Investor Presentaiton
Note 7. LEASES
Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most
real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The
Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or
restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate.
The components of lease expense are as follows:
(In millions)
Operating lease cost
Finance lease cost:
Amortization of lease assets
Interest on lease liabilities
Short-term lease cost
Variable lease cost
Sublease income
Total lease cost
2022
2021
2020
$
179 $ 164 $ 184
11
12
6
1
2
1
17
15
18
27
16
3
(1)
(2)
(2)
$
234 $ 207 $
210
During 2022, Eaton entered into sale leaseback transactions primarily for certain office and distribution facilities and
recorded gains of $81 million in Other expense (income) - net. The terms of the new operating leases ranged from 15 to 20
years. There were no sale leaseback transactions for the year ended December 31, 2021 and gains recorded on sale leaseback
transactions were $9 million for the year ended December 31, 2020.
Supplemental cash flow information related to leases is as follows:
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases
Operating cash outflows - interest payments on finance leases
Financing cash outflows - payments on finance lease obligations
Lease assets obtained in exchange for new lease obligations, including leases acquired:
Operating leases
Finance leases
2022
2021
2020
$ (159) $ (158) $ (144)
(2)
(2)
(1)
(11)
(11)
(8)
$ 245
$ 145 $
144
10
14
16
41View entire presentation