Eaton Corp plc (ETN) Business

Item 1. Business.

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

Founded in 1911, Eaton has continuously evolved to meet the changing and expanding needs of our stakeholders. With revenues of $27.4 billion in 2025, the Company serves customers in 180 countries.

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

Acquisitions and Divestiture of Businesses

In 2025, the Company acquired Fibrebond Corporation (Fibrebond) and Resilient Power Systems Inc. (Resilient), and announced an agreement to acquire Boyd Thermal. Additionally, on January 23, 2026, the Company closed the acquisition of Ultra PCS Limited (Ultra PCS). The acquisition of Resilient strengthens our power distribution offerings and accelerates the commercialization of solid-state transformer technology for future global applications in data centers and energy storage. Adding Fibrebond to the portfolio expands Eaton’s presence in the growing market for modular solutions for multi-tenant and hyperscale data center customers. The acquisition of Ultra PCS expands and integrates Eaton’s offerings in next-generation aerospace solutions. The agreement to acquire Boyd Thermal expands Eaton’s existing portfolio of solutions for data center customers to include critical liquid cooling technology, enabling the Company to serve hyperscale and colocation customers from the chip to the grid.

On January 26, 2026, Eaton announced its intention to pursue a spin-off of its Mobility business, which consists of its Vehicle and eMobility operating segments, into an independent, publicly traded company.

More information regarding the Company's acquisitions and divestiture is presented in Note 2 of the Notes to the consolidated financial statements.

Business Segment Information

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

During the first quarter of 2026, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segment is Mobility, which consists of the legacy Vehicle and eMobility segments. Financial information for this new reportable segment has not been provided as the re-segmentation occurred subsequent to the year ended December 31, 2025. The Company expects to provide financial information for this new reportable segment in the Quarterly Report on Form 10-Q for the period ended March 31, 2026.

Electrical Americas and Electrical Global

Eaton’s Electrical sector helps customers manage power in a way that’s reliable, efficient, safe and sustainable. From the grid to homes, buildings, data centers and industrials – Eaton plays a vital role in modernizing infrastructure and accelerating the electrification of society. As the world’s demand for electricity grows, so does the need for Eaton’s innovative technology and solutions.

Principal methods of competition in these segments are performance of products and systems, technology, customer service and support, and price. Eaton has a strong competitive position in these segments and, with respect to many products, is considered among the market leaders. In normal economic cycles, sales of these segments are historically lower in the first quarter and higher in the third and fourth quarters of a specific year. In 2025, 22% of these segments' sales were made to six large customers of electrical products and electrical systems and services.

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Aerospace

Eaton’s industry-leading portfolio of aerospace technologies elevates aircraft efficiency, safety and performance for customers across the commercial, military and space markets. As the demand for more electric and sustainable aviation solutions amplifies, the company is uniquely positioned to help power the next generation of platforms.

Principal methods of competition in this segment are total cost of ownership, product and system performance, quality, design engineering capabilities, and timely delivery. Eaton has a strong competitive position in this segment and, with respect to many products and platforms, is considered among the market leaders. In 2025, 20% of this segment's sales were made to three large original equipment manufacturers of aircraft.

Vehicle

Eaton provides differentiated technologies that improve safety, efficiency, and performance for customers in the automotive, commercial vehicle, aftermarket and off-road segments. The company is committed to enabling the transition to electrified vehicles (EVs) while also continuing to provide innovative and efficient internal combustion engine (ICE) solutions.

Principal methods of competition in this segment are product performance, technology, global service, and price. Eaton is considered among the market leaders in this segment. In 2025, 37% of this segment's sales were made to four large original equipment manufacturers of vehicles and related components.

eMobility

Principal methods of competition in this segment are product performance, technology, global service, and price. In 2025, 18% of this segment's sales were made to one large original equipment manufacturer of vehicles and related components.

Information Concerning Eaton's Business in General

Raw Materials

Eaton's major requirements for raw materials include iron, steel, copper, nickel, aluminum, lead, silver, gold, titanium, rubber, plastic, electronic components, chemicals, and fluids. Materials are purchased in various forms, such as coils, sheets, strips, ingots, bars, extrusions, castings, forgings, stampings, powder metal, plastic resins, and pellets. Raw materials, as well as parts and other components, are purchased from many suppliers. Under normal circumstances, the Company has no difficulty obtaining its raw materials. To mitigate the impact of supply chain risk events we continue to invest in supply chain resiliency and work closely with our partners.

Intellectual Property

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

Environmental Contingencies

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

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Human Capital Management

Eaton has approximately 97,000 employees globally. The number of persons employed by our reportable segments and corporate at December 31, 2025 are as follows:

Eaton uses and monitors a variety of metrics to demonstrate our objectives related to employee attraction, development, and retention are met. Most notably, Eaton tracks the following:

Inclusion and Diversity

Eaton aspires to be a model of inclusion and diversity in the industry - known for the way it welcomes all employees to the table and includes them by listening to what they have to offer.

We’re doing this because we believe an inclusive and diverse workforce makes better decisions. Our success depends on our ability to attract and retain the best employees without regard to race, color, social or economic status, religion, national origin, marital status, age, veteran status, sexual orientation, gender identity, or any protected status. It is the policy of the Company to make all decisions regarding employment based on the principle of equal employment opportunity and without discrimination. We embrace the power of diverse experiences, backgrounds and perspectives from all our employees to drive innovation and sustainable growth that benefits our employees, investors, customers and communities.

We also believe that when we value the uniqueness of each individual, we can attract and retain top talent, enable higher-performing teams, and accelerate the process of becoming an enterprise that can win in all markets.

At December 31, 2025, Eaton’s workforce distribution is as follows:

1 Excluding Puerto Rico

Our plan to be a model of inclusion and diversity among our peers encompasses a number of actions, including an examination into our programs, practices, processes, and policies to look for opportunities to strengthen our entire workforce.

Compensation

A key component of Eaton’s attraction and retention strategy is providing a competitive total rewards package which includes items such as salaries, wages, short- and long-term incentive compensation, in addition to health, welfare, retirement, and other benefits. Eaton regularly benchmarks its compensation and benefits practices against those of our industry peers and in the markets in which we operate to evaluate how our plans and programs are aligned with external practices in effort to maintain a high performing workforce.

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Safety

At Eaton, our goal is to support the safety, health and wellness of our employees. We have established safety principles that underline the importance of protecting our employees’ well-being and require each individual to be responsible and accountable for recognizing and correcting at-risk behavior or unsafe conditions. We recognize that all injuries and occupational illnesses are preventable, and a workplace with zero incidents is achievable.

Throughout our operations, our goal is to have no safety incidents and we continue to make progress towards that goal. Our 2024 Total Recordable Case Rate (TRCR) was 0.39 and our Days Away Case Rate (DACR) was 0.17. We have consistently reduced our annual TRCR and consider our 2030 target of 0.25 to be a world-leading safety rating. Our 2025 TRCR will be provided in our annual Sustainability Report to be issued in 2026.

Achieving work-life balance

We aspire to support the safety, health and wellbeing of our employees. We do this by helping all our employees maximize their physical, financial and emotional wellbeing, both at work and at home. Eaton’s three dimensions of wellbeing focus on increasing engagement and productivity, and improving health risks. We believe wellbeing is a state of balance that consists of having the appropriate resources, opportunities, and challenges needed to achieve optimal health and performance for the individual and the organization. Our culture of wellbeing is anchored by the global framework of country-level assessments of resources and commitment to provide our employees with the knowledge and support needed to live well.

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

Engagement

Fully engaged employees feel motivated to contribute to organizational success and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals. Examples of how we engage our employees include enterprise-wide town halls, hosting informal listening meetings and surveying groups of employees on specific subjects. In addition, we have programs focused on career development of employees at all levels and we are committed to a wide range of strategies designed to improve and sustain employee engagement over the long-term. Our most recent engagement survey of all employees was completed in 2025. Of those who responded to the survey, 86% had favorable engagement indicating they were proud to work at Eaton, felt personal accomplishment from their work, and would recommend Eaton as a place to work.

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Information about our Executive Officers

A listing of executive officers, their ages, positions and offices held over the past five years, as of February 1, 2026, is as follows:

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There are no family relationships among the officers listed, and there are no arrangements or understandings pursuant to which any of them were elected as officers. All officers hold office for one year and until their successors are elected and qualified, unless otherwise specified by the Board of Directors; provided, however, that any officer is subject to removal with or without cause, at any time, by a vote of a majority of the Board of Directors.