Investor Presentaiton
Derivative Financial Statement Impacts
The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
(In millions)
Notional
amount
Other
Other
Other
Other
current noncurrent current noncurrent
assets
assets liabilities liabilities
Type of
hedge
Term
December 31, 2022
Derivatives designated as hedges
Currency exchange contracts
$ 1,240
$
Commodity contracts
64
35 $
4
2 $
17 $
9
2
Cash flow
Cash flow
1 to 36 months
1 to 12 months
Total
$
39 $
2 $
19 $
9
Derivatives not designated as hedges
Currency exchange contracts
$ 4,683 $
30
$
14
1 to 12 months
December 31, 2021
Derivatives designated as hedges
Fixed-to-floating interest rate
swaps
$ 1,800 $
22 $
29 $
$
Fair value
8 months to
13 years
Forward starting floating-to-fixed
interest rate swaps
1,350
38
79
Cash flow
11 to 31 years
Currency exchange contracts
1,212
17
2
3
Cash flow
1 to 36 months
Commodity contracts
50
2
1
Cash flow
1 to 12 months
Total
$
41
$
69
$
12
$
82
Derivatives not designated as hedges
Currency exchange contracts
Commodity contracts
Total
$ 5,285 $
62
34
$
9
1
1
$
35
$
10
1 to 12 months
1 month
The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts
entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not
elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet
exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its
operations. This activity represents the great majority of these currency exchange contracts. The cash flows resulting from the
settlement of these derivatives have been classified in investing activities in the Consolidated Statement of Cash Flows.
As of December 31, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted
transactions:
Aluminum
Copper
Gold
Silver
Commodity
68
December 31, 2022
Term
4
10
Millions of pounds
Millions of pounds
1 to 12 months
1 to 12 months
1,604
699,932
Troy ounces
Troy ounces
1 to 12 months
1 to 12 monthsView entire presentation