Eaton (ETN) 10-K risk factor changes: FY2021 vs FY2020

Further, [added: some of] Eaton's suppliers of component parts [removed: may increase] [added: have increased] their prices in response to increases in costs of raw materials that they use to manufacture component [removed: parts.][added: parts, including logistics inflation.]

[removed: The] [added: 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.

The Company's effective tax rate could be affected [added: 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.

If these audits result in assessments different from amounts reserved, future financial results may include [added: material] unfavorable adjustments to the Company's tax liabilities.

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 has disrupted economic activity around the world.

As a result, we and our employees, suppliers, customers and others have been and may continue to be restricted or prevented from conducting normal business activities, including as a result of shutdowns, travel restrictions and other actions that may be requested or mandated by governmental authorities.

While a substantial portion of our businesses and facilities have been classified as essential in jurisdictions in which facility closures have been mandated, 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.

We have experienced and could continue to experience supply and labor shortages as the Company expands its production capacity to meet increased customer demand as global economies recover.

The 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, including the resurgence of COVID-19 as a result of new variants, the effectiveness of COVID-19 vaccines and the speed at which populations are vaccinated around the globe, the impact of COVID-19 on economic activity and regulatory actions taken to contain the impact of COVID-19 on public health and the global economy.

The impact of COVID-19 may also 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.

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.

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.

Shortages have affected the prices Eaton's businesses are charged as global economies recover from the COVID-19 pandemic.

If this trend continues, the competitive position of our products and services may be impacted, which could have a material adverse impact on operating results.

The coronavirus (COVID-19) outbreak has negatively impacted our results of operations.

As a result of the COVID-19 pandemic outbreak, authorities have implemented measures to try to contain the virus, such as travel bans and restrictions, shelter-in place-orders, and shut downs, and consumers have changed their demand patterns.

As a result, our operations and financial results have been impacted.

The degree to which COVID-19 impacts our future results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume.

These technology networks and systems may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components; power outages; hardware failures; or computer viruses.

In addition, security breaches could result in unauthorized disclosure of confidential information.

If these information technology systems suffer severe damage, disruption, breach, or shutdown, and business continuity plans do not effectively resolve the issues in a timely manner, there could be a negative impact on operating results or the Company may suffer financial or reputational damage.

Further*,* Cyber-based risks could also include attacks targeting the security, integrity and/or reliability of the hardware, software and information installed, stored or transmitted in our products, including after the purchase of those products and when they are incorporated into third party products, facilities or infrastructure.

Such attacks could result in disruptions to third party systems, unauthorized release of confidential or otherwise protected information and corruption of data (our own or that of third parties).

Further, to a significant extent, the security of our customers’ systems depends on how those systems are protected, configured, updated and monitored, all of which are typically outside our control.

Significant shortages could affect the prices Eaton's businesses are charged and the competitive position of their products and services, all of which could adversely affect operating results.

In [removed: 2020, 20%] [added: 2021, 22%] of these segments' sales were made to [removed: six] [added: seven] large [removed: distributors] [added: customers] of electrical products and electrical systems and services.

In [removed: 2020,] [added: 2021,] 18% of this segment's sales were made to [removed: six] [added: three] large original equipment manufacturers [removed: or distributors] of [removed: agricultural, construction, and industrial] [added: vehicles, construction] equipment and [removed: parts.][added: related components.]

In [removed: 2020, 22%] [added: 2021, 20%] of this segment's sales were made to [removed: four] [added: three] large original equipment manufacturers of aircraft.

In [removed: 2020, 38%] [added: 2021, 36%] of this segment's sales were made to four large original equipment manufacturers of vehicles and related components.

Eaton's major requirements for raw materials include iron, steel, copper, nickel, aluminum, [removed: brass, tin, silver,] lead, [added: silver, gold,] titanium, rubber, plastic, electronic components, chemicals, and fluids.

Materials are purchased in various forms, such as [added: bar stock,] extrusions, castings, [added: forgings,] powder metal, [removed: metal sheets and] [added: coils, sheets,] strips, [removed: forging billets, bar stock, and] [added: stampings,] plastic [added: resins and] pellets.

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 [added: capital expenditures, including expenditures for environmental control facilities,] earnings or the competitive position of the Company.

Eaton has approximately [removed: 92,000] [added: 86,000] employees globally.

The number of persons employed by our reportable segments and corporate [removed: in 2020 was] [added: at December 31, 2021 are] as follows:

| Electrical Americas | | | [removed: 27] [added: 28] | | |

| Electrical Global | | | [removed: 25] [added: 26] | | |

| Aerospace | | | [removed: 10] [added: 12] | | |

| Total number of persons employed | | | [removed: 92] [added: 86] | | |

At December 31, [removed: 2020,] [added: 2021,] Eaton’s distribution by gender, and United States distribution by minority status, [removed: was] [added: is] as follows:

| [removed: (As of December 31, 2020)] | | | | | | Total Global | | | | | | Number of women [added: (Global)] | | | | | | Percentage of women [added: (Global)] | | | | | | U.S. total | | | | | | Number of minorities (U.S. [removed: only)] [added: only)1] | | | | | | Percentage of minorities (U.S. [removed: only)] [added: only)1] | | |

| Board of directors | | | | | | 12 | | | | | | 4 | | | | | | 33.3 | | % | | | | [removed: 9] [added: 10] | | | | | | [removed: 2] [added: 4] | | | | | | [removed: 22.2] [added: 40.0] | | % |

| Global leadership team | | | | | | [removed: 26] [added: 25] | | | | | | [removed: 5] [added: 6] | | | | | | [removed: 19.2] [added: 24.0] | | % | | | | [removed: 24] [added: 23] | | | | | | 13 | | | | | | [removed: 54.2] [added: 56.5] | | % |

Our plan to achieve this goal encompasses a number of actions, including [removed: a detailed] [added: 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.

Eaton regularly benchmarks its compensation [removed: strategies] [added: practices] with industry peers to maintain a top performing workforce.

The total compensation of our median employee on October 1, [removed: 2019,] [added: 2020,] as reported in our [removed: 2020] [added: 2021] Proxy Statement filed in March [removed: 2020,] [added: 2021,] and as calculated in accordance with Item 402(u) of Regulation S-K, was [removed: $57,712.][added: $63,951.]

Throughout our operations, our goal is to have no safety [removed: incidents.][added: incidents and we continue to make progress towards that goal.]

[removed: In 2019] [added: For example, in 2020] we reduced our Total Recordable Case Rate (TRCR) by [removed: 16% (0.54)] [added: 26% (0.40)] and our Days Away Case Rate (DACR) by [removed: 4% (0.23)] [added: 26% (0.17)] compared to [removed: 2018.][added: 2019.]

Our TRCR of [removed: 0.54] [added: 0.40] approaches our long-term goal of [removed: 0.50,] [added: 0.25,] which we believe is a world-class safety rate.

Further, in [removed: 2020,] [added: 2021,] the Company took a number of measures to [added: continue to] protect our workforce from the COVID-19 pandemic, including the [removed: following:][added: following as appropriate:]

- Enacting social distancing procedures, staggered shifts, a rotating office work schedule, and modified workspace and meeting space layouts [added: as appropriate]

Our [removed: 2018] [added: 2021] survey on employee engagement showed a favorable response from [removed: 81] [added: 83] percent of employees who completed it.

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere.

We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power – today and well into the future.

By capitalizing on the global growth trends of electrification and digitalization, we're accelerating the planet's transition to renewable energy, helping to solve the world's most urgent power management challenges, and doing what's best for our stakeholders and all of society.

Founded in 1911, Eaton has been listed on the New York Stock Exchange for nearly a century.

We reported revenues of $19.6 billion in 2021 and serve customers in more than 170 countries.

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.

However, as global economies recovered from the COVID-19 pandemic in 2021, 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.

Additional information related to the impact of supply chain constraints and inflation is presented in “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

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.

Compliance with future environmental protection laws may require an increase in capital expenditures.

| (In thousands) | | | 2021 | | |

| | | | | | |

*Inclusion and Diversity*

| Executives | | | | | | 587 | | | | | | 137 | | | | | | 23.3 | | % | | | | 413 | | | | | | 70 | | | | | | 16.9 | | % |

| Managers | | | | | | 7,185 | | | | | | 1,697 | | | | | | 23.6 | | % | | | | 3,668 | | | | | | 731 | | | | | | 19.9 | | % |

| All other employees | | | | | | 78,150 | | | | | | 26,827 | | | | | | 34.3 | | % | | | | 20,171 | | | | | | 7,340 | | | | | | 36.4 | | % |

| All employees | | | | | | 85,947 | | | | | | 28,667 | | | | | | 33.4 | | % | | | | 24,275 | | | | | | 8,154 | | | | | | 33.6 | | % |

1 Excluding Puerto Rico

Eaton’s 2021 total employee costs was $5.5 billion including salaries, wages, equity-based compensation, pension and other benefits.

- Encouraging vaccination for all employees and at select locations, arranging for vaccination clinics and transportation

Eaton Corporation plc (Eaton or the Company) is a power management company with 2020 net sales of $17.9 billion.

Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services.

We provide sustainable solutions that help our customers effectively manage electrical, hydraulic and mechanical power – more safely, more efficiently and more reliably.

Eaton has approximately 92,000 employees in 60 countries and sells products to customers in more than 175 countries.

Principal methods of competition in this segment are product performance, geographic coverage, 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 2020, 25% of this segment's sales were made to five large original equipment manufacturers of vehicles, construction equipment and related components.

In 2020, Eaton maintained appropriate levels of inventory to prevent shortages and stayed in close contact with its suppliers to manage the impact of the COVID-19 pandemic on the supply chain.

Eaton's estimated capital expenditures for environmental control facilities are not expected to be material for 2021 and 2022.

| (In thousands) | | | 2020 | | |

| Hydraulics | | | 10 | | |

*Diversity*

| Executives | | | | | | 594 | | | | | | 126 | | | | | | 21.2 | | % | | | | 412 | | | | | | 73 | | | | | | 17.7 | | % |

| Managers | | | | | | 7,479 | | | | | | 1,705 | | | | | | 22.8 | | % | | | | 3,877 | | | | | | 698 | | | | | | 18.0 | | % |

| All other employees | | | | | | 83,888 | | | | | | 27,722 | | | | | | 33.0 | | % | | | | 21,522 | | | | | | 7,276 | | | | | | 33.8 | | % |

| All employees | | | | | | 91,987 | | | | | | 29,558 | | | | | | 32.1 | | % | | | | 25,835 | | | | | | 8,060 | | | | | | 31.2 | | % |

Eaton’s 2020 total employee costs was $5.2 billion.

For the year ended December 31, [removed: 2020][added: 2021]

The aggregate market value of Ordinary Shares held by non-affiliates of the registrant as of June 30, [removed: 2020] [added: 2021] was [removed: $35.0] [added: $59.1] billion.

As of January 31, [removed: 2021,] [added: 2022,] there were [removed: 398.1] [added: 398.8] million Ordinary Shares outstanding.

Portions of the Proxy Statement for the [removed: 2021] [added: 2022] annual shareholders meeting are incorporated by reference into Part III.

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| [Item [removed: 11.](#ifab7067eea954b8bbefbf2188b995125_67)] [added: 11.](#i07263c46541c4e4fb51563d7ec8000f1_67)] | | | [Executive [removed: Compensation](#ifab7067eea954b8bbefbf2188b995125_67)] [added: Compensation](#i07263c46541c4e4fb51563d7ec8000f1_67)] | | | | | | [removed: [11](#ifab7067eea954b8bbefbf2188b995125_67)] [added: [12](#i07263c46541c4e4fb51563d7ec8000f1_67)] | | |

| [Item [removed: 12.](#ifab7067eea954b8bbefbf2188b995125_70)] [added: 12.](#i07263c46541c4e4fb51563d7ec8000f1_70)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ifab7067eea954b8bbefbf2188b995125_70)] [added: Matters](#i07263c46541c4e4fb51563d7ec8000f1_70)] | | | | | | [removed: [11](#ifab7067eea954b8bbefbf2188b995125_70)] [added: [12](#i07263c46541c4e4fb51563d7ec8000f1_70)] | | |

| [Item [removed: 13.](#ifab7067eea954b8bbefbf2188b995125_73)] [added: 13.](#i07263c46541c4e4fb51563d7ec8000f1_73)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ifab7067eea954b8bbefbf2188b995125_73)] [added: Independence](#i07263c46541c4e4fb51563d7ec8000f1_73)] | | | | | | [removed: [11](#ifab7067eea954b8bbefbf2188b995125_73)] [added: [12](#i07263c46541c4e4fb51563d7ec8000f1_73)] | | |

| [Item [removed: 14.](#ifab7067eea954b8bbefbf2188b995125_76)] [added: 14.](#i07263c46541c4e4fb51563d7ec8000f1_76)] | | | [Principal Accounting Fees and [removed: Services](#ifab7067eea954b8bbefbf2188b995125_76)] [added: Services](#i07263c46541c4e4fb51563d7ec8000f1_76)] | | | | | | [removed: [12](#ifab7067eea954b8bbefbf2188b995125_76)] [added: [12](#i07263c46541c4e4fb51563d7ec8000f1_76)] | | |

| [Item [removed: 15.](#ifab7067eea954b8bbefbf2188b995125_82)] [added: 15.](#i07263c46541c4e4fb51563d7ec8000f1_82)] | | | [Exhibits, Financial Statement [removed: Schedules](#ifab7067eea954b8bbefbf2188b995125_82)] [added: Schedules](#i07263c46541c4e4fb51563d7ec8000f1_82)] | | | | | | [removed: [12](#ifab7067eea954b8bbefbf2188b995125_82)] [added: [12](#i07263c46541c4e4fb51563d7ec8000f1_82)] | | |

| [Item [removed: 16.](#ifab7067eea954b8bbefbf2188b995125_85)] [added: 16.](#i07263c46541c4e4fb51563d7ec8000f1_85)] | | | [Form 10-K [removed: Summary](#ifab7067eea954b8bbefbf2188b995125_85)] [added: Summary](#i07263c46541c4e4fb51563d7ec8000f1_85)] | | | | | | [removed: [16](#ifab7067eea954b8bbefbf2188b995125_85)] [added: [16](#i07263c46541c4e4fb51563d7ec8000f1_85)] | | |

| [Part I](#i07263c46541c4e4fb51563d7ec8000f1_10) | | | | | | | | | [2](#i07263c46541c4e4fb51563d7ec8000f1_10) | | |

| [Part II](#i07263c46541c4e4fb51563d7ec8000f1_34) | | | | | | | | | [10](#i07263c46541c4e4fb51563d7ec8000f1_34) | | |

| [Item 6.](#i07263c46541c4e4fb51563d7ec8000f1_40) | | | [\[Reserved\]](#i07263c46541c4e4fb51563d7ec8000f1_40) | | | | | | [10](#i07263c46541c4e4fb51563d7ec8000f1_40) | | |

| [Item 9C.](#i07263c46541c4e4fb51563d7ec8000f1_1726) | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#i07263c46541c4e4fb51563d7ec8000f1_1726) | | | | | | [11](#i07263c46541c4e4fb51563d7ec8000f1_1726) | | |

| [Part IV](#i07263c46541c4e4fb51563d7ec8000f1_79) | | | | | | | | | [12](#i07263c46541c4e4fb51563d7ec8000f1_79) | | |

| [SIGNATURES](#i07263c46541c4e4fb51563d7ec8000f1_88) | | | | | | | | | [17](#i07263c46541c4e4fb51563d7ec8000f1_88) | | |

| [Part I](#ifab7067eea954b8bbefbf2188b995125_10) | | | | | | | | | [2](#ifab7067eea954b8bbefbf2188b995125_10) | | |

| [Part II](#ifab7067eea954b8bbefbf2188b995125_34) | | | | | | | | | [9](#ifab7067eea954b8bbefbf2188b995125_34) | | |

| [Item 6.](#ifab7067eea954b8bbefbf2188b995125_40) | | | [Selected Financial Data](#ifab7067eea954b8bbefbf2188b995125_40) | | | | | | [10](#ifab7067eea954b8bbefbf2188b995125_40) | | |

| [Part IV](#ifab7067eea954b8bbefbf2188b995125_79) | | | | | | | | | [12](#ifab7067eea954b8bbefbf2188b995125_79) | | |

| [SIGNATURES](#ifab7067eea954b8bbefbf2188b995125_88) | | | | | | | | | [17](#ifab7067eea954b8bbefbf2188b995125_88) | | |

The Company maintains manufacturing facilities at approximately [removed: 267] [added: 224] locations in [removed: 39] [added: 36] countries.

A listing of executive officers, their ages, positions and offices held over the past five years, as of February 1, [removed: 2021,] [added: 2022, is as] follows:

| Craig Arnold | | | | | | [removed: 60] [added: 61] | | | | | | Chairman of Eaton Corporation plc (June 1, 2016 - present) | | |

| | | | | | | | | | | | | [added: Executive] Vice [removed: Chairman] [added: President] and Chief Financial [removed: and Planning Officer] [added: Officer-Elect] of Eaton Corporation | | |

| Thomas B. Okray | | | | | | [removed: 58] [added: 59] | | | | | | Executive Vice President and Chief Financial [removed: Officer-Elect] [added: Officer] of Eaton Corporation | | |

| | | | | | | | | | | | | (January 2021 - [removed: present)] [added: March 2021)] | | |

| Uday Yadav | | | | | | [removed: 57] [added: 58] | | | | | | President and Chief Operating Officer - Electrical Sector of Eaton Corporation | | |

| Heath B. Monesmith | | | | | | [removed: 50] [added: 51] | | | | | | President and Chief Operating Officer - Industrial Sector of Eaton Corporation | | |

| April Miller Boise | | | | | | [removed: 52] [added: 53] | | | | | | Executive Vice President, [removed: General Counsel] [added: Chief Legal Officer] and Secretary of Eaton Corporation | | |

| Ernest W. Marshall, Jr. | | | | | | [removed: 52] [added: 53] | | | | | | Executive Vice President and Chief Human Resources Officer of Eaton Corporation | | |

| [removed: Ken D. Semelsberger] [added: Daniel Hopgood] | | | | | | [removed: 59] [added: 50] | | | | | | Senior Vice President and Controller of Eaton Corporation [added: (April 1, 2021 - present)] | | |

| Joao V. Faria | | | | | | [removed: 56] [added: 57] | | | | | | President - Vehicle Group of Eaton Corporation (May 1, 2017 - present) | | |

| Nandakumar Cheruvatath | | | | | | [removed: 59] [added: 60] | | | | | | President - Aerospace Group of Eaton Corporation (September 1, 2015 - present) | | |

| Brian S. Brickhouse | | | | | | [removed: 57] [added: 58] | | | | | | President - Americas Region, Electrical Sector of Eaton Corporation | | |

| | | | | | | | | | | | | (March 2021 - present) | | |

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| | | | | | | | | | | | | Senior Vice President Global Financial Services and Systems of Eaton Corporation | | |

| | | | | | | | | | | | | (September 2017 - March 30, 2021) | | |

| | | | | | | | | | | | | Senior Vice President, Finance and Planning, Industrial Sector of Eaton Corporation | | |

| | | | | | | | | | | | | (September 2013 - September 2017) | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

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| | | | | | | | | | | | | | | |

| Richard H. Fearon | | | | | | 64 | | | | | | Director of Eaton Corporation plc (September 1, 2015 - present) | | |

| | | | | | | | | | | | | (April 24, 2002 - present) | | |

| | | | | | | | | | | | | (November 1, 2013 - present) | | |

| Paulo Ruiz Sternadt | | | | | | 46 | | | | | | President - Hydraulics Group of Eaton Corporation (April 1, 2019 - present) | | |

| | | | | | | | | | | | | Chief Executive Officer - Dresser Rand, a Siemens business | | |

| | | | | | | | | | | | | (October 19, 2017 - March 30, 2019) | | |

| | | | | | | | | | | | | Executive Vice President - Global Solutions and New Technologies & Strategic | | |

| | | | | | | | | | | | | Business Development of Dresser Rand, a Siemens business | | |

| | | | | | | | | | | | | (April 1, 2016 - October 18, 2017) | | |

| | | | | | | | | | | | | Global Segment Head - Business Segment Bushings, Instrument Transformers & Coils, | | |

| | | | | | | | | | | | | Siemens AG (April 1, 2012 - March 30, 2016) | | |

At December 31, [removed: 2020,] [added: 2021,] there were [removed: 11,390] [added: 10,447] holders of record of the Company's ordinary shares.

Additionally, [removed: 16,400] [added: 14,835] current and former employees were shareholders through participation in the Eaton Savings Plan (ESP), the Eaton Personal Investment Plan (EPIP), and the Eaton Puerto Rico Retirement Savings Plan.

Issuer's Purchases of Equity Securities

During the fourth quarter of 2020, 1.2 million ordinary shares were repurchased in the open market at a total cost of $131 million.

A summary of the shares repurchased in the fourth quarter of 2020 follows:

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Month | | | | | | Total number of shares purchased | | | | | | Average price paid per share | | | | | | Total number of shares purchased as part of publicly announced plans or programs | | | | | | Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) | | |

| October | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 2,225 | |

| November | | | | | | 685,999 | | | | | | $ | 110.17 | | | | | 685,999 | | | | | | $ | 2,149 | |

| December | | | | | | 476,491 | | | | | | $ | 115.74 | | | | | 476,491 | | | | | | $ | 2,094 | |

| Total | | | | | | 1,162,490 | | | | | | $ | 112.45 | | | | | 1,162,490 | | | | | | | | |

Information regarding selected financial data is presented in the “Five-Year Consolidated Financial Summary” of this Form 10-K.

Information regarding selected quarterly financial information for 2020 and 2019 is presented in “Quarterly Data” of this Form 10-K.

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 [removed: Richard H.][added: Thomas B.]

[removed: Fearon] [added: Okray] - 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, [removed: 2020.][added: 2021.]

“Report of Independent Registered Public Accounting Firm” relating to internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] is included in Item 15 of this Form 10-K.

During the fourth quarter of [removed: 2020,] [added: 2021,] 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.

Management is currently evaluating the impact of the [removed: business] [added: businesses] acquired in [removed: 2020] [added: 2021] on Eaton's internal control over financial reporting.

Part III

Not Applicable.

Part III

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 [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

There were no changes during the fourth quarter [removed: 2020] [added: 2021] 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 [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

Information required with respect to delinquent Section 16(a) reports is set forth under the caption “Delinquent Section 16(a) Reports” in the Company’s definitive Proxy Statement to be filed on or about March 18, 2022 and is incorporated by reference.

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 [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

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 [removed: 19, 2021,] [added: 18, 2022,] 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 [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

Information required with respect to certain relationships and related [removed: transactions] [added: transactions, as well as director independence,] is set forth under the caption [removed: “Review of Related Person Transactions”] [added: “Director Independence”] in the Company's definitive Proxy Statement to be filed on or about March [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

Information required with respect to director independence is set forth under the caption “Director Independence” in the Company's definitive Proxy Statement to be filed on or about March 19, 2021, and is incorporated by reference.

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 [removed: 19, 2021,] [added: 18, 2022,] and is incorporated by reference.

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

Consolidated Statements of Income - Years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Comprehensive Income - Years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Balance Sheets - December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

Consolidated Statements of Cash Flows - Years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Shareholders' Equity - Years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

| 3 (i) | | | [Certificate of Incorporation - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex41.htm) | | | | | | [added: | | |]

| 3 (ii) | | | [Amended and restated Memorandum and Articles of Incorporation - Incorporated by reference to the Form 8-K Report filed on May 1, 2017](http://www.sec.gov/Archives/edgar/data/1551182/000155118217000127/armemorandumarticles2017.htm) | | | | | | [added: | | |]

| 4.1 | | | [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)](https://www.sec.gov/Archives/edgar/data/1551182/000155118220000050/etn1231201941.htm) | | | | | | [added: | | |]

| 4.2 | | | [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))](http://www.sec.gov/Archives/edgar/data/1551182/000119312512480576/d443829dex41.htm) | | | | | | [added: | | |]

| 4.3 | | | [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)](http://www.sec.gov/Archives/edgar/data/31277/000119312513359886/d576218dex42.htm) | | | | | | [added: | | |]

| 4.4 | | | [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)](http://www.sec.gov/Archives/edgar/data/31277/000119312513359886/d576218dex43.htm) | | | | | | [added: | | |]

| 4.5 | | | [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)](http://www.sec.gov/Archives/edgar/data/1551182/000155118218000074/etn12312017ex44.htm) | | | | | | [added: | | |]

| 4.6 | | | [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)](http://www.sec.gov/Archives/edgar/data/1551182/000155118218000074/etn12312017ex45.htm) | | | | | | [added: | | |]

| 4.7 | | | [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)](http://www.sec.gov/Archives/edgar/data/1551182/000155118218000074/etn12312017ex46.htm) | | | | | | [added: | | |]

| 4.8 | | | 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 - 4.7) hereto | | | | | | [added: | | |]

| 10 | | | Material contracts | | | | | | [added: | | |]

| | | | (a) | | | [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](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10a.htm) | | | [added: | | |]

| | | | (b) | | | [Deferred Incentive Compensation Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wf.txt) | | | [added: | | |]

| | | | (c) | | | [First Amendment to Deferred Incentive Compensation Plan II - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex412.htm) | | | [added: | | |]

| | | | (d) | | | [Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wg.txt) | | | [added: | | |]

| | | | (e) | | | [First Amendment to Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the [removed: Form 10-K] [added: Form](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10e.htm) [10-K] Report for the year ended December 31, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10e.htm) | | | [added: | | |]

| | | | (f) | | | [Incentive Compensation Deferral Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wh.txt) | | | [added: | | |]

| | | | (g) | | | [First Amendment to Incentive Compensation Deferral Plan II - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex411.htm) | | | [added: | | |]

| | | | (h) | | | [Limited Eaton Service Supplemental Retirement Income Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wi.txt) | | | [added: | | |]

| | | | (i) | | | [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](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10i.htm) | | | [added: | | |]

| | | | (j) | | | [Supplemental Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wj.txt) | | | [added: | | |]

| | | | (k) | | | [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](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10k.htm) | | | [added: | | |]

| | | | (l) | | | [Form of Restricted Share Unit Agreement - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2015](http://www.sec.gov/Archives/edgar/data/1551182/000155118216000041/etn12312015ex10l.htm) | | | [added: | | |]

| | | | (m) | | | [Form of Restricted Share Award Agreement - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2015](http://www.sec.gov/Archives/edgar/data/1551182/000155118216000041/etn12312015ex10m.htm) | | | [added: | | |]

| | | | (n) | | | [Form of Restricted Share Agreement (Non-Employee Directors) - Incorporated by reference to the [removed: Form 8-K] [added: Form](http://www.sec.gov/Archives/edgar/data/31277/000095012310007207/l38711exv10w2.htm) [8-K] Report filed February 1, 2010](http://www.sec.gov/Archives/edgar/data/31277/000095012310007207/l38711exv10w2.htm) | | | [added: | | |]

| | | | (o) | | | [Form of Directors' Restricted Share Unit Agreement - Incorporated by reference to the Form 10-K report for the year ended December 31, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10o.htm) | | | [added: | | |]

| | | | (p) | | | [Form of Stock Option Agreement for Executives - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2015](http://www.sec.gov/Archives/edgar/data/1551182/000155118216000041/etn12312015ex10p.htm) | | | [added: | | |]

| | | | (q) | | | [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](http://www.sec.gov/Archives/edgar/data/31277/000095015208001530/l30233aexv10wq.txt) | | | [added: | | |]

| | | | (r) | | | [Amended and Restated 2002 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex48.htm) | | | [added: | | |]

| | | | (s) | | | [Amended and Restated 2004 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex47.htm) | | | [added: | | |]

| | | | (t) | | | [Amended and Restated 2008 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex46.htm) | | | [added: | | |]

| | | | (u) | | | [Second Amended and Restated 2009 Stock Plan - Incorporated by reference to Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex45.htm) | | | [added: | | |]

| | | | (v) | | | [Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000119312512487405/d432654dex44.htm) | | | [added: | | |]

| | | | (w) | | | [Amendment to Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012](http://www.sec.gov/Archives/edgar/data/1551182/000155118213000005/etn12312012ex10w.htm) | | | [added: | | |]

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_______________________________

Date: February [removed: 24, 2021][added: 23, 2022]

| Craig Arnold | | | | | | Chairman, Principal Executive Officer; Director | | | | | | [removed: Richard H. Fearon] [added: Thomas B. Okray] | | | | | | Principal Financial [removed: Officer, Director] [added: Officer] | | |

| [removed: Ken D. Semelsberger] [added: Daniel Hopgood] | | | | | | Principal Accounting Officer | | | | | | Christopher M. Connor | | | | | | Director | | |

| [removed: Michael J. Critelli] [added: Olivier Leonetti] | | | | | | Director | | | | | | [removed: Olivier Leonetti] [added: Deborah L. McCoy] | | | | | | Director | | |

| [removed: Deborah L. McCoy] [added: Silvio Napoli] | | | | | | Director | | | | | | [removed: Silvio Napoli] [added: Gregory R. Page] | | | | | | Director | | |

| [removed: Gregory R. Page] [added: Sandra Pianalto] | | | | | | Director | | | | | | [removed: Sandra Pianalto] [added: Robert V. Pragada] | | | | | | Director | | |

| Dorothy C. Thompson | | | | | | Director | | | | | | [added: Darryl L. Wilson] | | | | | | [added: Director] | | |

| | | | | | | [removed: Richard H. Fearon,] [added: Thomas B. Okray,] Attorney-in-Fact for the officers and directors signing in the capacities indicated | | |

We have audited the accompanying consolidated balance sheets of Eaton Corporation plc (“the Company”) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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, [removed: 2020,] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] 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 [removed: 24, 2021] [added: 23, 2022] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | As discussed in Note 11 to the consolidated financial statements, the Company had gross unrecognized income tax benefits of [removed: $1,036] [added: $1,120] million related to its uncertain tax positions at December 31, [removed: 2020.] [added: 2021.] 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 [removed: prospect] [added: timing] of [removed: retroactive regulations, new case law, the willingness] [added: finalizing resolutions] of [removed: the income tax authority to settle the issue, including the timing thereof,] [added: audit disputes through reaching settlement agreements or concluding litigation, or changes in law,] and other factors. | | |

| *How We Addressed the Matter in Our Audit* | | | 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 uncertain tax positions. We also evaluated the Company’s assessment of its uncertain tax positions. Our audit procedures included 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 and trends in similar positions challenged by tax authorities. 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 in the Company’s recognition determination. [removed: Further, we tested the Company’s release of previously recorded unrecognized income tax benefits, which along with the recording of additional unrecognized tax benefits, impacts the Company’s tax provision.] We have also evaluated the Company’s income tax disclosures in relation to these matters. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the [removed: design] [added: design,] and tested the operating effectiveness of [removed: management’s] [added: the Company’s] controls over [added: its accounting for] the [removed: goodwill allocation processes.] [added: acquisition of Tripp Lite, including recognition and measurement of the intangible assets acquired.] For example, we tested controls over [added: the recognition and measurement of the customer relationships intangible asset, including] management’s review of the [added: methods and] significant assumptions [removed: described above along with the completeness and accuracy of the data] used [removed: in these] [added: to develop the] fair value [removed: estimates.] [added: estimate.] To test the estimated fair value of the [removed: impacted reporting units, our] [added: customer relationships intangible asset, we performed] audit procedures [added: that] included, among others, evaluating the [removed: Company’s fair value] [added: Company's selection of the valuation] methodology, [removed: testing] [added: evaluating] the [added: methods and] significant assumptions [removed: discussed above] [added: used by the Company's valuation specialist,] and [removed: testing] [added: evaluating] the [added: completeness and accuracy of the] underlying data [removed: used by] [added: supporting] the [removed: Company in each of its analyses.] [added: significant assumptions and estimates.] For example, [added: when evaluating the assumptions related to the revenue growth rates and future EBITDA margins,] we compared the [removed: significant] assumptions [removed: used by management] to [removed: current industry and economic trends. We assessed] the [removed: historical accuracy] [added: past performance] of [removed: management’s estimates] [added: Tripp Lite] and [added: expected industry trends and considered whether they were consistent with evidence obtained in other areas of the audit. We also] performed sensitivity analyses [removed: of significant assumptions] to evaluate the changes in the fair [removed: values] [added: value] of the [removed: impacted reporting units] [added: customer relationships intangible asset] that would result from changes in [added: the significant] assumptions. We [removed: also] involved [added: our] EY valuation specialists to assist [removed: in] [added: with] our evaluation of the [removed: weighted-average cost of capital utilized in each fair value estimate. We tested the allocations of goodwill] [added: methodology used] by [removed: recalculating] the [removed: amounts based on the estimated fair values of each of the impacted reporting units. Furthermore, we have evaluated the Company’s disclosures] [added: Company and certain significant assumptions included] in [removed: relation to] the [removed: reallocation of goodwill.] [added: fair value estimate.] | | |

| *Description of the Matter* | | | As discussed in Note 2 to the consolidated financial statements, during [removed: December 2019] [added: March 2021,] the Company completed the acquisition of [removed: the Souriau-Sunbank Connection Technologies business (“Souriau-Sunbank”)] [added: Tripp Lite] for a total purchase price of approximately [removed: $907 million,] [added: $1.65 billion,] net of cash received. The acquisition was accounted for using the acquisition method of accounting. The consideration paid in the acquisition must be allocated to the acquired assets and liabilities assumed generally based on their fair value with the excess of the purchase price over those fair values allocated to goodwill. The [removed: preliminary] estimates of the fair value of intangible assets were [removed: revised during the measurement period] [added: recorded] in [removed: 2020 as] [added: 2021 based upon] third-party [removed: valuations were received and finalized resulting] [added: valuations, which resulted] in the recognition of [removed: customer relationships and technology] intangible assets [added: totaling approximately $604 million,] of [removed: $250] [added: which approximately $539] million [removed: and $95 million, respectively.] [added: related to customer relationships.] Auditing the Company’s accounting for its acquisition of [removed: Souriau-Sunbank] [added: Tripp Lite] was complex because the customer relationships [removed: and technology] intangible [removed: assets] [added: asset] recognized [removed: were] [added: was] material to the consolidated financial statements and the [removed: estimates] [added: estimate] of fair value involved subjectivity. The subjectivity was primarily due to the sensitivity of the [removed: respective] fair [removed: values] [added: value] to underlying assumptions about the future performance of the acquired business. The Company used [added: a] discounted cash flow [removed: models] [added: model] to measure the [added: customer relationships] intangible [removed: assets.] [added: asset.] The significant assumptions used to estimate the fair value of the [added: customer relationships] intangible [removed: assets] [added: asset] included [added: the] discount [removed: rates] [added: rate] and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and future EBITDA margins). These significant assumptions are forward looking and could be affected by future economic and market conditions. | | |

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, [removed: 2020.][added: 2021.]

The Board of Directors pursues its responsibility for the quality of Eaton's financial reporting primarily through its Audit Committee, which is composed of [removed: five] [added: six] independent directors.

We have audited Eaton Corporation plc’s (“the Company”) internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the [removed: entity] [added: entities] that [removed: was] [added: were] acquired during [removed: 2020] [added: 2021] (as [removed: defined] [added: described] in Note [removed: 2 to the consolidated financial statements),] [added: 2),] which [removed: is] [added: are] included in the [removed: 2020] [added: 2021] consolidated financial statements of the Company and constituted [removed: less than 1%] [added: approximately 12%] of total assets (inclusive of acquired intangible assets) as of December 31, [removed: 2020] [added: 2021] and [removed: less than 1%] [added: approximately 5%] of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the [removed: entity] [added: entities] that [removed: was] [added: were] acquired during [removed: 2020.][added: 2021.]

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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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, [removed: 2020,] [added: 2021,] and the related notes and our report dated February [removed: 24, 2021] [added: 23, 2022] expressed an unqualified opinion thereon.

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, [removed: 2020.][added: 2021.]

Our evaluation of internal control over financial reporting did not include the internal controls of the [removed: entity] [added: entities] that [removed: was] [added: were] acquired during [removed: 2020] [added: 2021] (as [removed: defined] [added: described] in Note 2), which [removed: is] [added: are] included in the [removed: 2020] [added: 2021] consolidated financial statements and constituted [removed: less than 1%] [added: approximately 12%] of total assets (inclusive of acquired intangible assets) as of December 31, [removed: 2020] [added: 2021] and [removed: less than 1%] [added: approximately 5%] of net sales for the year then ended.

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, [removed: 2020.][added: 2021.]

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, [removed: 2020.][added: 2021.]

| (In millions except for per share data) | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net sales | | | $ | [removed: 17,858] [added: 19,628] | | | | | $ | [removed: 21,390] [added: 17,858] | | | | | $ | [removed: 21,609] [added: 21,390] | |

| Cost of products sold | | | [removed: 12,408] [added: 13,293] | | | | | | [removed: 14,338] [added: 12,408] | | | | | | [removed: 14,511] [added: 14,338] | | |

| Selling and administrative expense | | | [removed: 3,075] [added: 3,256] | | | | | | [removed: 3,583] [added: 3,075] | | | | | | [removed: 3,548] [added: 3,583] | | |

| Research and development expense | | | [removed: 551] [added: 616] | | | | | | [removed: 606] [added: 551] | | | | | | [removed: 584] [added: 606] | | |

| Interest expense - net | | | [removed: 149] [added: 144] | | | | | | [removed: 199] [added: 149] | | | | | | [removed: 258] [added: 199] | | |

| Gain on sale of [removed: business] [added: businesses] | | | [removed: 221] [added: 617] | | | | | | [removed: —] [added: 221] | | | | | | — | | |

| Other expense - net | | | [removed: 150] [added: 40] | | | | | | [removed: 73] [added: 150] | | | | | | [removed: 9] [added: 73] | | |

| Income before income taxes | | | [removed: 1,746] [added: 2,896] | | | | | | [removed: 2,591] [added: 1,746] | | | | | | [removed: 2,424] [added: 2,591] | | |

| Income tax expense | | | [removed: 331] [added: 750] | | | | | | [removed: 378] [added: 331] | | | | | | [removed: 278] [added: 378] | | |

| Net income | | | [removed: 1,415] [added: 2,146] | | | | | | [removed: 2,213] [added: 1,415] | | | | | | [removed: 2,146] [added: 2,213] | | |

| Less net income for noncontrolling interests | | | [removed: (5)] [added: (2)] | | | | | | [removed: (2)] [added: (5)] | | | | | | [removed: (1)] [added: (2)] | | |

| Net income attributable to Eaton ordinary shareholders | | | $ | [removed: 1,410] [added: 2,144] | | | | | $ | [removed: 2,211] [added: 1,410] | | | | | $ | [removed: 2,145] [added: 2,211] | |

| Diluted | | | $ | [removed: 3.49] [added: 5.34] | | | | | $ | [removed: 5.25] [added: 3.49] | | | | | $ | [removed: 4.91] [added: 5.25] | |

| Date: | | | February 23, 2022 | | | By: | | | /s/ Thomas B. Okray | | |

| | | | | | | | | | Thomas B. Okray | | |

| /s/ Craig Arnold | | | | | | | | | | | | /s/ Thomas B. Okray | | | | | | | | |

| /s/ Daniel Hopgood | | | | | | | | | | | | * | | | | | | | | |

| * | | | | | | | | | | | | * | | | | | | | | |

| *By | | | | | | /s/ Thomas B. Okray | | |

| | | | Valuation of Customer Relationships Intangible Asset in the Acquisition of Tripp Lite | | |

February 23, 2022

| /s/ Craig Arnold | | | | | | /s/ Thomas B. Okray | | | | | | /s/ Daniel Hopgood | | |

| February 23, 2022 | | | | | | | | | | | | | | |

February 23, 2022

| /s/ Craig Arnold | | | | | | /s/ Thomas B. Okray | | | | | | /s/ Daniel Hopgood | | |

| February 23, 2022 | | | | | | | | | | | | | | |

| (In millions) | | | 2021 | | | | | | 2020 | | |

| Investments in associate companies | | | (124) | | | | | | (19) | | | | | | (11) | | |

| Payments on borrowings | | | (1,013) | | | | | | (249) | | | | | | (348) | | |

| Short-term debt, net | | | 20 | | | | | | (254) | | | | | | (159) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Repurchase of shares | | | (0.9) | | | | | | — | | | | | | — | | | | | | (122) | | | | | | — | | | | | | — | | | | | | (122) | | | | | | — | | | | | | (122) | | |

| Balance at December 31, 2021 | | | 398.8 | | | | | | $ | 4 | | | | | $ | 12,449 | | | | | $ | 7,594 | | | | | $ | (3,633) | | | | | $ | (1) | | | | | $ | 16,413 | | | | | $ | 38 | | | | | $ | 16,451 | |

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere.

We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power – today and well into the future.

By capitalizing on the global growth trends of electrification and digitalization, we're accelerating the planet's transition to renewable energy, helping to solve the world's most urgent power management challenges, and doing what's best for our stakeholders and all of society.

Founded in 1911, Eaton has been listed on the New York Stock Exchange for nearly a century.

We reported revenues of $19.6 billion in 2021 and serve customers in more than 170 countries.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Eaton adopted Accounting Standards Update 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, in the fourth quarter of 2021.

This standard requires unbilled receivables (revenue recognized exceeds amount billed to customer) and deferred revenue liabilities (advanced payments and billings in excess of revenue recognized) from contracts with customers acquired as part of an acquisition of a business to be recognized and measured using revenue recognition accounting guidance, rather than at fair value.

The adoption of the standard was applied to businesses acquired during 2021 and did not have a material impact on the consolidated financial statements.

LIBOR Transition

In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced it intends to phase out LIBOR.

The final publication of rates for certain USD LIBOR tenors is expected to be on June 30, 2023.

Various parties, including government agencies, are seeking to identify alternative rates to replace LIBOR.

The Company has established a cross-functional project team to evaluate the potential impacts of alternative rates as replacements to LIBOR in the Company’s contracts, which primarily include revolving credit facilities, fixed-to-floating interest rate swaps, and forward starting floating-to-fixed interest rate swaps.

As of December 31, 2021, the Company’s $500 million 364-day revolving credit facility that will expire on October 3, 2022 and $2,000 million five-year revolving credit facility that will expire on October 4, 2026 both include a transition process from LIBOR to an alternative rate.

The Company’s interest rate swaps are expected to settle prior to June 30, 2023.

The Company continues to evaluate the potential impacts of the transition from LIBOR to alternative rates in its contracts and the transition is not expected to have a material impact on the consolidated financial statements.

The Company uses the following depreciation and amortization periods:

| Category | | | | | | Estimated useful life or amortization period | | |

| Buildings | | | | | | Generally 40 years | | |

| | | | | | | | | | | | |

| Date: | | | February 24, 2021 | | | By: | | | /s/ Richard H. Fearon | | |

| | | | | | | | | | Richard H. Fearon | | |

| /s/ Craig Arnold | | | | | | | | | | | | /s/ Richard H. Fearon | | | | | | | | |

| /s/ Ken D. Semelsberger | | | | | | | | | | | | * | | | | | | | | |

| * | | | | | | | | | | | | | | | | | | | | |

| *By | | | | | | /s/ Richard H. Fearon | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | Reallocation of Goodwill related to the Divestiture of the Hydraulics Business and the Re-segmentation of certain Operating Segments | | |

| *Description of the Matter* | | | As discussed in Notes 2 and 6 to the consolidated financial statements, in January 2020 the Company entered into an agreement to sell its Hydraulics business to Danfoss A/S for $3.3 billion in cash and classified the assets and liabilities of the Hydraulics business being sold (“Hydraulics”) as held for sale. In conjunction with classification of Hydraulics as held for sale, management reassigned goodwill using a relative fair value allocation to both Hydraulics and the Filtration and Golf Grip businesses previously included in the Hydraulics operating segment and subsequently included within the Aerospace operating segment as part of the re-segmentation described below. Goodwill of $907 million was allocated to Hydraulics as part of the classifying Hydraulics assets as held for sale in the first quarter. Additionally, during the first quarter of 2020, as discussed in Note 6 to the consolidated financial statements, the Company re-segmented certain operating segments due to a reorganization of the Company’s businesses. Specific to the Electrical business, the Company replaced the previous Electrical Products and Electrical Systems and Services segments with the Electrical Americas and the Electrical Global segments (collectively referred to as the “New Electrical Segments”). Management reassigned goodwill to the New Electrical Segments using a relative fair value allocation which resulted in goodwill of $6.4 billion and $4.0 billion being allocated to the Electrical Americas and Electrical Global operating segments, respectively. Auditing the Company's reallocation of goodwill to Hydraulics and the New Electrical Segments was complex due to the significant estimation required to determine each of the fair values of the impacted reporting units referred to above. These fair value estimates were sensitive to significant assumptions such as the weighted-average cost of capital, revenue growth rates, operating margins and the terminal values, which are affected by expectations about future market or economic conditions. | | |

| | | | Valuation of Intangible Assets in the Acquisition of Souriau-Sunbank Connection Technologies | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over its accounting for the acquisition of Souriau-Sunbank, including recognition and measurement of the intangible assets acquired. For example, we tested controls over the recognition and measurement of customer relationships and technology intangible assets, including management’s review of the methods and significant assumptions used to develop such fair value estimates. To test the estimated fair values of the customer relationships and technology intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company's valuation specialist, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We also performed sensitivity analyses to evaluate the changes in the fair value of such intangible assets that would result from changes in the significant assumptions. We involved our EY valuation specialists to assist with our evaluation of the methodology used by the Company and certain significant assumptions included in the fair value estimates. For example, when evaluating the assumptions related to the revenue growth rates and future EBITDA margins, we compared the assumptions to the past performance of Souriau-Sunbank and expected industry trends and considered whether they were consistent with evidence obtained in other areas of the audit. Furthermore, we have evaluated the Company’s disclosures in relation to the Souriau-Sunbank acquisition. | | |

February 24, 2021

| /s/ Craig Arnold | | | | | | /s/ Richard H. Fearon | | | | | | /s/ Ken D. Semelsberger | | |

| February 24, 2021 | | | | | | | | | | | | | | |

| Arbitration decision expense | | | — | | | | | | — | | | | | | 275 | | |

| Payments on borrowings | | | (504) | | | | | | (507) | | | | | | (574) | | |

| Balance at January 1, 2018 | | | 439.9 | | | | | | $ | 4 | | | | | $ | 11,987 | | | | | $ | 8,669 | | | | | $ | (3,404) | | | | | $ | (3) | | | | | $ | 17,253 | | | | | $ | 37 | | | | | $ | 17,290 | |

| Cumulative-effect adjustment upon adoption of ASU 2014-09 | | | — | | | | | | — | | | | | | — | | | | | | (2) | | | | | | — | | | | | | — | | | | | | (2) | | | | | | — | | | | | | (2) | | |

| Cumulative-effect adjustment upon adoption of ASU 2016-16 | | | — | | | | | | — | | | | | | — | | | | | | (199) | | | | | | — | | | | | | — | | | | | | (199) | | | | | | — | | | | | | (199) | | |

| Repurchase of shares | | | (17.5) | | | | | | — | | | | | | — | | | | | | (1,300) | | | | | | — | | | | | | — | | | | | | (1,300) | | | | | | — | | | | | | (1,300) | | |

Eaton Corporation plc (Eaton or the Company) is a power management company with 2020 net sales of $17.9 billion.

Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services.

We provide sustainable solutions that help our customers effectively manage electrical, hydraulic and mechanical power – more safely, more efficiently and more reliably.

Eaton has approximately 92,000 employees in 60 countries and sells products to customers in more than 175 countries.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses.

The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments.

Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization.

The Company also changed how it measures business segment performance in 2020 as it no longer allocates acquisition and divestiture charges to its operating segments.

Historical segment information has been retrospectively adjusted to reflect these changes.

The Company recorded $37 and $13 of net gains for the years ended December 31, 2019 and 2018, respectively, related primarily to the remeasurement of intercompany loans denominated in a foreign currency and the currency exchange derivative contracts used to hedge these exposures.

In the first quarter of 2020, Eaton changed the presentation of these gains from Other expense - net to Interest expense - net, and reclassified all prior periods.

In the first quarter of 2020, the Company also changed the presentation of the following items within the operating activities section of the Consolidated Statements of Cash Flows:

- The non-cash gains and losses associated with currency exchange derivative contracts have been moved from Other current assets and Other current liabilities to Other-net.

This puts the non-cash impact of these derivatives on the same line as the non-cash impact from the balance sheet currency exposures they are used to hedge.

- The changes in both uncertain tax positions and prepaid taxes have been moved from Other-net and Other current assets, respectively, to Accrued income and other taxes.

This places the cash flow impact from all taxes on the same line.

- The changes in non-trade receivables have been moved from Accounts receivable-net to Other current assets.

This separates the cash flows associated with non-trade receivables from customer collections.