UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2022

Commission file number 000-54863

EATON CORPORATION plc

(Exact name of registrant as specified in its charter)

Ireland				98-1059235
(State or other jurisdiction of incorporation or organization)				(IRS Employer Identification Number)
Eaton House,	30 Pembroke Road,	Dublin 4,	Ireland	D04 Y0C2
(Address of principal executive offices)				(Zip Code)

			+353	1637 2900
	(Registrant's telephone number, including area code)
	Not applicable
	(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class		Trading Symbol		Name of each exchange on which registered
Ordinary shares ($0.01 par value)		ETN		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐	(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 398.3 million Ordinary Shares outstanding as of June 30, 2022.

TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS	2
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	40
ITEM 4. CONTROLS AND PROCEDURES	40
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	40
ITEM 1A. RISK FACTORS	40
ITEM 2. UNRESTRICTED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	41
ITEM 6. EXHIBITS	42
SIGNATURES	44

PART I — FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Net sales	$	5,212	$	5,215	$	10,054	$	9,907
Cost of products sold	3,505		3,545		6,774		6,729
Selling and administrative expense	828		876		1,618		1,671
Research and development expense	168		154		333		302
Interest expense - net	31		37		63		75
Gain on sale of business	—		—		24		—
Other income - net	(41)		(17)		(50)		(28)
Income before income taxes	720		620		1,339		1,158
Income tax expense	119		114		205		193
Net income	601		506		1,135		965
Less net income for noncontrolling interests	—		—		(1)		(1)
Net income attributable to Eaton ordinary shareholders	$	601	$	506	$	1,133	$	964
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	1.50	$	1.26	$	2.82	$	2.40
Basic	1.51		1.27		2.84		2.42
Weighted-average number of ordinary shares outstanding
Diluted	400.7		401.4		401.2		401.2
Basic	399.0		398.8		399.1		398.6
Cash dividends declared per ordinary share	$	0.81	$	0.76	$	1.62	$	1.52

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

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EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended June 30				Six months ended June 30
(In millions)	2022		2021		2022		2021
Net income	$	601	$	506	$	1,135	$	965
Less net income for noncontrolling interests	—		—		(1)		(1)
Net income attributable to Eaton ordinary shareholders	601		506		1,133		964
Other comprehensive income (loss), net of tax
Currency translation and related hedging instruments	(470)		80		(533)		(92)
Pensions and other postretirement benefits	(41)		161		36		208
Cash flow hedges	68		(47)		169		48
Other comprehensive income (loss) attributable to Eaton    ordinary shareholders	(444)		194		(328)		164
Total comprehensive income attributable to Eaton   ordinary shareholders	$	157	$	700	$	805	$	1,128

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

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EATON CORPORATION plc

CONSOLIDATED BALANCE SHEETS

(In millions)	June 30, 2022		December 31, 2021
Assets
Current assets
Cash	$	364	$	297
Short-term investments	259		271
Accounts receivable - net	3,837		3,297
Inventory	3,445		2,969
Prepaid expenses and other current assets	781		677
Total current assets	8,687		7,511
Property, plant and equipment
Land and buildings	2,156		2,227
Machinery and equipment	5,654		5,591
Gross property, plant and equipment	7,810		7,818
Accumulated depreciation	(4,768)		(4,754)
Net property, plant and equipment	3,043		3,064
Other noncurrent assets
Goodwill	14,805		14,751
Other intangible assets	5,689		5,855
Operating lease assets	493		442
Deferred income taxes	403		392
Other assets	2,033		2,012
Total assets	$	35,153	$	34,027
Liabilities and shareholders’ equity
Current liabilities
Short-term debt	$	1,392	$	13
Current portion of long-term debt	2,030		1,735
Accounts payable	3,013		2,797
Accrued compensation	363		501
Other current liabilities	2,176		2,166
Total current liabilities	8,974		7,212
Noncurrent liabilities
Long-term debt	6,277		6,831
Pension liabilities	772		872
Other postretirement benefits liabilities	253		263
Operating lease liabilities	386		337
Deferred income taxes	628		559
Other noncurrent liabilities	1,446		1,502
Total noncurrent liabilities	9,762		10,364
Shareholders’ equity
Ordinary shares (398.3 million outstanding in 2022 and 398.8 million in 2021)	4		4
Capital in excess of par value	12,452		12,449
Retained earnings	7,886		7,594
Accumulated other comprehensive loss	(3,961)		(3,633)
Shares held in trust	(1)		(1)
Total Eaton shareholders’ equity	16,380		16,413
Noncontrolling interests	36		38
Total equity	16,416		16,451
Total liabilities and equity	$	35,153	$	34,027

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

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EATON CORPORATION plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended June 30
(In millions)	2022		2021
Operating activities
Net income	$	1,135	$	965
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization	479		437
Deferred income taxes	(14)		(73)
Pension and other postretirement benefits expense	21		27
Contributions to pension plans	(55)		(268)
Contributions to other postretirement benefits plans	(12)		(13)
Gain on sale of business	(24)		—
Changes in working capital	(1,144)		(169)
Other - net	(5)		(9)
Net cash provided by operating activities	382		897
Investing activities
Capital expenditures for property, plant and equipment	(254)		(272)
Proceeds from sales of property, plant and equipment	92		16
Cash paid for acquisitions of businesses, net of cash acquired	(612)		(4,500)
Proceeds from sale of business, net of cash sold	22		—
Investments in associate companies	(17)		(122)
Sales (purchases) of short-term investments - net	(4)		401
Proceeds from (payments for) settlement of currency exchange contracts not designated as hedges - net	(9)		30
Other - net	(41)		(36)
Net cash used in investing activities	(822)		(4,483)
Financing activities
Proceeds from borrowings	—		1,798
Payments on borrowings	(6)		(1,009)
Short-term debt, net	1,384		3,380
Cash dividends paid	(654)		(613)
Exercise of employee stock options	13		31
Repurchase of shares	(186)		(76)
Employee taxes paid from shares withheld	(58)		(44)
Other - net	(1)		(14)
Net cash provided by financing activities	492		3,453
Effect of currency on cash	15		(13)
Less: Increase in cash classified as held for sale	—		(13)
Total increase (decrease) in cash	66		(159)
Cash at the beginning of the period	297		438
Cash at the end of the period	$	364	$	279

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

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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 2021 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.

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

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

Note 2.ACQUISITIONS AND DIVESTITURE OF BUSINESSES

Acquisition of Tripp Lite

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

The acquisition of Tripp Lite has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in March 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.

(In millions)	Preliminary Allocation		Measurement Period Adjustments		Final Allocation
Short-term investments	$	5	$	—	$	5
Accounts receivable	94		(1)		93
Inventory	184		(5)		179
Prepaid expenses and other current assets	6		(1)		5
Property, plant and equipment	6		(5)		1
Other intangible assets	630		(26)		604
Other assets	—		2		2
Accounts payable	(13)		—		(13)
Other current liabilities	(32)		(2)		(34)
Other noncurrent liabilities	(157)		(10)		(167)
Total identifiable net assets	723		(48)		675
Goodwill	928		48		976
Total consideration, net of cash received	$	1,651	$	—	$	1,651

6

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

Eaton's 2021 Condensed Consolidated Financial Statements include Tripp Lite’s results of operations, including segment operating profit of $53 million on sales of $151 million, from the date of acquisition through June 30, 2021.

Acquisition of Mission Systems

On June 1, 2021, Eaton acquired Mission Systems for $2.80 billion, net of cash received. Mission Systems is a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission Systems is reported within the Aerospace business segment.

The acquisition of Mission Systems has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in June 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.

(In millions)	Preliminary Allocation		Measurement Period Adjustments		Adjusted Preliminary Allocation
Accounts receivable	$	84	$	—	$	84
Inventory	179		(1)		178
Prepaid expenses and other current assets	45		5		50
Property, plant and equipment	86		11		97
Other intangible assets	1,575		(113)		1,462
Other assets	19		(4)		15
Accounts payable	(40)		—		(40)
Other current liabilities	(159)		(43)		(202)
Other noncurrent liabilities	(77)		(31)		(108)
Total identifiable net assets	1,712		(176)		1,536
Goodwill	1,088		176		1,264
Total consideration, net of cash received	$	2,800	$	—	$	2,800

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

Eaton's 2021 Condensed Consolidated Financial Statements include Mission Systems’ results of operations, including segment operating profit of $19 million on sales of $72 million, from the date of acquisition through June 30, 2021.

7

Sale of Hydraulics business

On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. According to the terms of the sales agreement, the Company finalized negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022. As a result of these negotiations, the Company recognized an additional pre-tax gain of $24 million. In the second quarter of 2022, Eaton received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments. The business had sales of $1.3 billion in 2021 through the date of the sale.

Acquisition of Royal Power Solutions

On January 5, 2022, Eaton acquired Royal Power Solutions for $612 million, net of cash received. Royal Power Solutions is a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment.

The acquisition of Royal Power Solutions has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date, as well as measurement period adjustments recorded as of June 30, 2022. The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, further information becomes available and additional analyses are performed, and these differences could have a material impact on Eaton's preliminary purchase price allocation. The current measurement period adjustments did not have a material impact to the Consolidated Statements of Income.

(In millions)	Preliminary Allocation		Measurement Period Adjustments		Adjusted Preliminary Allocation
Accounts receivable	$	36	$	—	$	36
Inventory	43		—		43
Prepaid expenses and other current assets	1		—		1
Property, plant and equipment	25		—		25
Other intangible assets	306		—		306
Other assets	21		(21)		—
Accounts payable	(24)		—		(24)
Other current liabilities	(10)		—		(10)
Other noncurrent liabilities	(70)		21		(49)
Total identifiable net assets	328		—		328
Goodwill	284		—		284
Total consideration, net of cash received	$	612	$	—	$	612

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Royal Power Solutions. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. Other intangible assets of $306 million are expected to include customer relationships, trademarks and technology. Given the timing of the acquisition, Eaton utilized a benchmarking approach based on similar acquisitions to determine the preliminary fair values for intangible assets. See Note 6 for additional information about goodwill.

Eaton's 2022 Condensed Consolidated Financial Statements include Royal Power Solutions' results of operations, including segment operating profit of $11 million on sales of $79 million, from the date of acquisition through June 30, 2022.

Russia

During the second quarter of 2022, in light of the ongoing war with Ukraine, the Company decided to exit its business operations in Russia and recorded charges of $29 million presented in Other income - net on the Consolidated Statements of Income. The charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance.

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

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

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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 June 30				Six months ended June 30
(In millions)	2022		2021		2022		2021
Electrical Americas
Products	$	695	$	555	$	1,298	$	1,075
Systems	1,436		1,294		2,724		2,396
Total	$	2,131	$	1,849	$	4,022	$	3,471
Electrical Global
Products	$	878	$	846	$	1,754	$	1,559
Systems	617		572		1,178		1,112
Total	$	1,495	$	1,418	$	2,932	$	2,671
Hydraulics
United States	$	—	$	235	$	—	$	457
Rest of World	—		325		—		664
Total	$	—	$	560	$	—	$	1,121
Aerospace
Original Equipment Manufacturers	$	285	$	239	$	577	$	447
Aftermarket	242		191		463		337
Industrial and Other	215		195		419		360
Total	$	742	$	625	$	1,459	$	1,144
Vehicle
Commercial	$	445	$	384	$	847	$	726
Passenger and Light Duty	263		291		532		603
Total	$	708	$	675	$	1,379	$	1,329
eMobility	$	136	$	88	$	262	$	171
Total net sales	$	5,212	$	5,215	$	10,054	$	9,907

9

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivable from customers were $3,405 million and $2,896 million at June 30, 2022 and December 31, 2021, 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 $209 million and $187 million at June 30, 2022 and December 31, 2021, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased business activity in 2022.

Changes in the deferred revenue liabilities are as follows:

(In millions)	Deferred Revenue
Balance at January 1, 2022	$	422
Customer deposits and billings	742
Revenue recognized in the period	(705)
Translation	(15)
Balance at June 30, 2022	$	444

(In millions)	Deferred Revenue
Balance at January 1, 2021	$	257
Customer deposits and billings	570
Revenue recognized in the period	(545)
Deferred revenue from business acquisitions	99
Translation and other	(3)
Balance at June 30, 2021	$	378

Deferred revenue liabilities of $421 million and $395 million as of June 30, 2022 and December 31, 2021, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities.

A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at June 30, 2022 was approximately $10.2 billion. At June 30, 2022, approximately 87% 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 $49 million and $42 million at June 30, 2022 and December 31, 2021, respectively. The change in the allowance for credit losses includes expense and net write-offs, none of which are significant.

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Note 5.    INVENTORY

Inventory is carried at lower of cost or net realizable value. The components of inventory are as follows:

(In millions)	June 30, 2022		December 31, 2021
Raw materials	$	1,224	$	1,096
Work-in-process	833		620
Finished goods	1,388		1,253
Total inventory	$	3,445	$	2,969

Note 6.    GOODWILL

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

(In millions)	January 1, 2022		Additions		Translation		June 30, 2022
Electrical Americas	$	7,417	$	5	$	(15)	$	7,406
Electrical Global	4,183		2		(270)		3,915
Aerospace	2,781		184		(132)		2,833
Vehicle	290		—		(3)		287
eMobility	80		284		—		364
Total	$	14,751	$	475	$	(420)	$	14,805

The 2022 additions to goodwill relate primarily to the anticipated synergies of acquiring Royal Power Solutions and Mission Systems. The allocation of the Royal Power Solutions purchase price is preliminary and will be completed during the measurement period.

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Note 7.    RETIREMENT BENEFITS PLANS

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

	United States pension benefit expense (income)				Non-United States pension benefit expense (income)				Other postretirement benefits expense (income)
	Three months ended June 30
(In millions)	2022		2021		2022		2021		2022		2021
Service cost	$	8	$	10	$	14	$	19	$	1	$	—
Interest cost	28		16		12		11		1		1
Expected return on plan assets	(52)		(55)		(29)		(30)		—		—
Amortization	4		10		12		18		(2)		—
	(12)		(19)		9		18		—		1
Settlements	17		12		1		1		—		—
Total expense (income)	$	5	$	(7)	$	10	$	19	$	—	$	1
	United States pension benefit expense (income)				Non-United States pension benefit expense (income)				Other postretirement benefits expense (income)
	Six months ended June 30
(In millions)	2022		2021		2022		2021		2022		2021
Service cost	$	16	$	20	$	30	$	38	$	1	$	—
Interest cost	48		33		24		21		3		3
Expected return on plan assets	(105)		(111)		(60)		(60)		—		—
Amortization	12		20		24		37		(4)		(1)
	(29)		(38)		18		36		—		2
Settlements	31		26		1		1		—		—
Total expense (income)	$	2	$	(12)	$	19	$	37	$	—	$	2

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.

During the second quarter and first six months of 2022, the Company recognized settlement losses from lump-sum distributions of $18 million and $32 million, respectively. During the second quarter and first six months of 2021, the Company recognized settlement losses from lump-sum distributions of $13 million and $27 million, respectively. The Company remeasured certain pension plans as a result of lump-sum distributions exceeding or expected to exceed the sum of service and interest costs for the year. These remeasurements resulted in the following changes:

	Increase (decrease)				Increase (decrease)
	Three months ended June 30				Six months ended June 30
(In millions)	2022		2021		2022		2021
Pension assets	$	(151)	$	—	$	(119)	$	—
Pension liabilities	(14)		(181)		(29)		(181)
Accumulated other comprehensive loss	137		(181)		90		(181)

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Note 8.    LEGAL CONTINGENCIES

Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations and indemnity claims, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to asbestos 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 9.    INCOME TAXES

The effective income tax rate for the second quarter of 2022 was expense of 16.5% compared to expense of 18.4% for the second quarter of 2021. The decrease in the effective tax rate in the second quarter of 2022 was primarily due to the one-time impact of a tax rate change in the United Kingdom recognized in the second quarter of 2021. The effective income tax rate for the first six months of 2022 was expense of 15.3% compared to expense of 16.7% for the first six months of 2021. The decrease in the effective tax rate in the first six months of 2022 was primarily due to excess tax benefits recognized for employee share-based payments in 2022 and the one-time impact of a tax rate change in the United Kingdom recognized in the first six months of 2021.

Brazil Tax Years 2005-2012

The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $27 million plus $99 million of interest and penalties (translated at the June 30, 2022 exchange rate). The Company is challenging this assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 27, 2022, the Company filed a motion for clarification relating to that decision. On May 20, 2022, the court largely upheld its prior decision without further clarification. On June 9, 2022, the Company filed its notice of appeal to the second level court. The Company intends to continue its challenge of this assessment in the judicial system.

As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $31 million plus $107 million of interest and penalties (translated at the June 30, 2022 exchange rate), which the Company is challenging in the judicial system. This case is still pending resolution at the first judicial level.

Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of certain assets as security for the alleged deficiencies. As of June 30, 2022, the Company pledged Brazilian real estate assets with net book value of $20 million and provided additional security in the form of bank secured bonds and insurance bonds totaling $108 million and a cash deposit of $18 million (translated at the June 30, 2022 exchange rate).

U.S. Tax Years 2005-2006

In 2011, the United States Internal Revenue Service (IRS) issued a Statutory Notice of Deficiency for the Company’s United States subsidiaries (Eaton US) for the 2005 and 2006 tax years (the 2005-06 Notice), which Eaton US contested in United States Tax Court. The 2005-06 Notice proposed assessments of $75 million in additional taxes plus $52 million in penalties related primarily to transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the United States. Eaton US has set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. Immediately prior to the 2005-06 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs. The case in Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. The Tax Court’s ruling on the APAs did not have a material impact on Eaton’s consolidated financial statements. On May 24, 2021, the IRS filed a notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals, and the parties have fully briefed the issue to the court. On July 21, 2022, the Sixth Circuit panel heard oral arguments. The Company continues to believe it will prevail. Tax years 2005 and 2006 remain open until this matter is resolved.

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

Note 10. EQUITY

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three and six months ended June 30, 2022, 0.7 million and 1.3 million ordinary shares, respectively, were repurchased under the 2022 program in the open market at a total cost of $100 million and $186 million, respectively. During the three and six months ended June 30, 2021, 0.1 million and 0.6 million ordinary shares, respectively, were repurchased under the 2019 Program in the open market at a total cost of $17 million and $76 million, respectively.

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, 2022	398.8	$	4	$	12,449	$	7,594	$	(3,633)	$	(1)	$	16,413	$	38	$	16,451
Net income	—	—		—		532		—		—		532		1		533
Other comprehensive income, net of tax								116				116		—		116
Cash dividends paid and accrued	—	—		—		(331)		—		—		(331)		(2)		(333)
Issuance of shares under equity-based compensation plans	0.8	—		(22)		(2)		—		—		(24)		—		(24)
Changes in noncontrolling interest of consolidated subsidiaries - net	—	—		—		—		—		—		—		(1)		(1)
Repurchase of shares	(0.6)	—		—		(86)		—		—		(86)		—		(86)
Balance at March 31, 2022	399.0	$	4	$	12,427	$	7,707	$	(3,517)	$	(1)	$	16,620	$	36	$	16,656
Net income	—	—		—		601		—		—		601		—		601
Other comprehensive loss, net of tax								(444)				(444)				(444)
Cash dividends paid	—	—		—		(323)		—		—		(323)		—		(323)
Issuance of shares under equity-based compensation plans	—	—		26		1		—		—		27		—		27
Changes in noncontrolling interest of consolidated subsidiaries - net	—	—		(1)		—		—		—		(1)		—		(1)
Repurchase of shares	(0.7)	—		—		(100)		—		—		(100)		—		(100)
Balance at June 30, 2022	398.3	$	4	$	12,452	$	7,886	$	(3,961)	$	(1)	$	16,380	$	36	$	16,416

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	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, 2021	398.1	$	4	$	12,329	$	6,794	$	(4,195)	$	(2)	$	14,930	$	43	$	14,973
Net income	—	—		—		458		—		—		458		1		459
Other comprehensive loss, net of tax								(30)				(30)		—		(30)
Cash dividends paid and accrued	—	—		—		(309)		—		—		(309)		—		(309)
Issuance of shares under equity-based compensation plans	0.9	—		6		(1)		—		—		5		—		5
Changes in noncontrolling interest of consolidated subsidiaries - net	—	—		—		—		—		—		—		(2)		(2)
Repurchase of shares	(0.5)	—		—		(59)		—		—		(59)		—		(59)
Balance at March 31, 2021	398.5	$	4	$	12,335	$	6,883	$	(4,225)	$	(2)	$	14,995	$	42	$	15,037
Net income	—	—		—		506		—		—		506		—		506
Other comprehensive income, net of tax								194				194				194
Cash dividends paid	—	—		—		(304)		—		—		(304)		—		(304)
Issuance of shares under equity-based compensation plans	0.2	—		33		—		—		1		34		—		34
Repurchase of shares	(0.1)	—		—		(17)		—		—		(17)		—		(17)
Balance at June 30, 2021	398.6	$	4	$	12,368	$	7,068	$	(4,031)	$	(1)	$	15,408	$	42	$	15,450

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, 2022	$	(2,617)	$	(986)	$	(30)	$	(3,633)
Other comprehensive income (loss) before    reclassifications	(533)		(18)		174		(378)
Amounts reclassified from Accumulated other    comprehensive loss (income)	—		54		(5)		50
Net current-period Other comprehensive    income (loss)	(533)		36		169		(328)
Balance at June 30, 2022	$	(3,150)	$	(950)	$	139	$	(3,961)

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

(In millions)	Six months ended June 30, 2022			Consolidated statements of income classification
Amortization of defined benefit pensions and other   postretirement benefits items
Actuarial loss and prior service cost	$	(64)	1
Tax benefit	10
Total, net of tax	(54)
Gains and (losses) on cash flow hedges
Currency exchange contracts	4			Net sales and Cost of products sold
Commodity contracts	2			Cost of products sold
Tax expense	(1)
Total, net of tax	5
Total reclassifications for the period	$	(50)

1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about pension and other postretirement benefits items.

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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 June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Net income attributable to Eaton ordinary shareholders	$	601	$	506	$	1,133	$	964
Weighted-average number of ordinary shares outstanding - diluted	400.7		401.4		401.2		401.2
Less dilutive effect of equity-based compensation	1.7		2.6		2.1		2.6
Weighted-average number of ordinary shares outstanding - basic	399.0		398.8		399.1		398.6
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	1.50	$	1.26	$	2.82	$	2.40
Basic	1.51		1.27		2.84		2.42

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

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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 and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:

(In millions)	Total		Level 1		Level 2		Level 3
June 30, 2022
Cash	$	364	$	364	$	—	$	—
Short-term investments	259		259		—		—
Net derivative contracts	110		—		110		—
Contingent consideration from acquisition of Green Motion	(57)		—		—		(57)
December 31, 2021
Cash	$	297	$	297	$	—	$	—
Short-term investments	271		271		—		—
Net derivative contracts	41		—		41		—
Contingent consideration from acquisition of Green Motion	(57)		—		—		(57)

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.

On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of cash paid at closing and $57 million of estimated fair value of contingent future consideration based on 2023 and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a maximum possible undiscounted value of $109 million.

Other Fair Value Measurements

Long-term debt and the current portion of long-term debt had a carrying value of $8,307 million and fair value of $8,034 million at June 30, 2022 compared to $8,566 million and $9,232 million, respectively, at December 31, 2021. The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement.

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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, and is effective, as part of a hedging relationship and, if so, as to 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 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). Foreign currency denominated debt designated as non-derivative net investment hedging instruments had a carrying value on an after-tax basis of $2,641 million at June 30, 2022 and $2,880 million at December 31, 2021.

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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
June 30, 2022
Derivatives designated as hedges
Forward starting floating-to-fixed  interest rate swaps	$	2,000	$	—	$	127	$	—	$	3	Cash flow	5 to 30 years
Currency exchange contracts	1,209		23		1		20		12		Cash flow	1 to 36 months
Commodity contracts	63		—		—		8		—		Cash flow	1 to 12 months
Total			$	23	$	128	$	28	$	15
Derivatives not designated as hedges
Currency exchange contracts	$	4,472	$	25			$	14				1 to 12 months
Commodity contracts	48		—				9					1 month
Total			$	25			$	23
December 31, 2021
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	1,800	$	22	$	29	$	—	$	—	Fair value	8 months to 13 years
Forward starting floating-to-fixed  interest rate swaps	1,350		—		38		—		79		Cash flow	11 to 31 years
Currency exchange contracts	1,212		17		2		11		3		Cash flow	1 to 36 months
Commodity contracts	50		2		—		1		—		Cash flow	1 to 12 months
Total			$	41	$	69	$	12	$	82
Derivatives not designated as hedges
Currency exchange contracts	$	5,285	$	34			$	9				1 to 12 months
Commodity contracts	62		1				1					1 month
Total			$	35			$	10

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

As of June 30, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:

Commodity	June 30, 2022		Term
Copper	10	Millions of pounds	1 to 12 months
Gold	1,643	Troy ounces	1 to 12 months
Silver	383,724	Troy ounces	1 to 12 months

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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) (a)
Location on Consolidated Balance Sheets	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Long-term debt	$	(2,413)	$	(2,413)	$	(62)	$	(84)

(a) At June 30, 2022 and December 31, 2021, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $62 million and $33 million, respectively.

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

	Three months ended June 30, 2022
(In millions)	Net Sales		Cost of products sold		Interest expense - net
Amounts from Consolidated Statements of Income	$	5,212	$	3,505	$	31
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	2	$	(4)	$	—
Derivative designated as hedging instrument	(2)		4		—
Commodity contracts
Hedged item	$	—	$	(1)	$	—
Derivative designated as hedging instrument	—		1		—

	Three months ended June 30, 2021
(In millions)	Net Sales		Cost of products sold		Interest expense - net
Amounts from Consolidated Statements of Income	$	5,215	$	3,545	$	37
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	1	$	—	$	—
Derivative designated as hedging instrument	(1)		—		—
Commodity contracts
Hedged item	$	—	$	(3)	$	—
Derivative designated as hedging instrument	—		3		—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—	$	—	$	7
Derivative designated as hedging instrument	—		—		(7)

20

	Six months ended June 30, 2022
(In millions)	Net sales		Cost of products sold		Interest expense - net
Amounts from Consolidated Statements of Income	$	10,054	$	6,774	$	63
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	4	$	(7)	$	—
Derivative designated as hedging instrument	(4)		7		—
Commodity contracts
Hedged item	$	—	$	(2)	$	—
Derivative designated as hedging instrument	—		2		—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—	$	—	$	8
Derivative designated as hedging instrument	—		—		(8)

	Six months ended June 30, 2021
(In millions)	Net sales		Cost of products sold		Interest expense - net
Amounts from Consolidated Statements of Income	$	9,907	$	6,729	$	75
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	4	$	1	$	—
Derivative designated as hedging instrument	(4)		(1)		—
Commodity contracts
Hedged item	$	—	$	(5)	$	—
Derivative designated as hedging instrument	—		5		—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—	$	—	$	26
Derivative designated as hedging instrument	—		—		(26)

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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 June 30
(In millions)	2022		2021
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	(25)	$	86	Interest expense - net
Commodity contracts	(16)		7		Other income - net and Cost of products sold (a)
Total	$	(41)	$	93

	Gain (loss) recognized in Consolidated Statements of Income				Consolidated Statements of Income classification
	Six months ended June 30
(In millions)	2022		2021
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	(33)	$	23	Interest expense - net
Commodity contracts	(15)		9		Other income - net and Cost of products sold (a)
Total	$	(48)	$	32

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

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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 (loss) income				Location of gain (loss) reclassified from Accumulated other comprehensive loss	Gain (loss) reclassified from Accumulated other comprehensive loss
	Three months ended June 30					Three months ended June 30
(In millions)	2022		2021			2022		2021
Derivatives designated as    cash flow hedges
Forward starting floating-to-fixed  interest rate swaps	$	113	$	(68)	Interest expense - net	$	—	$	—
Currency exchange contracts	(10)		8		Net sales and Cost of products sold	4		(1)
Commodity contracts	(12)		2		Cost of products sold	1		3
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	179		(40)		Interest expense - net	—		—
Total	$	270	$	(98)		$	5	$	2
	Gain (loss) recognized in other comprehensive (loss) income				Location of gain (loss) reclassified from Accumulated other comprehensive loss	Gain (loss) reclassified from Accumulated other comprehensive loss
	Six months ended June 30					Six months ended June 30
(In millions)	2022		2021			2022		2021
Derivatives designated as cash    flow hedges
Forward starting floating-to-fixed interest rate swaps	$	237	$	61	Interest expense - net	$	—	$	—
Currency exchange contracts	(10)		(5)		Net sales and Cost of products sold	4		(5)
Commodity contracts	(7)		5		Cost of products sold	2		5
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	241		104		Interest expense - net	—		—
Total	$	461	$	165		$	6	$	—

At June 30, 2022, a loss of $6 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 12 months.

23

Note 13.     RESTRUCTURING CHARGES

In the second quarter of 2020, Eaton decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company has incurred charges of $320 million. These restructuring activities are expected to incur additional expenses of $30 million in 2022 primarily comprised of plant closing and other costs, resulting in total estimated charges of $350 million for the entire program.

A summary of restructuring program charges is as follows:

	Three months ended June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Workforce reductions	$	2	$	(2)	$	7	$	—
Plant closing and other	8		15		21		29
Total before income taxes	10		13		28		29
Income tax benefit	2		2		6		6
Total after income taxes	$	8	$	11	$	22	$	23
Per ordinary share - diluted	$	0.02	$	0.03	$	0.05	$	0.06

Restructuring program charges related to the following segments:

	Three months ended June 30				Six months ended June 30
(In millions)	2022		2021		2022		2021
Electrical Americas	$	5	$	3	$	10	$	8
Electrical Global	1		—		6		2
Aerospace	2		2		5		3
Vehicle	3		5		6		11
eMobility	—		1		—		1
Corporate	—		2		2		4
Total	$	10	$	13	$	28	$	29

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, 2020	$	—	$	—	$	—
Liability recognized	172		42		214
Payments, utilization and translation	(33)		(39)		(72)
Balance at December 31, 2020	$	139	$	3	$	142
Liability recognized	21		57		78
Payments, utilization and translation	(64)		(52)		(116)
Balance at December 31, 2021	$	96	$	8	$	104
Liability recognized	7		21		28
Payments, utilization and translation	(21)		(23)		(44)
Balance at June 30, 2022	$	81	$	6	$	88

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.

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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. Eaton's operating segments are Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility. On August 2, 2021, Eaton completed the sale of the Hydraulics business. Operating profit includes the operating profit from intersegment sales. For additional information regarding Eaton's business segments, see Note 17 to the Consolidated Financial Statements contained in the 2021 Form 10-K.

	Three months ended June 30				Six months ended June 30
(In millions)	2022		2021		2022		2021
Net sales
Electrical Americas	$	2,131	$	1,849	$	4,022	$	3,471
Electrical Global	1,495		1,418		2,932		2,671
Hydraulics	—		560		—		1,121
Aerospace	742		625		1,459		1,144
Vehicle	708		675		1,379		1,329
eMobility	136		88		262		171
Total net sales	$	5,212	$	5,215	$	10,054	$	9,907
Segment operating profit (loss)
Electrical Americas	$	495	$	393	$	857	$	725
Electrical Global	282		259		561		472
Hydraulics	—		73		—		157
Aerospace	163		131		321		227
Vehicle	108		121		221		234
eMobility	(2)		(6)		(5)		(13)
Total segment operating profit	1,046		971		1,955		1,802
Corporate
Intangible asset amortization expense	(122)		(108)		(250)		(200)
Interest expense - net	(31)		(37)		(63)		(75)
Pension and other postretirement benefits income	9		16		28		30
Restructuring program charges	(10)		(13)		(28)		(29)
Other expense - net	(171)		(209)		(302)		(370)
Income before income taxes	720		620		1,339		1,158
Income tax expense	119		114		205		193
Net income	601		506		1,135		965
Less net income for noncontrolling interests	—		—		(1)		(1)
Net income attributable to Eaton ordinary shareholders	$	601	$	506	$	1,133	$	964

25

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Amounts are in millions of dollars or shares unless indicated otherwise (per share data assume dilution). Columns and rows may not add and the sum of components may not equal total amounts reported due to rounding.

COMPANY OVERVIEW

Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to 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.

Eaton’s businesses are well-positioned to take advantage of secular growth trends related to the energy transition from fossil fuels to renewables. We are responding to these trends by innovating solutions that transform the electrical power value chain, investing in electrical vehicle markets, increasing our focus on electrification, and employing digital technologies for power management. The Company’s innovations are expected to enable the integration of renewables and sustainability solutions, with new types of equipment, services, and software. These strategic focus areas are an important part of our response to climate change.

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.

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Portfolio Changes

The Company continues to actively manage its portfolio of businesses to deliver on its strategic objectives. The Company is focused on deploying its capital toward businesses that provide opportunities for above-market growth, strong returns, and align with secular trends and its power management strategies. During 2021 and 2022, Eaton has completed a number of transactions to strengthen its portfolio.

Acquisitions of businesses and investments in associate companies	Date of acquisition	Business segment
Tripp Lite	March 17, 2021	Electrical Americas
A leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas.
Green Motion SA	March 22, 2021	Electrical Global
A leading designer and manufacturer of electric vehicle charging hardware and related software.
HuanYu High Tech	March 29, 2021	Electrical Global
A 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region.
Mission Systems	June 1, 2021	Aerospace
A leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets.
Jiangsu YiNeng Electric's busway business	June 25, 2021	Electrical Global
A 50 percent stake in Jiangsu YiNeng Electric's busway business which manufactures and markets busway products in China.
Royal Power Solutions	January 5, 2022	eMobility
A manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets.
Jiangsu Huineng Electric Co., Ltd’s circuit breaker business	July 1, 2022	Electrical Global
A 50 percent stake in Jiangsu Huineng Electric Co., Ltd's circuit breaker business which manufactures and markets low-voltage circuit breakers in China.

Divestiture of business	Date of divestiture	Business segment
Hydraulics business	August 2, 2021	Hydraulics

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

27

Restructuring

In the second quarter of 2020, Eaton decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company has incurred charges of $320 million. These restructuring activities are expected to incur additional expenses of $30 million in 2022 primarily comprised of plant closing and other costs, resulting in total estimated charges of $350 million for the entire program. The projected mature year savings from these restructuring actions are expected to be $250 million when fully implemented in 2023. Additional information related to this restructuring is presented in Note 13.

Summary of Results of Operations

A summary of Eaton’s Net sales, Net income attributable to Eaton ordinary shareholders, and Net income per share attributable to Eaton ordinary shareholders - diluted is as follows:

	Three months ended June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Net sales	$	5,212	$	5,215	$	10,054	$	9,907
Net income attributable to Eaton ordinary shareholders	601		506		1,133		964
Net income per share attributable to Eaton ordinary shareholders - diluted	$	1.50	$	1.26	$	2.82	$	2.40

RESULTS OF OPERATIONS

Non-GAAP Financial Measures

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

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Acquisition and Divestiture Charges

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

	Three months ended June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Acquisition integration, divestiture charges and transaction costs	$	51	$	87	$	79	$	133
Gain on the sale of the Hydraulics business	—		—		(24)		—
Total before income taxes	51		87		55		133
Income tax benefit	7		15		8		24
Total after income taxes	$	44	$	72	$	47	$	109
Per ordinary share - diluted	$	0.11	$	0.18	$	0.12	$	0.27

Acquisition integration, divestiture charges and transaction costs in 2022 are primarily related to the acquisitions of Royal Power Solutions, Souriau-Sunbank Connection Technologies, Green Motion, Tripp Lite, and Mission Systems, and other charges to acquire and exit businesses. These costs also included charges of $29 million presented in Other income - net on the Consolidated Statements of Income related to the decision in the second quarter to exit the Company's business operations in Russia. These charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance. Charges in 2021 are primarily related to the divestiture of the Hydraulics business, the acquisitions of Tripp Lite, Mission Systems, Souriau-Sunbank Connection Technologies, and Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S., and other charges to exit businesses. These charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other income - net. In Business Segment Information in Note 14, the charges were included in Other expense - net.

Intangible Asset Amortization Expense

Intangible asset amortization expense is as follows:

	Three months ended June 30				Six months ended June 30
(In millions except for per share data)	2022		2021		2022		2021
Intangible asset amortization expense	$	122	$	108	$	250	$	200
Income tax benefit	23		7		52		29
Total after income taxes	$	99	$	101	$	198	$	171
Per ordinary share - diluted	$	0.24	$	0.25	$	0.50	$	0.43

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Consolidated Financial Results

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions except for per share data)	2022			2021					2022			2021
Net sales	$	5,212		$	5,215		—	%	$	10,054		$	9,907		1	%
Gross profit	1,706			1,670			2	%	3,280			3,178			3	%
Percent of net sales	32.7		%	32.0		%			32.6		%	32.1		%
Income before income taxes	720			620			16	%	1,339			1,158			16	%
Net income	601			506			19	%	1,135			965			18	%
Less net income for noncontrolling interests	—			—					(1)			(1)
Net income attributable to Eaton ordinary shareholders	601			506			19	%	1,133			964			18	%
Excluding acquisition and divestiture charges, after-tax	44			72					47			109
Excluding restructuring program charges, after-tax	8			11					22			23
Excluding intangible asset amortization expense, after-tax	99			101					198			171
Adjusted earnings	$	751		$	690		9	%	$	1,400		$	1,267		10	%
Net income per share attributable to Eaton ordinary shareholders - diluted	$	1.50		$	1.26		19	%	$	2.82		$	2.40		18	%
Excluding per share impact of acquisition and divestiture charges, after-tax	0.11			0.18					0.12			0.27
Excluding per share impact of restructuring program charges, after-tax	0.02			0.03					0.05			0.06
Excluding per share impact of intangible asset amortization expense, after-tax	0.24			0.25					0.50			0.43
Adjusted earnings per ordinary share	$	1.87		$	1.72		9	%	$	3.49		$	3.16		10	%

Net Sales

Changes in Net sales are summarized as follows:	Three months ended June 30		Six months ended June 30
	2022		2022
Organic growth	11	%	11	%
Acquisitions of businesses	2	%	4	%
Divestiture of business	(11)	%	(12)	%
Foreign currency	(2)	%	(2)	%
Total increase (decrease) in Net sales	—	%	1	%

Organic sales increased 11% in the second quarter and first six months of 2022 due to broad-based strength in end-markets of the Electrical Americas and Electrical Global business segments, strength in sales to commercial OEM and aftermarket in the Aerospace business segment, and higher sales volumes from inflationary price increases in the Vehicle business segment. Despite strong growth, many of our businesses continue to be impacted by supply chain disruptions or shortages, inflation, labor shortages, and plant shutdowns associated with lockdowns in various cities around the globe.

The acquisitions of Mission Systems and Royal Power Solutions increased sales in the second quarter of 2022 and the acquisitions of Tripp Lite, Mission Systems, and Royal Power Solutions increased sales in the first six months of 2022. The divestiture of the Hydraulics business reduced sales in the second quarter and first six months of 2022.

Gross Profit

Gross profit margin increased from 32.0% in the second quarter of 2021 to 32.7% in the second quarter of 2022 and from 32.1% in the first six months of 2021 to 32.6% in the first six months of 2022 primarily due to higher organic sales, including favorable pricing recovery. Gross profit also improved due to the net impact of the acquisition of Royal Power Solutions and the divestiture of the Hydraulics business. Conversely, commodity and logistics inflation had an unfavorable impact on gross margin during the second quarter and first six months of 2022, despite offsetting pricing actions.

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Income Taxes

The effective income tax rate for the second quarter of 2022 was expense of 16.5% compared to expense of 18.4% for the second quarter of 2021. The decrease in the effective tax rate in the second quarter of 2022 was primarily due to the one-time impact of a tax rate change in the United Kingdom recognized in the second quarter of 2021. The effective income tax rate for the first six months of 2022 was expense of 15.3% compared to expense of 16.7% for the first six months of 2021. The decrease in the effective tax rate in the first six months of 2022 was primarily due to excess tax benefits recognized for employee share-based payments in 2022 and the one-time impact of a tax rate change in the United Kingdom recognized in the first six months of 2021.

Net Income

Net income attributable to Eaton ordinary shareholders of $601 million in the second quarter of 2022 increased 19% compared to Net income attributable to Eaton ordinary shareholders of $506 million in the second quarter of 2021. The increase in the second quarter of 2022 was primarily due to higher gross profit, lower acquisition and divestiture charges, and a net improvement in other income which included gains from the sale of certain office facilities. Net income attributable to Eaton ordinary shareholders of $1,133 million in the first six months of 2022 increased 18% compared to Net income attributable to Eaton ordinary shareholders of $964 million in the first six months of 2021. The increase in the first six months of 2022 was primarily due to higher gross profit, lower acquisition and divestiture charges and a net improvement in other income which included gains from the sale of certain office facilities, partially offset by higher intangible asset amortization expense.

Net income per ordinary share increased to $1.50 in the second quarter of 2022 compared to $1.26 in the second quarter of 2021. Net income per ordinary share increased to $2.82 in the first six months of 2022 compared to $2.40 in the first six months of 2022. The increase in Net income per ordinary share in the second quarter and first six months of 2022 was due to higher Net income attributable to Eaton ordinary shareholders and the impact of the Company's share repurchases over the past year.

Adjusted Earnings

Adjusted earnings of $751 million in the second quarter of 2022 increased 9% compared to Adjusted earnings of $690 million in the second quarter of 2021. Adjusted earnings of $1,400 million in the first six months of 2022 increased 10% compared to Adjusted earnings of $1,267 million in the first six months of 2021. The increase in Adjusted earnings in the second quarter and first six months of 2022 was primarily due to higher Net income attributable to Eaton ordinary shareholders, adjusted for acquisition and divestiture charges, restructuring program charges, and intangible asset amortization expense.

Adjusted earnings per ordinary share increased to $1.87 in the second quarter of 2022 compared to $1.72 in the second quarter of 2021. Adjusted earnings per ordinary share increased to $3.49 in the first six months of 2022 compared to $3.16 in the first six months of 2022. The increase in Adjusted earnings per ordinary share in the second quarter and first six months of 2022 was due to higher Adjusted earnings and the impact of the Company's share repurchases over the past year.

31

Business Segment Results of Operations

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

Electrical Americas

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions)	2022			2021					2022			2021
Net sales	$	2,131		$	1,849		15	%	$	4,022		$	3,471		16	%
Operating profit	$	495		$	393		26	%	$	857		$	725		18	%
Operating margin	23.2		%	21.3		%			21.3		%	20.9		%
Changes in Net sales are summarized as follows:							Three months ended June 30								Six months ended June 30
							2022								2022
Organic growth							16	%							13	%
Acquisition of Tripp Lite							—	%							3	%
Foreign currency							(1)	%							—	%
Total increase (decrease) in Net sales							15	%							16	%

The increase in organic sales in the second quarter and first six months of 2022 reflects broad-based strength in end-markets, with particular strength in commercial, residential and industrial.

The operating margin increased from 21.3% in the second quarter of 2021 to 23.2% in the second quarter of 2022 and from 20.9% in the first six months of 2021 to 21.3% in the first six months of 2022 primarily due to higher sales volumes including favorable pricing recovery, while headwinds from commodity and logistics inflation and supply chain disruptions were offset by gains from the sale of certain office facilities.

Electrical Global

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions)	2022			2021					2022			2021
Net sales	$	1,495		$	1,418		5	%	$	2,932		$	2,671		10	%
Operating profit	$	282		$	259		9	%	$	561		$	472		19	%
Operating margin	18.9		%	18.3		%			19.1		%	17.7		%
Changes in Net sales are summarized as follows:							Three months ended June 30								Six months ended June 30
							2022								2022
Organic growth							12	%							15	%
Foreign currency							(7)	%							(5)	%
Total increase (decrease) in Net sales							5	%							10	%

The increase in organic sales in the second quarter and first six months of 2022 was primarily due to broad-based strength in end-markets, with particular strength in data center, commercial and industrial markets.

The operating margin increased from 18.3% in the second quarter of 2021 to 18.9% in the second quarter of 2022 and from 17.7% in the first six months of 2021 to 19.1% in the first six months of 2022 primarily due to higher sales volumes including favorable pricing recovery, partially offset by commodity and logistics inflation.

32

Hydraulics

On August 2, 2021, Eaton completed the sale of the Hydraulics business segment. For the second quarter and first six months ended June 30, 2021, the Hydraulics segment generated net sales of $560 million and $1,121 million, respectively, and operating profit of $73 million and $157 million, respectively.

Aerospace

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions)	2022			2021					2022			2021
Net sales	$	742		$	625		19	%	$	1,459		$	1,144		28	%
Operating profit	$	163		$	131		24	%	$	321		$	227		41	%
Operating margin	21.9		%	21.0		%			22.0		%	19.8		%
Changes in Net sales are summarized as follows:							Three months ended June 30								Six months ended June 30
							2022								2022
Organic growth							10	%							12	%
Acquisition of Mission Systems							12	%							19	%
Foreign currency							(3)	%							(3)	%
Total increase (decrease) in Net sales							19	%							28	%

The increase in organic sales in the second quarter and first six months of 2022 was primarily due to strength in sales to commercial OEM and aftermarket.

The operating margin increased from 21.0% in the second quarter of 2021 to 21.9% in the second quarter of 2022 and from 19.8% in the first six months of 2021 to 22.0% in the first six months of 2022 primarily due to higher organic sales volumes.

33

Vehicle

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions)	2022			2021					2022			2021
Net sales	$	708		$	675		5	%	$	1,379		$	1,329		4	%
Operating profit	$	108		$	121		(11)	%	$	221		$	234		(6)	%
Operating margin	15.3		%	17.9		%			16.0		%	17.6		%
Changes in Net sales are summarized as follows:							Three months ended June 30								Six months ended June 30
							2022								2022
Organic growth							7	%							5	%
Foreign currency							(2)	%							(1)	%
Total increase (decrease) in Net sales							5	%							4	%

The increase in organic sales in the second quarter of 2022 was primarily due to strength in the South American truck, bus and agriculture markets, and North American light vehicle markets, partially offset by weakness in the China light vehicle market primarily due to COVID-19 related lockdowns. The increase in organic sales in the first six months of 2022 was primarily due to strength in the South American truck, bus and agriculture markets, and North American truck and light vehicle markets, partially offset by weakness in the China light vehicle market primarily due to COVID-19 related lockdowns.

The operating margin decreased from 17.9% in the second quarter of 2021 to 15.3% in the second quarter of 2022 and from 17.6% in the first six months of 2021 to 16.0% in the first six months of 2022 primarily due to commodity and logistics inflation and operating inefficiencies due to supply chain constraints, partially offset by higher sales volumes from inflationary price increases.

eMobility

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
(In millions)	2022			2021					2022			2021
Net sales	$	136		$	88		55	%	$	262		$	171		53	%
Operating profit (loss)	$	(2)		$	(6)		67	%	$	(5)		$	(13)		62	%
Operating margin	(1.5)		%	(6.8)		%			(1.8)		%	(7.6)		%
Changes in Net sales are summarized as follows:							Three months ended June 30								Six months ended June 30
							2022								2022
Organic growth							11	%							9	%
Acquisition of Royal Power Solutions							46	%							46	%
Foreign currency							(2)	%							(2)	%
Total increase (decrease) in Net sales							55	%							53	%

The increase in organic sales in the second quarter and first six months of 2022 was due to strength in all regions.

The operating margin increased from negative 6.8% in the second quarter of 2021 to negative 1.5% in the second quarter of 2022 and from negative 7.6% in the first six months of 2021 to negative 1.8% in the first six months of 2022 primarily due to higher organic sales volumes and the acquisition of Royal Power Solutions.

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Corporate Expense

	Three months ended June 30				Increase (decrease)		Six months ended June 30				Increase (decrease)
(In millions)	2022		2021				2022		2021
Intangible asset amortization expense	$	122	$	108	13	%	$	250	$	200	25	%
Interest expense - net	31		37		(16)	%	63		75		(16)	%
Pension and other postretirement benefits income	(9)		(16)		(44)	%	(28)		(30)		(7)	%
Restructuring program charges	10		13		(23)	%	28		29		(3)	%
Other expense - net	171		209		(18)	%	302		370		(18)	%
Total corporate expense	$	325	$	351	(7)	%	$	615	$	644	(5)	%

Total corporate expense was $325 million in the second quarter of 2022 compared to $351 million in the second quarter of 2021 and $615 million in the first six months of 2022 compared to $644 million in the first six months of 2021. The decreases in Total corporate expense for the second quarter and first six months of 2022 were primarily due to lower Other expense - net and lower Interest expense - net, partially offset by higher Intangible asset amortization expense. The decreases in Other expense - net are primarily due to lower acquisition and divestiture charges and the gain on sale of the Hydraulics business recognized in the first quarter of 2022 discussed in Note 2.

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LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

Liquidity and Financial Condition

Eaton’s objective is to finance its business through operating cash flow and an appropriate mix of equity and long-term and short-term debt. By diversifying its debt maturity structure, Eaton reduces liquidity risk.

The Company maintains revolving credit facilities consisting of a $500 million 364-day revolving credit facility that will expire on October 3, 2022 and a $2,000 million five-year revolving credit facility that will expire on October 4, 2026. The revolving credit facilities totaling $2,500 million are used to support commercial paper borrowings and are fully and unconditionally guaranteed by Eaton and certain of its direct and indirect subsidiaries on an unsubordinated, unsecured basis. There were no borrowings outstanding under Eaton’s revolving credit facilities at June 30, 2022. The Company maintains access to the commercial paper markets through its $2,500 million commercial paper program, of which $1,372 million was outstanding on June 30, 2022.

In 2021, Eaton received proceeds of $3.1 billion from the sale of its Hydraulics business and paid $4.45 billion to acquire Tripp Lite and Mission Systems. In 2022, the Company paid $612 million to acquire Royal Power Solutions and received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments from the sale of the Hydraulics business.

Over the course of a year, cash, short-term investments, and short-term debt may fluctuate in order to manage global liquidity. As of June 30, 2022 and December 31, 2021, Eaton had cash of $364 million and $297 million, short-term investments of $259 million and $271 million, and short-term debt of $1,392 million and $13 million, respectively. Eaton believes it has the operating flexibility, cash flow, cash and short-term investment balances, availability under existing revolving credit facilities, and access to capital markets in excess of the liquidity necessary to meet future operating needs of the business, fund capital expenditures and acquisitions of businesses, as well as scheduled payments of long-term debt.

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

Cash Flows

A summary of cash flows is as follows:

	Six months ended June 30
(In millions)	2022		2021		Change from 2021
Net cash provided by operating activities	$	382	$	897	$	(515)
Net cash used in investing activities	(822)		(4,483)		3,661
Net cash provided by financing activities	492		3,453		(2,961)
Effect of currency on cash	15		(13)		28
Increase in cash classified as held for sale	—		(13)		13
Total increase (decrease) in cash	$	66	$	(159)

Operating Cash Flow

Net cash provided by operating activities decreased by $515 million in the first six months of 2022 compared to 2021. The decrease in net cash provided by operating activities in the first six months of 2022 was primarily due to higher working capital balances to support the Company’s organic growth, partially offset by lower pension contributions in 2022 due to a $200 million contribution to Eaton's U.S. qualified pension plan in 2021, cash received from the termination of interest rate swaps in 2022, and higher net income in 2022.

Investing Cash Flow

Net cash used in investing activities decreased by $3,661 million in the first six months of 2022 compared to 2021. The decrease in the use of cash in the first six months of 2022 was primarily driven by the decrease in cash paid for business acquisitions to $612 million in 2022 from $4,500 million in 2021, a decrease in cash paid for investments in associate companies to $17 million in 2022 from $122 million in 2021, and proceeds from the sale of certain office facilities in 2022, partially offset by net purchases of short-term investments of $4 million in 2022 compared to net sales of $401 million in 2021.

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Financing Cash Flow

Net cash provided by financing activities decreased by $2,961 million in the first six months of 2022 compared to 2021. The decrease in the source of cash in the first six months of 2022 was primarily due to no proceeds from borrowings in 2022 compared to proceeds from borrowings of $1,798 million in 2021, a decrease in net proceeds of short-term debt to $1,384 million in 2022 from $3,380 million in 2021, and higher share repurchases of $186 million in 2022 compared to $76 million in 2021, partially offset by lower payments on borrowings of $6 million in 2022 compared to $1,009 million in 2021.

Uses of Cash

Capital Expenditures

Capital expenditures were $254 million and $272 million in the first six months of 2022 and 2021, respectively. Eaton expects approximately $650 million in capital expenditures in 2022.

Dividends

Cash dividend payments were $654 million and $613 million in the first six months of 2022 and 2021, respectively. Payment of quarterly dividends in the future depends upon the Company’s ability to generate net income and operating cash flows, among other factors, and is subject to declaration by the Eaton Board of Directors. The Company intends to continue to pay quarterly dividends in 2022.

Share Repurchases

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. In the first six months of 2022, 1.3 million ordinary shares were repurchased under the 2022 program in the open market at a total cost of $186 million. In the first six months of 2021, 0.6 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $76 million. At June 30, 2022, there is $4,814 million still available for share repurchases under the 2022 Program. The Company will continue to pursue share repurchases in 2022 depending on market conditions and capital levels.

Acquisition of Businesses

The Company paid cash of $612 million and $4,500 million to acquire businesses in the first six months of 2022 and 2021, respectively. The Company will continue to focus on deploying its capital toward businesses that provide opportunities for higher growth and strong returns, and align with secular trends and its power management strategies.

Debt

The Company manages a number of short-term and long-term debt instruments, including commercial paper. At June 30, 2022, the Company had Short-term debt of $1,392 million, Current portion of long-term debt of $2,030 million, and Long-term debt of $6,277 million.

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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. The SCF program does not have a significant impact on the Company’s liquidity as payments by the Company to participating suppliers are paid to the financial institution on the invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. The amounts due to the financial institution for suppliers that participate in the SCF program are included in Accounts payable on the Company’s Consolidated Balance Sheets, and the associated payments are included in operating activities on the Condensed Consolidated Statements of Cash Flows. At  June 30, 2022 and December 31, 2021, Accounts payable included $183 million and $151 million, respectively, payable to suppliers that have elected to participate in the SCF program.

Guaranteed Debt

Issuers, Guarantors and Guarantor Structure    

Eaton Corporation has issued senior notes pursuant to indentures dated April 1, 1994 (the 1994 Indenture), November 20, 2012 (the 2012 Indenture) and September 15, 2017 (the 2017 Indenture). The senior notes of Eaton Corporation are registered under the Securities Act of 1933, as amended (the Registered Senior Notes). Eaton Corporation is also the issuer of one outstanding series of privately placed debt securities (the PPNs), and Eaton Capital Unlimited Company, another subsidiary of Eaton, is the issuer of four outstanding series of debt securities sold in offshore transactions under Regulation S promulgated under the Securities Act (the Eurobonds). The PPNs, the Eurobonds and the Registered Senior Notes (together, the Senior Notes) comprise substantially all of Eaton’s long-term indebtedness.

Substantially all of the Senior Notes, together with the credit facilities described above under Financial Condition and Liquidity (the Credit Facilities), are guaranteed by Eaton and 18 of its subsidiaries. Accordingly, they rank equally with each other. However, because these obligations are not secured, they would be effectively subordinated to any existing or future secured indebtedness of Eaton and its subsidiaries. As of June 30, 2022, Eaton has no material, long-term secured debt. The guaranteed Registered Senior Notes are also structurally subordinated to the liabilities of Eaton's subsidiaries that are not guarantors. Except as described below under Future Guarantors, Eaton is not obligated to cause its subsidiaries to guarantee the Registered Senior Notes.

The table set forth in Exhibit 22 filed with this Form 10-Q details the primary obligors and guarantors with respect to the guaranteed Registered Senior Notes.

Terms of Guarantees of Registered Securities

Payment of principal and interest on the Registered Senior Notes is guaranteed, on an unsecured, unsubordinated basis by the subsidiaries of Eaton set forth in the table referenced in the 10-K Exhibit 22. Each guarantee is full and unconditional, and joint and several. Each guarantor's guarantee is an unsecured obligation that ranks equally with all its other unsecured and unsubordinated indebtedness. The obligations of each guarantor under its guarantee of the Registered Senior Notes is subject to a customary savings clause or similar provision designed to prevent such guarantee from constituting a fraudulent conveyance or otherwise legally impermissible or voidable obligation.

Generally, each guarantee of the Registered Senior Notes by a guarantor other than Eaton provides that it will be automatically and unconditionally released and discharged upon:

(a)the consummation of any transaction permitted under the applicable indenture resulting in such guarantor ceasing to be a subsidiary, such as a sale to a third party;

(b)such guarantee (so long as the guarantor is not obligated under any other U.S. debt obligations), becoming prohibited by any applicable law, rule or regulation or by any contractual obligation;

(c)such guarantee resulting in material adverse tax consequences to Eaton or any of its subsidiaries (so long as the applicable guarantor is not obligated under any other U.S. debt obligation); or

(d)such guarantor becoming a controlled foreign corporation within the meaning Section 957(a) of the Internal Revenue Code (a CFC), or an entity the material assets of which is limited to equity interests of a CFC.

Notwithstanding the foregoing, each guarantee by a direct or indirect parent of Eaton Corporation (other than Eaton) provides that it will be released only under the circumstances described in subparagraphs (b) and (c) above.

The guarantee of Eaton does not contain any release provisions.

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Future Guarantors

The 2012 and 2017 Indentures generally provide that, with certain limited exceptions, any subsidiary of Eaton must become a guarantor if it becomes obligated as borrower or guarantor under any series of debt securities or a syndicated credit facility. Further, any entity that becomes a direct or indirect parent entity of Eaton Corporation and holds any material assets, with certain limited exceptions, or owes any material liabilities must become a guarantor.

The 1994 Indenture does not contain provisions with respect to future guarantors.

Summarized Financial Information of Guarantors and Issuers

(In millions)	June 30, 2022		December 31, 2021
Current assets	$	3,701	$	3,032
Noncurrent assets	11,535		11,553
Current liabilities	5,606		3,950
Noncurrent liabilities	7,922		8,461
Amounts due to subsidiaries that are non-issuers and non-guarantors - net	16,976		18,006
			Six months ended June 30
(In millions)			2022
Net sales			$	5,359
Sales to subsidiaries that are non-issuers and non-guarantors			449
Cost of products sold			4,467
Expense from subsidiaries that are non-issuers and non-guarantors - net			257
Net income			20

The financial information presented is that of Eaton Corporation and the Guarantors, which includes Eaton Corporation plc, on a combined basis and the financial information of non-issuer and non-guarantor subsidiaries has been excluded. Intercompany balances and transactions between Eaton Corporation and Guarantors have been eliminated, and amounts due from, amounts due to, and transactions with non-issuer and non-guarantor subsidiaries have been presented separately.

FORWARD-LOOKING STATEMENTS

This Form 10-Q Report contains forward-looking statements concerning litigation, expected capital expenditures, future dividend payments, anticipated share repurchases, and expected restructuring charges. These statements may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Eaton, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside Eaton’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: the course of the COVID-19 pandemic, including government responses thereto and the rate of global economic recovery therefrom; unanticipated changes in the markets for the Company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; the availability of credit to customers and suppliers; supply chain disruptions, competitive pressures on sales and pricing; unanticipated changes in the cost of material, labor and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; war, natural disasters, civil or political unrest or terrorism; and unanticipated deterioration of economic and financial conditions in the United States and around the world. Eaton does not assume any obligation to update these forward-looking statements.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in exposures to market risk since December 31, 2021.

ITEM 4.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures - Pursuant to SEC Rule 13a-15, an evaluation was performed under the supervision and with the participation of Eaton’s management, including Craig Arnold - Principal Executive Officer; and Thomas B. Okray - Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, management concluded that Eaton’s disclosure controls and procedures were effective as of June 30, 2022.

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

During the second quarter of 2022, 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 businesses acquired in the past twelve months on Eaton's internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS.

Information regarding the Company's current legal proceedings is presented in Note 8 of the Notes to the condensed consolidated financial statements.

ITEM 1A.RISK FACTORS.

“Item 1A. Risk Factors” in Eaton's 2021 Form 10-K includes a discussion of the Company's risk factors. There have been no material changes from the risk factors described in the 2021 Form 10-K, except as follows:

Eaton uses a variety of raw materials and components in its businesses, and significant shortages, price increases or supplier insolvencies, or similar challenges for our customers could adversely impact our results of operations.

Eaton's major requirements for raw materials are described in Item 1 “Raw Materials” of our Form 10-K for the year ended December 31, 2021. Shortages have continued to affect the prices Eaton's businesses are charged as global economies recover from the COVID-19 pandemic and react to Russia's invasion of Ukraine. Additionally, some of our suppliers have continued to increase their prices in response to increases in their costs of raw materials, energy and/or labor. While we strive to recoup these increased costs through our pricing, if we are unable to do so without compromising the competitive position of our products and services, our results could continue to be impacted by this trend. Further, should these trends continue or worsen, the impact could have a material adverse impact on our operating results.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c) Issuer's Purchases of Equity Securities

During the second quarter of 2022, 0.7 million ordinary shares were repurchased in the open market at a total cost of $100 million. These shares were repurchased under the program approved by the Board on February 23, 2022 (the 2022 Program). A summary of the shares repurchased in the second quarter of 2022 is as 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)
April	—	$	—	—	$	4,914
May	741,445	$	134.87	741,445	$	4,814
June	—	$	—	—	$	4,814
Total	741,445	$	134.87	741,445

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ITEM 6.EXHIBITS.

Eaton Corporation plc

Second Quarter 2022 Report on Form 10-Q

3 (i)	Certificate of Incorporation — Incorporated by reference to the Form S-8 filed November 30, 2012
3 (ii)	Amended and Restated Memorandum and Articles of Incorporation — Incorporated by reference to the Form 8-K filed on May 1, 2017
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)
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))
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)
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 Exhibit 4.3 of the registrant's Form S-4 filed on September 6, 2013)
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 Exhibit 4.4 of the registrant's Form 10-K filed on February 28, 2018)
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 Exhibit 4.5 of the registrant's Form 10-K filed on February 28, 2018)
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 Exhibit 4.6 of the registrant's Form 10-K filed on February 28, 2018)
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
10.1	5-Year Revolving Credit Agreement, dated as of October 4, 2021, among Eaton Corporation plc, Eaton Corporation, Eaton Capital Unlimited, the guarantors from time to time party thereto, the several lenders from time to time parties thereto, Citibank, N.A., as Administrative Agent, Citibank, N.A., JPMorgan Chase Bank, N.A., BofA Securities, Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as syndication agent and Bank of America, N.A., BNP Paribas, Deutsche Bank AG New York Branch and Morgan Stanley Senior Funding, Inc., as documentation agents, incorporated by reference to Exhibit 99.1 to The Form 8-K filed by the registrant on October 8, 2021.
10.2	364-Day Revolving Credit Agreement, dated as of October 4, 2021, among Eaton Corporation plc, Eaton Corporation, Eaton Capital Unlimited, the guarantors from time to time party thereto, the several lenders from time to time parties thereto, Citibank, N.A., as Administrative Agent, Citibank, N.A., JPMorgan Chase Bank, N.A., BofA Securities, Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as syndication agent and Bank of America, N.A., BNP Paribas, Deutsche Bank AG New York Branch and Morgan Stanley Senior Funding, Inc., as documentation agents, incorporated by reference to Exhibit 99.2 to The Form 8-K filed by the registrant on October 8, 2021.
22	Table of Senior Notes, Issuer and Guarantors — Filed in conjunction with this Form 10-Q Report *
31.1	Certification of Principal Executive Officer (Pursuant to Rule 13a-14(a)) — Filed in conjunction with this Form 10-Q Report *
31.2	Certification of Principal Financial Officer (Pursuant to Rule 13a-14(a)) — Filed in conjunction with this Form 10-Q Report *
32.1	Certification of Principal Executive Officer (Pursuant to Rule 13a-14(b) as adopted pursuant to Section 906 of the Sarbanes-Oxley Act) — Filed in conjunction with this Form 10-Q Report *
32.2	Certification of Principal Financial Officer (Pursuant to Rule 13a-14(b) as adopted pursuant to Section 906 of the Sarbanes-Oxley Act) — Filed in conjunction with this Form 10-Q Report *

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101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Label Definition Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_______________________________

* Submitted electronically herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			EATON CORPORATION plc
			Registrant
Date:	August 2, 2022	By:	/s/ Thomas B. Okray
			Thomas B. Okray
			Principal Financial Officer
			(On behalf of the registrant and as Principal Financial Officer)

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