Eaton Corp plc
For the period ended Mar 31, 2026. Filed May 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
ETN$341.72+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001551182-25-000036
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001551182-26-000013
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 109 current paragraphs.
63 unchanged; 31 reworded; 15 added; 17 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
During the first quarter of 2026, Eaton re-segmented certain business segments due to a reorganization of the Company's businesses. The new segment is Mobility, which consists of the legacy Vehicle and eMobility segments. Historical segment information has been recast to reflect this change.
Current report
On January 26, 2026, Eaton announced its intention to pursue a spin-off of its Mobility business, which consists of the Mobility business segment, into an independent, publicly traded company. Eaton expects to complete the anticipated spin-off by the end of the first quarter of 2027, subject to customary legal and regulatory requirements and approvals, including final approval of the Company’s Board of Directors and effectiveness of a Form 10 registration statement filed with the Securities and Exchange Commission. The planned spin-off is expected to be completed in a manner that is tax-free to Eaton ordinary shareholders for U.S. federal income tax purposes.
Current report
IEEPA Tariffs
Current report
On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA), and thereafter, the Court of International Trade (CIT) ordered the Customs and Border Protection (CBP) to develop a process to refund tariffs imposed under IEEPA. We are evaluating the impact of these developments on our business and financial statements and cannot reasonably estimate the financial impact nor deem such impact probable. Some of the factors considered in our evaluation include the uncertainty as to the extent tariffs will be refunded by CBP, what processes will govern such refunds, or if such refunds are fully collectable. No amounts have been recorded in the condensed consolidated financial statements as of March 31, 2026 given the uncertainty regarding the potential refund process.
Current report
Gross profit margin decreased from 38.4% in the first quarter of 2025 to 35.6% in the first quarter of 2026. Material factors affecting this decrease were a 400 basis point decline from commodity and wage inflation, partially offset by an 80 basis point increase from operating efficiencies and a 70 basis point increase from higher sales.
Current report
The increase in organic sales in the first quarter of 2026 was due to strength in data center, commercial & institutional, and machine OEM end-markets, partially offset by weakness in utility and industrial end-markets.
Current report
The operating margin decreased from 30.0% in the first quarter of 2025 to 25.6% in the first quarter of 2026. Material factors affecting this decrease were a 480 basis point decline from higher commodity inflation and a 100 basis point decline from higher costs to support growth initiatives, partially offset by a 210 basis point increase from higher sales.
Current report
The operating margin increased from 23.1% in the first quarter of 2025 to 26.7% in the first quarter of 2026. Material factors affecting this increase were a 280 basis point increase from the sale of a facility in the first quarter of 2026, a 190 basis point increase from higher sales, and a 160 basis point increase from favorable mix, partially offset by a 320 basis point decline from higher commodity and wage inflation.
Current report
Mobility
Current report
The operating margin was flat at 11.7% in both the first quarter of 2026 and 2025. Material factors affecting the operating margin were a 320 basis point increase from favorable mix and a 180 basis point increase from operating efficiencies, offset by a 210 basis point decline from higher commodity and wage inflation and a 120 basis point decline from lower sales.
Current report
On March 6, 2026, Eaton Corporation, a subsidiary of Eaton, terminated the $8,000 million senior unsecured delayed-draw term loan facility (Term Credit Agreement) entered into on February 6, 2026. No loans were outstanding as of the date of termination and the Company incurred no fees or penalties in connection with the termination. The Term Credit Agreement was terminated in connection with the issuance of the 2026 U.S. Notes and 2026 Euro Notes.
Current report
Net cash provided by financing activities increased by $11,040 million in the first three months of 2026 compared to 2025. Material factors affecting this increase were an increase in proceeds from borrowings of $9,871 million in 2026 compared to no proceeds from borrowings in 2025, an increase in net proceeds of short-term debt of $2,507 million in 2026 from $805 million in 2025, and no repurchase of shares in 2026 compared to repurchase of shares of $615 million in 2025, partially offset by payments on borrowings of $1,069 million in 2026 from $3 million in 2025.
Current report
Uses of Cash
Current report
This Form 10-Q Report contains “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements are based upon management’s current expectations, predictions, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, litigation, expected capital expenditures, future dividend payments, anticipated share repurchases, liquidity, the successful integration of recent acquisitions, the anticipated separation of the Mobility business, anticipated capital deployment, and expected restructuring program charges and benefits. These statements may also discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to the Company. These statements are not guarantees of future performance, and actual results may differ materially. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “aim,” “anticipate,” “believe,” “could,” “develop,” “endeavor,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project” “seek,” “should,” “target,” “will,” “would” or other similar words, phrases or expressions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of our control.
Current report
The following factors could cause actual results to differ materially from those in the forward-looking statements: the impact of acquisitions, joint ventures, and investments and the integration of acquired entities; disruptions by natural disasters, labor strikes, wars, geopolitical instability and/or conflict, political unrest, terrorist activity, economic upheaval, or public health concerns that impact our production facilities; significant inflation or shortages of raw materials, energy, components, and/or labor, or similar challenges for our customers; reliance on suppliers to provide raw materials, components and services; the development and use of artificial intelligence in our business operations, including potential impacts on compliance with law and our reputation; service interruptions, data corruption, loss or impairment, network security and related operational impacts due to cybersecurity attacks; weather disruptions and regulatory, market and social reactions to such disruptions; our ability to identify, attract, develop, engage and retain qualified employees; our ability to complete the anticipated spin-off of our Mobility business; stock price and end market impacts due to technology disruptions; volatility of end markets; continued successful research, development and marketing of new or improved products; geopolitical, economic or other risks arising from worldwide or regional economic conditions; the global nature of Eaton’s business and exposure to economic and political instability, including war or armed conflict, changes in governmental laws, regulations and policies; changes in countries’ trade policies, including the imposition of sanctions or tariffs; changes in our tax rates or tax laws and regulations applicable to our business; rules, regulations, audits and investigations and related compliance risks associated with being a governmental contractor; our ability to protect our intellectual property; litigation and environmental regulations impacting our business; and the other risk factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and other reports filed by the Company with the SEC. We disclaim any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
Removed paragraphs (17)
Previous report
On June 16, 2025, Eaton signed an agreement to acquire Ultra PCS Limited (Ultra PCS), which is headquartered in the U.K. with operations in the U.K. and the U.S. Ultra PCS produces electronic controls, sensing, stores ejection and data processing solutions, enabling mission success for global aerospace customers in the air and on the ground. Under the terms of the agreement, Eaton will pay $1.55 billion for Ultra PCS. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the fourth quarter of 2025. Ultra PCS will be reported within the Aerospace business segment.
Previous report
On November 2, 2025, Eaton signed an agreement to acquire Boyd Thermal, a U.S. based global leader in thermal components, systems, and ruggedized solutions for data center, aerospace and other end-markets. Boyd Thermal employs more than 5,000 people with manufacturing sites across North America, Asia, and Europe. Under the terms of the agreement, Eaton will pay $9.5 billion for Boyd Thermal. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2026.
Previous report
Acquisition integration, divestiture charges and transaction costs in 2024 are primarily related to acquisitions completed prior to 2023, and include other charges and income to acquire and exit businesses.
Previous report
Gross profit margin decreased from 38.6% in the third quarter of 2024 to 38.3% in the third quarter of 2025. Material factors affecting this decrease were a 340 basis point decline from higher commodity and wage inflation and a 30 basis point decline from higher intangible asset amortization expense, partially offset by a 240 basis point increase from higher sales and a 130 basis point increase from operating efficiencies.
Previous report
Gross profit margin decreased from 38.0% in thefirst nine months of 2024 to 37.9% in thefirst nine months of 2025. Material factors affecting this decrease were a 260 basis point decline from higher wage and commodity inflation, a 20 basis point decline from higher intangible asset amortization expense, and a 20 basis point decline from higher acquisition and divestiture charges, partially offset by a 230 basis point increase from higher sales and a 40 basis point increase from operating efficiencies.
Previous report
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law in the United States. The OBBBA extends and modifies certain provisions of the 2017 Tax Cuts and Jobs Act and has multiple effective dates, with some provisions beginning in 2025. The OBBBA did not have a material impact on the Company’s condensed consolidated financial statements in the third quarter of 2025. The Company will continue to assess the impact of OBBBA and does not expect the OBBBA to have a material impact on its effective tax rate in future periods.
Previous report
The operating margin increased from 30.1% in the third quarter of 2024 to 30.3% in the third quarter of 2025. Material factors affecting this increase were a 300 basis point increase from higher sales and a 170 basis point increase from operating efficiencies, partially offset by a 450 basis point decline from higher commodity and wage inflation. The operating margin increased from 29.7% in thefirst nine months of 2024 to 29.9% in thefirst nine months of 2025. Material factors affecting this increase were a 340 basis point increase from higher sales and a 50 basis point increase from operating efficiencies, partially offset by a 350 basis point decline from higher commodity and wage inflation.
Previous report
The increase in organic sales in the third quarter of 2025 was due to strength in data center, machine OEM, residential, and commercial & industrial end-markets, partially offset by weakness in utility end-markets. The increase in organic sales in thefirst nine monthsof 2025 was due to strength in data center, machine OEM, and residential end-markets, partially offset by weakness in industrial end-markets. Additionally, the increase in organic sales in the third quarter of 2025 was due to strength in the European and Asia Pacific regions and in the Global Energy Infrastructure Solutions (GEIS) business, and the increase in organic sales in thefirst nine monthsof 2025 was due to strength in the European and Asia Pacific regions.
Previous report
The increase in organic sales in the third quarter of 2025 was due to broad-based strength across all markets, with particular strength in military aftermarket. The increase in organic sales in the first nine months of 2025 was due to broad-based strength across all markets, with particular strength in military aftermarket and commercial aftermarket.
Previous report
The operating margin increased from 24.4% in third quarter of 2024 to 25.9% in third quarter of 2025. Material factors affecting this increase were a 610 basis point increase from higher sales, partially offset by a 340 basis point decline from higher commodity and wage inflation and a 70 basis point decline from operating inefficiencies. The operating margin increased from 23.0% in thefirst nine months of 2024 to 23.8% in thefirst nine months of 2025. Material factors affecting this increase were a 530 basis point increase from higher sales, partially offset by a 260 basis point decline from higher commodity and wage inflation, a 100 basis point decline from operating inefficiencies, and an 80 basis point decline due to the sale of a production facility in the first quarter of 2024.
Previous report
Vehicle
Previous report
The decrease in organic sales in the third quarterand first nine months of 2025 was due to weakness in the North American truck and light vehicle markets.
Previous report
The operating margin decreased from 19.4% in the third quarter of 2024 to 17.8% in the third quarter of 2025. Material factors affecting this decrease were a 310 basis point decline from higher commodity and wage inflation, an 80 basis point decline from lower sales, and a 50 basis point decline from unfavorable product mix, partially offset by a 290 basis point increase from operating efficiencies. The operating margin decreased from 17.8% in thefirst nine months of 2024 to 16.8% in thefirst nine months of 2025. Material factors affecting this decrease were a 250 basis point decline from higher commodity and wage inflation, a 90 basis point decline due to the sale of a non-production facility in the second quarter of 2024 and a 60 basis point decline from lower sales, partially offset by a 280 basis point increase from operating efficiencies.
Previous report
eMobility
Previous report
The operating margin decreased from negative 4.4% in the third quarter of 2024 to negative 6.6% in the third quarter of 2025. Material factors affecting this decrease were a 770 basis point decline from lower sales and a 190 basis point decline from unfavorable product mix, partially offset by a 780 basis point increase from operating efficiencies. The operating margin decreased from negative 1.8% in thefirst nine months of 2024 to negative 5.0% in thefirst nine months of 2025. Material factors affecting this decrease were a 340 basis point decline from higher commodity inflation, a 300 basis point decline from the sale of non-production facilities in the second quarter of 2024, partially offset by a 230 basis point increase from operating efficiencies.
Previous report
Net cash used in financing activities decreased by $880 million in thefirst nine months of 2025 compared to 2024. Material factors affecting this decrease were net proceeds of short-term debt of $761 million in 2025 compared to net payments of short-term debt of $6 million in 2024, and a decrease in payments on borrowings to $714 million in 2025 from $1,011 million in 2024, partially offset by an increase in cash dividends paid to $1,222 million in 2025 from $1,130 million in 2024 and an increase in repurchase of shares to $1,669 million in 2025 from $1,615 million in 2024.
Previous report
This Form 10-Q Report contains forward-looking statements concerning litigation, expected capital expenditures, future dividend payments, anticipated share repurchases, liquidity, the anticipated closing of acquisitions, anticipated capital deployment, and expected restructuring program charges and benefits. 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: global pandemics; 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 disruptive or competing technologies; unexpected technical or marketing difficulties; unexpected or adverse determinations with respect to claims, charges, audits, investigations, court or administrative proceedings, litigation, arbitrations, judgements, or dispute resolutions; strikes or other labor unrest at Eaton or at our customers or suppliers; the impact of acquisitions and divestitures unanticipated difficulties integrating acquisitions; the effect, interpretation, or application of new or existing laws, regulations, legal proceedings or accounting pronouncements, tariffs and governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; war, geopolitical tensions, 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.
Reworded paragraphs (31)
Previous wording
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 energy transition, electrification, and digitalization. The reindustrialization of and growth of megaprojects in North America and increased global infrastructure spending focused on clean energy programs 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 accelerating the planet’s transition to renewable energy sources, helping to solve the world’s most urgent power management challenges, and building a more sustainable society for people today and for future generations.
Current wording
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.
Previous wording
Founded in 1911, Eaton has continuously evolved to meet the changing and expanding needs of our stakeholders. With revenues of nearly $25 billion in 2024, the Company serves customers in more than 160 countries.
Current wording
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.
Previous wording
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 2024 and 2025, Eaton continued to selectively add businesses to strengthen its portfolio.
Current wording
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 and strong returns, and that align with secular trends and its power management strategies. During 2025 and 2026, Eaton completed several transactions to strengthen its portfolio.
Previous wording
Acquisition integration, divestiture charges and transaction costs in 2025 are primarily related to the following:
Current wording
Acquisition integration, divestiture charges and transaction costs in 2026 and 2025 are primarily related to the following:
Previous wording
•The acquisitions of Fibrebond and Exertherm, transactions completed prior to 2023, and other charges to acquire and exit businesses.
Current wording
•The acquisitions of Fibrebond Corporation, Resilient Power Systems Inc., Ultra PCS Limited, Boyd Thermal, and Exertherm, the anticipated spin-off of the Mobility business, transactions completed prior to 2023, and other charges to acquire and exit businesses.
Previous wording
•Employee transaction and retention award compensation expense related to the acquisition of Fibrebond of $16 million and $64 millionin thethird quarter and first nine months of 2025, respectively.
Current wording
•Employee transaction and retention award compensation expense related to the acquisition of Fibrebond of $14 million in the first quarter of 2026.
Previous wording
•Employee incentive compensation expense related to the acquisition of Resilient of $4 million in the third quarter of 2025.
Current wording
•Employee incentive compensation expense related to the acquisition of Resilient of $11 million in the first quarter of 2026.
Previous wording
Charges in 2025 and 2024 were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) - net. In Business Segment Information in Note 16, the charges were included in Other expense - net.
Current wording
Charges in 2026 and 2025 were included in Cost of products sold, Selling and administrative expense, or Other income - net. In Business Segment Information in Note 15, the charges were included in Other expense - net.
Previous wording
During the first quarter of 2024, Eaton implemented a multi-year restructuring program to accelerate opportunities to optimize its operations and global support structure. These actions will better align the Company's functions to support anticipated growth and drive greater effectiveness throughout the Company. Since the inception of the program, the Company has incurred charges of $300 million. This restructuring program is expected to be completed in 2026 and is expected to incur additional expenses related to workforce reductions of $118 million and plant closing and other costs of $57 million, resulting in total estimated charges of $475 million for the entire program. The Company expects mature year benefits of $375 million when the multi-year program is fully implemented.
Current wording
During the first quarter of 2024, Eaton implemented a multi-year restructuring program to accelerate opportunities to optimize its operations and global support structure. These actions will better align the Company's functions to support anticipated growth and drive greater effectiveness throughout the Company. Since the inception of the program, the Company has incurred charges of $374 million. This restructuring program is expected to be completed in 2026 and is expected to incur additional expenses related to workforce reductions of $78 million and plant closing and other costs of $24 million, resulting in total estimated charges of $475 million for the entire program. The Company expects mature year benefits of $375 million when the multi-year program is fully implemented.
Previous wording
The increase in organic salesin thethird quarter of 2025 was due to strength in data center end-markets in the Electrical Americas and Electrical Global business segments, strength in machine OEM, residential, and commercial & institutional end-markets in the Electrical Global business segment, and broad based strength across all markets in the Aerospace business segment, partially offset by weakness in industrial end-markets in the Electrical Americas business segment, weakness in utility end-markets in the Electrical Global business segment, weakness in the North American truck and light vehicle markets in the Vehicle business segment, and weakness in the European region in the eMobility business segment.
Current wording
The increase in organic salesin thefirst quarter of 2026 was due to strength in data center and machine OEM end-markets in the Electrical Americas and Electrical Global business segments, strength in commercial & institutional end-markets in the Electrical Americas business segment, strength in residential end-markets in the Electrical Global business segment, and strength in military aftermarket, commercial OEM, and commercial aftermarket in the Aerospace business segment, partially offset by weakness in industrial end-markets in the Electrical Americas and Electrical Global business segments, weakness in utility end-markets in the Electrical Americas business segment, and weakness in the North American region driven by the exit of a low-margin light vehicle business in the Mobility business segment.
Previous wording
The effective income tax rate for the third quarter of 2025 was expense of 20.7% compared to expense of 16.1% for the third quarter of 2024. The effective income tax rate for the first nine months of 2025 was expense of 18.7% compared to expense of 16.8% for the first nine months of 2024. The increase in the effective tax rate in the third quarter and first nine months of 2025 was primarily due to greater levels of income in higher tax jurisdictions and the fact that the effective tax rate for the third quarter and first nine months of 2024 included a reduction in valuation allowances on foreign tax attributes.
Current wording
The effective income tax rate for the first quarter of 2026 was expense of 21.6% compared to expense of 18.0% for the first quarter of 2025. The increase in the effective tax rate in the first quarter of 2026 was primarily due to greater levels of income in higher tax jurisdictions and the fact that the effective tax rate for the first quarter of 2025 included a reduction in the amount of foreign unrecognized tax benefits.
Previous wording
The increase in organic sales in the third quarter andfirst nine monthsof 2025 was due to strength in data center end-markets, partially offset by weakness in industrial end-markets.
Current wording
The increase in organic sales in the first quarter of 2026 was due to strength in data center, residential, and machine OEM end-markets, partially offset by weakness in industrial end-markets.
Previous wording
The operating margin increased from 18.7% in the third quarter of 2024 to 19.1% in the third quarter of 2025. Material factors affecting this increase were a 310 basis point increase from higher sales, partially offset by a 290 basis point decline from higher commodity and wage inflation. The operating margin increased from 18.6% in thefirst nine months of 2024 to 19.3% in thefirst nine months of 2025. Material factors affecting this increase were a 270 basis point increase from higher sales and a 40 basis point increase from operating efficiencies, partially offset by a 220 basis point decline from higher commodity and wage inflation.
Current wording
The operating margin increased from 18.6% in the first quarter of 2025 to 19.2% in the first quarter of 2026. Material factors affecting this increase were a 180 basis point increase from higher sales and a 290 basis point increase from operating efficiencies, partially offset by a 470 basis point decline from higher commodity and wage inflation.
Previous wording
The increase in organic salesin the first nine months of 2025 was due to strength in data center end-markets in the Electrical Americas and Electrical Global business segments, strength in machine OEM and residential end-markets in the Electrical Global business segment, and strength in military aftermarket and commercial aftermarket in the Aerospace business segment, partially offset by weakness in industrial end-markets in the Electrical Americas and Electrical Global business segments, weakness in the North American truck and light vehicle markets in the Vehicle business segment, and weakness in the North American and European regions in the eMobility business segment.
Current wording
The increase in organic sales in the first quarter of 2026 was due to strength in military aftermarket, commercial OEM, and commercial aftermarket.
Previous wording
The decrease in organic sales in the third quarter of 2025 was due to weakness in the European region. The decrease in organic sales in the first nine months of 2025 was due to weakness in the North American and European regions.
Current wording
The decrease in organic sales in the first quarter of 2026 was due to weakness in the North American region driven by the exit of a low-margin light vehicle business, partially offset by strength in the European region.
Previous wording
Total corporate expense increased from $340 million in the third quarter of 2024 to $474 million in the third quarter of 2025 and from $1,018 million in thefirst nine months of 2024 to $1,316 million in thefirst nine months of 2025. Material factors affecting the increase in Total corporate expense in the third quarterand first nine months of 2025 were higher Other expense - net, Interest expense - net, and Intangible asset amortization expense. The increase in Other expense - net is primarily due to higher acquisition and divestiture costs.
Current wording
The material factors affecting the increase in Total corporate expense in the first quarter of 2026 were higher Other expense - net, Interest expense - net, Intangible asset amortization expense, and Restructuring program changes. The increase in Other expense - net is primarily due to higher acquisition and divestiture costs.
Previous wording
On September 29, 2025, a subsidiary of Eaton entered into a new $3,000 million five-year revolving credit agreement that will expire on September 27, 2030 (New Revolving Credit Agreement), which replaced the $500 million 364-day revolving credit agreement dated September 30, 2024 and $2,500 million five-year revolving credit agreement dated October 3, 2022. The New Revolving Credit Agreement is used to support commercial paper borrowings and is 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 the New Revolving Credit Agreement at September 30, 2025. The Company maintains access to the commercial paper markets through its $3,000 million commercial paper program, of which $755 million was outstanding on September 30, 2025, used primarily to manage fluctuations in working capital.
Current wording
On February 6, 2026, Eaton Corporation, a subsidiary of Eaton, exercised a $1,000 million upsize of the existing $3,000 million five-year revolving credit agreement, increasing the total facility size to $4,000 million. The facility’s maturity date remains unchanged at September 27, 2030. The revolving credit facility is used to support commercial paper borrowings and is 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 the revolving credit facility at March 31, 2026. Also on February 6, 2026 the Company increased its commercial paper program from $3,000 million to $4,000 million. The Company maintains access to the commercial paper markets through its $4,000 million commercial paper program, of which $2,497 million was outstanding on March 31, 2026, used primarily to manage fluctuations in working capital and to partially fund acquisitions closed during 2026.
Previous wording
Also on May 9, 2025, the same subsidiary of Eaton issued senior notes (2025 Notes) with a face amount of $500 million. The 2025 Notes mature in 2030 with interest payable semi-annually at a rate of 4.45% per annum. The issuer received proceeds totaling $495 million from the 2025 Notes issuance, net of financing costs and discounts. The 2025 Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2025 Notes contain customary optional redemption and par call provisions. The 2025 Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2025 Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees are amortized in Interest expense - net over the term of the 2025 Notes. The 2025 Notes are subject to customary non-financial covenants.
Current wording
On March 6, 2026, Eaton Corporation, a subsidiary of Eaton, issued notes (2026 U.S. Notes) with an aggregate face amount of $8,500 million. The 2026 U.S. Notes are comprised of six tranches: 3.85% notes due 2028 in the amount of $1,500 million; 3.95% notes due 2029 in the amount of $1,500 million; 4.20% notes due 2031 in the amount of $1,500 million; 4.50% notes due 2033 in the amount of $1,000 million; 4.80% notes due 2036 in the amount of $2,000 million; and 5.45% notes due 2056 in the amount of $1,000 million. Interest is payable semi-annually. The issuer received proceeds totaling $8,428 million from the 2026 U.S. Notes issuance, net of financing costs and discounts. The 2026 U.S. Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The U.S. 2026 Notes contain customary optional redemption and par call provisions. The U.S. 2026 Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2026 U.S. Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees are amortized in Interest expense - net over the respective terms of the 2026 U.S. Notes. The 2026 U.S. Notes are subject to customary non-financial covenants.
Previous wording
On May 9, 2025, a subsidiary of Eaton issued Euro denominated notes (2025 Euro Notes) with a face amount of €500 million ($564 million). The 2025 Euro Notes mature in 2035 with interest payable annually at a rate of 3.625% per annum. The issuer received proceeds totaling €494 million ($558 million) from the 2025 Euro Notes issuance, net of financing costs and discounts. The 2025 Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2025 Euro Notes contain customary optional redemption and par call provisions. The 2025 Euro Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2025 Euro Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees are amortized in Interest expense - net over the term of the 2025 Euro Notes. The 2025 Euro Notes are subject to customary non-financial covenants.
Current wording
On March 10, 2026, Eaton Capital Unlimited Company, a subsidiary of Eaton, issued Euro denominated notes (2026 Euro Notes) with an aggregate face amount of €1,200 million ($1,390 million). The 2026 Euro Notes are comprised of two tranches of €600 million each, which mature in 2034 and 2038, with interest payable annually at a respective rate of 3.55% and 4.00% per annum. The issuer received proceeds totaling €1,191 million ($1,380 million) from the 2026 Euro Notes issuance, net of financing costs and discounts. The 2026 Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2026 Euro Notes contain customary optional redemption and par call provisions. The 2026 Euro Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2026 Euro Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees are amortized in Interest expense - net over the respective terms of the 2026 Euro Notes. The 2026 Euro Notes are subject to customary non-financial covenants.
Previous wording
Over the course of a year, cash, short-term investments, and short-term debt may fluctuate in order to manage global liquidity. As of September 30, 2025 and December 31, 2024, Eaton had cash of $328 million and $555 million, short-term investments of $237 million and $1,525 million, respectively, with $761 million short-term debt as of September 30, 2025 and no short-term debt as of December 31, 2024. 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.
Current wording
Over the course of a year, cash, short-term investments, and short-term debt may fluctuate in order to manage global liquidity. As of March 31, 2026 and December 31, 2025, Eaton had cash of $565 million and $622 million, short-term investments of $186 million and $181 million, and short-term debt of $2,510 million and $1 million, respectively. Eaton believes it has the operating flexibility, cash flow, cash and short-term investment balances, availability under the existing revolving credit facility, 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, for at least the next 12 months and the foreseeable future thereafter.
Previous wording
On April 1, 2025, the Company paid $1.45 billion, net of cash acquired, to acquire Fibrebond Corporation. On August 6, 2025, the Company acquired Resilient Power Systems Inc. for $86 million, including $55 million of cash paid at closing and an initial estimate of $31 million for the fair value of contingent future consideration. In addition, the Company expects to close the acquisitions of Ultra PCS and Boyd Thermal in the fourth quarter of 2025 and second quarter of 2026, respectively, for $1.55 billion and $9.5 billion, respectively.
Current wording
On April 1, 2025, the Company paid $1.43 billion, net of cash acquired, to acquire Fibrebond Corporation. On August 6, 2025, the Company acquired Resilient Power Systems Inc. for $86 million, including $55 million of cash paid at closing and an initial estimate of $31 million for the fair value of contingent future consideration. On January 23, 2026, the Company paid $1.53 billion, net of cash acquired, to acquire Ultra PCS Limited and on March 12, 2026, the Company paid $9.55 billion, net of cash acquired, to acquire Boyd Thermal. Additionally, on January 15, 2026, Eaton invested $75 million in SPAN for a stake of approximately 7 percent.
Previous wording
Eaton was in compliance with each of its debt covenants for all periods presented.
Current wording
Eaton is in compliance with each of its debt covenants for all periods presented.
Previous wording
Net cash provided by operating activities decreased by $223 million in thefirst nine months of 2025 compared to 2024. Material factors affecting this decrease were working capital balances being $656 million higher, partially offset by higher net income of $131 million.
Current wording
Net cash provided by operating activities increased by $269 million in the first three months of 2026 compared to 2025. Material factors affecting this increase were working capital balances being $299 lower, partially offset by lower net income of $97 million.
Previous wording
Net cash used in investing activities increased by $783 million in thefirst nine months of 2025 compared to 2024. Material factors affecting this increase were an increase in cash paid for business acquisitions of $1,504 million in 2025 compared to $50 million in 2024, partially offset by sales of short-term investments of $1,287 million in 2025 compared to $595 million in 2024.
Current wording
Net cash used in investing activities increased by $12,608 million in the first three months of 2026 compared to 2025. Material factors affecting this increase were an increase in cash paid for business acquisitions of $11,079 million in 2026 compared to no cash paid for business acquisitions in 2025 and purchases of short-term investments of $13 million in 2026 compared to sales of short term investments of $1,366 million in 2025.
Previous wording
Capital expenditures were $527 million and $553 million in thefirst nine months of 2025 and 2024, respectively. The Company plans to increase capital expenditures over the next several years to expand production capacity across various markets to support anticipated growth. As a result, Eaton expects approximately $900 million in capital expenditures in 2025.
Current wording
Capital expenditures were $193 million and $147 million in the first three months of 2026 and 2025, respectively. The Company plans to increase capital expenditures over the next several years to expand production capacity across various markets to support anticipated growth. As a result, Eaton expects approximately $1.15 billion in capital expenditures in 2026.
Previous wording
Cash dividend payments were $1,222 million and $1,130 million in thefirst nine months of 2025 and 2024, 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 2025.
Current wording
Cash dividend payments were $415 million and $397 million in the first three months of 2026 and 2025, 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 2026.
Previous wording
On February 23, 2022, the Board of Directors adopted a share repurchase program for repurchases of ordinary shares up to $5.0 billion to be made during the three-year period commencing on that date (2022 Program). On February 27, 2025, the Board of Directors renewed the 2022 Program by providing authority for up to $9.0 billion in repurchases to be made during the three-year period commencing on that date (2025 Program). Under the 2025 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three and nine months ended September 30, 2025, 1.0 million and 5.2 million ordinary shares, respectively, were repurchased under the 2025 or 2022 Programs in the open market at a total cost of $355 million and $1,661 million, respectively. During the three and nine months ended September 30, 2024, 3.0 million and 5.3 million ordinary shares, respectively, were repurchased under the 2022 program in the open market at a total cost of $891 million and $1,629 million, respectively.
Current wording
On February 23, 2022, the Board of Directors adopted a share repurchase program for repurchases of ordinary shares up to $5.0 billion to be made during the three-year period commencing on that date (2022 Program). On February 27, 2025, the Board of Directors renewed the 2022 Program by providing authority for up to $9.0 billion in repurchases to be made during the three-year period commencing on that date (2025 Program). Under the 2025 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three months ended March 31, 2026, no ordinary shares were repurchased. During the three months ended March 31, 2025, 1.9 million ordinary shares were repurchased under the 2025 Program and the 2022 Program in the open market at a total cost of $608 million. The Company does not intend to pursue share repurchases in 2026 due to the acquisition of Boyd Thermal on March 12, 2026.
Previous wording
Acquisition of Businesses and Investments in Associate Companies
Current wording
Acquisition of Businesses and Investments in Nonmarketable Securities
Previous wording
The Company paid cash of $1,504 million and $50 million in the first nine months of 2025 and 2024, respectively, to acquire businesses. The Company paid cash of $16 million and $68 million in the first nine months of 2025 and 2024, respectively, for investments in associate companies. 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.
Current wording
The Company paid cash of $11,079 million in the first three months of 2026 to acquire businesses. There were no business acquisitions in the first three months of 2025. Additionally, the Company paid $85 million in the first three months of 2026 for investments in nonmarketable securities. There were no investments in nonmarketable securities in the first three months of 2025. 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.
Previous wording
The Company manages a number of short-term and long-term debt instruments, including commercial paper. At September 30, 2025, the Company had Short-term debt of $761 million, Current portion of long-term debt of $1,136 million, and Long-term debt of $8,756 million. The Company believes it has the operating flexibility, cash flow, and access to capital markets to meet scheduled payments of long-term debt.
Current wording
The Company manages a number of short-term and long-term debt instruments, including commercial paper. At March 31, 2026, the Company had Short-term debt of $2,510 million, Current portion of long-term debt of $84 million, and Long-term debt of $18,535 million. The Company believes it has the operating flexibility, cash flow, and access to capital markets to meet scheduled payments of long-term debt. For additional information on financing transactions and debt see Note 8.
Previous wording
Eaton Corporation has issued senior notes pursuant to indentures dated April 1, 1994 (the 1994 Indenture), November 20, 2012 (the 2012 Indenture), September 15, 2017 (the 2017 Indenture), and August 23, 2022 (as supplemented by the First and Second Supplemental Indentures of the same date and the Third Supplemental Indenture dated May 18, 2023, the 2022 Indenture). Eaton Capital Unlimited Company, a 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) and Registered Senior Notes (as defined below) issued under an indenture dated May 9, 2025 (as supplemented by the First and Second Supplemental Indentures of the same date, the 2025 Indenture). The senior notes issued under the 1994, 2012, 2017, 2022, and 2025 Indentures are registered under the Securities Act of 1933, as amended (the Registered Senior Notes). The Eurobonds and the Registered Senior Notes (together, the Senior Notes) comprise substantially all of Eaton’s long-term indebtedness.
Current wording
Eaton Corporation has issued senior notes pursuant to indentures dated April 1, 1994 (the 1994 Indenture), November 20, 2012 (the 2012 Indenture), September 15, 2017 (the 2017 Indenture), August 23, 2022 (as supplemented by the First and Second Supplemental Indentures of the same date and the Third Supplemental Indenture dated May 18, 2023, the 2022 Indenture), and May 9, 2025 (as supplemented by the First and Second Supplemental Indentures of the same date, the Third Supplemental Indenture dated March 6, 2026, and the Fourth Supplemental Indenture dated March 10, 2026, the 2025 Indenture). Eaton Capital Unlimited Company, a subsidiary of Eaton, is the issuer of six outstanding series of debt securities sold in offshore transactions under Regulation S promulgated under the Securities Act (the Eurobonds) and Registered Senior Notes (as defined below) issued under the 2025 Indenture. The senior notes issued under the 1994, 2012, 2017, 2022, and 2025 Indentures are registered under the Securities Act of 1933, as amended (the Registered Senior Notes). The Eurobonds and the Registered Senior Notes (together, the Senior Notes) comprise substantially all of Eaton’s long-term indebtedness.