ETN

New in FY2025

• Among the risks that could materially adversely affect Eaton's businesses, financial condition or results of operations are the following: Operational Risks We are subject to risks relating to acquisitions, joint ventures and investments, and risks relating to the integration of acquired companies.
• As part of our strategy, we pursue strategic transactions, including but not limited to acquisitions, joint ventures, and investments.
• Acquisitions and investments may involve significant cash expenditures, debt incurrences, equity issuances, operating losses and expenses, in addition to integration challenges whether foreseen or unforeseen, which may be dilutive to earnings and unfavorably impact cash flow.
• Acquisitions also involve numerous other risks, including: the diversion of management attention to integration matters; difficulties in integrating operations and systems; challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; difficulties in assimilating employees and in attracting and retaining key personnel; challenges in keeping existing customers and obtaining new customers; difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects; contingent liabilities (including contingent tax liabilities and earn-out obligations) that are larger than expected; and potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with acquired companies.
• Financial success of a strategic transaction requires balancing both short- and long-term inputs driven by internal and external factors difficult to fully identify prior to transaction consummation.
• Transactional challenges post-closing could materially and adversely impact our business, financial condition and results of operations.
• Our operations depend on production facilities throughout the world, which subjects them to varying degrees of risk of disrupted production.
• Our manufacturing facilities and operations could be disrupted by a natural disaster, labor strike, war, geopolitical instability and/or conflict, political unrest, terrorist activity, economic upheaval, or public health concerns.
• Significant inflation or shortages of raw materials, energy, components, and/or labor, or similar challenges for our customers, could continue to adversely impact our results of operations.
• We have been affected by supply chain disruptions and related inflationary pressures.
• Labor shortages persist broadly in select markets, and shortages of certain raw materials have continued to affect the prices that our businesses are charged, particularly commodities.
• While we strive to recoup these increased costs through our pricing, product modifications or other mediating responses, 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.
• We rely on suppliers to provide raw materials, components, and services.
• Our business requires that we buy raw materials, components, and services from third parties.
• Supplier relationships have in the past been and could in the future be interrupted or terminated.
• Our reliance on suppliers involves certain risks, including: • shortages of commodities, components, or other materials, which could adversely affect our manufacturing efficiencies and ability to make timely delivery of our products, solutions, and services; • changes in the cost of these purchases due to inflation, exchange rate fluctuations, taxes, tariffs, commodity market volatility, or other factors that affect our suppliers; • poor quality or insecure supply chain, which could adversely affect the reliability and reputation of our products, solutions, and services; • climate impacts, severe weather events, or natural and other disasters that impact our suppliers; • sanctions, embargoes, and other trade restrictions that may affect our ability to purchase commodities, components, or other materials from various suppliers; and • intellectual property risks such as challenges to ownership of rights or alleged infringement by suppliers.
• Any of these uncertainties could adversely impact our financial results and ability to compete.
• We also maintain single-source supplier relationships because either alternative sources are not available, or the relationship is advantageous due to certain considerations, such as performance, quality, support, delivery, capacity, or price.
• Unavailability of, or delivery delays for, single-source components or products could adversely affect our ability to manufacture or ship the related products in a timely manner.
• The effect of unavailability or delivery delays would be more severe if associated with our higher volume and more profitable products.
• Even where substitute sources of supply are available, qualifying alternative suppliers and establishing reliable supplies could cost more or result in delays and loss of sales.
• We may rely on third-party suppliers for the components used in our products, and we may rely on third-party manufacturers to manufacture certain of our assemblies and finished products.
• Our results of operations, financial position, and cash flows could be adversely affected if such third parties lack sufficient quality control or if there are significant changes in their financial or business condition.
• If these third parties fail to deliver quality products, parts, and components on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could be damaged.
• Risks and uncertainties related to the development and use of artificial intelligence may present business, compliance and reputational risks.
• Recent technological advances in artificial intelligence (AI) and machine-learning technology have presented opportunities for us to drive internal efficiencies in our business operations, but they also pose risks to us.
• If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer, particularly if our competitors more effectively use AI to drive their business efficiencies or create new or enhanced products or services that we are unable to compete against on cost, quality or other attributes.
• However, the introduction of AI technologies, particularly generative AI, into internal processes and/or new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.
• Furthermore, any confidential information that is disclosed to a third-party generative AI platform could be leaked or disclosed to others, which could result in loss or theft of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity.
• Moreover, the use of AI may give rise to risks related to harmful content, accuracy, and bias, which could expose us to risks related to inaccuracies or errors in the output of such technologies.
• The rapidly evolving legal and regulatory environment relating to AI, in the United States and globally, could also impact Eaton’s implementation of AI technology, and increase compliance costs and the risk of non-compliance.
• If we are unable to protect our information technology infrastructure against service interruptions, data corruption, cyberbased attacks or network security breaches, product or service offerings could be compromised or operations could be disrupted or data confidentiality impaired.
• Some of this information may be stored in the cloud or on networks not managed by us.
• Our customers, including governmental agencies, are increasingly requiring cybersecurity protections and mandating cybersecurity standards, which may result in additional operating or production costs.
• Weather disruptions and regulatory, market and social reactions to them create uncertainties that could negatively impact our business.
• Extreme weather events may create physical risks to our operating locations and supply chains, as well as to our suppliers’ and customers’ operations.
• Operational, environmental and social regulations may pose stringent obligations on our operations, which could impact our financial results and adversely affect our ability to conduct normal business operations.
• Those events could also change customer and market demands, and we may not be able to move quickly enough to meet such demands or meet all of the varying demands from different geographic regions, markets and business sector, which could negatively affect our business, results of operations, and financial condition.
• Our ability to identify, attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy.
• The market for employees and leaders with certain skills and experiences is very competitive.

and 44 more.

Gone since FY2024

• Among the risks that could materially adversely affect Eaton's businesses, financial condition or results of operations are the following: Operational Risks If Eaton is unable to protect its information technology infrastructure against service interruptions, data corruption, cyberbased attacks or network security breaches, product or service offerings could be compromised or operations could be disrupted or data confidentiality impaired.
• Some of this information may be stored in the cloud or on networks not managed by Eaton.
• Eaton’s customers, including governmental agencies, are increasingly requiring cybersecurity protections and mandating cybersecurity standards which may result in additional operating or production costs.
• 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, may create physical risks to Eaton’s operating locations and supply chains, as well as to Eaton's customers' operations.
• While Eaton is working to make its own operations carbon neutral by 2030, external factors could cause increases in these extreme weather events, political instability, and workforce migration, ultimately increasing Eaton’s cost of doing business.
• 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.
• Our manufacturing facilities and operations could be disrupted by a natural disaster, labor strike, war, geopolitical instability and/or conflict, political unrest, terrorist activity, economic upheaval, or public health concerns (for example, COVID-19).
• 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 address it with price increases, product modifications or other adjustments, our competitive position may be impacted, which could have a material adverse impact on operating results.
• Further, some of our 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, it could adversely affect our 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 affected by supply chain disruptions and unexpected shortages of raw materials in the future could impact our results.
• Further, labor shortages persist broadly in select markets.
• While we strive to recoup these increased costs through our pricing or other mediating responses, 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.
• Industry and Market Risks Volatility of end markets that Eaton serves.
• Profitability can be negatively impacted by macroeconomic conditions and volatility in the end markets that Eaton serves.
• Technology disruption may impact our stock price and/or negatively impact our end markets.
• Our products and services support cutting edge technology and mega trends, including, for example, data centers.
• 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.
• 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, but not limited to, 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 we monitor exchange rate exposures and attempt to reduce these exposures through hedging activities, these risks could adversely affect our operating results.
• Changes in countries' trade policy globally, including imposition of sanctions or tariffs, may have a material adverse impact on our business and results of operations.
• Changes globally in various countries’ trade policies, including tariffs and duties, may materially increase costs for goods imported into the United States and could potentially lead to broader cost pressures even for goods that are not imported.
• 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.
• If these audits and/or litigation result in assessments different from amounts reserved, future financial results may include material unfavorable adjustments to our tax liabilities.
• Eaton may be unable to adequately protect its intellectual property rights, which could affect our ability to compete.
• 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 our businesses, financial condition or results of operations.