Investor Presentaiton
Terms of Guarantees of Registered Securities
Payment of principal and interest on the Registered Senior Notes is guaranteed, on an unsecured, unsubordinated basis by
the subsidiaries of Eaton set forth in the table referenced in Exhibit 22. Each guarantee is full and unconditional, and joint and
several. Each guarantor's guarantee is an unsecured obligation that ranks equally with all its other unsecured and
unsubordinated indebtedness. The obligations of each guarantor under its guarantee of the Registered Senior Notes is subject to
a customary savings clause or similar provision designed to prevent such guarantee from constituting a fraudulent conveyance
or otherwise legally impermissible or voidable obligation.
Though the terms of the indentures vary slightly, generally, each guarantee of the Registered Senior Notes by a guarantor
that is a subsidiary of Eaton Corporation provides that it will be automatically and unconditionally released and discharged
under certain circumstances, including, but not limited to:
(a) the consummation of certain types of transactions permitted under the applicable indenture, including one that results in
such guarantor ceasing to be a subsidiary; and
(b) for Registered Senior Notes issued under the 2022 Indenture, when such guarantor is a guarantor or issuer of indebtedness
in an aggregate outstanding principal amount of less than 25% of our total outstanding indebtedness.
Further, each guarantee by a direct or indirect parent of Eaton Corporation (other than Eaton) provides that it will also be
released if:
(c) such guarantee (so long as the guarantor is not obligated under any other U.S. debt obligations), becomes prohibited by any
applicable law, rule or regulation or by any contractual obligation; or
(d) such guarantee results in material adverse tax consequences to Eaton or any of its subsidiaries (so long as the applicable
guarantor is not obligated under any other U.S. debt obligation).
The guarantee of Eaton does not contain any release provisions.
Future Guarantors
The 2012 and 2017 Indentures generally provide that, with certain limited exceptions, any subsidiary of Eaton must become
a guarantor if it becomes obligated as borrower or guarantor under any series of debt securities or a syndicated credit facility.
Further, the 2012 and 2017 Indentures provide that any entity that becomes a direct or indirect parent entity of Eaton
Corporation and holds any material assets, with certain limited exceptions, or owes any material liabilities must become a
guarantor. The 2022 Indenture provides only that, with certain limited exceptions, any subsidiary of Eaton must become a
guarantor if it becomes obligated as borrower or guarantor under indebtedness with an aggregate outstanding principal amount
in excess of 25% of the Parent and its Subsidiaries' then-outstanding indebtedness.
The 1994 Indenture does not contain provisions with respect to future guarantors.
Summarized Financial Information of Guarantors and Issuers
(In millions)
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Amounts due to subsidiaries that are non-issuers and non-guarantors - net
December 31,
2022
3,363
12,938
2,948
10,047
16,285
(In millions)
Net sales
Sales to subsidiaries that are non-issuers and non-guarantors
Cost of products sold
Expense from subsidiaries that are non-issuers and non-guarantors - net
Net loss
2022
11,433
911
9,277
747
(26)
The financial information presented is that of Eaton Corporation and the Guarantors, which includes Eaton Corporation plc,
on a combined basis and the financial information of non-issuer and non-guarantor subsidiaries has been excluded.
Intercompany balances and transactions between Eaton Corporation and Guarantors have been eliminated, and amounts due
from, amounts due to, and transactions with non-issuer and non-guarantor subsidiaries have been presented separately.
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