Item 1. FINANCIAL STATEMENTS.

EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF INCOME

			Three months ended March 31
(In millions except for per share data)			2025						2024
Net sales			$	6,377					$	5,943
Cost of products sold			3,930						3,725
Selling and administrative expense			1,048						1,025
Research and development expense			198						189
Interest expense - net			33						30
Other income - net			(9)						(26)
Income before income taxes			1,177						1,001
Income tax expense			212						179
Net income			965						822
Less net income for noncontrolling interests			(1)						(1)
Net income attributable to Eaton ordinary shareholders			$	964					$	821
Net income per share attributable to Eaton ordinary shareholders
Diluted			$	2.45					$	2.04
Basic			2.46						2.05
Weighted-average number of ordinary shares outstanding
Diluted			393.6						401.9
Basic			392.2						399.9
Cash dividends declared per ordinary share			$	1.04					$	0.94

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

EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			Three months ended March 31
(In millions)			2025						2024
Net income			$	965					$	822
Less net income for noncontrolling interests			(1)						(1)
Net income attributable to Eaton ordinary shareholders			964						821
Other comprehensive income (loss), net of tax
Currency translation and related hedging instruments			84						(53)
Pensions and other postretirement benefits			(3)						17
Cash flow hedges			11						(4)
Other comprehensive income (loss) attributable to Eaton ordinary shareholders			92						(40)
Total comprehensive income attributable to Eaton ordinary shareholders			$	1,056					$	781

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

EATON CORPORATION plc

CONSOLIDATED BALANCE SHEETS

(In millions)			March 31, 2025						December 31, 2024
Assets
Current assets
Cash			$	1,777					$	555
Short-term investments			162						1,525
Accounts receivable - net			5,094						4,619
Inventory			4,392						4,227
Prepaid expenses and other current assets			1,009						874
Total current assets			12,434						11,801
Property, plant and equipment
Land and buildings			2,177						2,239
Machinery and equipment			6,981						6,823
Gross property, plant and equipment			9,158						9,062
Accumulated depreciation			(5,394)						(5,333)
Net property, plant and equipment			3,765						3,729
Other noncurrent assets
Goodwill			14,851						14,713
Other intangible assets			4,586						4,658
Operating lease assets			813						806
Deferred income taxes			609						609
Other assets			2,148						2,066
Total assets			$	39,206					$	38,381
Liabilities and shareholders’ equity
Current liabilities
Short-term debt			$	805					$	—
Current portion of long-term debt			1,666						674
Accounts payable			3,654						3,678
Accrued compensation			489						670
Other current liabilities			2,908						2,835
Total current liabilities			9,522						7,857
Noncurrent liabilities
Long-term debt			7,609						8,478
Pension liabilities			733						741
Other postretirement benefits liabilities			162						164
Operating lease liabilities			669						669
Deferred income taxes			267						275
Other noncurrent liabilities			1,696						1,667
Total noncurrent liabilities			11,136						11,994
Shareholders’ equity
Ordinary shares (391.3 million outstanding in 2025 and 392.9 million in 2024)			4						4
Capital in excess of par value			12,711						12,731
Retained earnings			10,041						10,096
Accumulated other comprehensive loss			(4,250)						(4,342)
Shares held in trust			(1)						(1)
Total Eaton shareholders’ equity			18,506						18,488
Noncontrolling interests			41						43
Total equity			18,547						18,531
Total liabilities and equity			$	39,206					$	38,381

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

EATON CORPORATION plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three months ended March 31
(In millions)			2025						2024
Operating activities
Net income			$	965					$	822
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization			232						225
Deferred income taxes			25						32
Pension and other postretirement benefits expense			9						4
Contributions to pension plans			(34)						(46)
Contributions to other postretirement benefits plans			(4)						(4)
Changes in working capital			(913)						(524)
Other - net			(42)						(34)
Net cash provided by operating activities			238						475
Investing activities
Capital expenditures for property, plant and equipment			(147)						(183)
Proceeds from sales of property, plant and equipment			49						58
Investments in associate companies			(13)						—
Sales of short-term investments - net			1,366						150
Proceeds from settlement of currency exchange contracts not designated as hedges - net			—						11
Other - net			(22)						(3)
Net cash provided by investing activities			1,233						33
Financing activities
Payments on borrowings			(3)						(4)
Short-term debt, net			805						(7)
Cash dividends paid			(397)						(368)
Exercise of employee stock options			7						41
Repurchase of shares			(615)						(138)
Employee taxes paid from shares withheld			(41)						(56)
Other - net			—						(4)
Net cash used in financing activities			(244)						(536)
Effect of currency on cash			(7)						13
Total increase (decrease) in cash			1,221						(15)
Cash at the beginning of the period			555						488
Cash at the end of the period			$	1,777					$	473

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

EATON CORPORATION plc

NOTES TO THE CONDENSED 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. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods.

This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2024 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

Adoption of New Accounting Standard

Eaton adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, in the fourth quarter of 2024 on a retrospective basis. 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. The adoption of the standard did not have a material impact on the condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (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.

In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). This accounting standard requires disaggregated income statement expense disclosures on an annual and interim basis, including inventory purchases, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains these expenses. The standard also requires disclosure of total selling expenses on an annual and interim basis, and the definition of those expenses disclosed annually. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and may be applied prospectively or retrospectively. The Company is evaluating the impact of ASU 2024-03 and expects the standard will only impact its disclosures with no material impact to the consolidated financial statements.

Note 2. ACQUISITIONS OF BUSINESSES

Acquisition of Exertherm

On May 20, 2024, Eaton acquired Exertherm, a U.K.-based provider of thermal monitoring solutions for electrical equipment. Exertherm is reported within the Electrical Americas business segment.

Acquisition of a 49% stake in NordicEPOD AS

On May 31, 2024, Eaton acquired a 49 percent stake in NordicEPOD AS, which designs and assembles standardized power modules for data centers in the Nordic region. Eaton accounts for this investment on the equity method of accounting and it is reported within the Electrical Global business segment.

Acquisition of Fibrebond Corporation

On April 1, 2025, Eaton acquired Fibrebond Corporation (Fibrebond) for $1.45 billion, net of cash acquired. Fibrebond is a U.S. based designer and builder of pre-integrated modular power enclosures for data center, industrial, utility and communications customers. Fibrebond had sales of approximately $378 million for the twelve months ended February 28, 2025 and will be reported within the Electrical Americas business segment.

The acquisition of Fibrebond will be accounted for using the acquisition method of accounting. Due to the timing of the closing date, the Company is unable to provide the preliminary estimated fair values of the assets acquired and liabilities assumed as of the acquisition date.

As part of the acquisition, Eaton assumed $240 million of employee transaction and retention awards. Awards will vest in six equal annual installments starting in the second quarter of 2025, subject to continued employment with Eaton. Forfeited employee awards will be paid to former Fibrebond shareholders annually. Eaton will recognize compensation expense for the awards over the requisite service period and any employee forfeitures owed to former Fibrebond shareholders will be expensed immediately in Other income - net.

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 following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:

			Three months ended March 31
(In millions)			2025						2024
Electrical Americas
Products			$	743					$	733
Systems			2,267						1,957
Total			$	3,010					$	2,690
Electrical Global
Products			$	938					$	844
Systems			672						656
Total			$	1,610					$	1,500
Aerospace
Original Equipment Manufacturers			$	386					$	355
Aftermarket			350						291
Industrial and Other			242						225
Total			$	979					$	871
Vehicle
Commercial			$	360					$	435
Passenger and Light Duty			257						290
Total			$	617					$	724
eMobility			$	162					$	158
Total net sales			$	6,377					$	5,943

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 $4,592 million and $4,079 million at March 31, 2025 and December 31, 2024, 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 $392 million and $330 million at March 31, 2025 and December 31, 2024, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized and not yet billed from increased business activity in 2025.

Changes in the deferred revenue liabilities are as follows:

(In millions)			Deferred Revenue
Balance at January 1, 2025			$	618
Customer deposits and billings			853
Revenue recognized in the period			(813)
Translation			7
Balance at March 31, 2025			$	665

(In millions)			Deferred Revenue
Balance at January 1, 2024			$	626
Customer deposits and billings			657
Revenue recognized in the period			(612)
Translation			(5)
Balance at March 31, 2024			$	666

Deferred revenue liabilities of $647 million and $602 million as of March 31, 2025 and December 31, 2024, respectively, were included in Other current liabilities on the Consolidated Balance Sheets 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 March 31, 2025 was approximately $16.0 billion. At March 31, 2025, approximately 74% 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 $52 million and $55 million at March 31, 2025 and December 31, 2024, 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. The components of inventory are as follows:

(In millions)			March 31, 2025						December 31, 2024
Raw materials			$	1,665					$	1,614
Work-in-process			1,137						1,038
Finished goods			1,591						1,576
Total inventory			$	4,392					$	4,227

Note 6. GOODWILL

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

(In millions)			January 1, 2025																								Translation						March 31, 2025
Electrical Americas			$	7,396																							$	7					$	7,403
Electrical Global			3,842																								85						3,928
Aerospace			2,856																								44						2,899
Vehicle			285																								2						287
eMobility			333																								1						334
Total			$	14,713																							$	138					$	14,851

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 Condensed Consolidated Statements of Cash Flows.

The changes in SCF obligations are as follows:

(In millions)			SCF Obligations
Balance at January 1, 2025			$	398
Invoices confirmed during the period			390
Invoices paid during the period			(365)
Translation			1
Balance at March 31, 2025			$	424

(In millions)			SCF Obligations
Balance at January 1, 2024			$	369
Invoices confirmed during the period			351
Invoices paid during the period			(359)
Balance at March 31, 2024			$	361

Note 8. RETIREMENT BENEFITS PLANS

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

			United States pension benefit expense												Non-United States pension benefit expense												Other postretirement benefits expense (income)
			Three months ended March 31
(In millions)			2025						2024												2025						2024												2025						2024
Service cost			$	4					$	5											$	11					$	12											$	—					$	—
Interest cost			34						33												21						21												2						2
Expected return on plan assets			(48)						(47)												(31)						(33)												—						—
Amortization			4						2												4						3												(3)						(3)
			(6)						(7)												5						3												(1)						(1)
Settlements			9						9												2						1												—						—
Total expense (income)			$	3					$	1											$	7					$	4											$	(1)					$	(1)

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

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.

Note 9. LEGAL CONTINGENCIES

Eaton is subject to a broad range of claims, administrative and legal proceedings, including claims for punitive damages, penalties, and interest, in a variety of matters, including contract, indemnity, tax, patent infringement, intellectual property, personal injury, commercial, warranty, product liability, environmental, antitrust and trade regulation, class action, and labor and employment 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 condensed consolidated financial statements.

Note 10. EATON SHAREHOLDERS' EQUITY

The changes in Shareholders’ equity are as follows:

			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
(In millions)			Shares						Dollars
Balance at January 1, 2025			392.9						$	4					$	12,731					$	10,096					$	(4,342)					$	(1)					$	18,488					$	43					$	18,531
Net income			—						—						—						964						—						—						964						1						965
Other comprehensive income, net of tax																											92												92												92
Cash dividends paid and accrued			—						—						—						(411)						—						—						(411)						(2)						(413)
Issuance of shares under equity-based compensation plans			0.4						—						(19)						—						—						—						(19)						—						(19)
Changes in noncontrolling interest of consolidated subsidiaries - net			—						—						—						—						—						—						—						(1)						(1)
Repurchase of shares			(1.9)						—						—						(608)						—						—						(608)						—						(608)
Balance at March 31, 2025			391.3						$	4					$	12,711					$	10,041					$	(4,250)					$	(1)					$	18,506					$	41					$	18,547

			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
(In millions)			Shares						Dollars
Balance at January 1, 2024			399.4						$	4					$	12,634					$	10,305					$	(3,906)					$	(1)					$	19,036					$	33					$	19,069
Net income			—						—						—						821						—						—						821						1						822
Other comprehensive loss, net of tax																											(40)												(40)						—						(40)
Cash dividends paid and accrued			—						—						—						(381)						—						—						(381)						—						(381)
Issuance of shares under equity-based compensation plans			0.9						—						(4)						(1)						—						—						(5)						—						(5)
Repurchase of shares			(0.5)						—						—						(138)						—						—						(138)						—						(138)
Balance at March 31, 2024			399.8						$	4					$	12,630					$	10,605					$	(3,946)					$	(1)					$	19,292					$	34					$	19,326

On February 23, 2022, the Board of Directors adopted a share repurchase program for repurchases of ordinary shares up to $5.0 billion to be made during the three-year period commencing on that date (2022 Program). On February 27, 2025, the Board of Directors renewed the 2022 Program by providing authority for up to $9.0 billion in repurchases to be made during the three-year period commencing on that date (2025 Program). Under the 2025 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 the three months ended March 31, 2025, 1.9 million ordinary shares were repurchased under the 2025 and 2022 Programs in the open market at a total cost of $608 million. During the three months ended March 31, 2024, 0.5 million ordinary shares were repurchased under the 2022 program in the open market at a total cost of $138 million.

The changes in Accumulated other comprehensive loss are as follows:

(In millions)			Currency translation and related hedging instruments						Pensions and other postretirement benefits						Cash flow hedges						Total
Balance at January 1, 2025			$	(3,399)					$	(1,044)					$	101					$	(4,342)
Other comprehensive income (loss) before reclassifications			86						(18)						8						76
Amounts reclassified from Accumulated other comprehensive loss (income)			(2)						15						3						16
Net current-period Other comprehensive income (loss)			84						(3)						11						92
Balance at March 31, 2025			$	(3,315)					$	(1,047)					$	112					$	(4,250)

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

(In millions)						Three months ended March 31, 2025						Consolidated Statements of Income classification
Gains and (losses) on net investment hedges (amount excluded from effectiveness testing)
Currency exchange contracts						$	2					Interest expense - net
Tax expense						—
Total, net of tax						2
Amortization of defined benefits pensions and other postretirement benefits items
Actuarial loss and prior service cost						(16)			1
Tax benefit						1
Total, net of tax						(15)
Gains and (losses) on cash flow hedges
Floating-to-fixed interest rate swaps						3						Interest expense - net
Currency exchange contracts						(8)						Net sales and Cost of products sold
Tax benefit						1
Total, net of tax						(3)
Total reclassifications for the period						$	(16)

1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 8 for additional information about pension and other postretirement benefits items.

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:

			Three months ended March 31
(In millions except for per share data)			2025						2024
Net income attributable to Eaton ordinary shareholders			$	964					$	821
Weighted-average number of ordinary shares outstanding - diluted			393.6						401.9
Less dilutive effect of equity-based compensation			1.4						2.0
Weighted-average number of ordinary shares outstanding - basic			392.2						399.9
Net income per share attributable to Eaton ordinary shareholders
Diluted			$	2.45					$	2.04
Basic			2.46						2.05

For the first quarter of 2025 and 2024, all stock options were included in the calculation of diluted net income per share attributable to Eaton ordinary shareholders because they were all dilutive.

Note 11. 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 recognized at fair value, and the fair value measurements used, is as follows:

(In millions)			Total						Quoted prices in active markets for identical assets (Level 1)						Other observable inputs (Level 2)						Unobservable inputs (Level 3)
March 31, 2025
Cash			$	1,777					$	1,777					$	—					$	—
Short-term investments			162						162						—						—
Net derivative contracts			1						—						1						—
December 31, 2024
Cash			$	555					$	555					$	—					$	—
Short-term investments			1,525						1,525						—						—
Net derivative contracts			(16)						—						(16)						—

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 $9,275 million and fair value of $8,847 million at March 31, 2025 compared to $9,152 million and $8,651 million, respectively, at December 31, 2024. 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.

Note 12. 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 Condensed 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, cross-currency interest rate swaps, 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 derivative financial instruments are used in net investment hedges. Under this method, changes in the fair value of currency exchange contracts attributable to changes in the spot exchange rate and changes in the fair value of cross-currency interest rate swaps are recognized in Accumulated other comprehensive loss. Changes related to the forward rate of currency exchange contracts 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. Interest accruals on cross-currency interest rate swaps are excluded from the hedging relationship and recognized in Interest expense - net. The cash flows resulting from currency exchange contracts and cross-currency interest rate swaps are classified in investing activities on the Condensed Consolidated Statements of Cash Flows.

Derivative Financial Statement Impacts

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

(In millions)			Notional amount						Other current assets						Other noncurrent assets						Other current liabilities						Other noncurrent liabilities						Type of hedge						Term
March 31, 2025
Derivatives designated as hedges
Forward starting floating-to-fixed interest rate swaps			$	162					$	—					$	3					$	—					$	—					Cash flow						10 years
Currency exchange contracts			455						10						—						4						—						Cash flow						1 to 11 months
Commodity contracts			4						1						—						—						—						Cash flow						1 to 10 months
Currency exchange contracts			647						—						—						1						—						Net investment						3 months
Cross-currency interest rate swaps			523						—						—						—						9						Net investment						5 years
Total									$	10					$	3					$	5					$	9
Derivatives not designated as hedges
Currency exchange contracts			$	3,630					$	16											$	14																	1 to 7 months
December 31, 2024
Derivatives designated as hedges
Forward starting floating-to-fixed interest rate swaps			$	156					$	—					$	—					$	—					$	1					Cash flow						11 years
Currency exchange contracts			499						12						—						14						—						Cash flow						1 to 13 months
Commodity contracts			4						—						—						—						—						Cash flow						1 to 11 months
Currency exchange contracts			545						3						—						—						—						Net investment						3 months
Total									$	15					$	—					$	14					$	1
Derivatives not designated as hedges
Currency exchange contracts			$	4,945					$	13											$	29																	1 to 7 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 95% to 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 Condensed 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 $3,229 million at March 31, 2025 and $3,105 million at December 31, 2024.

As of March 31, 2025, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:

Commodity						March 31, 2025												Term
Copper						1						Millions of pounds						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			March 31, 2025									December 31, 2024						March 31, 2025						December 31, 2024
Long-term debt			$	(647)								$	(647)					$	(35)					$	(37)

1 At March 31, 2025 and December 31, 2024, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $35 million and $37 million, respectively.

The impact of hedging activities to the Consolidated Statements of Income is as follows:

			Three months ended March 31, 2025
(In millions)			Net Sales						Cost of products sold						Interest expense - net
Amounts from Consolidated Statements of Income			$	6,377					$	3,930					$	33
Gain (loss) on derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps
Hedged item			$	—					$	—					$	(3)
Derivative designated as hedging instrument			—						—						3
Currency exchange contracts
Hedged item			$	2					$	6					$	—
Derivative designated as hedging instrument			(2)						(6)						—
Gain (loss) on derivatives designated as net investment hedges
Cross-currency interest rate swaps
Initial value of component excluded from effectiveness testing amortized to earnings			$	—					$	—					$	1

			Three months ended March 31, 2024
(In millions)			Net Sales						Cost of products sold						Interest expense - net
Amounts from Consolidated Statements of Income			$	5,943					$	3,725					$	30
Gain (loss) on derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps
Hedged item			$	—					$	—					$	(3)
Derivative designated as hedging instrument			—						—						3
Currency exchange contracts
Hedged item			$	(1)					$	(7)					$	—
Derivative designated as hedging instrument			1						7						—
Commodity contracts
Hedged item			$	—					$	1					$	—
Derivative designated as hedging instrument			—						(1)						—

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

			Gain (loss) recognized in Consolidated Statements of Income												Consolidated Statements of Income classification
			Three months ended March 31
(In millions)			2025						2024
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts			$	18					$	20					Interest expense - net
Total			$	18					$	20

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

			Gain (loss) recognized in other comprehensive income (loss)												Location of gain (loss) reclassified from Accumulated other comprehensive loss						Gain (loss) reclassified from Accumulated other comprehensive loss
			Three months ended March 31																		Three months ended March 31
(In millions)			2025						2024												2025						2024
Derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps			$	4					$	2					Interest expense - net						$	3					$	3
Currency exchange contracts			4						3						Net sales and Cost of products sold						(8)						8
Commodity contracts			1						1						Cost of products sold						—						(1)
Derivatives designated as net investment hedges
Currency exchange contracts
Effective portion			(7)						11						Gain (loss) on sale of business						—						—
Amount excluded from effectiveness testing			2						3						Interest expense - net						2						4
Cross-currency interest rate swaps
Effective portion			(17)						—						Gain (loss) on sale of business						—						—
Amount excluded from effectiveness testing not amortized to earnings			8						—						Gain (loss) on sale of business						—						—
Non-derivative designated as net investment hedges
Foreign currency denominated debt			(123)						72						Gain (loss) on sale of business						—						—
Total			$	(128)					$	92											$	(2)					$	15

The pre-tax gain (loss) on derivative financial instruments designated as net investment hedges included in Accumulated other comprehensive loss is as follows:

			Gain (loss) included in Accumulated other comprehensive loss
(In millions)			March 31, 2025						December 31, 2024
Effective portion
Currency exchange contracts			$	20					$	27
Cross-currency interest rate swaps			(17)						—
Amount excluded from effectiveness testing
Currency exchange contracts			$	—					$	1
Cross-currency interest rate swaps			8						—

At March 31, 2025, a gain of $11 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.

Note 13. RESTRUCTURING CHARGES

During the first quarter of 2024, Eaton implemented a 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. Since the inception of the program, the Company has incurred charges of $220 million. This restructuring program is expected to be completed in 2026 and is expected to incur additional expenses related to workforce reductions of $171 million and plant closing and other costs of $84 million, resulting in total estimated charges of $475 million for the entire program.

A summary of restructuring program charges is as follows:

			Three months ended March 31
(In millions except for per share data)			2025						2024
Workforce reductions			$	13					$	59
Plant closing and other			6						4
Total before income taxes			18						63
Income tax benefit			4						14
Total after income taxes			$	14					$	49
Per ordinary share - diluted			$	0.04					$	0.12

Restructuring program charges related to the following segments:

			Three months ended March 31												Restructuring program charges incurred from inception through
(In millions)			2025						2024						March 31, 2025
Electrical Americas			$	1					$	7					$	13
Electrical Global			14						24						102
Aerospace			—						8						9
Vehicle			2						24						42
eMobility			1						—						26
Corporate			1						—						30
Total			$	18					$	63					$	220

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

(In millions)			Workforce reductions						Plant closing and other						Total
Balance at January 1, 2024			$	35					$	6					$	41
Liability recognized, net			120						83						202
Payments, utilization and translation			(59)						(81)						(141)
Balance at December 31, 2024			96						7						103
Liability recognized, net			13						6						18
Payments, utilization and translation			(14)						(7)						(21)
Balance at March 31, 2025			$	94					$	6					$	100

These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other income - net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 14 for additional information about business segments.

Note 14. BUSINESS SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company's chief operating decision maker is the chairman and chief executive officer. Eaton's operating segments are Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility. Operating profit (loss) includes the operating profit from intersegment sales. For additional information regarding Eaton's business segments, see Note 19 to the consolidated financial statements contained in the 2024 Form 10-K.

The chief operating decision maker uses segment operating profit (loss) as an input to assess segment performance and determine appropriate resource allocations, including capital, financial, and employee resources. Segment operating profit (loss) results are regularly evaluated versus annual profit plan, forecast and/or prior year.

Other segment items are primarily comprised of Cost of products sold, Selling and administrative expense, Research and development expense, depreciation of property, plant and equipment, and certain items included in Other income – net on the Consolidated Statements of Income. The Company's chief operating decision maker manages these items on a consolidated basis.

Business Segment Information

									Three months ended March 31
(In millions)															2025						2024
Net sales
Electrical Americas															$	3,010					$	2,690
Electrical Global															1,610						1,500
Aerospace															979						871
Vehicle															617						724
eMobility															162						158
Total net sales															$	6,377					$	5,943
Other segment items
Electrical Americas															$	2,106					$	1,905
Electrical Global															1,310						1,226
Aerospace															753						670
Vehicle															521						608
eMobility															166						162
Total other segment items															$	4,855					$	4,572
Segment operating profit (loss)
Electrical Americas															$	904					$	785
Electrical Global															300						274
Aerospace															226						201
Vehicle															96						116
eMobility															(4)						(4)
Total segment operating profit															1,522						1,371
Corporate
Intangible asset amortization expense															(106)						(106)
Interest expense - net															(33)						(30)
Pension and other postretirement benefits income															5						12
Restructuring program charges															(18)						(63)
Other expense - net															(193)						(184)
Income before income taxes															1,177						1,001
Income tax expense															212						179
Net income															965						822
Less net income for noncontrolling interests															(1)						(1)
Net income attributable to Eaton ordinary shareholders															$	964					$	821

(In millions)			March 31, 2025						December 31, 2024
Identifiable assets
Electrical Americas			$	5,332					$	4,933
Electrical Global			3,371						3,233
Aerospace			2,569						2,392
Vehicle			2,063						1,987
eMobility			689						633
Total identifiable assets			14,025						13,178
Goodwill			14,851						14,713
Other intangible assets			4,586						4,658
Corporate			5,744						5,833
Total assets			$	39,206					$	38,381
			Three months ended March 31
(In millions)			2025						2024
Capital expenditures for property, plant and equipment
Electrical Americas			$	57					$	92
Electrical Global			40						30
Aerospace			17						14
Vehicle			12						19
eMobility			9						19
Total			136						174
Corporate			11						9
Total expenditures for property, plant and equipment			$	147					$	183
			Three months ended March 31
(In millions)			2025						2024
Depreciation of property, plant and equipment
Electrical Americas			$	31					$	28
Electrical Global			26						24
Aerospace			18						17
Vehicle			24						23
eMobility			7						6
Total			105						98
Corporate			10						9
Total depreciation of property, plant and equipment			$	115					$	107