Investor Presentaiton
Legal and Regulatory Risks
Eaton's global operations subject it to economic risk as Eaton's results of operations may be adversely affected by changes
in government legislation, regulations and policies, or currency fluctuations.
Operating globally subjects Eaton to changes in government regulations and policies in a large number of jurisdictions
around the world, including those related to tariffs and trade barriers, investments, property ownership rights, taxation, data
privacy, and exchange controls. Changes in the relative values of currencies occur from time to time and could affect Eaton's
operating results. While the Company monitors exchange rate exposures and attempts to reduce these exposures through
hedging activities, these risks could adversely affect operating results.
Further, existing free trade laws and regulations provide certain beneficial duties and tariffs for qualifying imports and
exports, subject to compliance with applicable classification and other requirements. Changes in laws or policies governing the
terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we
manufacture products, could have an impact on our business and financial results.
Eaton may be subject to risks relating to changes in its tax rates, changes in global tax laws and regulations, or exposure to
additional income tax liabilities.
Eaton is subject to income taxes in many jurisdictions around the world. Income tax liabilities are subject to the allocation of
income among various tax jurisdictions. The Company's effective tax rate could be affected materially by changes in the mix
among earnings in countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, or
changes in tax legislation, regulations, and policies. The amount of income taxes paid is subject to ongoing audits by tax
authorities in the countries in which Eaton operates. If these audits result in assessments different from amounts reserved, future
financial results may include material unfavorable adjustments to the Company's tax liabilities.
Eaton may be unable to adequately protect its intellectual property rights, which could affect the Company's ability to
compete.
Protecting Eaton's intellectual property rights is critical to its ability to compete and succeed. The Company owns a large
number of patents and patent applications worldwide, as well as trademark and copyright registrations that are necessary, and
contribute significantly, to the preservation of Eaton's competitive position in various markets. Although management believes
that the loss or expiration of any single intellectual property right would not have a material effect on the results of operations
or financial position of Eaton or its business segments, there can be no assurance that any one, or more, of these patents and
other intellectual property will not be challenged, invalidated, or circumvented by third parties. Eaton enters into confidentiality
and invention assignment agreements with the Company's employees, and into non-disclosure agreements with suppliers and
appropriate customers, so as to limit access to and disclosure of proprietary information. These measures may not suffice to
deter misappropriation or independent third party development of similar technologies.
Eaton is subject to litigation and environmental regulations that could adversely impact Eaton's businesses.
At any given time, Eaton may be subject to litigation, the disposition of which may have a material adverse effect on the
Company's businesses, financial condition or results of operations. 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.
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. Management
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.
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