Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Eaton Corp. plc, consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Net income	4,090)	3,798)	3,223)	2,465)	2,146)
Depreciation and amortization	1,006)	921)	926)	954)	922)
Deferred income taxes	45)	(154)	(182)	(128)	(111)
Pension and other postretirement benefits expense	43)	24)	15)	54)	53)
Contributions to pension plans	(124)	(110)	(113)	(116)	(343)
Contributions to other postretirement benefits plans	(16)	(18)	(20)	(24)	(20)
Gain on sale of business	—)	—)	—)	(24)	(197)
Accounts receivable, net	(420)	(215)	(341)	(743)	(271)
Inventory	(256)	(566)	(282)	(490)	(629)
Unbilled receivables	(357)	(52)	(54)	—)	—)
Accounts payable	332)	399)	256)	334)	832)
Accrued compensation	(50)	21)	197)	(16)	154)
Accrued income and other taxes	(116)	142)	61)	170)	(317)
Deferred revenue liabilities	202)	2)	119)	—)	—)
Other current assets	(198)	(27)	(58)	(179)	(116)
Other current liabilities	145)	77)	(47)	236)	38)
Changes in working capital	(718)	(219)	(149)	(688)	(309)
Other, net	146)	85)	(76)	40)	22)
Adjustments to reconcile to net cash provided by operating activities	382)	529)	401)	68)	17)
Net cash provided by operating activities	4,472)	4,327)	3,624)	2,533)	2,163)
Capital expenditures for property, plant and equipment	(919)	(808)	(757)	(598)	(575)
Cash paid for acquisition of businesses, net of cash acquired	(1,490)	(50)	—)	(610)	(4,500)
Proceeds from sales of property, plant and equipment	80)	85)	76)	163)	44)
Investments in associate companies	(16)	(70)	(68)	(42)	(124)
Return of investment from associate companies	—)	33)	9)	1)	—)
(Purchases) sales of short-term investments, net	1,339)	575)	(1,861)	(19)	379)
Proceeds from (payments for) settlement of currency exchange contracts not designated as hedges, net	3)	(3)	92)	(47)	(27)
Other, net	(98)	(33)	(66)	(48)	3,039)
Net cash used in investing activities	(1,101)	(271)	(2,575)	(1,200)	(1,764)
Proceeds from borrowings	1,058)	1,084)	818)	1,995)	1,798)
Payments on borrowings	(717)	(1,015)	(19)	(2,012)	(1,013)
Short-term debt, net	1)	(8)	(311)	317)	20)
Cash dividends paid	(1,626)	(1,500)	(1,379)	(1,299)	(1,219)
Exercise of employee stock options	39)	69)	78)	28)	63)
Repurchase of shares	(1,862)	(2,492)	—)	(286)	(122)
Employee taxes paid from shares withheld	(52)	(70)	(49)	(60)	(47)
Other, net	(14)	(4)	(9)	(23)	(15)
Net cash used in financing activities	(3,173)	(3,936)	(871)	(1,340)	(535)
Effect of currency on cash	(131)	(53)	16)	4)	(5)
Increase (decrease) in cash	67)	67)	194)	(3)	(141)
Cash at the beginning of the period	555)	488)	294)	297)	438)
Cash at the end of the period	622)	555)	488)	294)	297)

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

Overall, the cash flow statement reveals a generally positive trend in net cash provided by operating activities, alongside fluctuating cash flows from investing and financing activities. While operating cash flow demonstrates consistent growth, significant variations exist in the investing and financing sections, driven by acquisitions, debt management, and shareholder returns.

Operating Activities: Net cash provided by operating activities exhibits a consistent upward trend, increasing from US$2,163 million in 2021 to US$4,472 million in 2025. This growth is largely aligned with the increasing net income over the same period. Adjustments to reconcile net income to net cash from operations show a substantial increase in 2023 and 2024, suggesting significant non-cash adjustments impacting cash flow. Changes in working capital generally represent a cash outflow, with a particularly large outflow in 2025, potentially indicating increased investment in working capital components.
Investing Activities: Cash flow from investing activities is predominantly negative throughout the period, indicating consistent investment in the business. Capital expenditures for property, plant, and equipment remain consistently negative, ranging from US$575 million to US$919 million annually, demonstrating ongoing investment in fixed assets. A substantial cash outflow of US$4,500 million was observed in 2021 related to the acquisition of businesses. Further significant cash outflows for acquisitions occurred in 2025 (US$1,490 million). Fluctuations in (purchases) sales of short-term investments are notable, with a large outflow in 2023 and a significant inflow in 2025.
Financing Activities: Cash flow from financing activities is highly variable. Proceeds from borrowings are significant in 2021, 2022, and 2025, while payments on borrowings are substantial throughout the period. Cash dividends paid consistently represent a significant cash outflow, increasing from US$1,219 million in 2021 to US$1,626 million in 2025. A large outflow related to the repurchase of shares is observed in 2024 (US$2,492 million) and 2025 (US$1,862 million). The net effect is a generally negative cash flow from financing, particularly pronounced in 2024 and 2025, suggesting a focus on returning capital to shareholders and managing debt.
Cash Position: The company experienced a decrease in cash in 2021 and 2022, followed by increases in 2023, 2024, and 2025. The effect of currency on cash is relatively small, though a notable outflow is observed in 2025. The cash balance increased from US$438 million in 2021 to US$622 million in 2025, indicating an overall strengthening of the cash position despite significant investing and financing activities.
Specific Items: Deferred income taxes show a negative impact on cash flow in 2021, 2022, 2023, and 2024, but a positive impact in 2025. Contributions to pension plans and other postretirement benefits plans consistently represent cash outflows, though the magnitude varies. A significant gain on the sale of a business impacted cash flow negatively in 2021 and 2022. Fluctuations in accounts receivable, inventory, and accounts payable contribute to the changes in working capital, impacting operating cash flow.

AI Ask an analyst for more

Download chart

Eaton Corp. plc (NYSE:ETN)

Cash Flow Statement