AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 19/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Intellectual property and engineering capabilities exist, but their ability to prevent substitution or competitive entry is unestablished. Strong demand and profitability alone do not establish a structural barrier.
durability · — · No demonstrated duration of competitive protection is supplied. Patent expiration and ongoing innovation requirements matter, while acquisition valuation assumptions cannot establish economic durability.
customer dependency · — · Firm backlog and aftermarket demand support continuing customer use, but do not establish dependence on Eaton rather than available substitutes.
erosion resilience · — · Segment results demonstrate uneven operating resilience, but the underlying barrier has not been established, preventing an assessment of its resistance to erosion.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Actual pricing actions contributed to 2022 organic growth, and positive net price realization supported 2023 gross margin. This demonstrates historical pricing execution, but current pricing contribution and full inflation recovery are not isolated.
retention · 2/4 · Assessed indirectly from continued commercial and military aftermarket demand, firm backlog and Electrical Americas organic growth. These support repeat demand and commitments, but provide no customer-level retention record or evidence that demand persisted specifically after repricing.
margin resilience · 2/4 · First-half 2026 Electrical Americas margin fell to 26.6% from 29.7% despite 16% organic growth. Electrical Global offset substantial inflation through sales, mix and efficiency; aerospace improved with help from mix and a facility sale. Resilience is mixed and cannot be attributed solely to pricing.
contractual freedom · 2/4 · Contracts permit modifications involving sale price, and volume rebates show differentiated commercial terms. This supports some negotiated flexibility, but unilateral repricing rights and automatic cost pass-through are undisclosed. Customer concentration and explicit price competition constrain the assessment.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.40
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.28
Financial strength71
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 74.50
- netDebtEbitGrade
- 64.15
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 45.49
- Debt / FCF (x)
- 2.78
- Net debt / operating income (x)
- 1.79
- Current ratio (x)
- 1.32
Capital allocation—
Missing required inputs: sbcRevenue. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 16.84
- 3-year average dilution (%)
- -0.74
- cashConversionGrade
- 89.55
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 operating cash flow of $1.634 billion covered $446 million of capital expenditure and $858 million of dividends, and repurchases stopped following Boyd Thermal's acquisition. However, $11.079 billion of acquisition spending required substantial borrowing, with returns on that deployment still unproven.
incentive alignment · 3/4 · Actual 2025 grants split long-term incentives between performance units and time-based equity; the proxy documents a performance award vested in February 2026, ownership requirements and a recovery policy. These are established arrangements rather than proposals. Individual ownership compliance is not separately proven, and continued vesting plus discretionary retirement vesting after a departure temper the assessment.
execution · 2/4 · Realized restructuring benefits of approximately $265 million in 2024 and a positive first-half 2026 operational contribution to the earnings bridge demonstrate execution. The overall result is mixed: net income fell, Electrical Americas margins compressed, and acquisition-related interest, amortization and charges increased. Execution is assessed from operating outcomes, without attributing all results to management.
governance · 3/4 · Existing annual elections, majority voting, an independent chairman, shareholder access rights and 98.8% meeting attendance support strong governance practices. The auditor found effective year-end 2025 financial reporting controls. Disclosed late insider filings temper the result; proposed 2026 resolutions are not treated as approved.
Evidence
Eaton considers its intellectual property, including without limitation patents, trade names, domain names, trademarks, confidential information, and trade secrets to be of significant value to its business as a whole.
Business / Intellectual Property · Filed 26/02/2026
Principal methods of competition in this segment are total cost of ownership, product and system performance, quality, design engineering capabilities, and timely delivery.
Business / Aerospace competition · Filed 26/02/2026
Eaton has a strong competitive position in this segment and, with respect to many products and platforms, is considered among the market leaders.
Business / Aerospace market-position assertion · Filed 26/02/2026
The increase in organic sales in the first six months of 2026 was due to strength in commercial OEM, commercial aftermarket, and military aftermarket.
MD&A / Aerospace first-half 2026 organic sales · Filed 31/07/2026
The estimated fair value of the customer relationships, technology, trademarks and backlog intangible assets of $410 million, $171 million, $74 million and $60 million, respectively were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates.
Acquisition accounting / Fibrebond intangible valuation estimates · Filed 31/07/2026
The Company's products may be manufactured, marketed and sold using a portfolio of patents, trademarks, licenses, and other forms of intellectual property, some of which expire in the future.
Business / Intellectual property expiration · Filed 26/02/2026
Our operating results depend in part on continued successful research, development, and marketing of new and/or improved products and services, and there can be no assurance that we will continue to successfully introduce new products and services or maintain present market positions.
Risk Factors / Continued product development and market position · Filed 26/02/2026
Principal methods of competition in these segments are performance of products and systems, technology, customer service and support, and price.
Business / Electrical competition · Filed 26/02/2026
•Backlog: Includes orders to which customers are firmly committed •Organic change in backlog: Percentage change in backlog, excluding (1) the impact of foreign currency, (2) divestitures, and (3) firm orders in place prior to closing of business acquisitions •Organic change in customer orders: Percentage change in firm customer orders on a trailing twelve month basis, excluding (1) the impact of foreign currency, (2) divestitures, and (3) firm orders in place prior to closing of business acquisitions •Book-to-bill: Average of the ratio of firm customer orders to Net sales for the last four quarters Electrical Americas Three months ended June 30 Increase (decrease) Six months ended June 30 Increase (decrease) ($ in millions) 2026 2025 2026 2025 Net sales $ 3,951 $ 3,350 18 % $ 7,551 $ 6,360 19 % Operating profit $ 1,088 $ 987 10 % $ 2,010 $ 1,891 6 % Operating margin 27.5 % 29.5 % 26.6 % 29.7 % Changes in Net sales: Organic growth 18 % 16 % Acquisitions of businesses — % 2 % Foreign currency — % 1 % Total increase in Net sales 18 % 19 % Change from June 30 Performance metrics: June 30, 2026 June 30, 2025 2026 vs.
MD&A / Electrical Americas first-half 2026 results and demand definitions · Filed 31/07/2026
In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included.
Revenue Recognition / Firm backlog definition · Filed 31/07/2026
Using this criterion, total backlog at June 30, 2026 was approximately $24.1 billion.
Revenue Recognition / June 30, 2026 backlog · Filed 31/07/2026
At June 30, 2026, approximately 71% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.
Revenue Recognition / Backlog delivery timing · Filed 31/07/2026
These open orders are not considered firm as they have been historically subject to releases by customers.
Revenue Recognition / Nonfirm open orders · Filed 31/07/2026
In 2025, 22% of these segments' sales were made to six large customers of electrical products and electrical systems and services.
Business / Electrical customer concentration · Filed 26/02/2026
In 2025, 20% of this segment's sales were made to three large original equipment manufacturers of aircraft.
Business / Aerospace customer concentration · Filed 26/02/2026
2022: Organic sales increased 13% in 2022 due to broad-based strength in end-markets and pricing actions in response to inflationary pressures.
MD&A / 2022 organic growth and realized pricing actions · Filed 29/02/2024
2023: Gross profit margin increased from 33.2% in 2022 to 36.4% in 2023 primarily due to higher sales volumes and net price realization, partially offset by higher costs to support growth initiatives in the Electrical Americas and Aerospace business segments, unfavorable product mix in the Electrical Global, Aerospace, and eMobility business segments, and operating inefficiencies in the Electrical Global and Vehicle business segments.
MD&A / 2023 gross margin and net price realization · Filed 27/02/2025
While we strive to recoup these increased costs through our pricing, product modifications or other mediating responses, if we are unable to do so without compromising the competitive position of our products and services, our results could continue to be impacted by this trend.
Risk Factors / Limits to inflation recovery through pricing · Filed 26/02/2026
Material factors affecting this increase were a 210 basis point increase from higher sales, a 130 basis point increase from favorable mix, and a 120 basis point increase from operating efficiencies, partially offset by a 460 basis point decline from higher commodity and wage inflation.
MD&A / Electrical Global first-half 2026 margin drivers · Filed 31/07/2026
Material factors affecting this increase were a 170 basis point increase from higher sales, a 130 basis point increase from the sale of a facility in the first quarter of 2026, a 130 basis point increase from favorable mix, and a 30 basis point increase from the acquisition of Ultra PCS, partially offset by a 310 basis point decline from higher commodity and wage inflation.
MD&A / Aerospace first-half 2026 margin drivers · Filed 31/07/2026
Additionally, contracts can be modified to account for changes in contract specifications, requirements or sale price.
Revenue Recognition / Contract modifications and sale price · Filed 26/02/2026
The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels.
Revenue Recognition / Customer volume rebates · Filed 26/02/2026
4 Table of Contents EATON CORPORATION plc CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30 (In millions) 2026 2025 Operating activities Net income $ 1,690 $ 1,947 Adjustments to reconcile to net cash provided by operating activities Depreciation and amortization 671 493 Deferred income taxes 135 123 Pension and other postretirement benefits expense 23 20 Contributions to pension plans (48) (58) Contributions to other postretirement benefits plans (6) (9) Changes in working capital (833) (1,397) Other - net 2 37 Net cash provided by operating activities 1,634 1,156 Investing activities Capital expenditures for property, plant and equipment (446) (349) Cash paid for acquisition of businesses, net of cash acquired (11,079) (1,450) Proceeds from sales of property, plant and equipment 39 53 Investments in nonmarketable securities (85) — Sales (purchases) of short-term investments - net (43) 1,343 Proceeds from (payments for) settlement of currency exchange contracts not designated as hedges - net 1 (21) Other - net (48) (65) Net cash used in investing activities (11,661) (490) Financing activities Proceeds from borrowings 9,871 1,058 Payments on borrowings (1,143) (713) Short-term debt - net 2,088 1,111 Debt issuance costs (64) (8) Cash dividends paid (858) (818) Exercise of employee stock options 35 29 Repurchase of shares — (1,307) Employee taxes paid from shares withheld (53) (46) Other - net (2) (3) Net cash provided by (used in) financing activities 9,874 (697) Effect of currency on cash 13 (126) Total decrease in cash (139) (157) Cash at the beginning of the period 622 555 Cash at the end of the period $ 483 $ 398 The accompanying notes are an integral part of these condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows / First half 2026 · Filed 31/07/2026
3 Table of Contents EATON CORPORATION plc CONSOLIDATED BALANCE SHEETS (In millions) June 30, 2026 December 31, 2025 Assets Current assets Cash $ 483 $ 622 Short-term investments 212 181 Accounts receivable - net 6,673 5,387 Inventory 5,417 4,721 Prepaid expenses and other current assets 1,987 1,444 Total current assets 14,772 12,355 Property, plant and equipment Land and buildings 2,526 2,361 Machinery and equipment 8,011 7,667 Gross property, plant and equipment 10,537 10,028 Accumulated depreciation (5,834) (5,712) Net property, plant and equipment 4,702 4,316 Other noncurrent assets Goodwill 20,229 15,769 Other intangible assets 12,611 5,054 Operating lease assets 855 768 Deferred income taxes 592 707 Other assets 2,419 2,281 Total assets $ 56,181 $ 41,251 Liabilities and shareholders’ equity Current liabilities Short-term debt $ 2,091 $ 1 Current portion of long-term debt 11 1,136 Accounts payable 5,421 4,168 Accrued compensation 630 644 Other current liabilities 3,755 3,421 Total current liabilities 11,909 9,370 Noncurrent liabilities Long-term debt 18,509 8,758 Pension liabilities 601 702 Other postretirement benefits liabilities 158 161 Operating lease liabilities 715 637 Deferred income taxes 2,139 265 Other noncurrent liabilities 1,850 1,889 Total noncurrent liabilities 23,972 12,412 Shareholders’ equity Ordinary shares (388.4 million outstanding in 2026 and 387.9 million in 2025) 4 4 Capital in excess of par value 12,867 12,837 Retained earnings 11,530 10,702 Accumulated other comprehensive loss (4,146) (4,118) Shares held in trust — — Total Eaton shareholders’ equity 20,254 19,425 Noncontrolling interests 45 44 Total equity 20,299 19,469 Total liabilities and equity $ 56,181 $ 41,251 The accompanying notes are an integral part of these condensed consolidated financial statements.
Consolidated Balance Sheets / June 30, 2026 and December 31, 2025 · Filed 31/07/2026
The Company does not intend to pursue share repurchases in 2026 due to the acquisition of Boyd Thermal on March 12, 2026.
MD&A / Repurchase suspension following completed Boyd Thermal acquisition · Filed 31/07/2026
This restructuring program was substantially complete at the end of 2023 and mature year benefits from the program of approximately $265 million were realized in 2024.
MD&A / Realized 2024 restructuring benefits · Filed 26/02/2026
30 Table of Contents Net Income Changes in Net income attributable to Eaton ordinary shareholders and Net income per share attributable to Eaton ordinary shareholders - diluted are summarized as follows: Three months ended Six months ended (In millions except for per share data) Dollars Per share Dollars Per share June 30, 2025 $ 982 $ 2.51 $ 1,945 $ 4.96 Business segment results of operations Operational performance 244 0.62 373 0.96 Foreign currency (5) (0.01) 3 0.01 Corporate Interest expense - net (107) (0.27) (167) (0.42) Intangible asset amortization expense (97) (0.25) (123) (0.33) Restructuring program charges — — (16) (0.05) Acquisition and divestiture charges (137) (0.35) (216) (0.55) Other corporate items 5 0.01 (5) (0.01) Tax rate impact (64) (0.16) (107) (0.27) Impact of shares — 0.01 — 0.03 June 30, 2026 $ 821 $ 2.11 $ 1,687 $ 4.33 31 Table of Contents Business Segment Results of Operations The following is a discussion of Net sales, operating profit and operating margin by business segment.
MD&A / First-half 2026 net income bridge · Filed 31/07/2026
Long-term incentive grants were comprised of PSUs (50%) and time-based equity awards (50%).
Compensation Discussion and Analysis / Actual 2025 long-term grant mix · Filed 13/03/2026
Ruiz $850,000 5,235 7,225 $2,694,636 $82,068 $2,776,704 H.
Compensation Discussion and Analysis / CEO performance award vested February 25, 2026 · Filed 13/03/2026
Share ownership requirements for executives (6x base salary for the Chief Executive Officer and 3-4x base salary for other named executive officers)
Executive Compensation Practices / Share ownership requirements · Filed 13/03/2026
As of the date of this Proxy Statement, each of the NEOs has exceeded his or her ownership and holding requirements or is making adequate progress to meet the requirements within the five-year time frame.
Executive Compensation Policies / Ownership compliance or progress as of proxy date · Filed 13/03/2026
Compensation recovery policy (clawback for financial restatements due to material noncompliance with financial reporting requirements and forfeiture for misconduct)
Executive Compensation Practices / Compensation recovery policy · Filed 13/03/2026
Proposals Board Voting Recommendations Page Proposal 1 Electing the 11 director nominees FOR each nominee 6 Proposal 2 Approving the appointment of independent auditor for 2026 and authorizing the Audit Committee of the Board of Directors to set auditor remuneration FOR 24 Proposal 3 Approving, on an advisory basis, the Company's executive compensation FOR 26 Proposal 4 Approving the Board of Directors' authority to issue shares under Irish law FOR 72 Proposal 5 Approving the Board of Directors' authority to opt-out of pre-emption rights under Irish law FOR 73 Proposal 6 Authorizing the Company and any subsidiary of the Company to make overseas market purchases of Company shares FOR 75 EATON 2026 Proxy Statement Table of Contents Proxy Summary 2 EATON 2026 Proxy Statement BOARD AND GOVERNANCE HIGHLIGHTS Current Board Mix: Board and Governance Information Board and Governance Information Number of new directors added in the last two years 4 Mandatory retirement age Yes Average director attendance at the Board and Committee meetings 98.8% Proxy access rights for shareholders Yes Overboarding policy Yes Holders of 10% of the outstanding stock may call a special meeting of shareholders Yes Annual election of all directors Yes Board orientation and continuing education program Yes Majority voting for directors Yes Board oversight of sustainability matters Yes Independent Chairman of the Board Yes Code of Ethics for directors, officers and employees Yes Independent directors meet without management present Yes Succession planning Yes Director stock ownership guidelines Yes Sustainability reporting: SASB, TCFD and GRI Yes Table of Contents Proxy Summary EATON 2026 Proxy Statement 3 DIRECTOR NOMINEES Each director nominee is elected annually by a majority of votes cast.
Proxy Summary / Existing governance practices and meeting attendance · Filed 13/03/2026
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
Independent auditor report / Effective internal control at December 31, 2025 · Filed 26/02/2026
Based solely on our review of Section 16 reports filed electronically with the SEC and written representations from certain reporting persons, we believe that all Section 16(a) filing requirements applicable to those officers, directors, and 10% shareholders were satisfied, except that due to administrative oversight: one Form 4 report for Paulo Ruiz, reporting transactions relating to acquisition of phantom units under the deferred compensation plan and exercise of stock options, was filed late on May 28, 2025; and one Form 3/A, reporting a transaction relating to a grant of RSUs, and one Form 4, reporting transactions relating to vesting and tax withholding of RSUs, for Lucy Clark Dougherty were filed late on February 20, 2026.
Other Information / Late Section 16 filings · Filed 13/03/2026
Marshall's outstanding unvested RSUs and stock options will continue to vest and all stock options will remain exercisable for the remaining term.
Compensation Tables / Continued vesting after executive departure · Filed 13/03/2026
The Committee also determined it was appropriate to vest a special one-time contribution to the Eaton Supplemental Retirement Plan that was provided at the time of hire.
Compensation Tables / Discretionary vesting of supplemental retirement contribution · Filed 13/03/2026
