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What changed in Eaton Corporation's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Eaton Corporation's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+33 added−33 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-23)

Top changes in Eaton Corporation's 2023 10-K

33 paragraphs added · 33 removed · 28 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAt December 31, 2022, Eaton’s distribution by gender, and United States distribution by minority status, is as follows: Total Global Number of women (Global) Percentage of women (Global) U.S. total Number of minorities (U.S. only) 1 Percentage of minorities (U.S. only) 1 Board of directors 11 4 36.4 % 9 4 44.4 % Global leadership team 25 5 20.0 % 23 13 56.5 % Executives 618 140 22.7 % 429 85 19.8 % Managers 8,202 1,998 24.4 % 4,270 871 20.4 % All other employees 83,079 29,276 35.2 % 22,702 8,248 36.3 % All employees 91,924 31,419 34.2 % 27,424 9,217 33.6 % 1 Excluding Puerto Rico At Eaton, one of our aspirational goals is to be a model of inclusion and diversity among our peers.
Biggest changeAt December 31, 2023, Eaton’s distribution by gender, and United States distribution by minority status, is as follows: Total Global Number of women (Global) Percentage of women (Global) U.S. total Number of minorities (U.S. only) 1 Percentage of minorities (U.S. only) 1 Board of directors 10 3 30.0 % 8 4 50.0 % Global leadership team 25 4 16.0 % 23 11 47.8 % Executives 671 161 24.0 % 480 102 21.3 % Managers 8,754 2,192 25.0 % 4,568 984 21.5 % All other employees 84,331 29,794 35.3 % 23,668 8,658 36.6 % All employees 93,781 32,151 34.3 % 28,739 9,755 33.9 % 1 Excluding Puerto Rico At Eaton, one of our aspirational goals is to be a model of inclusion and diversity among our peers.
Business Segment Information Information by business segment regarding principal products, principal markets, methods of distribution and net sales is presented in Note 17 of the Notes to the Consolidated Financial Statements. Additional information regarding Eaton's segments and business is presented below.
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.
In 2022, 22% of this segment's sales were made to three large original equipment manufacturers of aircraft. Vehicle Principal methods of competition in this segment are product performance, technology, global service, and price. Eaton has a strong competitive position in this segment and, with respect to many products, is considered among the market leaders.
In 2023, 21% of this segment's sales were made to three large original equipment manufacturers of aircraft. Vehicle Principal methods of competition in this segment are product performance, technology, global service, and price. Eaton has a strong competitive position in this segment and, with respect to many products, is considered among the market leaders.
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 10 of the Notes to the Consolidated Financial Statements. Human Capital Management Eaton has approximately 92,000 employees globally.
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. Human Capital Management Eaton has approximately 94,000 employees globally.
In 2022, 32% of this segment's sales were made to three 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. Eaton has a strong competitive position in this segment.
In 2023, 33% of this segment's sales were made to three 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. Eaton has a strong competitive position in this segment.
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 year. In 2022, 24% of these segments' sales were made to seven large customers of electrical products and electrical systems and services.
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 year. In 2023, 25% of these segments' sales were made to seven large customers of electrical products and electrical systems and services.
In 2022, 26% of this segment's sales were made to six large original equipment manufacturers of vehicles, construction equipment and related components. 2 Table of contents Hydraulics On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S, a Danish industrial company. Prior to the sale, the Hydraulics business was a reportable operating segment.
In 2023, 14% of this segment's sales were made to three large original equipment manufacturers of vehicles, construction equipment and related components. 2 Table of Contents Hydraulics On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S, a Danish industrial company. Prior to the sale, the Hydraulics business was a reportable operating segment.
Eaton regularly benchmarks its compensation practices with industry peers to maintain a top performing workforce. Eaton’s 2022 total employee costs was $5.5 billion including salaries, wages, equity-based compensation, pension and other benefits.
Eaton regularly benchmarks its compensation practices with industry peers to maintain a top performing workforce. Eaton’s 2023 total employee costs was $6.1 billion including salaries, wages, equity-based compensation, pension and other benefits.
The total compensation of our median employee on October 1, 2021, as reported in our 2022 Proxy Statement filed on March 18, 2022, and as calculated in accordance with Item 402(u) of Regulation S-K, was $56,287. Safety Throughout our operations, our goal is to have no safety incidents and we continue to make progress towards that goal.
The total compensation of our median employee on October 1, 2022, as reported in our 2023 Proxy Statement filed on March 17, 2023, and as calculated in accordance with Item 402(u) of Regulation S-K, was $59,064. Safety Throughout our operations, our goal is to have no safety incidents and we continue to make progress towards that goal.
The number of persons employed by our reportable segments and corporate at December 31, 2022 are as follows: (In thousands) 2022 Electrical Americas 30 Electrical Global 26 Aerospace 13 Vehicle 12 eMobility 2 Corporate 9 Total number of persons employed 92 3 Table of contents Eaton uses and monitors a variety of metrics to ensure our objectives related to employee attraction, development, and retention are met.
The number of persons employed by our reportable segments and corporate at December 31, 2023 are as follows: (In thousands) 2023 Electrical Americas 32 Electrical Global 26 Aerospace 14 Vehicle 12 eMobility 2 Corporate 8 Total number of persons employed 94 3 Table of Contents Eaton uses and monitors a variety of metrics to ensure our objectives related to employee attraction, development, and retention are met.
However, as global economies recovered from the COVID-19 pandemic and reacted to Russia's ongoing war in Ukraine, some of our businesses were impacted by inflation and supply chain constraints, including limited availability of select materials and delivery delays. During this time, we worked closely with our suppliers to manage and minimize the impact on our supply chain.
However, as global economies continued to recover from the COVID-19 pandemic and supply chains adjusted to the Russia Ukraine war, some of our businesses were impacted by inflation and supply chain constraints, including limited availability of select materials and delivery delays. During this time, we worked closely with our suppliers to manage and minimize the impact on our supply chain.
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 2021 and showed a favorable response from 83 percent of employees who completed it.
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 2023.
Engagement Fully engaged employees are more productive, innovative, and satisfied in their work. Examples of how we engage our employees include enterprise-wide town halls, hosting informal listening meetings and surveying groups of employees on specific subjects.
Flexible solutions include compressed work weeks, remote working, job sharing, part-time work, flextime, and telework. Engagement Fully engaged employees are more productive, innovative, and satisfied in their work. Examples of how we engage our employees include enterprise-wide town halls, hosting informal listening meetings and surveying groups of employees on specific subjects.
It is the policy of the Company to make all decisions regarding employment, including hiring, compensation, training, promotions, transfers, or lay-offs, based on the principle of equal employment opportunity and without discrimination.
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 reported revenues of $20.8 billion in 2022 and serve customers in more than 170 countries.
We reported revenues of $23.2 billion in 2023 and serve customers in more than 160 countries.
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.
Achieving work-life balance 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.
This group reported that they were proud to work at Eaton, felt personal accomplishment from their work, and would recommend Eaton as a place to work. In 2022, we performed a limited employee survey which generally showed similar results as 2021. We plan to perform another survey of all employees in 2023. 4 Table of contents
Of those who responded to the survey, 84% 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. We plan to perform another survey of all employees in 2025. 4 Table of Contents
Item 1. Business. 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.
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.
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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.
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We are well positioned to capitalize on the megatrends of electrification, energy transition and digitalization. The reindustrialization of North America and Europe, growth in North American megaprojects, and increased global infrastructure spending focused on clean energy programs are expanding our end markets and positioning Eaton for growth for years to come.
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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.
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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.
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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, 2023 marks Eaton's 100 th anniversary of being listed on the New York Stock Exchange.
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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. Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century.
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For example, in 2021 we reduced our Total Recordable Case Rate (TRCR) by 7% (0.39) and our Days Away Case Rate (DACR) by 12% (0.15) compared to 2020. Our TRCR of 0.39 approaches our long-term goal of 0.25, which we believe is a world-class safety rate.
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Our 2022 Total Recordable Case Rate (TRCR) was 0.40 and our Days Away Case Rate (DACR) was 0.16. We have improved our TRCR 38% since 2018 and consider our 2030 target of 0.25 to be a world-leading safety rating. Our 2023 TRCR will be provided in our annual Sustainability Report to be issued in 2024.
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Our 2022 TRCR will be provided in our annual Sustainability Report to be issued in 2023. Achieving work-life balance Achieving work-life balance is a common concern of today's employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNone the less, we can give no assurance that there will not be additional closures in the future or that our businesses and facilities will be classified as essential in each of the jurisdictions in which we operate, should future outbreaks and/or additional strains of the virus impact global economic activity.
Biggest changeNonetheless, we can give no assurance that there will not be additional closures in the future or that our businesses and facilities will be classified as essential in each of the jurisdictions in which we operate, should future outbreaks and/or additional strains of the virus impact global economic activity. Further, the pandemic has, and could further disrupt our supply chain.
Eaton's major requirements for raw materials are described above in Item 1 “Raw Materials”. Global shortages have continued to affect the prices Eaton's businesses are charged for raw materials, particularly commodities. Further, Eaton has been impacted by logistics and wage inflation.
Eaton's major requirements for raw materials are described above in Item 1 Raw Materials. Global shortages have continued to affect the prices Eaton's businesses are charged for raw materials, particularly commodities. Further, Eaton has been impacted by logistics and wage inflation.
Further, the pandemic has, and could further disrupt our supply chain. The duration of and extent to which the COVID-19 pandemic continues to impact our results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted.
The duration of and extent to which the COVID-19 pandemic continues to impact our results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted.
Information regarding current legal proceedings is presented in Note 10 and Note 11 of the Notes to the Consolidated Financial Statements. Item 1B. Unresolved Staff Comments. None.
Information regarding current legal proceedings is presented in Note 11 and Note 12 of the Notes to the consolidated financial statements. Item 1B. Unresolved Staff Comments. None. 7 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeManagement believes that the existing manufacturing facilities are adequate for its operations and that the facilities are maintained in good condition. Item 3. Legal Proceedings. Information regarding the Company's current legal proceedings is presented in Note 10 and Note 11 of the Notes to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 7 Table of contents
Biggest changeManagement believes that the existing manufacturing facilities are adequate for its operations and that the facilities are maintained in good condition. Item 3. Legal Proceedings. Information regarding the Company's current legal proceedings is presented in Note 11 and Note 12 of the Notes to the consolidated financial statements.
Item 2. Properties. Eaton's principal executive offices are located at Eaton House, 30 Pembroke Road, Dublin 4, Ireland D04 Y0C2. The Company maintains manufacturing facilities at approximately 216 locations in 36 countries. The Company is a lessee under a number of operating leases for certain real properties and equipment, none of which is material to its operations.
Item 2. Properties. Eaton's principal executive offices are located at Eaton House, 30 Pembroke Road, Dublin 4, Ireland D04 Y0C2. The Company maintains manufacturing facilities at approximately 208 locations in 35 countries. The Company is a lessee under a number of operating and finance leases for certain real properties and equipment, none of which is individually material to its operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations. Information required by this Item is presented in “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Information regarding market risk is presented in “Market Risk Disclosure” of this Form 10-K.
Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations. Information required by this Item is presented in “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Information regarding market risk is presented in “Market Risk Disclosure” of this Form 10-K. Item 8.
Eaton shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability for Irish income tax on the dividends unless they are otherwise subject to Irish income tax. Issuer’s Purchases of Equity Securities During the fourth quarter of 2022, there were no shares repurchased. Item 6. [Reserved] Item 7.
Eaton shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability for Irish income tax on the dividends unless they are otherwise subject to Irish income tax. Issuer’s Purchases of Equity Securities During the fourth quarter of 2023, there were no shares repurchased. Item 6. [Reserved] Item 7.
Additionally, 14,158 current and former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, and The Eaton Puerto Rico Retirement Savings Plan. Information regarding equity-based compensation plans required by Regulation S-K Item 201(d) is provided in Item 12 of this Form 10-K Report.
Additionally, 13,994 current and former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, and The Eaton Puerto Rico Retirement Savings Plan. Information regarding equity-based compensation plans required by Regulation S-K Item 201(d) is provided in Item 12 of this Form 10-K Report.
Item 5. Market for the Registrant's Ordinary Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company's ordinary shares are listed for trading on the New York Stock Exchange under the symbol ETN. At December 31, 2022, there were 10,034 holders of record of the Company's ordinary shares.
Item 5. Market for the Registrant's Ordinary Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company's ordinary shares are listed for trading on the New York Stock Exchange under the symbol ETN. At December 31, 2023, there were 9,579 holders of record of the Company's ordinary shares.
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Financial Statements and Supplementary Data. The reports of the independent registered public accounting firm, consolidated financial statements, and notes to consolidated financial statements are presented in Item 15 of this Form 10-K. Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure. None. 10 Table of Contents

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