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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ______
Commission file number 000-54863
EATON CORPORATION plc
(Exact name of registrant as specified in its charter)
Ireland98-1059235
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification Number)
Eaton House, 30 Pembroke Road,Dublin 4,IrelandD04 Y0C2
(Address of principal executive offices)(Zip Code)
+3531637 2900
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Ordinary shares ($0.01 par value)ETNNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☑ Accelerated filer☐ Non-accelerated filer ☐
Smaller reporting company
☐
 Emerging growth company
☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
There were 398.1 million Ordinary Shares outstanding as of June 30, 2024.










































PART I — FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF INCOME
Three months ended
June 30		Six months ended
June 30
(In millions except for per share data)2024202320242023
Net sales$6,350 $5,866 $12,293 $11,349 
Cost of products sold3,940 3,747 7,665 7,346 
Selling and administrative expense1,021 986 2,046 1,890 
Research and development expense196 187 385 366 
Interest expense - net29 42 59 91 
Other expense (income) - net(32)7 (58)(4)
Income before income taxes1,195 898 2,195 1,660 
Income tax expense201 153 379 276 
Net income994 745 1,816 1,384 
Less net income for noncontrolling interests(1)(1)(2)(3)
Net income attributable to Eaton ordinary shareholders$993 $744 $1,814 $1,382 
Net income per share attributable to Eaton ordinary shareholders  
Diluted$2.48 $1.86 $4.52 $3.45 
Basic2.49 1.86 4.54 3.47 
Weighted-average number of ordinary shares outstanding  
Diluted401.0 400.7 401.5 400.6 
Basic399.2 398.9 399.6 398.7 
Cash dividends declared per ordinary share$0.94 $0.86 $1.88 $1.72 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended
June 30		Six months ended
June 30
(In millions)2024202320242023
Net income$994 $745 $1,816 $1,384 
Less net income for noncontrolling interests(1)(1)(2)(3)
Net income attributable to Eaton ordinary shareholders993 744 1,814 1,382 
Other comprehensive income (loss), net of tax
Currency translation and related hedging instruments(125)57 (178)176 
Pensions and other postretirement benefits13 (2)30 (5)
Cash flow hedges(10)(1)(14)14 
Other comprehensive income (loss) attributable to Eaton
   ordinary shareholders		(122)53 (162)185 
Total comprehensive income attributable to Eaton
  ordinary shareholders		$871 $797 $1,652 $1,567 
The accompanying notes are an integral part of these condensed consolidated financial statements.


3
EATON CORPORATION plc
CONSOLIDATED BALANCE SHEETS
(In millions)June 30, 2024December 31, 2023
Assets  
Current assets  
Cash$540 $488 
Short-term investments2,241 2,121 
Accounts receivable - net4,861 4,475 
Inventory3,963 3,739 
Prepaid expenses and other current assets1,046 851 
Total current assets12,652 11,675 
Property, plant and equipment
Land and buildings2,192 2,241 
Machinery and equipment6,660 6,497 
Gross property, plant and equipment8,852 8,738 
Accumulated depreciation(5,248)(5,208)
Net property, plant and equipment3,604 3,530 
Other noncurrent assets
Goodwill14,849 14,977 
Other intangible assets4,883 5,091 
Operating lease assets785 648 
Deferred income taxes499 458 
Other assets2,110 2,052 
Total assets$39,381 $38,432 
Liabilities and shareholders’ equity  
Current liabilities  
Short-term debt$4 $8 
Current portion of long-term debt1,278 1,017 
Accounts payable3,497 3,365 
Accrued compensation529 676 
Other current liabilities2,812 2,680 
Total current liabilities8,120 7,747 
Noncurrent liabilities  
Long-term debt8,555 8,244 
Pension liabilities709 768 
Other postretirement benefits liabilities175 180 
Operating lease liabilities656 533 
Deferred income taxes429 402 
Other noncurrent liabilities1,484 1,489 
Total noncurrent liabilities12,008 11,616 
Shareholders’ equity  
Ordinary shares (398.1 million outstanding in 2024 and 399.4 million in 2023)
4 4 
Capital in excess of par value12,662 12,634 
Retained earnings10,622 10,305 
Accumulated other comprehensive loss(4,069)(3,906)
Shares held in trust(1)(1)
Total Eaton shareholders’ equity19,219 19,036 
Noncontrolling interests35 33 
Total equity19,254 19,069 
Total liabilities and equity$39,381 $38,432 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4
EATON CORPORATION plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30
(In millions)20242023
Operating activities  
Net income$1,816 $1,384 
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization452 466 
Deferred income taxes9 (3)
Pension and other postretirement benefits expense11 9 
Contributions to pension plans(64)(51)
Contributions to other postretirement benefits plans(8)(10)
Changes in working capital(784)(622)
Other - net(11)12 
Net cash provided by operating activities1,421 1,185 
Investing activities  
Capital expenditures for property, plant and equipment(370)(286)
Proceeds from sales of property, plant and equipment77 — 
Cash paid for acquisition of a business, net of cash acquired(51)— 
Investments in associate companies(68)(68)
Return of investment from associate companies33 9 
Purchases of short-term investments - net(126)(719)
Proceeds from settlement of currency exchange contracts not designated as hedges - net1 42 
Other - net(7)(8)
Net cash used in investing activities(511)(1,030)
Financing activities  
Proceeds from borrowings1,084 818 
Payments on borrowings(399)(5)
Short-term debt, net(4)(225)
Cash dividends paid(756)(692)
Exercise of employee stock options46 46 
Repurchase of shares(738)— 
Employee taxes paid from shares withheld (63)(47)
Other - net(8)(7)
Net cash used in financing activities(839)(113)
Effect of currency on cash(20)16 
Total increase in cash52 59 
Cash at the beginning of the period488 294 
Cash at the end of the period$540 $353 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5
EATON CORPORATION plc
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Amounts are in millions unless indicated otherwise (per share data assume dilution). Columns and rows may not add and the sum of components may not equal total amounts reported due to rounding.

Note 1.    BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods.
This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2023 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.
Certain prior year amounts have been reclassified to conform to the current year presentation.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). This accounting standard requires additional segment disclosures on an annual and interim basis, including significant segment expenses that are regularly provided to the chief operating decision maker. The standard does not change how operating segments and reportable segments are determined. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The standard is required to be applied retrospectively to all periods presented in the consolidated financial statements. Eaton plans to adopt the standard for the year ended December 31, 2024. The Company is evaluating the impact of ASU 2023-07 and expects the standard will only impact its segment disclosures with no material impact to the consolidated financial statements.
In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). This accounting standard requires disaggregated income tax disclosures on an annual basis, including information on the Company’s effective income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. The Company is evaluating the impact of ASU 2023-09 and expects the standard will only impact its income taxes disclosures with no material impact to the consolidated financial statements.

Note 2.    ACQUISITIONS OF BUSINESSES
Acquisition of a 49% stake in Jiangsu Ryan Electrical Co. Ltd.
On April 23, 2023, Eaton acquired a 49 percent stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power distribution and sub-transmission transformers in China. Eaton accounts for this investment on the equity method of accounting and it is reported within the Electrical Global business segment.
Acquisition of Exertherm
On May 20, 2024, Eaton acquired Exertherm, a U.K.-based provider of thermal monitoring solutions for electrical equipment. Exertherm is reported within the Electrical Americas business segment.
Acquisition of a 49% stake in NordicEPOD AS
On May 31, 2024, Eaton acquired a 49 percent stake in NordicEPOD AS, which designs and assembles standardized power modules for data centers in the Nordic region. Eaton accounts for this investment on the equity method of accounting and it is reported within the Electrical Global business segment.
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Note 3.    REVENUE RECOGNITION
Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.
The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:
Three months ended
June 30		Six months ended
June 30
(In millions)2024202320242023
Electrical Americas
Products$745 $757 $1,478 $1,473 
Systems2,132 1,781 4,089 3,359 
Total$2,877 $2,538 $5,567 $4,832 
Electrical Global
Products$882 $889 $1,726 $1,772 
Systems724 680 1,380 1,297 
Total$1,606 $1,569 $3,105 $3,069 
Aerospace
Original Equipment Manufacturers$389 $324 $744 $638 
Aftermarket329 297 620 561 
Industrial and Other237 226 462 451 
Total$955 $848 $1,826 $1,650 
Vehicle
Commercial$454 $459 $889 $907 
Passenger and Light Duty269 292 558 583 
Total$723 $751 $1,447 $1,490 
eMobility$189 $161 $348 $308 
Total net sales$6,350 $5,866 $12,293 $11,349 
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivable from customers were $4,339 million and $3,966 million at June 30, 2024 and December 31, 2023, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were $332 million and $289 million at June 30, 2024 and December 31, 2023, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized and not yet billed from increased business activity in 2024.
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Changes in the deferred revenue liabilities are as follows:
(In millions)Deferred Revenue
Balance at January 1, 2024
$626 
Customer deposits and billings1,333 
Revenue recognized in the period(1,306)
Balance at June 30, 2024
$653 
(In millions)Deferred Revenue
Balance at January 1, 2023
$508 
Customer deposits and billings1,052 
Revenue recognized in the period(949)
Translation9 
Balance at June 30, 2023
$620 
Deferred revenue liabilities of $639 million and $610 million as of June 30, 2024 and December 31, 2023, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities.
A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at June 30, 2024 was approximately $15.2 billion. At June 30, 2024, approximately 72% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.

Note 4.    CREDIT LOSSES FOR RECEIVABLES
Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 days.
Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-off based on historic experience adjusted for market conditions. The Company's segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made.
Accounts receivable are net of an allowance for credit losses of $44 million and $38 million at June 30, 2024 and December 31, 2023, respectively. The change in the allowance for credit losses includes expense and net write-offs, none of which are significant.

Note 5.    INVENTORY
Inventory is carried at lower of cost or net realizable value. The components of inventory are as follows:
(In millions)June 30, 2024December 31, 2023
Raw materials$1,535 $1,515 
Work-in-process1,017 870 
Finished goods1,412 1,354 
Total inventory$3,963 $3,739 

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Note 6.    GOODWILL
Changes in the carrying amount of goodwill by segment are as follows:
(In millions)January 1, 2024AdditionsTranslationJune 30, 2024
Electrical Americas$7,415 $21 $(16)$7,420 
Electrical Global4,038 — (109)3,930 
Aerospace2,901 — (22)2,879 
Vehicle289 — (2)287 
eMobility334 — (1)334 
Total$14,977 $21 $(150)$14,849 
The 2024 additions to goodwill relate primarily to the anticipated synergies of acquiring Exertherm. The allocation of the Exertherm purchase price is preliminary and will be completed during the measurement period.

Note 7.    SUPPLY CHAIN FINANCE PROGRAM
The Company negotiates payment terms directly with its suppliers for the purchase of goods and services. In addition, a third-party financial institution offers a voluntary supply chain finance (SCF) program that enables certain of the Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institution on terms directly negotiated with the financial institution. If a supplier elects to participate in the SCF program, the supplier decides which invoices are sold to the financial institution and the Company has no economic interest in a supplier’s decision to sell an invoice. Payments by the Company to participating suppliers are paid to the financial institution on the invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. The amounts due to the financial institution for suppliers that participate in the SCF program are included in Accounts payable on the Consolidated Balance Sheets, and the associated payments are included in operating activities on the Condensed Consolidated Statements of Cash Flows.
The changes in SCF obligations are as follows:
(In millions)SCF Obligations
Balance at January 1, 2024
$369 
Invoices confirmed during the period695 
Invoices paid during the period(695)
Translation(1)
Balance at June 30, 2024
$367 
(In millions)SCF Obligations
Balance at January 1, 2023
$219 
Invoices confirmed during the period634 
Invoices paid during the period(519)
Translation2 
Balance at June 30, 2023
$336 

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Note 8.    DEBT
On May 21, 2024, a subsidiary of Eaton issued Euro denominated notes (2024 Euro Notes) with a face value of €1,000 million ($1,084 million), in accordance with Regulation S promulgated under the Securities Act of 1933, as amended. The 2024 Euro Notes are comprised of two tranches of €500 million each, which mature in 2031 and 2036, with interest payable annually at a respective rate of 3.601% and 3.802%. The issuer received proceeds totaling €995 million ($1,079 million) from the issuance, net of financing costs. The 2024 Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2024 Euro Notes contain customary optional redemption and par call provisions. The 2024 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 2024 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 2024 Euro Notes. The 2024 Euro Notes are subject to customary non-financial covenants.

Note 9.    RETIREMENT BENEFITS PLANS
The components of retirement benefits expense are as follows:
United States
pension benefit expense		Non-United States
pension benefit expense
Three months ended June 30
(In millions)2024202320242023
Service cost$5 $5 $11 $10 
Interest cost34 35 22 21 
Expected return on plan assets(48)(49)(33)(30)
Amortization3 1 2 3 
(6)(8)2 4 
Settlements10 10 2 — 
Total expense$4 $2 $4 $4 
United States
pension benefit expense		Non-United States pension benefit expense
Six months ended June 30
(In millions)2024202320242023
Service cost$9 $10 $23 $21 
Interest cost67 71 43 42 
Expected return on plan assets(95)(98)(66)(60)
Amortization5 2 5 4 
(14)(15)5 7 
Settlements19 19 3 1 
Total expense$5 $4 $8 $8 
The components of retirement benefits expense other than service costs are included in Other expense (income) - net.
During 2020, the Company announced it was freezing its United States pension plans for its non-union employees. The freeze was effective January 1, 2021 for non-union U.S. employees whose retirement benefit was determined under a cash balance formula and is effective January 1, 2026 for non-union U.S. employees whose retirement benefit is determined under a final average pay formula.
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Note 10.    LEGAL CONTINGENCIES
Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations and indemnity claims, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to legal claims from historic products which may have contained asbestos. Insurance may cover some of the costs associated with these claims and proceedings. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes they will not have a material adverse effect on the condensed consolidated financial statements.

Note 11.    INCOME TAXES
The effective income tax rate for the second quarter of 2024 was expense of 16.8% compared to expense of 17.0% for the second quarter of 2023. The decrease in the effective tax rate in the second quarter of 2024 was due to the reduction of valuation allowances on foreign tax attributes, partially offset by greater levels of income in higher tax jurisdictions. The effective income tax rate for the first six months of 2024 was expense of 17.3% compared to expense of 16.6% for the first six months of 2023. The increase in the effective tax rate in the first six months of 2024 was due to greater levels of income in higher tax jurisdictions, partially offset by a larger impact from the excess tax benefits recognized for employee share-based payments and the reduction of valuation allowances on foreign tax attributes.
Brazil Tax Years 2005-2012
The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $24 million plus $108 million of interest and penalties (translated at the June 30, 2024 exchange rate). The Company is challenging this assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 27, 2022, the Company filed a motion for clarification relating to that decision. On May 20, 2022, the court largely upheld its prior decision without further clarification. On June 9, 2022, the Company filed its notice of appeal to the second level court. The Company intends to continue its challenge of this assessment in the judicial system.
As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $30 million plus $109 million of interest and penalties (translated at the June 30, 2024 exchange rate), which the Company is challenging in the judicial system. On April 4, 2024, the court published a favorable decision resulting in a reduction to the Case 1 assessment for the goodwill generated from the acquisition of a third-party business. In the same decision, the court confirmed the cancellation of an additional 75% penalty imposed by the tax authorities. As a result of the favorable decision, the alleged tax deficiency was reduced to $29 million plus $89 million of interest and penalties (translated at the June 30, 2024 exchange rate). The remainder of Case 1 is still pending resolution at the first judicial level.
Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of certain assets as security for the alleged deficiencies. As of June 30, 2024, the Company pledged Brazilian real estate assets with net book value of $18 million and provided additional security in the form of bank secured bonds and insurance bonds totaling $122 million and a cash deposit of $24 million (translated at the June 30, 2024 exchange rate).
The Company believes that the final resolution of both of the assessments will not have a material impact on its condensed consolidated financial statements. The ultimate outcome of these matters cannot be predicted with certainty given the complex nature of tax controversies. Should the ultimate outcome of these matters deviate from our reasonable expectations, they may have a material adverse impact on the Company’s condensed consolidated financial statements. However, Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct.

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Note 12.    EATON SHAREHOLDERS' EQUITY
The changes in Shareholders’ equity are as follows:
Ordinary sharesCapital in excess of par valueRetained earningsAccumulated other comprehensive lossShares held in trustTotal Eaton shareholders' equityNoncontrolling interestsTotal equity
(In millions)SharesDollars
Balance at January 1, 2024
399.4 $4 $12,634 $10,305 $(3,906)$(1)$19,036 $33 $19,069 
Net income— — — 821 — — 821 1 822 
Other comprehensive loss, net of tax   (40) (40) (40)
Cash dividends paid and accrued— — — (381)— — (381)— (381)
Issuance of shares under equity-based
   compensation plans		0.9 — (4)(1)— — (5)— (5)
Repurchase of shares(0.5)— — (138)— — (138)— (138)
Balance at March 31, 2024
399.8 $4 $12,630 $10,605 $(3,946)$(1)$19,292 $34 $19,326 
Net income— — — 993 — — 993 1 994 
Other comprehensive loss, net of tax    (122) (122) (122)
Cash dividends paid— — — (375)— — (375)— (375)
Issuance of shares under equity-based
   compensation plans		0.1 — 31 — — — 31 — 31 
Repurchase of shares(1.9)— — (600)— — (600)— (600)
Balance at June 30, 2024
398.1 $4 $12,662 $10,622 $(4,069)$(1)$19,219 $35 $19,254 
Ordinary sharesCapital in excess of par valueRetained earningsAccumulated other comprehensive lossShares held in trustTotal Eaton shareholders' equityNoncontrolling interestsTotal equity
(In millions)SharesDollars
Balance at January 1, 2023
397.8 $4 $12,512 $8,468 $(3,946)$(1)$17,038 $38 $17,075 
Net income— — — 638 — — 638 1 639 
Other comprehensive income, net of tax   132  132 — 132 
Cash dividends paid and accrued— — — (348)— — (348)(4)(352)
Issuance of shares under equity-based
   compensation plans		0.7 — (11)(1)— 1 (11)— (11)
Changes in noncontrolling interest of
   consolidated subsidiaries - net		— — — — — — — 1 1 
Balance at March 31, 2023
398.6 $4 $12,502 $8,757 $(3,814)$— $17,449 $36 $17,485 
Net income— — — 744 — — 744 1 745 
Other comprehensive income, net of tax    53  53  53 
Cash dividends paid— — — (344)— — (344)— (344)
Issuance of shares under equity-based
   compensation plans		0.4 — 52 (1)— (1)51 — 51 
Changes in noncontrolling interest of
   consolidated subsidiaries - net		— — — — — — — (1)(1)
Balance at June 30, 2023
399.0 $4 $12,554 $9,156 $(3,760)$(1)$17,953 $36 $17,988 
On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three and six months ended June 30, 2024, 1.9 million and 2.3 million ordinary shares, respectively, were repurchased under the 2022 program in the open market at a total cost of $600 million and $738 million, respectively. During the three and six months ended June 30, 2023, no ordinary shares were repurchased.
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The changes in Accumulated other comprehensive loss are as follows:
(In millions)Currency translation and related hedging instrumentsPensions and other postretirement benefitsCash flow
hedges		Total
Balance at January 1, 2024
$(3,029)$(995)$118 $(3,906)
Other comprehensive income (loss) before
    reclassifications		(171)7 — (164)
Amounts reclassified from Accumulated other
   comprehensive loss (income)		(7)23 (14)2 
Net current-period Other comprehensive
   income (loss)		(178)30 (14)(162)
Balance at June 30, 2024
$(3,207)$(965)$104 $(4,069)
The reclassifications out of Accumulated other comprehensive loss are as follows:
(In millions)Six months ended
June 30, 2024		Consolidated Statements
of Income classification
Gains and (losses) on net investment hedges (amount excluded
  from effectiveness testing)
Currency exchange contracts$7 Interest expense - net
Tax expense— 
Total, net of tax7 
Amortization of defined benefits pensions and other
   postretirement benefits items
Actuarial loss and prior service cost(26)1
Tax benefit3 
Total, net of tax(23)
Gains and (losses) on cash flow hedges
Floating-to-fixed interest rate swaps6 Interest expense - net
Currency exchange contracts11 Net sales and Cost of products sold
Commodity contracts— Cost of products sold
Tax expense(4)
Total, net of tax14 
Total reclassifications for the period$(2)
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 9 for additional information about pension and other postretirement benefits items.
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Net Income Per Share Attributable to Eaton Ordinary Shareholders
A summary of the calculation of net income per share attributable to Eaton ordinary shareholders is as follows:
Three months ended
June 30		Six months ended
June 30
(In millions except for per share data)2024202320242023
Net income attributable to Eaton ordinary shareholders$993 $744 $1,814 $1,382 
Weighted-average number of ordinary shares outstanding - diluted401.0 400.7 401.5 400.6 
Less dilutive effect of equity-based compensation1.8 1.8 1.9 1.9 
Weighted-average number of ordinary shares outstanding - basic399.2 398.9 399.6 398.7 
Net income per share attributable to Eaton ordinary shareholders  
Diluted$2.48 $1.86 $4.52 $3.45 
Basic2.49 1.86 4.54 3.47 
For the second quarter and first six months of 2024, all stock options were included in the calculation of diluted net income per share attributable to Eaton ordinary shareholders because they were all dilutive. For the second quarter and first six months of 2023, 0.1 million stock options were excluded from the calculation of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive.

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Note 13.     FAIR VALUE MEASUREMENTS
Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:
(In millions)TotalQuoted prices in active markets for identical assets
(Level 1)		Other observable inputs
(Level 2)		Unobservable inputs
(Level 3)
June 30, 2024    
Cash$540 $540 $— $— 
Short-term investments2,241 2,241 — — 
Net derivative contracts(16)— (16)— 
Contingent future payments from acquisition of Green Motion(17)— — (17)
December 31, 2023    
Cash$488 $488 $— $— 
Short-term investments2,121 2,121 — — 
Net derivative contracts11 — 11 — 
Contingent future payments from acquisition of Green Motion(18)— — (18)
Eaton values its financial instruments using an industry standard market approach, in which prices and other relevant information is generated by market transactions involving identical or comparable assets or liabilities.
On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of cash paid at closing and an initial estimate of $57 million for the fair value of contingent future consideration based on 2023 and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a maximum possible undiscounted value of $114 million. As of June 30, 2024, the fair value of the contingent future payments has been reduced to $17 million based primarily on lower revenue in 2023 and anticipated reductions in projected 2024 revenue compared to the initial estimates at closing.
Other Fair Value Measurements
Long-term debt and the current portion of long-term debt had a carrying value of $9,833 million and fair value of $9,246 million at June 30, 2024 compared to $9,261 million and $8,924 million, respectively, at December 31, 2023. The fair value of Eaton's debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement.

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Note 14.    DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and commodity contracts to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes.
Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated as part of a hedging relationship, is effective and the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as:
•Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in income during the period of change in fair value.
•Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such an asset or liability (a cash flow hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss on the hedged item is included in income.
•Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss related to the net investment in the foreign operation is included in income.
The gain or loss from a derivative financial instrument designated as a hedge is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these financial instruments are classified in operating activities on the Condensed Consolidated Statements of Cash Flows.
For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain commodity contracts that arise in the normal course of business.
Eaton uses currency exchange contracts and certain of its debt denominated in foreign currency to hedge portions of its net investments in foreign operations against foreign currency exposure (net investment hedges). The Company uses the spot rate method to assess hedge effectiveness when currency exchange contracts are used in net investment hedges. Under this method, changes in the spot exchange rate are recognized in Accumulated other comprehensive loss. Changes related to the forward rate are excluded from the hedging relationship and the forward points are amortized to Interest expense - net on a straight-line basis over the term of the contract. The cash flows resulting from these currency exchange contracts are classified in investing activities on the Condensed Consolidated Statements of Cash Flows.
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Derivative Financial Statement Impacts
The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
(In millions)Notional
amount		Other
 current
assets		Other
noncurrent
assets		Other
current
liabilities		Other
noncurrent
liabilities		Type of
hedge		Term
June 30, 2024      
Derivatives designated as hedges      
Currency exchange contracts$561 $3 $2 $15 $— Cash flow
1 to 19 months
Commodity contracts23 3 — — — Cash flow
1 to 11 months
Currency exchange contracts548 — — — — Net investment
3 months
Total $6 $2 $15 $—  
Derivatives not designated as hedges     
Currency exchange contracts$4,441 $6  $15  
1 to 9 months
December 31, 2023      
Derivatives designated as hedges      
Forward starting floating-to-fixed interest rate swaps
$165 $— $— $— $3 Cash flow8 years
Currency exchange contracts505 17 3 7 1 Cash flow
1 to 25 months
Commodity contracts54 1 — 1 — Cash flow
1 to 12 months
Currency exchange contracts564 — — 1 — Net investment
3 months
Total $17 $3 $9 $4   
Derivatives not designated as hedges      
Currency exchange contracts$4,797 $12