Eaton(ETN) - 2024 Q4 - Annual Report

Revenue and Sales Performance - Eaton Corporation's revenue for 2024 is projected to be nearly $25 billion, serving customers in over 160 countries[13]. - In 2024, 26% of sales in the Electrical Americas and Electrical Global segments were made to eight large customers[17]. - The Aerospace segment saw 23% of its sales coming from four large original equipment manufacturers of aircraft in 2024[18]. - In the Vehicle segment, 28% of sales were attributed to two large original equipment manufacturers in 2024[19]. - The eMobility segment reported that 27% of its sales were made to three large original equipment manufacturers in 2024[20]. - Eaton Corporation reported net sales of$ 24,878 million for the year ended December 31, 2024, an increase of 7.3% from $23,196 million in 2023[132]. - The company recognized sales of$ 11,436 million in the Electrical Americas segment for 2024, up from $10,098 million in 2023[190]. - Total net sales for 2024 reached$ 24,878 million, an increase of 7.3% from $23,196 million in 2023[190]. Financial Performance - The company's net income attributable to Eaton ordinary shareholders was$ 3,794 million in 2024, up 17.9% from $3,218 million in 2023[132]. - Diluted net income per share increased to$ 9.50 in 2024, compared to $8.02 in 2023, reflecting a growth of 18.4%[132]. - Eaton's income before income taxes for 2024 was$ 4,566 million, a 19.3% increase from $3,827 million in 2023[132]. - The total comprehensive income attributable to Eaton ordinary shareholders was$ 3,358 million in 2024, compared to $3,257 million in 2023, reflecting a growth of 3.1%[134]. - The company declared cash dividends of$ 3.76 per ordinary share in 2024, up from $3.44 in 2023, representing an increase of 9.3%[132]. - The company paid cash dividends of$ 1,500 million in 2024, compared to $1,379 million in 2023, representing an increase of 8.8%[138]. Employee and Workforce - Eaton's total employee costs for 2024 amounted to$ 6.5 billion, including salaries, wages, and benefits[28]. - Eaton's workforce consists of approximately 94,000 employees globally, with a diverse representation across various levels[24]. - Eaton's commitment to inclusion and diversity is reflected in a global employee female representation of 33.8%[26]. Operational Challenges - Eaton has faced significant shortages of raw materials, energy, components, and labor, which could adversely impact future operating results[41]. - The company has experienced supply chain disruptions, leading to increased costs from suppliers, which may affect profitability if not recouped through pricing adjustments[41]. - Eaton's segment revenues and profitability have historically varied due to macroeconomic conditions and market volatility, necessitating diversification and geographic expansion to mitigate risks[42]. - The introduction of disruptive technologies in key markets, such as data centers, may negatively impact Eaton's end markets and stock price[43]. Research and Development - Successful research, development, and marketing of new products are critical for Eaton's operating results, with potential challenges in customer acceptance and product life cycles[44]. - Research and development expenses rose to $794 million in 2024, a 5.3% increase from$ 754 million in 2023, indicating a continued investment in innovation[132]. Tax and Compliance - Eaton is subject to income tax liabilities across various jurisdictions, with potential material impacts from changes in tax rates and ongoing audits[47]. - Unrecognized income tax benefits amounted to $1,361 million as of December 31, 2024, related to uncertain tax positions[114]. - The company recognized interest and penalties related to unrecognized income tax benefits in the provision for income tax expense, reflecting ongoing evaluations of tax positions[161]. Governance and Internal Controls - The company has established internal control over financial reporting, which was also audited and found to be effective[109]. - The Audit Committee of the Board of Directors ensures the quality of Eaton's financial reporting through regular meetings with management and auditors[118]. - The company has a robust governance structure, as evidenced by the various agreements and policies referenced in the filings[100]. Financial Position and Assets - The company reported its consolidated balance sheets as of December 31, 2024, and 2023, indicating a stable financial position[108]. - Total assets decreased slightly to$ 38,381 million in 2024 from $38,432 million in 2023, with current assets totaling$ 11,801 million[136]. - The company’s total liabilities increased to $19,850 million in 2024 from$ 19,363 million in 2023, primarily due to an increase in long-term debt[136]. - Eaton's shareholders' equity decreased to $18,531 million in 2024 from$ 19,069 million in 2023, with retained earnings at $10,096 million[138]. Acquisitions and Investments - Eaton acquired Royal Power Solutions for$ 610 million, with total identifiable net assets valued at $355 million and goodwill of$ 255 million recognized[167][168]. - The Company completed the sale of its Hydraulics business for $3.1 billion, recognizing a pre-tax gain of$ 617 million in 2021[166]. - The Company adopted Accounting Standards Update 2023-07 for segment reporting, which requires additional disclosures but did not materially impact the consolidated financial statements[147]. Shareholder Information - As of December 31, 2024, Eaton had 9,117 holders of record for its ordinary shares, with additional participation from 13,949 current and former employees in various savings plans[65]. - In Q4 2024, the company repurchased 2.5 million ordinary shares at a total cost of $870 million, averaging$ 347.44 per share[69]. - The total approximate dollar value of shares that may yet be purchased under the plans or programs is $2.77 billion[69].