer

 
 
Eaton Corporation plc
2023 Annual Report on Form 10-K
Exhibit 32.1
Certification

This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies 

Eaton Corporation plc’s Quarterly Report on Form 10-K for the quarter ended December 31, 2023 (“10-K Report”).

I hereby certify that, based on my knowledge, the Report on Form 10-K fully complies with the requirements of Section 
13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly 
presents, in all material respects, the financial condition and results of operations of Eaton Corporation plc and its consolidated 
subsidiaries.

Date: February 29, 2024

/s/ Craig Arnold 

Craig Arnold
Principal Executive Officer

 
 
Eaton Corporation plc
2023 Annual Report on Form 10-K
Exhibit 32.2
Certification

This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies 

Eaton Corporation plc’s Quarterly Report on Form 10-K for the quarter ended December 31, 2023 (“10-K Report”).

I hereby certify that, based on my knowledge, the Report on Form 10-K fully complies with the requirements of Section 
13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly 
presents, in all material respects, the financial condition and results of operations of Eaton Corporation plc and its consolidated 
subsidiaries.

Date: February 29, 2024

/s/ Olivier Leonetti

Olivier Leonetti
Principal Financial Officer

 
 
Eaton directors As of March 1, 2024

Craig Arnold 6*  
Chairman and Chief  
Executive Officer 

Gregory R. Page 2, 4, 6 
Lead Independent Director  
Retired Chairman and Chief Executive 
Officer, Cargill Incorporated, 
Minneapolis, Minnesota, an 
international marketer, processor and 
distributor of agricultural, food, financial 
and industrial products and services

Silvio Napoli 2, 3, 5*, 6 
Chairman and Chief Executive 
Officer, Schindler Holding Ltd., 
Hergiswil, Switzerland, a global 
provider of elevators, escalators 
and related services 

Sandra Pianalto 1, 3*, 5, 6 
Retired President and  
Chief Executive Officer,  
Federal Reserve Bank of  
Cleveland, Cleveland, Ohio 

Lori J. Ryerkerk 2*, 3, 5, 6
Chairman, Chief Executive  
Officer and President,  
Celanese Corporation, Irving,  
Texas, a global chemical and 
specialty materials company

Gerald B. Smith 1*, 4, 6 
Chairman, Smith, Graham & 
Company, Houston, Texas,  
an investment advisory firm 

Dorothy C. Thompson 1, 4*, 6 
Retired Chief Executive,  
Drax Group plc, London, England,  
an international renewable  
energy company 

Darryl Wilson 1, 4
Founder, Chairman and President,  
The Wilson Collective, Houston, Texas, 
a business advisory and investment 
firm with clients in the power 
generation, industrial, material supply 
and consumer segments

Robert Pragada 2, 3, 5
President and Chief Executive Officer, 
Jacobs Solutions, Inc., Dallas, Texas, 
a professional and technical solutions 
company that provides consulting, 
technical, scientific and project 
delivery services for the government 
and private sector

1   Audit Committee

2    Compensation and Organization Committee

3   Finance Committee

4   Governance Committee

5   Innovation & Technology Committee

6   Executive Committee

*   Denotes Committee Chair

EATON 2023 Annual Report 

Eaton global leadership team As of March 1, 2024

Craig Arnold  
Chairman and Chief  
Executive Officer 

Matt Hockman 
President, Global Energy  
Infrastructure Solutions,  
Electrical Sector 

Olivier Leonetti
Executive Vice President and  
Chief Financial Officer

Nanda Kumar 
President, Aerospace Group

Heath B. Monesmith 
President and Chief Operating  
Officer, Electrical Sector

Howard Liu 
President, Asia-Pacific Region,  
Electrical Sector

Paulo Ruiz 
President and Chief Operating 
Officer, Industrial Sector

Mike Yelton
President, Americas Region, 
Electrical Sector

Tim Darkes 
President, Europe, Middle East  
and Africa Region, Corporate  
and Electrical Sector 

Rogerio Branco 
Executive Vice President  
and Chief Supply Chain Officer

Pete Denk 
President, Mobility Group

Mary Kim Elkins 
Senior Vice President,  
Taxes and Finance Technology

EATON 2023 Annual Report 

Eaton global leadership team As of March 1, 2024

Daniel Hopgood 
Senior Vice President  
and Controller 

Katrina Redmond
Executive Vice President and  
Chief Information Officer 

Yan Jin 
Senior Vice President,  
Investor Relations

Joe Rodgers 
Senior Vice President,  
Ethics and Compliance

Harold V. Jones 
Chief Sustainability Officer  
and Executive Vice President,  
Eaton Business System

Harpreet Saluja 
Senior Vice President, Corporate 
Development and Planning 

Raja Ramana Macha
Executive Vice President and  
Chief Technology Officer 

Taras G. Szmagala Jr. 
Executive Vice President  
and Chief Legal Officer

Ernest W. Marshall Jr. 
Executive Vice President and  
Chief Human Resources Officer 

Armando Tellez
Vice President, Total Quality 
and Continuous Improvement

Kirsten M. Park 
Senior Vice President, Treasury 

Adam A. Wadecki 
Senior Vice President,  
Internal Audit

EATON 2023 Annual Report 

Electrical

Aerospace

Mobility

We help customers manage power 
in a way that’s reliable, efficient, 
safe and sustainable. From the grid 
to homes, buildings, data centers 
and industrials – we play a vital role 
in modernizing infrastructure and 
accelerating the energy transition. 
As the world’s demand for electricity 
grows, so does the need for Eaton’s 
innovative technology and solutions.

Our industry-leading portfolio of 
aerospace technologies elevates 
aircraft efficiency, safety and 
performance for customers across 
the commercial, military and space 
markets. As the demand for more 
electric and sustainable aviation 
solutions amplifies, we’re uniquely 
positioned to help power the next 
generation of platforms.  

We provide differentiated technologies 
that improve safety, efficiency, and 
performance for customers in the 
automotive, commercial vehicle  
and off-road segments. We are 
committed to enabling the transition 
to electrified vehicles (EVs) while also 
continuing to provide innovative and 
efficient internal combustion engine 
(ICE) solutions.

2023 recognitions

America’s Best Large Employers
 Forbes

America’s Greatest Workplaces  
for Diversity 
 Newsweek

Best for Vets
 Military Times

Best Place to Work for LGBTQ+ 
Equality in Mexico 
 Human Rights Campaign

Top 100 Global Most Loved  
Workplaces
 Newsweek

Europe’s Diversity Leaders
 Financial Times

Great Place to Work India 
 Great Place to Work Institute

Top Sustainability Initiative 
 Digital Engineering Awards

World’s Most Admired Companies 
 Fortune

Best of the Best Employer for Veterans 
 US Veterans Magazine

Most Honored Company 
 Institutional Investor Magazine

Best Place to Work for Disability 
Inclusion 
 Disability:IN

Most Loved Workplaces in 
the United Kingdom 
 Newsweek

World’s Most Ethical Companies 
 Ethisphere

Eaton Corporation plc
Eaton House
30 Pembroke Road
Dublin 4, Ireland
Eaton.com 

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