Investor Presentaiton
The Company is exposed to fluctuations in commodity prices due to volatility in raw material costs and contractual
agreements with suppliers. To partially mitigate this exposure, Eaton enters into commodity contracts for certain raw material
purchases with the objective of minimizing changes in inventory cost due to market price fluctuations. These commodity
contracts are designated for hedge accounting and are generally less than one year in duration. Based on Eaton's best estimate
for a hypothetical 10% fluctuation in commodity prices the gain or loss would be $5 million. The sensitivity analysis of the
effects of changes in commodity prices assumes the notional value to remain constant for the next 12 months. Any change in
the value of the contracts would be offset by an inverse change in the value of the underlying hedged transactions.
The Company is exposed to currency risk associated with translating its functional currency financial statements into its
reporting currency, which is the U.S. dollar. As a result, the Company is exposed to movements in the exchange rates of various
currencies against the U.S. dollar. Eaton also monitors exposure to transactions denominated in currencies other than the
functional currency of each country in which the Company operates, and regularly enters into forward contracts to mitigate that
exposure. In the aggregate, Eaton's portfolio of forward contracts related to such transactions was not material to its
Consolidated Financial Statements.
FORWARD-LOOKING STATEMENTS
This Annual Report to Shareholders contains forward-looking statements concerning litigation, expected capital
expenditures, future pension contributions, future dividend payments, anticipated share repurchases, and expected restructuring
program charges and benefits, among others. These statements may discuss goals, intentions and expectations as to future
trends, plans, events, results of operations or financial condition, or state other information relating to Eaton, based on current
beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking
statements generally will be accompanied by words such as "anticipate,” “believe,” “could,” “estimate," "expect," "forecast,"
"guidance," "intend,” “may,” “possible," "potential,” “predict,” “project” or other similar words, phrases or expressions. These
statements should be used with caution and are subject to various risks and uncertainties, many of which are outside Eaton's
control. The following factors could cause actual results to differ materially from those in the forward-looking statements: the
course of the COVID-19 pandemic, including government responses thereto and the rate of global economic recovery
therefrom; unanticipated changes in the markets for the Company's business segments; unanticipated downturns in business
relationships with customers or their purchases from us; the availability of credit to customers and suppliers; supply chain
disruptions, competitive pressures on sales and pricing; unanticipated changes in the cost of material, labor and other
production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies;
unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other
labor unrest; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions; new laws and
governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market
and currency fluctuations; war, natural disasters, civil or political unrest or terrorism; and unanticipated deterioration of
economic and financial conditions in the United States and around the world. Eaton does not assume any obligation to update
these forward-looking statements.
96
96View entire presentation