Eaton Corporation plc: 10-K Risk Factor Changes

As part of our strategy, we pursue strategic transactions, including but not limited to acquisitions, joint ventures, and investments. Acquisitions and investments may involve significant cash expenditures, debt incurrences, equity issuances, operating losses and expenses, in addition to integration challenges whether foreseen or unforeseen, which may be dilutive to earnings and unfavorably impact cash flow. Acquisitions also involve numerous other risks, including: the diversion of management attention to integration matters; difficulties in integrating operations and systems; challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; difficulties in assimilating employees and in attracting and retaining key personnel; challenges in keeping existing customers and obtaining new customers; difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects; contingent liabilities (including contingent tax liabilities and earn-out obligations) that are larger than expected; and potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with acquired companies. Financial success of a strategic transaction requires balancing both short- and long-term inputs driven by internal and external factors difficult to fully identify prior to transaction consummation. Transactional challenges post-closing could materially and adversely impact our business, financial condition and results of operations.

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.

Recent technological advances in artificial intelligence (AI) and machine-learning technology have presented opportunities for us to drive internal efficiencies in our business operations, but they also pose risks to us. If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer, particularly if our competitors more effectively use AI to drive their business efficiencies or create new or enhanced products or services that we are unable to compete against on cost, quality or other attributes. However, the introduction of AI technologies, particularly generative AI, into internal processes and/or new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. Furthermore, any confidential information that is disclosed to a third-party generative AI platform could be leaked or disclosed to others, which could result in loss or theft of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. Moreover, the use of AI may give rise to risks related to harmful content, accuracy, and bias, which could expose us to risks related to inaccuracies or errors in the output of such technologies. The rapidly evolving legal and regulatory environment relating to AI, in the United States and globally, could also impact Eaton’s implementation of AI technology, and increase compliance costs and the risk of non-compliance.

Extreme weather events may create physical risks to our operating locations and supply chains, as well as to our suppliers’ and customers’ operations. Operational, environmental and social regulations may pose stringent obligations on our operations, which could impact our financial results and adversely affect our ability to conduct normal business operations. Those events could also change customer and market demands, and we may not be able to move quickly enough to meet such demands or meet all of the varying demands from different geographic regions, markets and business sector, which could negatively affect our business, results of operations, and financial condition.

The market for employees and leaders with certain skills and experiences is very competitive. Our continued success depends, in part, on our ability to identify, attract, develop, engage, and retain qualified candidates with the requisite education, background, technical skills, industry knowledge, and experience. Failure to attract, develop, engage, and retain qualified employees, difficulty in recruiting new employees, perceived or actual erosion of our culture, or inadequate resources to train, integrate, and retain qualified employees, could impair our ability to execute our business strategy and could adversely affect our business, results of operations, and financial condition. In addition, the nature of our business requires us to maintain a labor force that is sufficiently large enough to support our manufacturing operations to meet customer demand, as well as provide on-site services and project support for our customers. We have in the past experienced, and could in the future experience, shortages for skilled or unskilled labor, which has in the past and could in the future negatively impact our growth and results of operations.

On January 26, 2026, we announced our intention to spin-off our Mobility business, which consists of the legacy Vehicle and eMobility segments, by the end of the first quarter of 2027, subject to the satisfaction of customary legal and regulatory requirements and approvals. The failure to satisfy all the required conditions could delay the completion of the spin-off for a significant period of time or prevent it from occurring at all. Spin-offs are complex in nature, and unanticipated developments or changes, including changes in law, the macroeconomic environment and market conditions or regulatory or political conditions may affect our ability to complete the anticipated spin-off as currently expected, within the anticipated time frame or at all. Any changes to the spin-off or delay in completing it could cause us not to realize some or all of the expected benefits, or realize them on a different timeline than expected. In addition, the terms and conditions of the required regulatory authorizations and consents that are granted, if any, may impose requirements, limitations or costs, or place restrictions on the conduct of the Mobility business, as an independent company, and may materially delay the completion of the spin-off. Whether or not the spin-off is completed, our business may face material challenges in connection with this transaction, including, without limitation: the diversion of management’s attention from ongoing business concerns; attracting and retaining key management and other employees; retaining existing, or attracting new, business and operational relationships; foreseen and unforeseen dis-synergy costs, costs of restructuring transactions (including taxes) and other significant costs and expenses; and potential negative reactions from the financial markets if we fail to complete the spin-off as currently expected, within the anticipated time frame or at all. Although we intend for the spin-off to be tax-free to our stockholders for U.S. federal income tax purposes, there can be no assurance that the spin-off will so qualify. Any of these factors could have a material adverse effect on our business, financial condition and our stock price.

Our global business is sensitive to macroeconomic conditions. Macroeconomic downturns may have an adverse effect on our business, results of operations and financial condition, as well as our distributors, customers and suppliers, and on activity in many of the industries and markets we serve. Among the economic factors that may have such an effect are disruptions in financial markets; adverse changes in the availability and cost of capital; economic downturns; military conflicts; wars; terrorism; pandemics, epidemics and public health emergencies; political changes and trends; tariffs and retaliatory counter measures; monetary policies; interest rates; inflation and deflation; recessions; commodity prices; currency volatility or exchange control; and ability to expatriate earnings. We cannot predict changes in worldwide or regional macroeconomic conditions, as such conditions are highly volatile and beyond our control. In addition, our responses to mitigate the impact of these conditions, such as potential price increases, could negatively impact our market share or relationships with distributors or customers. Furthermore, if these conditions deteriorate or remain at depressed levels for extended periods, our business, results of operations and financial condition could be materially adversely affected.

Operating globally subjects Eaton to various risks, including, but not limited to, economic and political instability, including war or armed conflict, changes in government policies, expropriation, nationalization, and other political, economic, or social developments; complex and continually changing government laws, regulations and policies; increased tariffs, trade barriers, trade agreements, and other restrictions on international trade; trade laws and trade treaties that impact our effective tax rate; supply chain disruptions, including, as a result of natural disasters, transportation disruptions, and geopolitical events; currency fluctuations, which can affect the value of our foreign currency revenues, expenses, and cash flows; inadequate intellectual property protections in foreign jurisdictions that could result in the unauthorized use or infringement of our intellectual property; adverse consumer sentiment for non-local products; and local labor market conditions. The occurrence of one or more of these events has, from time to time, impacted, and may in the future impact, our business in a variety of ways, including reducing demand for our products, increasing costs, limiting our ability to operate in certain jurisdictions, disrupting our ability to deliver products to customers on time and at competitive prices, subjecting us to fines, penalties, and sanctions, harming our competitive position, devaluation of assets, and impacting our financials. 11 11 11 Table of Contents Table of Contents

Doing business with the U.S. government subjects us to risks such as dependence on the level of government spending and compliance with and changes in governmental acquisition regulations and other requirements. Contracts relating to the sale of products to the U.S. government parties may impose terms or provisions that are not typical in commercially negotiated transactions and, in some instances, could impose added costs on our business. We are subject to audits and investigations of our business practices and compliance with government acquisition regulations, and any findings of wrongdoing could result in fines and penalties or termination of contracts or debarment from bidding on contracts, which could negatively impact our results of operations.