Eaton Corporation plc: 10-K Risk Factor Changes

Our business requires that we buy raw materials, components, and services from third parties. Supplier relationships have in the past been and could in the future be interrupted or terminated. Our reliance on suppliers involves certain risks, including: •shortages of commodities, components, or other materials, which could adversely affect our manufacturing efficiencies and ability to make timely delivery of our products, solutions, and services; •changes in the cost of these purchases due to inflation, exchange rate fluctuations, taxes, tariffs, commodity market volatility, or other factors that affect our suppliers; •poor quality or insecure supply chain, which could adversely affect the reliability and reputation of our products, solutions, and services; •climate impacts, severe weather events, or natural and other disasters that impact our suppliers; •sanctions, embargoes, and other trade restrictions that may affect our ability to purchase commodities, components, or other materials from various suppliers; and •intellectual property risks such as challenges to ownership of rights or alleged infringement by suppliers. 8 8 8 Table of Contents Table of Contents Any of these uncertainties could adversely impact our financial results and ability to compete. We also maintain single-source supplier relationships because either alternative sources are not available, or the relationship is advantageous due to certain considerations, such as performance, quality, support, delivery, capacity, or price. Unavailability of, or delivery delays for, single-source components or products could adversely affect our ability to manufacture or ship the related products in a timely manner. The effect of unavailability or delivery delays would be more severe if associated with our higher volume and more profitable products. Even where substitute sources of supply are available, qualifying alternative suppliers and establishing reliable supplies could cost more or result in delays and loss of sales. We may rely on third-party suppliers for the components used in our products, and we may rely on third-party manufacturers to manufacture certain of our assemblies and finished products. Our results of operations, financial position, and cash flows could be adversely affected if such third parties lack sufficient quality control or if there are significant changes in their financial or business condition. If these third parties fail to deliver quality products, parts, and components on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could be damaged.