Document and Entity Information
Document and Entity Information Document - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Eaton Corp plc | ||
Entity Central Index Key | 1,551,182 | ||
Trading Symbol | ETN | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 27.2 | ||
Entity Ordinary Shares, Shares Outstanding | 449.7 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | Feb. 22, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Statement [Abstract] | ||||
Net sales | $ 19,747 | $ 20,855 | $ 22,552 | |
Cost of products sold | 13,400 | 14,292 | 15,646 | |
Selling and administrative expense | 3,505 | 3,596 | 3,810 | |
Litigation settlements | 0 | 0 | 644 | |
Research and development expense | 589 | 625 | 647 | |
Interest expense - net | 233 | 232 | 227 | |
Other income - net | (107) | (35) | (183) | |
Income before income taxes | 2,127 | 2,145 | 1,761 | |
Income tax expense (benefit) | 202 | 164 | (42) | |
Net income | 1,925 | 1,981 | 1,803 | |
Less net income for noncontrolling interests | (3) | (2) | (10) | |
Net income attributable to Eaton ordinary shareholders | $ 1,922 | $ 1,979 | $ 1,793 | |
Net income per share attributable to Eaton ordinary shareholders | ||||
Diluted (usd per share) | $ 4.21 | $ 4.23 | $ 3.76 | |
Basic (usd per share) | $ 4.22 | $ 4.25 | $ 3.78 | |
Weighted-average number of ordinary shares outstanding | ||||
Diluted (shares) | 456.5 | 467.1 | 476.8 | |
Basic (shares) | 455 | 465.5 | 474.1 | |
Cash dividends declared per ordinary share (usd per share) | $ 0.60 | $ 2.28 | $ 2.20 | $ 1.96 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,925 | $ 1,981 | $ 1,803 |
Less net income for noncontrolling interests | (3) | (2) | (10) |
Net income attributable to Eaton ordinary shareholders | 1,922 | 1,979 | 1,793 |
Other comprehensive (loss) income, net of tax | |||
Currency translation and related hedging instruments | (570) | (1,078) | (1,019) |
Pensions and other postretirement benefits | (6) | 111 | (315) |
Cash flow hedges | (9) | 3 | (5) |
Net current-period Other comprehensive (loss) income | (585) | (964) | (1,339) |
Total comprehensive income attributable to Eaton ordinary shareholders | $ 1,337 | $ 1,015 | $ 454 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 543 | $ 268 |
Short-term investments | 203 | 177 |
Accounts receivable - net | 3,560 | 3,479 |
Inventory | 2,254 | 2,323 |
Prepaid expenses and other current assets | 381 | 369 |
Total current assets | 6,941 | 6,616 |
Property, plant and equipment | ||
Land and buildings | 2,369 | 2,383 |
Machinery and equipment | 5,670 | 5,501 |
Gross property, plant and equipment | 8,039 | 7,884 |
Accumulated depreciation | (4,596) | (4,319) |
Net property, plant and equipment | 3,443 | 3,565 |
Other noncurrent assets | ||
Goodwill | 13,201 | 13,479 |
Other intangible assets | 5,514 | 6,014 |
Deferred income taxes | 360 | 362 |
Other assets | 960 | 960 |
Total assets | 30,419 | 30,996 |
Current liabilities | ||
Short-term debt | 14 | 426 |
Current portion of long-term debt | 1,552 | 242 |
Accounts payable | 1,718 | 1,758 |
Accrued compensation | 379 | 366 |
Other current liabilities | 1,822 | 1,833 |
Total current liabilities | 5,485 | 4,625 |
Noncurrent liabilities | ||
Long-term debt | 6,711 | 7,746 |
Pension liabilities | 1,659 | 1,586 |
Other postretirement benefits liabilities | 368 | 440 |
Deferred income taxes | 321 | 390 |
Other noncurrent liabilities | 934 | 978 |
Total noncurrent liabilities | 9,993 | 11,140 |
Shareholders' equity | ||
Ordinary shares (449.4 million outstanding in 2016 and 458.8 million in 2015) | 5 | 5 |
Capital in excess of par value | 11,845 | 11,701 |
Retained earnings | 7,498 | 7,346 |
Accumulated other comprehensive loss | (4,448) | (3,863) |
Shares held in trust | (3) | (3) |
Total Eaton shareholders’ equity | 14,897 | 15,186 |
Noncontrolling interests | 44 | 45 |
Total equity | 14,941 | 15,231 |
Total liabilities and equity | $ 30,419 | $ 30,996 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - shares shares in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Ordinary shares outstanding shares) | 449.4 | 458.8 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||
Net income | $ 1,925 | $ 1,981 | $ 1,803 |
Adjustments to reconcile to net cash provided by operating activities | |||
Depreciation and amortization | 929 | 925 | 983 |
Deferred income taxes | (80) | (100) | (382) |
Pension and other postretirement benefits expense | 235 | 323 | 293 |
Contributions to pension plans | (262) | (330) | (362) |
Contributions to other postretirement benefits plans | (30) | (31) | (40) |
Excess tax benefit from equity-based compensation | (1) | (1) | (20) |
Gain on sale of businesses | 0 | 0 | (68) |
Changes in working capital | |||
Accounts receivable - net | (170) | 5 | (205) |
Inventory | 25 | (20) | (152) |
Accounts payable | 0 | (120) | 49 |
Accrued compensation | 20 | (28) | (32) |
Accrued income and other taxes | 30 | (9) | (73) |
Other current assets | (21) | 7 | 73 |
Other current liabilities | (62) | (76) | 8 |
Other - net | 14 | (155) | 3 |
Net cash provided by operating activities | 2,552 | 2,371 | 1,878 |
Investing activities | |||
Capital expenditures for property, plant and equipment | (497) | (506) | (632) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 1 | (72) | 2 |
Sales (purchases) of short-term investments - net | (40) | 37 | 522 |
Proceeds from sales of businesses | 0 | 1 | 282 |
Other - net | 7 | (35) | (31) |
Net cash (used in) provided by investing activities | (529) | (575) | 143 |
Financing activities | |||
Proceeds from borrowings | 631 | 425 | 0 |
Payments on borrowings | (653) | (1,027) | (582) |
Cash dividends paid | (1,037) | (1,026) | (929) |
Exercise of employee stock options | 74 | 52 | 54 |
Repurchase of shares | (730) | (682) | (650) |
Excess tax benefit from equity-based compensation | 1 | 1 | 20 |
Other - net | (6) | (10) | (43) |
Net cash used in financing activities | (1,720) | (2,267) | (2,130) |
Effect of currency on cash | (28) | (42) | (25) |
Total increase (decrease) in cash | 275 | (513) | (134) |
Cash at the beginning of the period | 268 | 781 | 915 |
Cash at the end of the period | $ 543 | $ 268 | $ 781 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity Statement - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares [Member] | Capital In Excess Of Par Value [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Shares Held in Trust [Member] | Total Eaton Shareholders' Equity [Member] | Noncontrolling Interests [Member] |
Ordinary shares, shares outstanding at period start, shares at Dec. 31, 2013 | 475.1 | |||||||
Beginning balance at Dec. 31, 2013 | $ 16,863 | $ 5 | $ 11,483 | $ 6,866 | $ (1,560) | $ (3) | $ 16,791 | $ 72 |
Net income | 1,803 | 0 | 0 | 1,793 | 0 | 0 | 1,793 | 10 |
Other comprehensive income (loss), net of tax | (1,339) | (1,339) | (1,339) | 0 | ||||
Cash dividends paid | (934) | $ 0 | 0 | (929) | 0 | 0 | (929) | (5) |
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively), shares | 2.4 | |||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively) | 134 | $ 0 | 136 | (2) | 0 | 0 | 134 | 0 |
Changes in noncontrolling interest of consolidated subsidiaries - net | (38) | $ 0 | (14) | 0 | 0 | 0 | (14) | (24) |
Repurchase of shares, shares | (9.6) | |||||||
Repurchase of shares | (650) | $ 0 | 0 | (650) | 0 | 0 | (650) | 0 |
Ordinary shares, shares outstanding at period end, shares at Dec. 31, 2014 | 467.9 | |||||||
Ending balance at Dec. 31, 2014 | 15,839 | $ 5 | 11,605 | 7,078 | (2,899) | (3) | 15,786 | 53 |
Net income | 1,981 | 0 | 0 | 1,979 | 0 | 0 | 1,979 | 2 |
Other comprehensive income (loss), net of tax | (964) | (964) | (964) | 0 | ||||
Cash dividends paid | (1,035) | $ 0 | 0 | (1,026) | 0 | 0 | (1,026) | (9) |
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively), shares | 2.2 | |||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively) | 96 | $ 0 | 99 | (3) | 0 | 0 | 96 | 0 |
Changes in noncontrolling interest of consolidated subsidiaries - net | (4) | $ 0 | (3) | 0 | 0 | 0 | (3) | (1) |
Repurchase of shares, shares | (11.3) | |||||||
Repurchase of shares | $ (682) | $ 0 | 0 | (682) | 0 | 0 | (682) | 0 |
Ordinary shares, shares outstanding at period end, shares at Dec. 31, 2015 | 458.8 | 458.8 | ||||||
Ending balance at Dec. 31, 2015 | $ 15,231 | $ 5 | 11,701 | 7,346 | (3,863) | (3) | 15,186 | 45 |
Net income | 1,925 | 0 | 0 | 1,922 | 0 | 0 | 1,922 | 3 |
Other comprehensive income (loss), net of tax | (585) | (585) | (585) | 0 | ||||
Cash dividends paid | (1,039) | $ 0 | 0 | (1,037) | 0 | 0 | (1,037) | (2) |
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively), shares | 2.4 | |||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1, $20 and $32 for the years 2015, 2014 and 2013, respectively) | 141 | $ 0 | 144 | (3) | 0 | 0 | 141 | 0 |
Changes in noncontrolling interest of consolidated subsidiaries - net | (2) | $ 0 | 0 | 0 | 0 | 0 | 0 | (2) |
Repurchase of shares, shares | (11.8) | |||||||
Repurchase of shares | $ (730) | $ 0 | 0 | (730) | 0 | 0 | (730) | 0 |
Ordinary shares, shares outstanding at period end, shares at Dec. 31, 2016 | 449.4 | 449.4 | ||||||
Ending balance at Dec. 31, 2016 | $ 14,941 | $ 5 | $ 11,845 | $ 7,498 | $ (4,448) | $ (3) | $ 14,897 | $ 44 |
Consolidated Statements of Sha8
Consolidated Statements of Shareholders' Equity Parenthetical - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Shareholders' Equity [Abstract] | |||
Issuance of shares under equity-based compensation plans - net, net of income tax benefit | $ 1 | $ 1 | $ 20 |
Eaton Corporation plc ordinary share par value | $ 0.01 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Information and Basis of Presentation Eaton Corporation plc (Eaton or the Company) is a power management company with 2016 net sales of $19.7 billion . The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 95,000 employees in over 60 countries and sells products to customers in more than 175 countries. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. During 2016 , the Company adopted Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the related debt liability rather than an asset. The Company has applied this standard retrospectively. The adoption of ASU 2015-03 resulted in the reclassification of $35 within the Company's Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, respectively, from Other noncurrent assets to a reduction in Long-term debt. During 2016, the Company adopted Accounting Standards Update 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2015-07). Topic 820 allows for investments to be valued at their net asset value if their share price is not published for current transactions (referred to as the practical expedient). Prior to ASU 2015-07, there has been diversity in practice related to how investments measured using the practical expedient are categorized within the fair value hierarchy. With the adoption of ASU 2015-07, these investments are no longer categorized in the fair value hierarchy, which eliminates the diversity in practice resulting from the way in which these investments were classified. In addition, ASU 2015-07 removes the requirement to make certain disclosures for these investments. The Company retrospectively applied the requirements of ASU 2015-07 for all comparative periods presented in Note 7 resulting in investments measured using the net asset value practical expedient no longer being categorized in the fair value hierarchy. Certain prior year amounts have been reclassified to conform to the current year presentation. Revenue Recognition Sales of products are recognized when a sales agreement is in place, products have been shipped to unaffiliated customers and title has transferred in accordance with shipping terms, the selling price is fixed and determinable and collectability is reasonably assured, all significant related acts of performance have been completed, and no other significant uncertainties exist. Shipping and handling costs billed to customers are included in Net sales and the related costs in Cost of products sold. Although the majority of the sales agreements contain standard terms and conditions, there are agreements that contain multiple elements or non-standard terms and conditions. As a result, judgment is required to determine the appropriate accounting, including whether the deliverables specified in these agreements should be treated as separate units of accounting for recognition purposes, and, if so, how the sales price should be allocated among the elements and when to recognize sales for each element. For delivered elements, sales generally are recognized only when the delivered elements have standalone value and there are no uncertainties regarding customer acceptance. Sales for service contracts generally are recognized as the services are provided. Eaton records reductions to revenue for customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Goodwill is tested for impairment at the reporting unit level, which is equivalent to Eaton's operating segments and based on the net assets for each segment, including goodwill and intangible assets. Goodwill is assigned to each operating segment, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of an operating segment is less than its carrying amount. Goodwill impairment testing for 2016 was performed using a quantitative analysis under which the fair value for each reporting unit was estimated using a discounted cash flow model, which considered forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the operating segment's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows of the respective reporting unit. Sensitivity analyses were performed around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Goodwill impairment testing in 2015 was performed using qualitative analysis, which is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative assessment performed in 2013. The results of the qualitative analysis did not indicate a need to perform a quantitative analysis. Based on a quantitative analysis performed in 2016 and a qualitative analysis performed in 2015, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2016 and 2015 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2016 and 2015 , the fair value of indefinite lived intangible assets exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 5. Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. Cost of buildings are depreciated generally over 40 years and machinery and equipment over 3 to 10 years . At December 31, 2016 , the weighted-average amortization period for intangible assets subject to amortization was 17 years for patents and technology, primarily as a result of the long life of aircraft platforms; 17 years for customer relationships; and 16 years for certain trademarks. Software is generally amortized up to a life of 10 years . Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment. Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10% , depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan, but is approximately 13 years on a weighted average basis. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. Warranty Accruals Product warranty accruals are established at the time the related sale is recognized through a charge to Cost of products sold. Warranty accrual estimates are based primarily on historical warranty claim experience and specific customer contracts. Provisions for warranty accruals are comprised of basic warranties for products sold, as well as accruals for product recalls and other events when they are known and estimable. See Note 8 for additional information about warranty accruals. Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value. Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Penalties on unrecognized income tax benefits have been accrued for jurisdictions where penalties are automatically applied to any deficiency, regardless of the merit of the position. For additional information about income taxes, see Note 9. Equity-Based Compensation Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service conditions or both service and market conditions are expensed over the period during which an employee is required to provide service in exchange for the award. Awards with both service and performance conditions are expensed over the period an employee is required to provide service based on the number of units for which achievement of the performance objective is probable. Participants awarded restricted stock units (RSUs) do not receive dividends; therefore, their fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The fair value of restricted stock awards (RSAs) and performance stock units (PSUs) with performance conditions are determined based on the closing market price of the Company’s ordinary shares at the date of grant. The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions, which incorporates assumptions regarding expected stock price volatility and the risk-free interest rate. Stock options are granted with an exercise price equal to the closing market price of Eaton ordinary shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected stock price volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. See Note 11 for additional information about equity-based compensation. Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 13 for additional information about hedges and derivative financial instruments. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). This accounting standard supersedes all existing US GAAP revenue recognition guidance. Under ASU 2014-09, a company will recognize revenue when it transfers the control of promised goods or services to customers in an amount that reflects the consideration which the company expects to collect in exchange for those goods or services. ASU 2014-09 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14). This accounting standard defers the effective date of ASU 2014-09 for one year and permits early adoption as of the original effective date. A cross-functional implementation team has been established consisting of representatives from all of our business segments. The implementation team is working to analyze the impact of the standard on the Company's contract portfolio by reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. In addition, the Company is in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard. Eaton plans to adopt the standard as of the first quarter of 2018 using the modified retrospective approach and will record a cumulative adjustment to equity for open contracts as of January 1, 2018. Certain revenues will move from point-in-time or multiple elements to over time because of the continuous transfer of control to customers. Eaton is continuing to evaluate the impact of ASU 2014-09 and an estimate of the impact to the consolidated financial statements cannot be made at this time. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02, Leases (Topic 842), (ASU 2016-02). This accounting standard requires that a lessee recognize a lease asset and a lease liability on its balance sheet for all leases, including operating leases, with a term greater than 12 months. ASU 2016-02 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2018. Eaton is evaluating the impact of ASU 2016-02 and an estimate of the impact to the consolidated financial statements cannot be made at this time. In March 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, (ASU 2016-09). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The new standard eliminates the accounting for excess tax benefits to be recognized in equity, and tax deficiencies recognized in either equity or the income tax provision. ASU 2016-09 is effective for annual and interim reporting periods beginning after December 15, 2016. The Company will adopt the new standard in the first quarter of 2017. Upon adoption, the Company anticipates recognizing deferred tax assets for all excess tax benefits that had not been previously recognized. This will be accomplished through a cumulative-effect adjustment to retained earnings and is not expected to have a material impact to the consolidated financial statements. |
Acquisitions and Sales of Busin
Acquisitions and Sales of Businesses | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Sales of Businesses | ACQUISITIONS AND SALES OF BUSINESSES Acquisition of Ephesus Lighting, Inc. On October 28, 2015, Eaton acquired Ephesus Lighting, Inc. (Ephesus). Ephesus is a leader in LED lighting for stadiums and other high lumen outdoor and industrial applications. Its sales for the 12 months ended September 30, 2015 were $ 23 . Ephesus is reported within the Electrical Products business segment. Acquisition of UK Safety Technology Manufacturer Oxalis Group Ltd. On January 12, 2015, Eaton acquired Oxalis Group Ltd. (Oxalis). Oxalis is a manufacturer of closed-circuit television camera stations, public address and general alarm systems and other electrical products for the hazardous area, marine and industrial communications markets. Its sales for the 12 months ended December 31, 2014 were $ 9 . Oxalis is reported within the Electrical Systems and Services business segment. Sale of Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions On May 9, 2014, Eaton sold the Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to Safran for $270 , which resulted in a pre-tax gain of $154 . |
Acquisition Integration Charges
Acquisition Integration Charges | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition Integration Charges | ACQUISITION INTEGRATION CHARGES Eaton incurs integration charges related to acquired businesses. A summary of these charges follows: 2016 2015 2014 Electrical Products $ 3 $ 25 $ 66 Electrical Systems and Services 1 15 51 Hydraulics — 2 12 Total business segments 4 42 129 Corporate — 5 25 Total acquisition integration charges before income taxes 4 47 154 Income taxes 1 16 52 Total after income taxes $ 3 $ 31 $ 102 Per ordinary share - diluted $ 0.01 $ 0.07 $ 0.21 Business segment acquisition integration charges in 2016 related to the integration of Ephesus Lighting, Inc. and Oxalis Group Ltd., which were acquired in 2015. The charges associated with Ephesus were included in Cost of products sold and Selling and administrative expense, while the charges associated with Oxalis were included in Cost of products sold. Business segment acquisition charges in 2015 related primarily to the integration of Cooper Industries plc, which was acquired in 2012. Business segment acquisition integration charges in 2014 related primarily to the integrations of Cooper and Polimer Kaucuk Sanayi ve Pazarlama A.S., which was acquired in 2012. The charges in 2015 and 2014 were included in Cost of products sold or Selling and administrative expense, as appropriate. In Business Segment Information, the charges reduced Operating profit of the related business segment. The integration of Cooper included costs related to restructuring activities Eaton undertook in an effort to gain efficiencies in selling, marketing, traditional back-office functions and manufacturing and distribution. These actions resulted in charges of $20 during 2015, comprised of severance costs and other expense totaling $1 and $19 , respectively, of which $14 were incurred in the Electrical Products segment, and $6 were incurred in the Electrical Systems and Services segment. In 2014, we incurred $95 of charges related to Cooper restructuring activities, comprised of severance costs totaling $69 and other expenses totaling $26 , of which $53 and $42 were recognized in the Electrical Products and Electrical Systems and Services business segments, respectively. Corporate integration charges related primarily to the acquisition of Cooper. These charges were included in Selling and administrative expense. In Business Segment Information, the charges were included in Other corporate expense - net. See Note 15 for additional information about business segments. |
Restructuring Charges Restructu
Restructuring Charges Restructuring Charges | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure | RESTRUCTURING CHARGES During 2015 , Eaton announced its commitment to undertake actions to reduce its cost structure in all business segments and at corporate. Restructuring charges incurred under this plan were $211 in 2016 and $129 in 2015 . The charges associated with restructuring activities are anticipated to be $100 in 2017. A summary of restructuring charges by type follows: 2016 2015 Workforce reductions $ 177 $ 112 Plant closings and other 34 17 Total $ 211 $ 129 A summary of restructuring charges by segment follows: 2016 2015 Electrical Products $ 44 $ 12 Electrical Systems & Services 49 29 Hydraulics 67 31 Aerospace 4 5 Vehicle 35 34 Corporate 12 18 Total $ 211 $ 129 A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows: Workforce reductions Plant closing and other Total Balance at December 31, 2014 $ — $ — $ — Liability recognized 112 17 129 Payments (59 ) (3 ) (62 ) Other adjustments 1 (14 ) (13 ) Balance at December 31, 2015 54 — 54 Liability recognized 177 34 211 Payments (116 ) (13 ) (129 ) Other adjustments (2 ) (20 ) (22 ) Balance at December 31, 2016 $ 113 $ 1 $ 114 These charges were included in Cost of products sold, Selling and administrative expenses or Other income-net, as appropriate. In Business Segment Information, the charges reduced Operating profit of the related business segment. See Note 15 for additional information about business segments. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by segment follow: Electrical Products Electrical Systems and Services Hydraulics Aerospace Vehicle Total December 31, 2014 $ 6,940 $ 4,314 $ 1,327 $ 962 $ 350 $ 13,893 Additions 31 20 — — — 51 Reclassifications (106 ) 106 — — — — Translation (223 ) (161 ) (68 ) (6 ) (7 ) (465 ) December 31, 2015 6,642 4,279 1,259 956 343 13,479 Translation (145 ) (76 ) (38 ) (18 ) (1 ) (278 ) December 31, 2016 $ 6,497 $ 4,203 $ 1,221 $ 938 $ 342 $ 13,201 A summary of other intangible assets follows: 2016 2015 Historical cost Accumulated amortization Historical cost Accumulated amortization Intangible assets not subject to amortization Trademarks $ 1,637 $ 1,661 Intangible assets subject to amortization Customer relationships $ 3,456 $ 1,199 $ 3,544 $ 1,010 Patents and technology 1,342 519 1,447 511 Trademarks 1,104 378 1,113 311 Other 97 26 103 22 Total intangible assets subject to amortization $ 5,999 $ 2,122 $ 6,207 $ 1,854 Amortization expense related to intangible assets subject to amortization in 2016 , and estimated amortization expense for each of the next five years, follows: 2016 $ 392 2017 375 2018 355 2019 348 2020 343 2021 334 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | DEBT A summary of long-term debt, including the current portion, follows: 2016 2015 2.375% debentures due 2016 $ — $ 240 5.30% notes due 2017 ($150 converted to floating rate by interest rate swap) 250 250 6.10% debentures due 2017 289 289 1.50% senior notes due 2017 ($750 converted to floating rate by interest rate swap) 1,000 1,000 5.60% notes due 2018 ($415 converted to floating rate by interest rate swap) 450 450 4.215% Japanese yen notes due 2018 86 83 6.95% notes due 2019 ($300 converted to floating rate by interest rate swap) 300 300 3.875% debentures due 2020 ($150 converted to floating rate by interest rate swap) 239 239 3.47% notes due 2021 ($275 converted to floating rate by interest rate swap) 300 300 8.10% debentures due 2022 100 100 2.75% senior notes due 2022 ($1,400 converted to floating rate by interest rate swap) 1,600 1,600 3.68% notes due 2023 ($200 converted to floating rate by interest rate swap) 300 300 0.75% euro notes due 2024 580 — 6.50% debentures due 2025 145 145 7.65% debentures due 2029 ($50 converted to floating rate by interest rate swap) 200 200 4.00% senior notes due 2032 700 700 5.45% debentures due 2034 ($25 converted to floating rate by interest rate swap) 136 136 5.80% notes due 2037 240 240 4.15% senior notes due 2042 1,000 1,000 5.25% to 8.875% notes (maturities ranging from 2018 to 2035, including $50 converted to floating rate by interest rate swap) 239 239 Other 109 177 Total long-term debt 8,263 7,988 Less current portion of long-term debt (1,552 ) (242 ) Long-term debt less current portion $ 6,711 $ 7,746 On October 14, 2016, Eaton refinanced a $750 , five -year revolving credit facility with a $750 , five -year revolving credit facility that will expire October 14, 2021. Eaton also maintains a $500 , four -year revolving credit facility that will expire on October 3, 2018 and a $750 , five -year credit facility that will expire October 3, 2019. This refinancing maintains long-term revolving credit facilities at a total of $2,000 . The revolving credit facilities are used to support commercial paper borrowings and are fully and unconditionally guaranteed by Eaton and certain of its direct and indirect subsidiaries on an unsubordinated, unsecured basis. There were no borrowings outstanding under Eaton's revolving credit facilities at December 31, 2016 or 2015. The Company had available lines of credit of $823 from various banks primarily for the issuance of letters of credit, of which there was $285 outstanding at December 31, 2016 . Borrowings outside the United States are generally denominated in local currencies. The Company repaid the 2.375% debentures on January 15, 2016, for $240 . The Company repaid the 5.45% debentures on April 1, 2015 for $300 , the 4.65% notes on June 15, 2015 for $100 and the 0.95% senior notes for $600 on November 2, 2015. Short-term debt was $14 all of which was outside the United States as of December 31, 2016 . On September 20, 2016, a subsidiary of Eaton issued euro denominated notes (Euro Notes) with a face value of €550 ( $615 based on the September 20, 2016 spot rate), in accordance with Regulation S promulgated under the Securities Act of 1933, as amended. The Euro Notes mature in 2024 with interest payable annually at a rate of 0.75% . The issuer received proceeds totaling €544 ( $609 based on the September 20, 2016 spot rate) from the issuance, net of financing costs and discounts. The senior Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The Euro Notes contain an optional redemption provision by which the Company may make an offer to purchase all or any part of the Euro Notes prior to June 20, 2024 at a purchase price of the greater of (a) 100% of the principal amount of the respective Euro Notes being redeemed, or (b) the sum of the present values of the respective remaining scheduled payments of principal and interest, discounted to the redemption date on an annual basis at the benchmark Bund Rate plus 20 basis points. In each case, the redemption price will include any accrued and unpaid interest on the Euro Notes being redeemed. At any time on or after June 20, 2024, the Company may redeem the Euro Notes, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest. The Euro Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the Euro Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees and discounts are amortized in Interest expense - net over the respective terms of the Euro Notes. The Euro Notes are subject to customary non-financial covenants. The senior notes registered by Eaton Corporation under the Securities Act of 1933 (the Senior Notes) are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. Substantially all of the other debt instruments issued by the Company or any of its subsidiaries are similarly guaranteed on an unsubordinated, unsecured basis by the identical group of guaranteeing entities. See Note 16 for additional information about the Senior Notes. Eaton is in compliance with each of its debt covenants for all periods presented. Maturities of long-term debt for each of the next five years follow: 2017 $ 1,552 2018 573 2019 340 2020 241 2021 302 Interest paid on debt follows: 2016 $ 266 2015 271 2014 296 |
Retirement Benefits Plans
Retirement Benefits Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefit Plans | RETIREMENT BENEFITS PLANS Eaton has defined benefits pension plans and other postretirement benefits plans. Obligations and Funded Status United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Funded status Fair value of plan assets $ 2,969 $ 2,934 $ 1,478 $ 1,472 $ 74 $ 93 Benefit obligations (3,771 ) (3,829 ) (2,314 ) (2,175 ) (473 ) (575 ) Funded status $ (802 ) $ (895 ) $ (836 ) $ (703 ) $ (399 ) $ (482 ) Amounts recognized in the Consolidated Balance Sheets Non-current assets $ 34 $ 11 $ 33 $ 57 $ — $ — Current liabilities (24 ) (57 ) (22 ) (23 ) (31 ) (42 ) Non-current liabilities (812 ) (849 ) (847 ) (737 ) (368 ) (440 ) Total $ (802 ) $ (895 ) $ (836 ) $ (703 ) $ (399 ) $ (482 ) Amounts recognized in Accumulated other comprehensive loss (pretax) Net actuarial loss $ 1,232 $ 1,322 $ 771 $ 644 $ 21 $ 95 Prior service cost (credit) 3 5 8 9 (60 ) (74 ) Total $ 1,235 $ 1,327 $ 779 $ 653 $ (39 ) $ 21 Change in Benefit Obligations United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 3,829 $ 4,047 $ 2,175 $ 2,337 $ 575 $ 676 Service cost 111 123 63 71 4 6 Interest cost 125 156 62 72 17 24 Actuarial (gain) loss 52 (179 ) 355 (23 ) (72 ) (66 ) Gross benefits paid (346 ) (318 ) (94 ) (100 ) (79 ) (86 ) Currency translation — — (245 ) (182 ) 1 (8 ) Plan amendments — — 2 — — (1 ) Other — — (4 ) — 27 30 Balance at December 31 $ 3,771 $ 3,829 $ 2,314 $ 2,175 $ 473 $ 575 Accumulated benefit obligation $ 3,620 $ 3,672 $ 2,189 $ 2,049 Change in Plan Assets United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 2,934 $ 3,086 $ 1,472 $ 1,535 $ 93 $ 116 Actual return on plan assets 221 (55 ) 212 29 3 1 Employer contributions 160 221 102 109 30 31 Gross benefits paid (346 ) (318 ) (94 ) (100 ) (79 ) (86 ) Currency translation — — (211 ) (101 ) — — Other — — (3 ) — 27 31 Balance at December 31 $ 2,969 $ 2,934 $ 1,478 $ 1,472 $ 74 $ 93 The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 follow: United States pension liabilities Non-United States pension liabilities 2016 2015 2016 2015 Projected benefit obligation $ 3,342 $ 3,376 $ 1,902 $ 1,387 Accumulated benefit obligation 3,190 3,219 1,824 1,328 Fair value of plan assets 2,505 2,470 1,066 650 Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss follow: United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 1,327 $ 1,382 $ 653 $ 706 $ 21 $ 90 Prior service cost arising during the year — — 2 — — (1 ) Net loss (gain) arising during the year 81 138 235 47 (69 ) (62 ) Currency translation — — (75 ) (58 ) 1 (4 ) Less amounts included in expense during the year (173 ) (193 ) (36 ) (42 ) 8 (2 ) Net change for the year (92 ) (55 ) 126 (53 ) (60 ) (69 ) Balance at December 31 $ 1,235 $ 1,327 $ 779 $ 653 $ (39 ) $ 21 Benefits Expense United States pension benefit expense Non-United States pension benefit expense Other postretirement benefits expense 2016 2015 2014 2016 2015 2014 2016 2015 2014 Service cost $ 111 $ 123 $ 117 $ 63 $ 71 $ 66 $ 4 $ 6 $ 13 Interest cost 125 156 162 62 72 85 17 24 32 Expected return on plan assets (250 ) (262 ) (246 ) (92 ) (99 ) (98 ) (6 ) (5 ) (6 ) Amortization 92 119 93 33 40 27 (9 ) 2 6 78 136 126 66 84 80 6 27 45 Settlements, curtailments and other 81 74 71 3 2 2 1 — (31 ) Total expense $ 159 $ 210 $ 197 $ 69 $ 86 $ 82 $ 7 $ 27 $ 14 The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2017 follow: United States pension liabilities Non-United States pension liabilities Other postretirement liabilities Actuarial loss $ 142 $ 54 $ 2 Prior service cost (credit) 1 1 (14 ) Total $ 143 $ 55 $ (12 ) Retirement Benefits Plans Assumptions For purposes of determining liabilities related to pension plans and other postretirement benefits plans in the United States, the Company updated its mortality assumption in 2014 to use the RP-2014 tables with a generational improvement scale based on MP-2014. In 2015, the Company updated its mortality assumption to use 2014 tables and a generational improvement scale that are based on MP-2015. In 2016, the Company updated its mortality assumption to use 2014 tables and a generational improvement scale that are based on MP-2016. In 2016, the Company adopted a change in the method it uses to estimate the service and interest cost components of net periodic benefit cost for its defined benefit pension and other postretirement benefit plans. Prior to 2016, for the vast majority of its plans, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in 2016, the Company used a spot rate approach by applying the specific spot rates along the yield curve to the relevant projected cash flows in the estimation of the service and interest components of benefit cost, resulting in a more precise measurement. This change does not affect the measurement of total benefit obligations. The change was accounted for as a change in estimate and, accordingly, was accounted for prospectively starting in 2016. The reductions in service cost and interest cost for 2016 associated with this change in estimate were $3 and $42 , respectively. Pension Plans United States pension plans Non-United States pension plans 2016 2015 2014 2016 2015 2014 Assumptions used to determine benefit obligation at year-end Discount rate 4.12 % 4.22 % 3.97 % 2.63 % 3.46 % 3.33 % Rate of compensation increase 3.15 % 3.18 % 3.16 % 3.13 % 3.12 % 3.13 % Assumptions used to determine expense Discount rate used to determine benefit obligation 4.22 % 3.97 % 4.67 % 3.46 % 3.33 % 4.20 % Discount rate used to determine service cost 4.35 % 3.97 % 4.67 % 4.13 % 3.33 % 4.20 % Discount rate used to determine interest cost 3.42 % 3.97 % 4.67 % 3.07 % 3.33 % 4.20 % Expected long-term return on plan assets 8.50 % 8.50 % 8.40 % 6.62 % 6.92 % 7.00 % Rate of compensation increase 3.18 % 3.16 % 3.16 % 3.12 % 3.13 % 3.12 % The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical data taking into account each plan's target asset allocation. The expected long-term rates of return on pension assets for United States pension plans and Non-United States pension plans for 2017 are 7.90% and 6.30%, respectively. The discount rates were determined using appropriate bond data for each country. Other Postretirement Benefits Plans Substantially all of the obligation for other postretirement benefits plans relates to United States plans. Assumptions used to determine other postretirement benefits obligations and expense follow: Other postretirement benefits plans 2016 2015 2014 Assumptions used to determine benefit obligation at year-end Discount rate 3.96 % 4.04 % 3.79 % Health care cost trend rate assumed for next year 7.35 % 7.10 % 6.31 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.77 % Year ultimate health care cost trend rate is achieved 2026 2025 2024 Assumptions used to determine expense Discount rate used to determine benefit obligation 4.04 % 3.79 % 4.48 % Discount rate used to determine service cost 4.26 % 3.79 % 4.48 % Discount rate used to determine interest cost 3.12 % 3.79 % 4.48 % Initial health care cost trend rate 7.10 % 6.31 % 6.64 % Ultimate health care cost trend rate 4.75 % 4.77 % 4.77 % Year ultimate health care cost trend rate is achieved 2025 2024 2023 Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A 1-percentage point change in the assumed health care cost trend rates would have the following effects: 1% increase 1% decrease Effect on total service and interest cost $ 1 $ (1 ) Effect on other postretirement liabilities 17 (15 ) Employer Contributions to Retirement Benefits Plans Contributions to pension plans that Eaton expects to make in 2017 , and made in 2016 , 2015 and 2014 , follow: 2017 2016 2015 2014 United States plans $ 125 $ 160 $ 221 $ 248 Non-United States plans 90 102 109 114 Total contributions $ 215 $ 262 $ 330 $ 362 The following table provides the estimated pension and other postretirement benefit payments for each of the next five years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below. Estimated United States pension payments Estimated non-United States pension payments Estimated other postretirement benefit payments Gross Medicare prescription drug subsidy 2017 $ 309 $ 77 $ 53 $ (5 ) 2018 279 80 50 (5 ) 2019 278 83 46 (4 ) 2020 281 86 42 (4 ) 2021 289 88 36 (3 ) 2022 - 2026 1,460 495 156 (9 ) Pension Plan Assets Investment policies and strategies are developed on a country specific basis. The United States plans, representing 67% of worldwide pension assets, and the United Kingdom plans representing 27% of worldwide pension assets, are invested primarily for growth, as the majority of the assets are in plans with active participants and ongoing accruals. In general, the plans have their primary allocation to diversified global equities, primarily through index funds in the form of common collective and other trusts. The United States plans' target allocation is 33% United States equities, 32% non-United States equities, 8% real estate (primarily equity of real estate investment trusts), 22% debt securities and 5% other, including hedge funds, private equity and cash equivalents. The United Kingdom plans' target asset allocations are 57% equities and the remainder in debt securities, cash equivalents and real estate investments. The equity risk for the plans is managed through broad geographic diversification and diversification across industries and levels of market capitalization. The majority of debt allocations for these plans are longer duration government and corporate debt. The United States, United Kingdom and Canada pension plans are authorized to use derivatives to achieve more economically desired market exposures and to use futures, swaps and options to gain or hedge exposures. Other Postretirement Benefits Plan Assets The Voluntary Employee Benefit Association trust which holds U.S. other postretirement benefits plan assets has investment guidelines that include allocations to global equities and fixed income investments. The trust's 2016 target investment allocation is 53% diversified global equities and 47% fixed income securities held in a trust that invests primarily in exchange traded funds. The fixed income allocation is primarily comprised of intermediate term, high quality, dollar denominated, fixed income instruments. The equity allocation is invested in diversified global equity index funds. Fair Value Measurements Financial instruments included in pension and other postretirement benefits plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology as follows: Level 1 - Quoted prices (unadjusted) for identical assets in active markets. Level 2 - Quoted prices for similar assets in active markets, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - Unobservable prices or inputs. Certain investments that are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables to permit a reconciliation to total plan assets. Pension Plans A summary of the fair value of pension plan assets at December 31, 2016 and 2015 , follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Common collective trusts Non-United States equity and global equities $ 413 $ — $ 413 $ — United States equity 94 — 94 — Fixed income 422 — 422 — Fixed income securities 359 — 359 — United States treasuries 123 123 — — Bank loans 150 — 150 — Real estate securities 201 195 — 6 Equity securities 104 104 — — Cash equivalents 276 21 255 — Exchange traded funds 55 55 — — Other 109 — 14 95 Common collective and other trusts measured at net asset value 2,038 Hedge funds measured at net asset value 85 Money market funds measured at net asset value 18 Total pension plan assets $ 4,447 $ 498 $ 1,707 $ 101 Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2015 Common collective trusts Non-United States equity and global equities $ 415 $ — $ 415 $ — United States equity 96 — 96 — Fixed income 418 — 418 — Fixed income securities 357 — 357 — United States treasuries 105 105 — — Bank loans 136 — 136 — Real estate securities 251 244 — 7 Equity securities 98 98 — — Cash equivalents 227 17 210 — Exchange traded funds 49 49 — — Other 100 — 14 86 Common collective and other trusts measured at net asset value 2,043 Hedge funds measured at net asset value 92 Money market funds measured at net asset value 19 Total pension plan assets $ 4,406 $ 513 $ 1,646 $ 93 The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2015 and 2016 due to the following: Real estate securities Other Total Balance at December 31, 2014 $ 6 $ 60 $ 66 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 1 (2 ) (1 ) Purchases, sales, settlements - net — 37 37 Transfers into or out of Level 3 — (9 ) (9 ) Balance at December 31, 2015 7 86 93 Actual return on plan assets: Gains (losses) relating to assets still held at year-end — (6 ) (6 ) Purchases, sales, settlements - net (1 ) 15 14 Transfers into or out of Level 3 — — — Balance at December 31, 2016 $ 6 $ 95 $ 101 Other Postretirement Benefits Plans A summary of the fair value of other postretirement benefits plan assets at December 31, 2016 and 2015 , follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Cash equivalents $ 8 $ 8 $ — $ — Common collective and other trusts measured at net asset value 66 Total other postretirement benefits plan assets $ 74 $ 8 $ — $ — Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2015 Fixed income securities 18 — 18 — United States treasuries 20 20 — — Cash equivalents 11 11 — — Common collective and other trusts measured at net asset value 44 Total other postretirement benefits plan assets $ 93 $ 31 $ 18 $ — Valuation Methodologies Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2016 and 2015 . Common collective and other trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. The investments in other trusts are predominantly in exchange traded funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective and other trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Fixed income securities - These securities consist of publicly traded United States and non-United States fixed interest obligations (principally corporate and government bonds and debentures). The fair value of corporate and government debt securities is determined through third-party pricing models that consider various assumptions, including time value, yield curves, credit ratings, and current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. United States treasuries - Valued at the closing price of each security. Bank loans - These securities consist of senior secured term loans of publicly traded and privately held United States and non-United States floating rate obligations (principally corporations of non-investment grade rating). The fair value is determined through third-party pricing models that primarily utilize dealer quoted current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. Real estate and equity securities - These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1. Cash equivalents - Primarily certificates of deposit, commercial paper, and repurchase agreements. Exchange traded funds - Valued at the closing price of the exchange traded fund's shares. Hedge funds - Consists of direct investments in hedge funds through limited partnership interests. Net asset values are based on the estimated fair value of the ownership interest in the investment as determined by the General Partner. The majority of the holdings of the hedge funds are in equity securities traded on public exchanges. The investment terms of the hedge funds allow capital to be redeemed quarterly given prior notice with certain limitations. Hedge funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Money market funds - Money market funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Other - Primarily insurance contracts for international plans and also futures contracts and over-the-counter options. These investments are valued based on the closing prices of future contracts or indices as available on Bloomberg or similar service, and private equity investments. For additional information regarding fair value measurements, see Note 12. Defined Contribution Plans The Company has various defined contribution benefit plans, primarily consisting of the plans in the United States. The total contributions related to these plans are charged to expense and were as follows: 2016 $ 72 2015 137 2014 141 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Contingencies Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, patent infringement, personal injuries, antitrust matters and employment-related matters. Eaton is also subject to asbestos claims from historic products which may have contained asbestos. Insurance may cover some of the costs associated with these claims. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes they will not have a material adverse effect on the consolidated financial statements. During the fourth quarter of 2016, the Company was able to resolve several insurance matters. In total, the income from insurance matters was $68. In December 2010, a Brazilian court held that a judgment obtained by a Brazilian company, Raysul, against another Brazilian company, Saturnia, which was sold by Eaton in 2006 , could be enforced against Eaton Ltda. The judgment was based on an alleged violation of an agency agreement between Raysul and Saturnia. At March 31, 2016, the Company had a total accrual of 100 Brazilian Reais related to this matter ( $31 based on June 2016 exchange rates). In June 2016, Eaton signed a settlement agreement and resolved the matter, which did not have a material impact on the consolidated financial statements. On October 5, 2006, ZF Meritor LLC and Meritor Transmission Corporation (collectively, Meritor) filed an action against Eaton in the United States District Court for Delaware. The action sought damages, which would have been trebled under United States antitrust laws, as well as injunctive relief and costs. The suit alleged that Eaton engaged in anti-competitive conduct against Meritor in the sale of heavy-duty truck transmissions in North America. On June 23, 2014, Eaton announced it signed a settlement agreement with Meritor in the amount of $500 that resolved the lawsuit and removed the uncertainty of a trial and appeal process. On July 16, 2014, Eaton paid Meritor the $500 . Frisby Corporation, now known as Triumph Actuation Systems, LLC, and other claimants (collectively, Triumph) asserted claims alleging, among other things, unfair competition, defamation, malicious prosecution, deprivation of civil rights, and antitrust in the Hinds County Circuit Court of Mississippi in 2004 and in the Federal District Court of North Carolina in 2011. Eaton had asserted claims against Triumph regarding improper use of trade secrets and these claims were dismissed by the Hinds County Circuit Court. On June 18, 2014, Eaton announced it signed a settlement agreement with Triumph in the amount of $147.5 that resolved all claims and lawsuits and removed the uncertainty of a trial and appeal process. On July 8, 2014, Eaton paid Triumph the $147.5 . Environmental Contingencies Eaton has established policies to ensure that its operations are conducted in keeping with good corporate citizenship and with a positive commitment to the protection of the natural and workplace environments. The Company's manufacturing facilities are required to be certified to ISO 14001, an international standard for environmental management systems. The Company routinely reviews EHS performance at each of its facilities and continuously strives to improve pollution prevention. Eaton is involved in remedial response and voluntary environmental remediation at a number of sites, including certain of its currently-owned or formerly-owned plants. The Company has also been named a potentially responsible party under the United States federal Superfund law, or the state equivalents thereof, at a number of disposal sites. The Company became involved in these sites as a result of government action or in connection with business acquisitions. At the end of 2016 , the Company was involved with a total of 121 sites worldwide, including the Superfund sites mentioned above, with none of these sites being individually significant to the Company. Remediation activities, generally involving soil and/or groundwater contamination, include pre-cleanup activities such as fact finding and investigation, risk assessment, feasibility study, design and action planning, performance (where actions may range from monitoring, to removal of contaminants, to installation of longer-term remediation systems), and operation and maintenance of a remediation system. The extent of expected remediation activities and costs varies by site. A number of factors affect the cost of environmental remediation, including the number of parties involved at a particular site, the determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental regulations, and the continuing advancement of remediation technology. Taking these factors into account, Eaton has estimated the costs of remediation, which will be paid over a period of years. The Company accrues an amount on an undiscounted basis, consistent with the estimates of these costs, when it is probable that a liability has been incurred. Actual results may differ from these estimates. At December 31, 2016 and 2015 , the Company had an accrual totaling $124 and $131 , respectively, for these costs. Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability by an amount that would have a material effect on its financial position, results of operations or cash flows. Warranty Accruals A summary of the current and long-term warranty accruals follows: 2016 2015 2014 Balance at January 1 $ 195 $ 213 $ 189 Provision 117 104 125 Settled (130 ) (114 ) (120 ) Other (2 ) (8 ) 19 Balance at December 31 $ 180 $ 195 $ 213 Lease Commitments Eaton leases certain real properties and equipment. A summary of minimum rental commitments at December 31, 2016 under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, for each of the next five years and thereafter in the aggregate, follow: 2017 $ 163 2018 127 2019 85 2020 58 2021 40 Thereafter 63 Total noncancelable lease commitments $ 536 A summary of rental expense follows: 2016 $ 220 2015 225 2014 244 |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | EQUITY-BASED COMPENSATION Restricted Stock Units and Awards Restricted stock units (RSUs) and restricted stock awards (RSAs) have been issued to certain employees and directors. Participants awarded RSUs do not receive dividends; therefore, the fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three years. The fair value of RSAs is determined based on the closing market price of the Company’s ordinary shares at the date of grant. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over three or four years. A summary of the RSU and RSA activity for 2016 follows: (Restricted stock units and awards in millions) Number of restricted stock units and awards Weighted-average fair value per unit and award Non-vested at January 1 2.1 $ 65.06 Granted 1.6 52.80 Vested (0.9 ) 64.11 Forfeited (0.2 ) 59.89 Non-vested at December 31 2.6 $ 57.87 Information related to RSUs and RSAs follows: 2016 2015 2014 Pretax expense for RSUs and RSAs $ 65 $ 68 $ 81 After-tax expense for RSUs and RSAs 42 44 53 Fair value of vested RSUs and RSAs 71 110 105 As of December 31, 2016 , total compensation expense not yet recognized related to non-vested RSUs and RSAs was $87 , and the weighted-average period in which the expense is expected to be recognized is 2.5 years. Excess tax benefit for RSUs and RSAs totaled $5 for 2014 . There was no excess tax benefit for RSUs and RSAs in 2016 and 2015 . Performance Share Units In February 2016, the Compensation and Organization Committee of the Board of Directors approved the grant of performance share units (PSUs) to certain employees that vest based on the satisfaction of a three-year service period and total shareholder return relative to that of a group of peers. Awards earned at the end of the three-year vesting period range from 0% to 200% of the targeted number of PSUs granted based on the ranking of total shareholder return of the Company, assuming reinvestment of all dividends, relative to a defined peer group of companies. Equity-based compensation expense for these PSUs is recognized over the period during which an employee is required to provide service in exchange for the award. Upon vesting, dividends that have accumulated during the vesting period are paid on earned awards. The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions. The principal assumptions utilized in valuing these PSUs include the expected stock price volatility (based on the most recent 3-year period as of the grant date) and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon bonds with a 3-year maturity as of the grant date). A summary of the assumptions used in determining fair value of these PSUs follows: 2016 Expected volatility 24 % Risk-free interest rate 0.88 % Weighted-average fair value of PSUs granted $ 76.41 A summary of the 2016 activity for these PSUs follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 — $ — Granted 1 0.6 76.41 Vested — — Forfeited (0.1 ) 76.41 Non-vested at December 31 0.5 $ 76.41 1 Performance shares granted assuming the Company will perform at target relative to peers. In February 2016 and 2015 , performance share units were granted to certain employees that entitles the holder to receive one ordinary share for each PSU that vest based on the satisfaction of a three-year service period and the achievement of certain performance metrics over that same period. Upon vesting, PSU holders receive dividends that accumulate during the vesting period. The fair value of these PSUs is determined based on the closing market price of the Company's ordinary shares at the date of grant. Equity-based compensation expense is recognized over the period an employee is required to provide service based on the number of PSUs for which achievement of the performance objectives is probable. A summary of the 2016 activity for these PSUs follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 0.8 $ 71.72 Granted 0.1 56.55 Vested — — Forfeited (0.2 ) 71.72 Non-vested at December 31 0.7 $ 68.23 Information related to PSUs follows: 2016 2015 Pretax expense for PSUs $ 13 $ 2 After-tax expense for PSUs 8 1 As of December 31, 2016 , total compensation expense not yet recognized related to non-vested PSUs was $30 and the weighted average period in which the expense is to be recognized is 2 years. There was no excess tax benefit for PSUs in 2016 and 2015 . Stock Options Under various plans, stock options have been granted to certain employees and directors to purchase ordinary shares at prices equal to fair market value on the date of grant. Substantially all of these options vest ratably during the three -year period following the date of grant and expire 10 years from the date of grant. Compensation expense is recognized for stock options based on the fair value of the options at the date of grant and amortized on a straight-line basis over the period the employee or director is required to provide service. The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The principal assumptions utilized in valuing stock options include the expected stock price volatility (based on the most recent historical period equal to the expected life of the option); the expected option life (an estimate based on historical experience); the expected dividend yield; and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon with a maturity equal to the expected life of the option). A summary of the assumptions used in determining the fair value of stock options follows: 2016 2015 2014 Expected volatility 27 % 29 % 34 % Expected option life in years 5.5 5.5 5.5 Expected dividend yield 2.5 % 2.6 % 2.4 % Risk-free interest rate 1.2 to 1.5% 1.6 to 1.5% 1.7 to 1.5% Weighted-average fair value of stock options granted $ 11.80 $ 15.25 $ 19.46 A summary of stock option activity follows: (Options in millions) Weighted-average exercise price per option Options Weighted-average remaining contractual life in years Aggregate intrinsic value Outstanding at January 1, 2016 $ 51.94 6.2 Granted 56.73 1.3 Exercised 40.32 (1.9 ) Forfeited and canceled 65.74 (0.1 ) Outstanding at December 31, 2016 $ 56.75 5.5 5.6 $ 64.5 Exercisable at December 31, 2016 $ 54.28 3.7 4.0 $ 51.3 Reserved for future grants at December 31, 2016 18.6 The aggregate intrinsic value in the table above represents the total excess of the $67.09 closing price of Eaton ordinary shares on the last trading day of 2016 over the exercise price of the stock option, multiplied by the related number of options outstanding and exercisable. The aggregate intrinsic value is not recognized for financial accounting purposes and the value changes based on the daily changes in the fair market value of the Company's ordinary shares. Information related to stock options follows: 2016 2015 2014 Pretax expense for stock options $ 14 $ 12 $ 12 After-tax expense for stock options 9 8 8 Proceeds from stock options exercised 74 52 54 Income tax benefit related to stock options exercised Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows 5 4 4 Excess tax benefit classified in financing activities in the Consolidated Statements of Cash Flows 1 1 15 Intrinsic value of stock options exercised 42 44 55 Total fair value of stock options vested $ 14 $ 12 $ 12 Stock options exercised, in millions of options 1.9 1.4 1.5 As of December 31, 2016 , total compensation expense not yet recognized related to non-vested stock options was $10.6 , and the weighted-average period in which the expense is expected to be recognized is 1.9 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax (benefit) expense are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable. Certain Eaton operations which are located outside the United States are subject to income tax in both the United States as well as the country in which the operations are located. As a result, income before tax by location and the components of income tax expense by taxing jurisdiction are not directly related. Income (loss) before income taxes 2016 2015 2014 Ireland $ (923 ) $ (608 ) $ (332 ) Foreign 3,050 2,753 2,093 Total income before income taxes $ 2,127 $ 2,145 $ 1,761 Income tax expense (benefit) 2016 2015 2014 Current Ireland $ 2 $ 8 $ (13 ) United States Federal 95 88 87 State and local (2 ) 22 41 Foreign - other 209 240 239 Total current income tax expense 304 358 354 Deferred Ireland 2 1 2 United States Federal (72 ) (65 ) (224 ) State and local (2 ) (6 ) (49 ) Foreign - other (30 ) (124 ) (125 ) Total deferred income tax benefit (102 ) (194 ) (396 ) Total income tax expense (benefit) $ 202 $ 164 $ (42 ) Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate follow: 2016 2015 2014 Income taxes at the applicable statutory rate 25.0 % 25.0 % 25.0 % Ireland operations Ireland tax on trading income (0.3 )% (0.4 )% (0.1 )% Nondeductible interest expense 11.5 % 7.9 % 4.8 % United States operations United States (loss) income 0.2 % (0.4 )% (2.8 )% Nondeductible goodwill - Aerospace divestitures — % — % 1.4 % Credit for research activities (0.8 )% (0.8 )% (1.0 )% Other - net 2.5 % 5.4 % 1.5 % Other foreign operations United States foreign tax credit 0.6 % (0.8 )% (1.1 )% Other foreign operations (earnings taxed at other than the applicable statutory tax rate) (26.8 )% (25.1 )% (24.8 )% Other foreign operations - other items 0.9 % (0.5 )% (1.0 )% Worldwide operations Adjustments to tax liabilities (2.5 )% (1.4 )% (1.7 )% Adjustments to valuation allowances (0.8 )% (1.2 )% (2.6 )% Effective income tax expense (benefit) rate 9.5 % 7.7 % (2.4 )% During 2016 , income tax expense of $202 was recognized (an effective tax rate of 9.5% ) compared to income tax expense of $164 for 2015 (an effective tax rate of 7.7% ) and income tax benefit of $42 for 2014 (an effective tax benefit rate of 2.4% ). The 2016 effective tax rate increased from 2015 primarily due to greater levels of income earned in higher tax jurisdictions, partially offset by net decreases in worldwide tax liabilities. In 2014, excluding the net tax benefit of 7.6% for the Meritor and Triumph litigation settlements and related legal costs and the gain on the sale of the Aerospace businesses, the effective tax rate was 5.2% . The 2015 effective tax rate increased from 2014 due to greater levels of income earned in higher tax jurisdictions and net increases in worldwide tax liabilities. See Note 8 and Note 2 for additional information about litigation settlements and sales of businesses, respectively. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries of approximately $17.3 billion at December 31, 2016 , since it is the Company's intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings. The Company expects to deploy capital to those markets which offer particularly attractive growth opportunities. Given expected population growth and economic growth rates, most of the particularly attractive markets are outside of the United States. The cash that is permanently reinvested is typically used to expand these operations either organically or through acquisitions. In addition, the Company expects that minimal to no Irish tax would apply to dividends paid to the Irish parent due to the impact of the Irish foreign tax credit system. The Company's public dividends and share repurchases are funded primarily from Non-U.S. operations. Worldwide income tax payments, net of tax refunds, follow: 2016 $ 272 2015 302 2014 258 Deferred Income Tax Assets and Liabilities Components of current and noncurrent deferred income taxes follow: 2016 2015 Noncurrent assets and liabilities Noncurrent assets and liabilities Accruals and other adjustments Employee benefits $ 761 $ 808 Depreciation and amortization (1,823 ) (1,824 ) Other accruals and adjustments 796 717 United States federal income tax loss carryforwards 51 20 United States federal income tax credit carryforwards 182 183 United States state and local tax loss carryforwards and tax credit carryforwards 63 63 Other foreign tax loss carryforwards 1,715 2,265 Other foreign income tax credit carryforwards 63 70 Valuation allowance for income tax loss and income tax credit carryforwards (1,728 ) (2,315 ) Other valuation allowances (41 ) (15 ) Total deferred income taxes $ 39 $ (28 ) In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). ASU 2013-11 requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions except where the deferred tax asset or other carryforward are not available for use. The adoption of this standard resulted in a reduction of the Company’s consolidated long term deferred tax assets by $331 in 2016 and $262 in 2015 . At December 31, 2016 , certain Irish and non-United States subsidiaries had tax loss carryforwards and income tax credit carryforwards that are available to reduce future taxable income and tax liabilities. These carryforwards and their respective expiration dates are summarized below: 2017 through 2021 2022 through 2026 2027 through 2031 2032 through 2036 Not subject to expiration Valuation allowance Ireland and Non-U.S. income tax loss carryforwards $ 652 $ 7,476 $ 3 $ — $ 3,685 $ — Ireland and Non-U.S. deferred income tax assets for income tax loss carryforwards 76 688 1 — 950 (1,607 ) Ireland and Non-U.S. income tax credit carryforwards 10 21 2 — 30 (31 ) At December 31, 2016 , United States federal income tax loss carryforwards and income tax credit carryforwards are available to reduce future United States federal taxable income or tax liabilities. These carryforwards and their respective expiration dates are summarized below: 2017 2022 2027 2032 2037 Not subject to expiration Valuation allowance United States federal income tax loss carryforwards $ — $ 15 $ 20 $ 618 $ — $ — $ — United States federal deferred income tax assets for income tax loss carryforwards — 5 7 172 — — (12 ) United States federal deferred income tax assets for income tax loss carryforwards after ASU 2013-11 — 5 7 39 — — (12 ) United States federal income tax credit carryforwards 62 36 39 115 — 29 (44 ) United States federal income tax credit carryforwards after ASU 2013-11 62 36 8 76 — — (44 ) At December 31, 2016 , United States state and local tax loss carryforwards and tax credit carryforwards are also available to reduce future taxable income or tax liabilities. The deferred tax assets for these carryforwards and their respective expiration dates are summarized below: 2017 2022 2027 2032 2037 Not subject to expiration Valuation allowance United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect $ 8 $ 17 $ 11 $ 8 $ — $ — $ (17 ) United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect after ASU 2013-11 — 12 11 8 — — (17 ) United States state and local income tax credit carryforwards - net of federal tax effect 11 11 7 4 5 — (17 ) United States state and local income tax credit carryforwards - net of federal tax effect after ASU 2013-11 8 11 6 2 5 — (17 ) Recoverability of Deferred Income Tax Assets Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine its income tax provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and income tax loss carryforwards and income tax credit carryforwards. Management evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If the Company experiences cumulative pretax income in a particular jurisdiction in the three -year period including the current and prior two years, management normally concludes that the deferred income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments would lead management to conclude otherwise. However, if the Company experiences cumulative pretax losses in a particular jurisdiction in the three -year period including the current and prior two years, management then considers a series of factors in the determination of whether the deferred income tax assets can be realized. These factors include historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the utilization of certain deferred income tax liabilities, tax law carryback capability in the particular country, prudent and feasible tax planning strategies, and estimates of future earnings and taxable income using the same assumptions as those used for the Company's goodwill and other impairment testing. After evaluation of these factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific country, management would conclude that no valuation allowance would be required. To the extent that the deferred income tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, management would establish a valuation allowance. Applying the above methodology, valuation allowances have been established for certain deferred income tax assets to the extent they are not expected to be realized within the particular tax carryforward period. Unrecognized Income Tax Benefits A summary of gross unrecognized income tax benefits follows: 2016 2015 2014 Balance at January 1 $ 584 $ 493 $ 479 Increases and decreases as a result of positions taken during prior years Transfers from valuation allowances — — (3 ) Other increases, including currency translation 21 34 37 Other decreases, including currency translation (24 ) (34 ) (3 ) Balances related to acquired businesses — (1 ) (3 ) Increases as a result of positions taken during the current year 90 109 65 Decreases relating to settlements with tax authorities (19 ) — (51 ) Decreases as a result of a lapse of the applicable statute of limitations (23 ) (17 ) (28 ) Balance at December 31 $ 629 $ 584 $ 493 Eaton's long-term policy has been to enter into tax planning strategies only if it is more likely than not that the benefit would be sustained upon audit. For example, the Company does not enter into any of the United States Internal Revenue Service (IRS) Listed Transactions as set forth in Treasury Regulation 1.6011-4. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $529 . As of December 31, 2016 and 2015 , Eaton had accrued approximately $94 and $108 , respectively, for the payment of worldwide interest and penalties, which are not included in the table of unrecognized income tax benefits above. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. The Company has accrued penalties in jurisdictions primarily where they are automatically applied to any deficiency, regardless of the merit of the position. The resolution of the majority of Eaton's unrecognized income tax benefits is dependent upon uncontrollable factors such as the prospect of retroactive regulations; new case law; the willingness of the income tax authority to settle the issue, including the timing thereof; and other factors. Therefore, for the majority of unrecognized income tax benefits, it is not reasonably possible to estimate the increase or decrease in the next 12 months. For each of the unrecognized income tax benefits where it is possible to estimate the increase or decrease in the balance within the next 12 months, the Company does not anticipate any significant change. Eaton or its subsidiaries file income tax returns in Ireland and many countries around the world. With only few exceptions, Irish and non-United States subsidiaries of Eaton are no longer subject to examinations for years before 2007. The United States Internal Revenue Service (“IRS”) has completed its examination of Eaton Corporation and Includible Subsidiaries’ United States income tax returns for 2005 through 2010 and has issued Statutory Notices of Deficiency (Notices) as discussed below. The statute of limitations on these tax years remains open until the matters are resolved. The IRS is currently examining tax years 2011 through 2013. The statute of limitations for tax years 2011 through 2013 is open until April 30, 2018. Tax years 2014 and 2015 are still subject to examination by the IRS. With respect to the BZ Holdings Inc. and Subsidiaries (the former U.S. holding company for Cooper Industries) final return period ended December 21, 2012, the statute of limitations closed on September 15, 2016. On December 22, 2012, BZ Holdings Inc. and Subsidiaries joined the Eaton US Holdings Inc. and Includible Subsidiaries consolidated United States income tax return for 2012. Eaton is also under examination for the income tax filings in various states and localities of the United States. With only a few exceptions, Eaton Corporation and Includible Subsidiaries are no longer subject to income tax examinations from states and localities within the United States for years before 2012. Income tax returns of states and localities within the United States will be reopened to the extent of United States federal income tax adjustments, if any, going back to 2005 when those audit years are finalized. Some states and localities may not limit their assessment to the United States federal adjustments, and may require the opening of the entire tax year. In addition, with only a few exceptions, BZ Holdings Inc. and Includible Subsidiaries are no longer subject to United States state and local income tax examinations for years before 2012. In 2011, the IRS issued a Notice for Eaton Corporation and Includible Subsidiaries for the 2005 and 2006 tax years (the 2011 Notice). The 2011 Notice proposed assessments of $75 in additional taxes plus $52 in penalties related primarily to transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the U.S., net of agreed credits and deductions. The Company has set its transfer prices for products sold between these affiliates at the same prices that the Company sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) the Company entered into with the IRS. For the years 2001 through 2004, the IRS had previously accepted the transfer pricing methodology related to these APAs after a comprehensive review conducted in two separate audit cycles. Immediately prior to the 2011 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs, even though their respective APA terms had already expired. The Company is contesting the proposed assessments. The Company believes that it was in full compliance with the terms of the two APAs, and that the IRS's cancellation of these two APAs is without merit. On February 29, 2012, the Company filed a Petition with the U.S. Tax Court in which it asserted that the transfer pricing established in the APAs meets the arms-length standard set by the U.S. income tax laws, and accordingly, that the APAs should be enforced in accordance with their terms. The case involves both whether the APAs should be enforced and, if not, the appropriate transfer pricing methodology. The Tax Court’s decision in the case is now pending following a trial in 2015 and the completion of the parties’ briefing in 2016. In 2014, the Company received a Notice from the IRS for the 2007 through 2010 tax years (the 2014 Notice) proposing assessments of $190 in additional taxes plus $72 in penalties, net of agreed credits and deductions. The proposed assessments pertain primarily to the same transfer pricing issues for which the Tax Court’s decision is pending, as noted above. During 2007 through 2010, the Company set its transfer prices for products sold between its affiliates consistent with the terms of a written APA between it and the IRS that covered the years at issue. To establish the relevant transfer prices, the APA relied on prices at which the Company sells the products to third parties. The Company has continued to apply the arms-length transfer pricing methodology for 2011 through the current reporting period. The 2014 Notice includes a separate proposed assessment involving the recognition of income for several of the Company’s controlled foreign corporations. The Company believes that all proposed assessments are without merit. On November 25, 2014, the Company filed a Petition with the U.S. Tax Court in which it challenged the IRS's adjustments. The Company expects the outcome of the 2014 Notice on the transfer pricing matter to be determined by the judicial decision related to the 2011 Notice. In 2016, litigation activities commenced for the separate issue in the 2014 Notice regarding recognition of income for several of the Company’s controlled foreign corporations. In 2014 and 2016, the Company resolved uncertain tax positions with a European government. The resolutions had minimal impact on the Company's Consolidated Statements of Income in each respective year. During 2010, the Company received a tax assessment of $51 (translated at the December 31, 2016 exchange rate), plus interest and penalties, in Brazil for the tax years 2005 through 2008 that relates to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. The Company is contesting the assessment, which is under review at the second of three administrative appeals levels. During 2013, the Brazilian tax authorities began an audit of tax years 2009 through 2012. During 2014, the Company received a tax assessment of $39 (translated at the December 31, 2016 exchange rate), plus interest and penalties, for the 2009 through 2012 tax years (primarily relating to the same issues concerning the 2005 through 2008 tax years), which the Company is also contesting and is under review in the second of three administrative appeals levels. Multiple outside advisors have stated that Brazilian tax authorities are raising the issue for most clients with similar facts and that the matter is expected to require at least 10 years to resolve. The Company continues to believe that final resolution of the assessments will not have a material impact on its consolidated financial statements. |
Eaton Shareholders' Equity
Eaton Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Eaton Shareholders' Equity | EATON SHAREHOLDERS' EQUITY There are 750 million Eaton ordinary shares authorized ( $0.01 par value per share), 449.4 million and 458.8 million of which were issued and outstanding at December 31, 2016 and 2015 , respectively. Eaton's Memorandum and Articles of Association authorized 40 thousand deferred ordinary shares ( €1.00 par value per share) and 10 thousand preferred A shares ( $1.00 par value per share), all of which were issued and outstanding at December 31, 2016 and 2015 , and 10 million serial preferred shares ( $0.01 par value per share), none of which is outstanding at December 31, 2016 and 2015 . At December 31, 2016 , there were 17,627 holders of record of Eaton ordinary shares. Additionally, 21,235 current and former employees were shareholders through participation in the Eaton Savings Plan, Eaton Personal Investment Plan, or the Eaton Puerto Rico Retirement Savings Plan. On October 22, 2013 , Eaton's Board of Directors adopted a share repurchase program (the 2013 Program). Under the 2013 Program, the ordinary shares were expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During 2016 , 2015 and 2014 , 1.5 million, 11.3 million and 9.6 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $82 , $682 and $650 , respectively. On February 24, 2016 , the Board of Directors approved a new share repurchase program for share repurchases up to $2,500 of ordinary shares (2016 Program). Under the 2016 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During 2016 , 10.3 million shares were purchased on the open market under the 2016 Program for a total cost of $648 . Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $13 and $16 of ordinary shares and marketable securities, as valued at December 31, 2016 and 2015 , respectively, to fund a portion of these liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' equity at historical cost. On February 22, 2017, Eaton's Board of Directors declared a quarterly dividend of $0.60 per ordinary share, payable on March 17, 2017, to shareholders of record at the close of business on March 06, 2017. Comprehensive Income (Loss) Comprehensive income (loss) consists primarily of net income, currency translation and related hedging instruments, changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open derivative contracts designated as cash flow hedges. The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss): 2016 2015 2014 Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Currency translation and related hedging instruments $ (562 ) $ (570 ) $ (1,080 ) $ (1,078 ) $ (1,014 ) $ (1,019 ) Pensions and other postretirement benefits Prior service credit (cost) arising during the year (2 ) (2 ) 1 1 82 51 Net (loss) gain arising during the year (247 ) (197 ) (123 ) (89 ) (718 ) (519 ) Currency translation 74 62 62 46 56 47 Other — (2 ) — (3 ) — (4 ) Amortization of actuarial loss and prior service cost reclassified to earnings 201 133 237 156 168 110 26 (6 ) 177 111 (412 ) (315 ) Cash flow hedges Gain (loss) on derivatives designated as cash flow hedges (21 ) (14 ) 20 13 (3 ) (2 ) Changes in cash flow hedges reclassified to earnings 8 5 (16 ) (10 ) (5 ) (3 ) Cash flow hedges, net of reclassification adjustments (13 ) (9 ) 4 3 (8 ) (5 ) Other comprehensive income (loss) income attributable to Eaton ordinary shareholders $ (549 ) $ (585 ) $ (899 ) $ (964 ) $ (1,434 ) $ (1,339 ) The changes in Accumulated other comprehensive loss follow: Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow hedges Total Balance at December 31, 2015 $ (2,492 ) $ (1,374 ) $ 3 $ (3,863 ) Other comprehensive (loss) income before reclassifications (570 ) (139 ) (14 ) (723 ) Amounts reclassified from Accumulated other comprehensive loss (income) — 133 5 138 Net current-period Other comprehensive (loss) income (570 ) (6 ) (9 ) (585 ) Balance at December 31, 2016 $ (3,062 ) $ (1,380 ) $ (6 ) $ (4,448 ) The reclassifications out of Accumulated other comprehensive loss follow: December 31, 2016 Consolidated Statements of Income classification Amortization of defined benefit pension and other postretirement benefits items Actuarial loss and prior service cost $ (201 ) 1 Tax benefit 68 Total, net of tax (133 ) Gains and (losses) on cash flow hedges Currency exchange contracts (8 ) Cost of products sold Tax benefit 3 Total, net of tax (5 ) Total reclassifications for the period $ (138 ) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about defined benefit pension and other postretirement benefits items. Net Income Per Share Attributable to Eaton Ordinary Shareholders A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows: (Shares in millions) 2016 2015 2014 Net income attributable to Eaton ordinary shareholders $ 1,922 $ 1,979 $ 1,793 Weighted-average number of ordinary shares outstanding - diluted 456.5 467.1 476.8 Less dilutive effect of equity-based compensation 1.5 1.6 2.7 Weighted-average number of ordinary shares outstanding - basic 455.0 465.5 474.1 Net income per share attributable to Eaton ordinary shareholders Diluted $ 4.21 $ 4.23 $ 3.76 Basic 4.22 4.25 3.78 In 2016 , 2015 , and 2014 , 1.7 million , 1.6 million , and 0.5 million stock options, respectively, were excluded from the calculation of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. A summary of financial instruments recognized at fair value, and the fair value measurements used, follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Cash $ 543 $ 543 $ — $ — Short-term investments 203 203 — — Net derivative contracts (3 ) — (3 ) — Long-term debt converted to floating interest rates by interest rate swaps - net (58 ) — (58 ) — 2015 Cash $ 268 $ 268 $ — $ — Short-term investments 177 177 — — Net derivative contracts 86 — 86 — Long-term debt converted to floating interest rates by interest rate swaps - net (94 ) — (94 ) — Eaton values its financial instruments using an industry standard market approach, in which prices and other relevant information is generated by market transactions involving identical or comparable assets or liabilities. No financial instruments were measured using unobservable inputs. Other Fair Value Measurements Long-term debt and the current portion of long-term debt had a carrying value of $8,263 and fair value of $8,477 at December 31, 2016 compared to $7,988 and $8,231 , respectively, at December 31, 2015 . The fair value of Eaton's debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement. Short-Term Investments Eaton invests excess cash generated from operations in short-term marketable investments. For those investments classified as “available-for-sale”, Eaton marks these investments to fair value with the offset recognized in Accumulated other comprehensive loss. A summary of the carrying value of short-term investments follows: 2016 2015 Time deposits, certificates of deposit and demand deposits with banks $ 149 $ 122 Money market investments 54 55 Total short-term investments $ 203 $ 177 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and, to a lesser extent, commodity contracts, to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes. Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated, and is effective, as part of a hedging relationship and, if so, as to the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as: • Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in income during the period of change in fair value. • Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such an asset or liability (a cash flow hedge); for these hedges, the effective portion of the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive loss and reclassified to income in the same period when the gain or loss on the hedged item is included in income. • Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these hedges, the effective portion of the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive loss and reclassified to income in the same period when the gain or loss related to the net investment in the foreign operation is included in income. The gain or loss from a derivative financial instrument designated as a hedge that is effective is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The change in fair value of a derivative financial instrument that is not effective as a hedge is immediately recognized in income. For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain commodity contracts that arise in the normal course of business. During 2016 , Eaton recognized a gain of $7 associated with these commodity hedge contracts. Gains and losses associated with commodity hedge contracts are classified in Cost of products sold. Eaton uses certain of its debt denominated in foreign currency to hedge portions of its net investments in foreign operations against foreign currency exposure (net investment hedges). Foreign currency denominated debt designated as non-derivative net investment hedging instruments on an after-tax basis was $86 and $83 at December 31, 2016 and 2015 , respectively, and designated on a pre-tax basis was $572 at December 31, 2016 . See Note 6 for additional information about debt. Interest Rate Risk Eaton has entered into fixed-to-floating interest rate swaps to manage interest rate risk of certain long-term debt. These interest rate swaps are accounted for as fair value hedges of certain long-term debt. The maturity of the swap corresponds with the maturity of the debt instrument as noted in the table of long-term debt in Note 6. Eaton has also entered into several forward starting floating-to-fixed interest rate swaps to manage interest rate risk on an anticipated debt refinancing in 2017. A summary of interest rate swaps outstanding at December 31, 2016 , follows: Fixed-to-Floating Interest Rate Swaps Notional amount Fixed interest rate received Floating interest rate paid Basis for contracted floating interest rate paid $ 150 5.30% 4.75% 1 month LIBOR + 4.26% 750 1.50% 0.95% 1 month LIBOR + 0.46% 415 5.60% 4.26% 6 month LIBOR + 3.18% 300 6.95% 5.85% 3 month LIBOR + 5.07% 25 8.88% 4.96% 6 month LIBOR + 3.84% 150 3.88% 2.61% 1 month LIBOR + 2.12% 275 3.47% 2.23% 1 month LIBOR + 1.74% 1,400 2.75% 1.07% 1 month LIBOR + 0.58% 200 3.68% 1.56% 1 month LIBOR + 1.07% 25 7.63% 3.55% 6 month LIBOR + 2.48% 50 7.65% 3.65% 6 month LIBOR + 2.57% 25 5.45% 1.36% 6 month LIBOR + 0.28% Forward Starting Floating-to-Fixed Interest Rate Swaps Notional amount Floating interest Fixed interest Basis for contracted floating interest rate received $ 50 —% 2.52% 3 month LIBOR + 0.00% 50 —% 2.38% 3 month LIBOR + 0.00% 50 —% 2.19% 3 month LIBOR + 0.00% 50 —% 2.19% 3 month LIBOR + 0.00% 50 —% 1.95% 3 month LIBOR + 0.00% 50 —% 1.80% 3 month LIBOR + 0.00% 50 —% 1.67% 3 month LIBOR + 0.00% 50 —% 1.66% 3 month LIBOR + 0.00% 50 —% 1.53% 3 month LIBOR + 0.00% Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows: Notional amount Other current assets Other noncurrent assets Other current liabilities Other noncurrent liabilities Type of hedge Term December 31, 2016 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,765 $ 1 $ 65 $ — $ 8 Fair value 3 months to 18 years Forward starting floating-to-fixed interest rate swaps 450 — 19 — 1 Cash flow 11 years Currency exchange contracts 802 11 1 22 17 Cash flow 1 to 36 months Total $ 12 $ 85 $ 22 $ 26 Derivatives not designated as hedges Currency exchange contracts $ 5,333 $ 31 $ 85 1 to 12 months Commodity contracts 10 2 — 1 to 12 months Total $ 33 $ 85 December 31, 2015 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,715 $ — $ 96 $ — $ 2 Fair value 2 to 19 years Forward starting floating-to-fixed interest rate swaps 50 — — — — Cash flow 12 years Currency exchange contracts 724 18 1 8 6 Cash flow 1 to 36 months Commodity contracts 1 — — — — Cash flow 1 to 12 months Total $ 18 $ 97 $ 8 $ 8 Derivatives not designated as hedges Currency exchange contracts $ 4,198 $ 27 $ 40 1 to 12 months Total $ 27 $ 40 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 sales 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 impact of derivative instruments to the Consolidated Statements of Income and Comprehensive Income follow: Gain (loss) recognized in other comprehensive (loss) income Location of gain (loss) reclassified from Accumulated other comprehensive loss Gain (loss) reclassified from Accumulated other comprehensive loss 2016 2015 2016 2015 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ 18 $ — Interest expense - net $ — $ — Currency exchange contracts (39 ) 20 Cost of products sold (8 ) 16 Total $ (21 ) $ 20 $ (8 ) $ 16 Amounts recognized in net income follow: 2016 2015 Derivatives designated as fair value hedges Fixed-to-floating interest rate swaps $ (36 ) $ 20 Related long-term debt converted to floating interest rates by interest rate swaps 36 (20 ) $ — $ — Gains and losses described above were recognized in Interest expense - net. |
Accounts Receivable and Invento
Accounts Receivable and Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable and Inventory [Abstract] | |
Accounts Receivable and Inventory | ACCOUNTS RECEIVABLE AND INVENTORY Accounts Receivable Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its accounts receivable based on the length of time the receivable is past due and any anticipated future write-off based on historic experience. Accounts receivable balances are written off against an allowance for doubtful accounts after a final determination of uncollectability has been made. Accounts receivable are net of an allowance for doubtful accounts of $50 at December 31, 2016 and 2015 . Inventory Inventory is carried at lower of cost or market. Inventory in the United States is generally accounted for using the last-in, first-out (LIFO) method. Remaining United States and non-United States inventory is accounted for using the first-in, first-out (FIFO) method. Cost components include raw materials, purchased components, direct labor, indirect labor, utilities, depreciation, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, and costs of the distribution network. The components of inventory follow: 2016 2015 Raw materials $ 880 $ 885 Work-in-process 396 412 Finished goods 1,074 1,131 Inventory at FIFO 2,350 2,428 Excess of FIFO over LIFO cost (96 ) (105 ) Total inventory $ 2,254 $ 2,323 Inventory at FIFO accounted for using the LIFO method was 44% and 43% at the end of 2016 and 2015, respectively. |
Business Segment and Geographic
Business Segment and Geographic Region Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Region Information | BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Eaton’s segments are as follows: Electrical Products and Electrical Systems and Services The Electrical Products segment consists of electrical components, industrial components, residential products, single phase power quality, emergency lighting, fire detection, wiring devices, structural support systems, circuit protection, and lighting products. The Electrical Systems and Services segment consists of power distribution and assemblies, three phase power quality, hazardous duty electrical equipment, intrinsically safe explosion-proof instrumentation, utility power distribution, power reliability equipment, and services. The principal markets for these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share several common global customers, but a large number of customers are located regionally. Sales are made directly to original equipment manufacturers, utilities, and certain other end users, as well as through distributors, resellers, and manufacturers' representatives. Hydraulics The Hydraulics segment is a global leader in hydraulics components, systems and services for industrial and mobile equipment. Eaton offers a wide range of power products including pumps, motors and hydraulic power units; a broad range of controls and sensing products including valves, cylinders and electronic controls; a full range of fluid conveyance products including industrial and hydraulic hose, fittings, and assemblies, thermoplastic hose and tubing, couplings, connectors, and assembly equipment; filtration systems solutions; industrial drum and disc brakes; and golf grips. The principal markets for the Hydraulics segment include renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, and power generation. Key manufacturing customers in these markets and other customers are located globally. Products are sold and serviced through a variety of channels. Aerospace The Aerospace segment is a leading global supplier of aerospace fuel, hydraulics, and pneumatic systems for commercial and military use. Products include hydraulic power generation systems for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, couplings, sealing and ducting; and fuel systems including fuel pumps, sensors, valves, adapters and regulators. In addition, products included power and load management systems and displays and panels until these businesses were sold in May of 2014. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers. These manufacturers and other customers operate globally. Products are sold and serviced through a variety of channels. Vehicle The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks and commercial vehicles. Products include transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, fuel vapor components, fluid connectors and conveyance products for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars and agricultural equipment. Other Information No single customer represented greater than 10% of net sales in 2016 , 2015 or 2014 , respectively. The accounting policies of the business segments are generally the same as the policies described in Note 1, except that inventory and related cost of products sold of the segments are accounted for using the FIFO method and operating profit only reflects the service cost component related to pensions and other postretirement benefits. Intersegment sales and transfers are accounted for at the same prices as if the sales and transfers were made to third parties. These intersegment sales are eliminated in consolidation. Operating profit includes the operating profit from intersegment sales. For purposes of business segment performance measurement, the Company does not allocate items that are of a non-operating nature or are of a corporate or functional governance nature. Corporate expenses consist of transaction costs associated with the acquisition of certain businesses and corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs. Identifiable assets of the business segments exclude goodwill, other intangible assets, and general corporate assets, which principally consist of certain cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets. Business Segment Information 2016 2015 2014 Net sales Electrical Products $ 6,957 $ 6,976 $ 7,254 Electrical Systems and Services 5,662 5,931 6,457 Hydraulics 2,222 2,459 2,975 Aerospace 1,753 1,807 1,860 Vehicle 3,153 3,682 4,006 Total net sales $ 19,747 $ 20,855 $ 22,552 Segment operating profit Electrical Products $ 1,240 $ 1,156 $ 1,184 Electrical Systems and Services 711 776 843 Hydraulics 198 246 367 Aerospace 335 310 273 Vehicle 474 645 645 Total segment operating profit 2,958 3,133 3,312 Corporate Litigation settlements — — (644 ) Amortization of intangible assets (392 ) (406 ) (431 ) Interest expense - net (233 ) (232 ) (227 ) Pension and other postretirement benefits expense (60 ) (130 ) (138 ) Other corporate expense - net (146 ) (220 ) (111 ) Income before income taxes 2,127 2,145 1,761 Income tax expense (benefit) 202 164 (42 ) Net income 1,925 1,981 1,803 Less net income for noncontrolling interests (3 ) (2 ) (10 ) Net income attributable to Eaton ordinary shareholders $ 1,922 $ 1,979 $ 1,793 Business segment operating profit was reduced by acquisition integration charges as follows: 2016 2015 2014 Electrical Products $ 3 $ 25 $ 66 Electrical Systems and Services 1 15 51 Hydraulics — 2 12 Total $ 4 $ 42 $ 129 Corporate acquisition integration charges totaled $5 and $25 in 2015 and 2014 , respectively, and are included above in Other corporate expense - net. There was no corporate acquisition integration charges in 2016 . See Note 3 for additional information about acquisition integration charges. 2016 2015 2014 Identifiable assets Electrical Products $ 2,363 $ 2,538 $ 3,012 Electrical Systems and Services 2,222 2,285 2,512 Hydraulics 1,188 1,138 1,315 Aerospace 830 841 832 Vehicle 1,549 1,579 1,668 Total identifiable assets 8,152 8,381 9,339 Goodwill 13,201 13,479 13,893 Other intangible assets 5,514 6,014 6,556 Corporate 3,552 3,122 3,699 Total assets $ 30,419 $ 30,996 $ 33,487 Capital expenditures for property, plant and equipment Electrical Products $ 134 $ 137 $ 170 Electrical Systems and Services 78 94 147 Hydraulics 92 61 79 Aerospace 28 33 28 Vehicle 142 119 160 Total 474 444 584 Corporate 23 62 48 Total expenditures for property, plant and equipment $ 497 $ 506 $ 632 Depreciation of property, plant and equipment Electrical Products $ 141 $ 137 $ 148 Electrical Systems and Services 82 82 90 Hydraulics 64 67 67 Aerospace 27 28 28 Vehicle 109 113 130 Total 423 427 463 Corporate 63 52 51 Total depreciation of property, plant and equipment $ 486 $ 479 $ 514 Geographic Region Information Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net. 2016 2015 2014 Net sales United States $ 10,937 $ 11,396 $ 11,701 Canada 898 969 1,113 Latin America 1,448 1,726 1,988 Europe 4,228 4,379 5,074 Asia Pacific 2,236 2,385 2,676 Total $ 19,747 $ 20,855 $ 22,552 Long-lived assets United States $ 1,924 $ 1,982 $ 1,988 Canada 19 19 25 Latin America 281 243 306 Europe 681 734 799 Asia Pacific 538 587 632 Total $ 3,443 $ 3,565 $ 3,750 |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS On November 14, 2013, Eaton Corporation registered senior notes under the Securities Act of 1933 (the Senior Notes). Eaton and certain other of Eaton's 100% owned direct and indirect subsidiaries (the Guarantors) fully and unconditionally guaranteed (subject, in the case of the Guarantors, other than Eaton, to customary release provisions as described below), on a joint and several basis, the Senior Notes. The following condensed consolidating financial statements are included so that separate financial statements of Eaton, Eaton Corporation and each of the Guarantors are not required to be filed with the Securities and Exchange Commission. The consolidating adjustments primarily relate to eliminations of investments in subsidiaries and intercompany balances and transactions. The condensed consolidating financial statements present investments in subsidiaries using the equity method of accounting. See Note 6 for additional information related to the Senior Notes. The guarantee of a Guarantor that is not a parent of the issuer will be automatically and unconditionally released and discharged in the event of any sale of the Guarantor or of all or substantially all of its assets, or in connection with the release or termination of the Guarantor as a guarantor under all other U.S. debt securities or U.S. syndicated credit facilities, subject to limitations set forth in the indenture. The guarantee of a Guarantor that is a direct or indirect parent of the issuer will only be automatically and unconditionally released and discharged in connection with the release or termination of such Guarantor as a guarantor under all other debt securities or syndicated credit facilities (in both cases, U.S. or otherwise), subject to limitations set forth in the indenture. During 2016 and 2015, the Company undertook certain steps to restructure ownership of various subsidiaries. The transactions were entirely among wholly-owned subsidiaries under the common control of Eaton. This restructuring has been reflected as of the beginning of the earliest period presented below. CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,447 $ 6,351 $ 11,961 $ (5,012 ) $ 19,747 Cost of products sold — 5,078 4,686 8,649 (5,013 ) 13,400 Selling and administrative expense 141 1,155 760 1,449 — 3,505 Research and development expense — 235 186 168 — 589 Interest expense (income) - net — 230 18 (14 ) (1 ) 233 Other expense (income) - net (35 ) (48 ) 42 (66 ) — (107 ) Equity in loss (earnings) of subsidiaries, net of tax (2,439 ) (741 ) (3,322 ) (898 ) 7,400 — Intercompany expense (income) - net 411 (157 ) 1,230 (1,484 ) — — Income (loss) before income taxes 1,922 695 2,751 4,157 (7,398 ) 2,127 Income tax expense (benefit) — 34 28 139 1 202 Net income (loss) 1,922 661 2,723 4,018 (7,399 ) 1,925 Less net loss (income) for noncontrolling interests — — — (5 ) 2 (3 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,922 $ 661 $ 2,723 $ 4,013 $ (7,397 ) $ 1,922 Other comprehensive income (loss) (585 ) 53 (567 ) (803 ) 1,317 (585 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,337 $ 714 $ 2,156 $ 3,210 $ (6,080 ) $ 1,337 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,925 $ 6,659 $ 12,533 $ (5,262 ) $ 20,855 Cost of products sold — 5,508 5,036 8,981 (5,233 ) 14,292 Selling and administrative expense 141 1,223 738 1,494 — 3,596 Research and development expense — 266 197 162 — 625 Interest expense (income) - net — 222 21 (13 ) 2 232 Other expense (income) - net — — 24 (59 ) — (35 ) Equity in loss (earnings) of subsidiaries, net of tax (2,456 ) (789 ) (3,285 ) (689 ) 7,219 — Intercompany expense (income) - net 336 (425 ) 1,218 (1,129 ) — — Income (loss) before income taxes 1,979 920 2,710 3,786 (7,250 ) 2,145 Income tax expense (benefit) — 103 (69 ) 141 (11 ) 164 Net income (loss) 1,979 817 2,779 3,645 (7,239 ) 1,981 Less net loss (income) for noncontrolling interests — — — (3 ) 1 (2 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,979 $ 817 $ 2,779 $ 3,642 $ (7,238 ) $ 1,979 Other comprehensive income (loss) (964 ) 6 (952 ) (1,179 ) 2,125 (964 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,015 $ 823 $ 1,827 $ 2,463 $ (5,113 ) $ 1,015 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2014 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,990 $ 6,885 $ 13,521 $ (4,844 ) $ 22,552 Cost of products sold — 5,519 5,075 9,882 (4,830 ) 15,646 Selling and administrative expense 171 1,246 742 1,651 — 3,810 Litigation settlements — 644 — — — 644 Research and development expense — 240 202 205 — 647 Interest expense (income) - net — 225 25 (29 ) 6 227 Other expense (income) - net — (17 ) (81 ) (85 ) — (183 ) Equity in loss (earnings) of subsidiaries, net of tax (2,191 ) (657 ) (2,660 ) (295 ) 5,803 — Intercompany expense (income) - net 227 (263 ) 855 (819 ) — — Income (loss) before income taxes 1,793 53 2,727 3,011 (5,823 ) 1,761 Income tax expense (benefit) — (100 ) 79 (14 ) (7 ) (42 ) Net income (loss) 1,793 153 2,648 3,025 (5,816 ) 1,803 Less net loss (income) for noncontrolling interests — — — (8 ) (2 ) (10 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,793 $ 153 $ 2,648 $ 3,017 $ (5,818 ) $ 1,793 Other comprehensive income (loss) (1,339 ) (191 ) (1,370 ) (1,646 ) 3,207 (1,339 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 454 $ (38 ) $ 1,278 $ 1,371 $ (2,611 ) $ 454 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ 1 $ 92 $ 4 $ 446 $ — $ 543 Short-term investments — — — 203 — 203 Accounts receivable - net — 536 1,049 1,975 — 3,560 Intercompany accounts receivable 5 954 4,023 3,633 (8,615 ) — Inventory — 342 642 1,349 (79 ) 2,254 Prepaid expenses and other current assets — 77 42 237 25 381 Total current assets 6 2,001 5,760 7,843 (8,669 ) 6,941 Property, plant and equipment - net — 857 706 1,880 — 3,443 Other noncurrent assets Goodwill — 1,355 6,293 5,553 — 13,201 Other intangible assets — 169 3,442 1,903 — 5,514 Deferred income taxes — 904 — 228 (772 ) 360 Investment in subsidiaries 32,795 13,743 72,938 12,516 (131,992 ) — Intercompany loans receivable — 7,605 2,061 56,598 (66,264 ) — Other assets — 491 134 335 — 960 Total assets $ 32,801 $ 27,125 $ 91,334 $ 86,856 $ (207,697 ) $ 30,419 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ — $ 8 $ 6 $ — $ 14 Current portion of long-term debt — 1,250 296 6 — 1,552 Accounts payable 1 372 252 1,093 — 1,718 Intercompany accounts payable 281 3,870 3,115 1,349 (8,615 ) — Accrued compensation — 98 58 223 — 379 Other current liabilities 1 591 291 941 (2 ) 1,822 Total current liabilities 283 6,181 4,020 3,618 (8,617 ) 5,485 Noncurrent liabilities Long-term debt — 5,767 936 8 — 6,711 Pension liabilities — 610 161 888 — 1,659 Other postretirement benefits liabilities — 198 99 71 — 368 Deferred income taxes — — 732 361 (772 ) 321 Intercompany loans payable 17,621 2,603 44,788 1,252 (66,264 ) — Other noncurrent liabilities — 327 211 396 — 934 Total noncurrent liabilities 17,621 9,505 46,927 2,976 (67,036 ) 9,993 Shareholders’ equity Eaton shareholders’ equity 14,897 11,439 40,387 80,224 (132,050 ) 14,897 Noncontrolling interests — — — 38 6 44 Total equity 14,897 11,439 40,387 80,262 (132,044 ) 14,941 Total liabilities and equity $ 32,801 $ 27,125 $ 91,334 $ 86,856 $ (207,697 ) $ 30,419 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ — $ 26 $ 7 $ 235 $ — $ 268 Short-term investments — — 2 175 — 177 Accounts receivable - net — 512 1,036 1,931 — 3,479 Intercompany accounts receivable 1 842 3,903 3,033 (7,779 ) — Inventory — 357 658 1,388 (80 ) 2,323 Prepaid expenses and other current assets — 77 41 228 23 369 Total current assets 1 1,814 5,647 6,990 (7,836 ) 6,616 Property, plant and equipment - net — 930 751 1,884 — 3,565 Other noncurrent assets Goodwill — 1,355 6,295 5,829 — 13,479 Other intangible assets — 182 3,634 2,198 — 6,014 Deferred income taxes — 1,016 — 218 (872 ) 362 Investment in subsidiaries 29,627 12,931 60,216 9,968 (112,742 ) — Intercompany loans receivable — 8,641 1,573 44,835 (55,049 ) — Other assets — 492 122 346 — 960 Total assets $ 29,628 $ 27,361 $ 78,238 $ 72,268 $ (176,499 ) $ 30,996 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ 408 $ — $ 18 $ — $ 426 Current portion of long-term debt — 1 240 1 — 242 Accounts payable — 392 266 1,100 — 1,758 Intercompany accounts payable 219 4,009 2,380 1,171 (7,779 ) — Accrued compensation — 77 53 236 — 366 Other current liabilities 1 644 319 874 (5 ) 1,833 Total current liabilities 220 5,531 3,258 3,400 (7,784 ) 4,625 Noncurrent liabilities Long-term debt — 7,053 675 17 1 7,746 Pension liabilities — 639 165 782 — 1,586 Other postretirement benefits liabilities — 245 118 77 — 440 Deferred income taxes — — 818 444 (872 ) 390 Intercompany loans payable 14,222 2,962 36,436 1,429 (55,049 ) — Other noncurrent liabilities — 346 200 432 — 978 Total noncurrent liabilities 14,222 11,245 38,412 3,181 (55,920 ) 11,140 Shareholders’ equity Eaton shareholders’ equity 15,186 10,585 36,568 65,650 (112,803 ) 15,186 Noncontrolling interests — — — 37 8 45 Total equity 15,186 10,585 36,568 65,687 (112,795 ) 15,231 Total liabilities and equity $ 29,628 $ 27,361 $ 78,238 $ 72,268 $ (176,499 ) $ 30,996 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (253 ) $ (215 ) $ (236 ) $ 3,256 $ — $ 2,552 Investing activities Capital expenditures for property, plant and equipment — (92 ) (114 ) (291 ) — (497 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — 1 — — 1 Sales (purchases) of short-term investment - net — — 2 (42 ) — (40 ) Investments in affiliates (1,250 ) — (120 ) (1,370 ) 2,740 — Return of investments in affiliates — — 47 — (47 ) — Loans to affiliates — (337 ) (655 ) (8,208 ) 9,200 — Repayments of loans from affiliates — 1,293 — 5,893 (7,186 ) — Other - net — (9 ) 41 (25 ) — 7 Net cash provided by (used in) investing activities (1,250 ) 855 (798 ) (4,043 ) 4,707 (529 ) Financing activities Proceeds from borrowings — 21 610 — — 631 Payments on borrowings — (408 ) (231 ) (14 ) — (653 ) Proceeds from borrowings from affiliates 3,843 4,045 1,120 192 (9,200 ) — Payments on borrowings from affiliates (646 ) (4,655 ) (1,844 ) (41 ) 7,186 — Capital contribution from affiliates — — 1,370 1,370 (2,740 ) — Return of investments in affiliates — — — (47 ) 47 — Other intercompany financing activities — 422 10 (432 ) — — Cash dividends paid (1,037 ) — — — — (1,037 ) Cash dividends paid to affiliates — — — — — — Exercise of employee stock options 74 — — — — 74 Repurchase of shares (730 ) — — — — (730 ) Excess tax benefit from equity-based compensation — 1 — — — 1 Other - net — — (4 ) (2 ) — (6 ) Net cash provided by (used in) financing activities 1,504 (574 ) 1,031 1,026 (4,707 ) (1,720 ) Effect of currency on cash — — — (28 ) — (28 ) Total increase (decrease) in cash 1 66 (3 ) 211 — 275 Cash at the beginning of the period — 26 7 235 — 268 Cash at the end of the period $ 1 $ 92 $ 4 $ 446 $ — $ 543 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (137 ) $ (46 ) $ (288 ) $ 2,846 $ (4 ) $ 2,371 Investing activities Capital expenditures for property, plant and equipment — (94 ) (146 ) (266 ) — (506 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — (35 ) (37 ) — (72 ) Sales (purchases) of short-term investments - net — — (2 ) 39 — 37 Investments in affiliates (1,482 ) — (1,176 ) (1,482 ) 4,140 — Loans to affiliates — (1,235 ) (39 ) (10,608 ) 11,882 — Repayments of loans from affiliates — 342 359 7,148 (7,849 ) — Proceeds from the sales of businesses — — — 1 — 1 Other - net — (50 ) 47 (32 ) — (35 ) Net cash provided by (used in) investing activities (1,482 ) (1,037 ) (992 ) (5,237 ) 8,173 (575 ) Financing activities Proceeds from borrowings — 408 — 17 — 425 Payments on borrowings — (724 ) (301 ) (2 ) — (1,027 ) Proceeds from borrowings from affiliates 3,322 6,885 997 678 (11,882 ) — Payments on borrowings from affiliates (48 ) (6,122 ) (1,282 ) (397 ) 7,849 — Capital contribution from affiliates — 1,176 1,482 1,482 (4,140 ) — Other intercompany financing activities — (688 ) 378 310 — — Cash dividends paid (1,026 ) — — — — (1,026 ) Cash dividends received from affiliates — — — (4 ) 4 — Exercise of employee stock options 52 — — — — 52 Repurchase of shares (682 ) — — — — (682 ) Excess tax benefit from equity-based compensation — 1 — — — 1 Other - net — — — (10 ) — (10 ) Net cash provided by (used in) financing activities 1,618 936 1,274 2,074 (8,169 ) (2,267 ) Effect of currency on cash — — — (42 ) — (42 ) Total increase (decrease) in cash (1 ) (147 ) (6 ) (359 ) — (513 ) Cash at the beginning of the period 1 173 13 594 — 781 Cash at the end of the period $ — $ 26 $ 7 $ 235 $ — $ 268 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2014 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (93 ) $ (411 ) $ (218 ) $ 2,568 $ 32 $ 1,878 Investing activities Capital expenditures for property, plant and equipment — (127 ) (168 ) (337 ) — (632 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — — 2 — 2 Sales (purchases) of short-term investments - net — — 133 389 — 522 Investments in affiliates (753 ) — — (753 ) 1,506 — Loans to affiliates — (354 ) (162 ) (10,546 ) 11,062 — Repayments of loans from affiliates — 978 212 8,451 (9,641 ) — Proceeds from the sales of businesses — 93 175 14 — 282 Other - net — (47 ) 44 (28 ) — (31 ) Net cash provided by (used in) investing activities (753 ) 543 234 (2,808 ) 2,927 143 Financing activities Proceeds from borrowings — — — — — — Payments on borrowings — (553 ) (1 ) (28 ) — (582 ) Proceeds from borrowings from affiliates 2,628 7,599 808 27 (11,062 ) — Payments on borrowings from affiliates (476 ) (6,907 ) (1,875 ) (383 ) 9,641 — Issuance of stock to affiliates — — 753 753 (1,506 ) — Other intercompany financing activities 217 (169 ) 302 (350 ) — — Cash dividends paid (929 ) — — — — (929 ) Cash dividends paid to affiliates — — — 32 (32 ) — Exercise of employee stock options 54 — — — — 54 Repurchase of shares (650 ) — — — — (650 ) Excess tax benefit from equity-based compensation — 20 — — — 20 Other - net — — — (43 ) — (43 ) Net cash provided by (used in) financing activities 844 (10 ) (13 ) 8 (2,959 ) (2,130 ) Effect of currency on cash — — — (25 ) — (25 ) Total increase (decrease) in cash (2 ) 122 3 (257 ) — (134 ) Cash at the beginning of the period 3 51 10 851 — 915 Cash at the end of the period $ 1 $ 173 $ 13 $ 594 $ — $ 781 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
General Information | General Information and Basis of Presentation Eaton Corporation plc (Eaton or the Company) is a power management company with 2016 net sales of $19.7 billion . The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 95,000 employees in over 60 countries and sells products to customers in more than 175 countries. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. During 2016 , the Company adopted Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the related debt liability rather than an asset. The Company has applied this standard retrospectively. The adoption of ASU 2015-03 resulted in the reclassification of $35 within the Company's Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, respectively, from Other noncurrent assets to a reduction in Long-term debt. During 2016, the Company adopted Accounting Standards Update 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2015-07). Topic 820 allows for investments to be valued at their net asset value if their share price is not published for current transactions (referred to as the practical expedient). Prior to ASU 2015-07, there has been diversity in practice related to how investments measured using the practical expedient are categorized within the fair value hierarchy. With the adoption of ASU 2015-07, these investments are no longer categorized in the fair value hierarchy, which eliminates the diversity in practice resulting from the way in which these investments were classified. In addition, ASU 2015-07 removes the requirement to make certain disclosures for these investments. The Company retrospectively applied the requirements of ASU 2015-07 for all comparative periods presented in Note 7 resulting in investments measured using the net asset value practical expedient no longer being categorized in the fair value hierarchy. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Business Description and Basis of Presentation | Eaton Corporation plc (Eaton or the Company) is a power management company with 2016 net sales of $19.7 billion . The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 95,000 employees in over 60 countries and sells products to customers in more than 175 countries. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. |
Consolidation Policy | The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. |
Foreign Currency Translation | Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. |
Reclassifications | During 2016 , the Company adopted Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the related debt liability rather than an asset. The Company has applied this standard retrospectively. The adoption of ASU 2015-03 resulted in the reclassification of $35 within the Company's Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, respectively, from Other noncurrent assets to a reduction in Long-term debt. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Revenue Recognition | Revenue Recognition Sales of products are recognized when a sales agreement is in place, products have been shipped to unaffiliated customers and title has transferred in accordance with shipping terms, the selling price is fixed and determinable and collectability is reasonably assured, all significant related acts of performance have been completed, and no other significant uncertainties exist. Shipping and handling costs billed to customers are included in Net sales and the related costs in Cost of products sold. Although the majority of the sales agreements contain standard terms and conditions, there are agreements that contain multiple elements or non-standard terms and conditions. As a result, judgment is required to determine the appropriate accounting, including whether the deliverables specified in these agreements should be treated as separate units of accounting for recognition purposes, and, if so, how the sales price should be allocated among the elements and when to recognize sales for each element. For delivered elements, sales generally are recognized only when the delivered elements have standalone value and there are no uncertainties regarding customer acceptance. Sales for service contracts generally are recognized as the services are provided. Eaton records reductions to revenue for customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. |
Goodwill and Indefinite Life Intangible Assets | Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Goodwill is tested for impairment at the reporting unit level, which is equivalent to Eaton's operating segments and based on the net assets for each segment, including goodwill and intangible assets. Goodwill is assigned to each operating segment, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of an operating segment is less than its carrying amount. Goodwill impairment testing for 2016 was performed using a quantitative analysis under which the fair value for each reporting unit was estimated using a discounted cash flow model, which considered forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the operating segment's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows of the respective reporting unit. Sensitivity analyses were performed around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Goodwill impairment testing in 2015 was performed using qualitative analysis, which is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative assessment performed in 2013. The results of the qualitative analysis did not indicate a need to perform a quantitative analysis. Based on a quantitative analysis performed in 2016 and a qualitative analysis performed in 2015, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2016 and 2015 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2016 and 2015 , the fair value of indefinite lived intangible assets exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 5. |
Other Long-Lived Assets | Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. Cost of buildings are depreciated generally over 40 years and machinery and equipment over 3 to 10 years . At December 31, 2016 , the weighted-average amortization period for intangible assets subject to amortization was 17 years for patents and technology, primarily as a result of the long life of aircraft platforms; 17 years for customer relationships; and 16 years for certain trademarks. Software is generally amortized up to a life of 10 years . Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment. |
Retirement Benefits Plans | Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10% , depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan, but is approximately 13 years on a weighted average basis. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. |
Warranty Accruals | Warranty Accruals Product warranty accruals are established at the time the related sale is recognized through a charge to Cost of products sold. Warranty accrual estimates are based primarily on historical warranty claim experience and specific customer contracts. Provisions for warranty accruals are comprised of basic warranties for products sold, as well as accruals for product recalls and other events when they are known and estimable. See Note 8 for additional information about warranty accruals. |
Asset Retirement Obligations | Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Penalties on unrecognized income tax benefits have been accrued for jurisdictions where penalties are automatically applied to any deficiency, regardless of the merit of the position. For additional information about income taxes, see Note 9. |
Equity-Based Compensation | Equity-Based Compensation Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service conditions or both service and market conditions are expensed over the period during which an employee is required to provide service in exchange for the award. Awards with both service and performance conditions are expensed over the period an employee is required to provide service based on the number of units for which achievement of the performance objective is probable. Participants awarded restricted stock units (RSUs) do not receive dividends; therefore, their fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The fair value of restricted stock awards (RSAs) and performance stock units (PSUs) with performance conditions are determined based on the closing market price of the Company’s ordinary shares at the date of grant. The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions, which incorporates assumptions regarding expected stock price volatility and the risk-free interest rate. Stock options are granted with an exercise price equal to the closing market price of Eaton ordinary shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected stock price volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. See Note 11 for additional information about equity-based compensation. |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 13 for additional information about hedges and derivative financial instruments. |
Recently Issued Accounting Pronouncement | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). This accounting standard supersedes all existing US GAAP revenue recognition guidance. Under ASU 2014-09, a company will recognize revenue when it transfers the control of promised goods or services to customers in an amount that reflects the consideration which the company expects to collect in exchange for those goods or services. ASU 2014-09 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14). This accounting standard defers the effective date of ASU 2014-09 for one year and permits early adoption as of the original effective date. A cross-functional implementation team has been established consisting of representatives from all of our business segments. The implementation team is working to analyze the impact of the standard on the Company's contract portfolio by reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. In addition, the Company is in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard. Eaton plans to adopt the standard as of the first quarter of 2018 using the modified retrospective approach and will record a cumulative adjustment to equity for open contracts as of January 1, 2018. Certain revenues will move from point-in-time or multiple elements to over time because of the continuous transfer of control to customers. Eaton is continuing to evaluate the impact of ASU 2014-09 and an estimate of the impact to the consolidated financial statements cannot be made at this time. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02, Leases (Topic 842), (ASU 2016-02). This accounting standard requires that a lessee recognize a lease asset and a lease liability on its balance sheet for all leases, including operating leases, with a term greater than 12 months. ASU 2016-02 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2018. Eaton is evaluating the impact of ASU 2016-02 and an estimate of the impact to the consolidated financial statements cannot be made at this time. In March 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, (ASU 2016-09). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The new standard eliminates the accounting for excess tax benefits to be recognized in equity, and tax deficiencies recognized in either equity or the income tax provision. ASU 2016-09 is effective for annual and interim reporting periods beginning after December 15, 2016. The Company will adopt the new standard in the first quarter of 2017. Upon adoption, the Company anticipates recognizing deferred tax assets for all excess tax benefits that had not been previously recognized. This will be accomplished through a cumulative-effect adjustment to retained earnings and is not expected to have a material impact to the consolidated financial statements. |
Acquisition Integration Charg26
Acquisition Integration Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition Integration Charges and Transaction Costs | A summary of these charges follows: 2016 2015 2014 Electrical Products $ 3 $ 25 $ 66 Electrical Systems and Services 1 15 51 Hydraulics — 2 12 Total business segments 4 42 129 Corporate — 5 25 Total acquisition integration charges before income taxes 4 47 154 Income taxes 1 16 52 Total after income taxes $ 3 $ 31 $ 102 Per ordinary share - diluted $ 0.01 $ 0.07 $ 0.21 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges by Type | A summary of restructuring charges by type follows: 2016 2015 Workforce reductions $ 177 $ 112 Plant closings and other 34 17 Total $ 211 $ 129 |
Restructuring Charges by Segment | A summary of restructuring charges by segment follows: 2016 2015 Electrical Products $ 44 $ 12 Electrical Systems & Services 49 29 Hydraulics 67 31 Aerospace 4 5 Vehicle 35 34 Corporate 12 18 Total $ 211 $ 129 |
Restructuring Liability Rollforward | A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows: Workforce reductions Plant closing and other Total Balance at December 31, 2014 $ — $ — $ — Liability recognized 112 17 129 Payments (59 ) (3 ) (62 ) Other adjustments 1 (14 ) (13 ) Balance at December 31, 2015 54 — 54 Liability recognized 177 34 211 Payments (116 ) (13 ) (129 ) Other adjustments (2 ) (20 ) (22 ) Balance at December 31, 2016 $ 113 $ 1 $ 114 |
Goodwill and Other Intangible28
Goodwill and Other Intangible Assets Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Rollforward of goodwill | Changes in the carrying amount of goodwill by segment follow: Electrical Products Electrical Systems and Services Hydraulics Aerospace Vehicle Total December 31, 2014 $ 6,940 $ 4,314 $ 1,327 $ 962 $ 350 $ 13,893 Additions 31 20 — — — 51 Reclassifications (106 ) 106 — — — — Translation (223 ) (161 ) (68 ) (6 ) (7 ) (465 ) December 31, 2015 6,642 4,279 1,259 956 343 13,479 Translation (145 ) (76 ) (38 ) (18 ) (1 ) (278 ) December 31, 2016 $ 6,497 $ 4,203 $ 1,221 $ 938 $ 342 $ 13,201 |
Summary of other intangible assets | A summary of other intangible assets follows: 2016 2015 Historical cost Accumulated amortization Historical cost Accumulated amortization Intangible assets not subject to amortization Trademarks $ 1,637 $ 1,661 Intangible assets subject to amortization Customer relationships $ 3,456 $ 1,199 $ 3,544 $ 1,010 Patents and technology 1,342 519 1,447 511 Trademarks 1,104 378 1,113 311 Other 97 26 103 22 Total intangible assets subject to amortization $ 5,999 $ 2,122 $ 6,207 $ 1,854 |
Expense related to intangible assets subject to amortization in 2014, and for each of the next five years | Amortization expense related to intangible assets subject to amortization in 2016 , and estimated amortization expense for each of the next five years, follows: 2016 $ 392 2017 375 2018 355 2019 348 2020 343 2021 334 |
Debt Debt (Tables)
Debt Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt, including the current portion | A summary of long-term debt, including the current portion, follows: 2016 2015 2.375% debentures due 2016 $ — $ 240 5.30% notes due 2017 ($150 converted to floating rate by interest rate swap) 250 250 6.10% debentures due 2017 289 289 1.50% senior notes due 2017 ($750 converted to floating rate by interest rate swap) 1,000 1,000 5.60% notes due 2018 ($415 converted to floating rate by interest rate swap) 450 450 4.215% Japanese yen notes due 2018 86 83 6.95% notes due 2019 ($300 converted to floating rate by interest rate swap) 300 300 3.875% debentures due 2020 ($150 converted to floating rate by interest rate swap) 239 239 3.47% notes due 2021 ($275 converted to floating rate by interest rate swap) 300 300 8.10% debentures due 2022 100 100 2.75% senior notes due 2022 ($1,400 converted to floating rate by interest rate swap) 1,600 1,600 3.68% notes due 2023 ($200 converted to floating rate by interest rate swap) 300 300 0.75% euro notes due 2024 580 — 6.50% debentures due 2025 145 145 7.65% debentures due 2029 ($50 converted to floating rate by interest rate swap) 200 200 4.00% senior notes due 2032 700 700 5.45% debentures due 2034 ($25 converted to floating rate by interest rate swap) 136 136 5.80% notes due 2037 240 240 4.15% senior notes due 2042 1,000 1,000 5.25% to 8.875% notes (maturities ranging from 2018 to 2035, including $50 converted to floating rate by interest rate swap) 239 239 Other 109 177 Total long-term debt 8,263 7,988 Less current portion of long-term debt (1,552 ) (242 ) Long-term debt less current portion $ 6,711 $ 7,746 |
Mandatory maturities of long-term debt for each of the next five years | Maturities of long-term debt for each of the next five years follow: 2017 $ 1,552 2018 573 2019 340 2020 241 2021 302 |
Interest paid on debt | Interest paid on debt follows: 2016 $ 266 2015 271 2014 296 |
Retirement Benefits Plans (Tabl
Retirement Benefits Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Obligations and funded status | Obligations and Funded Status United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Funded status Fair value of plan assets $ 2,969 $ 2,934 $ 1,478 $ 1,472 $ 74 $ 93 Benefit obligations (3,771 ) (3,829 ) (2,314 ) (2,175 ) (473 ) (575 ) Funded status $ (802 ) $ (895 ) $ (836 ) $ (703 ) $ (399 ) $ (482 ) Amounts recognized in the Consolidated Balance Sheets Non-current assets $ 34 $ 11 $ 33 $ 57 $ — $ — Current liabilities (24 ) (57 ) (22 ) (23 ) (31 ) (42 ) Non-current liabilities (812 ) (849 ) (847 ) (737 ) (368 ) (440 ) Total $ (802 ) $ (895 ) $ (836 ) $ (703 ) $ (399 ) $ (482 ) Amounts recognized in Accumulated other comprehensive loss (pretax) Net actuarial loss $ 1,232 $ 1,322 $ 771 $ 644 $ 21 $ 95 Prior service cost (credit) 3 5 8 9 (60 ) (74 ) Total $ 1,235 $ 1,327 $ 779 $ 653 $ (39 ) $ 21 |
Change in benefit obligations | Change in Benefit Obligations United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 3,829 $ 4,047 $ 2,175 $ 2,337 $ 575 $ 676 Service cost 111 123 63 71 4 6 Interest cost 125 156 62 72 17 24 Actuarial (gain) loss 52 (179 ) 355 (23 ) (72 ) (66 ) Gross benefits paid (346 ) (318 ) (94 ) (100 ) (79 ) (86 ) Currency translation — — (245 ) (182 ) 1 (8 ) Plan amendments — — 2 — — (1 ) Other — — (4 ) — 27 30 Balance at December 31 $ 3,771 $ 3,829 $ 2,314 $ 2,175 $ 473 $ 575 Accumulated benefit obligation $ 3,620 $ 3,672 $ 2,189 $ 2,049 |
Change in plan assets | Change in Plan Assets United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 2,934 $ 3,086 $ 1,472 $ 1,535 $ 93 $ 116 Actual return on plan assets 221 (55 ) 212 29 3 1 Employer contributions 160 221 102 109 30 31 Gross benefits paid (346 ) (318 ) (94 ) (100 ) (79 ) (86 ) Currency translation — — (211 ) (101 ) — — Other — — (3 ) — 27 31 Balance at December 31 $ 2,969 $ 2,934 $ 1,478 $ 1,472 $ 74 $ 93 |
Components of pension plans with accumulated benefit obligations in excess of plan assets | The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 follow: United States pension liabilities Non-United States pension liabilities 2016 2015 2016 2015 Projected benefit obligation $ 3,342 $ 3,376 $ 1,902 $ 1,387 Accumulated benefit obligation 3,190 3,219 1,824 1,328 Fair value of plan assets 2,505 2,470 1,066 650 |
Changes in pension and other postretirement benefits liabilities recognized in Accumulated other comprehensive loss | Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss follow: United States pension liabilities Non-United States pension liabilities Other postretirement liabilities 2016 2015 2016 2015 2016 2015 Balance at January 1 $ 1,327 $ 1,382 $ 653 $ 706 $ 21 $ 90 Prior service cost arising during the year — — 2 — — (1 ) Net loss (gain) arising during the year 81 138 235 47 (69 ) (62 ) Currency translation — — (75 ) (58 ) 1 (4 ) Less amounts included in expense during the year (173 ) (193 ) (36 ) (42 ) 8 (2 ) Net change for the year (92 ) (55 ) 126 (53 ) (60 ) (69 ) Balance at December 31 $ 1,235 $ 1,327 $ 779 $ 653 $ (39 ) $ 21 |
Benefits expense | Benefits Expense United States pension benefit expense Non-United States pension benefit expense Other postretirement benefits expense 2016 2015 2014 2016 2015 2014 2016 2015 2014 Service cost $ 111 $ 123 $ 117 $ 63 $ 71 $ 66 $ 4 $ 6 $ 13 Interest cost 125 156 162 62 72 85 17 24 32 Expected return on plan assets (250 ) (262 ) (246 ) (92 ) (99 ) (98 ) (6 ) (5 ) (6 ) Amortization 92 119 93 33 40 27 (9 ) 2 6 78 136 126 66 84 80 6 27 45 Settlements, curtailments and other 81 74 71 3 2 2 1 — (31 ) Total expense $ 159 $ 210 $ 197 $ 69 $ 86 $ 82 $ 7 $ 27 $ 14 |
Estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost | The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2017 follow: United States pension liabilities Non-United States pension liabilities Other postretirement liabilities Actuarial loss $ 142 $ 54 $ 2 Prior service cost (credit) 1 1 (14 ) Total $ 143 $ 55 $ (12 ) |
Assumptions used to determine other postretirement obligations and expense | Pension Plans United States pension plans Non-United States pension plans 2016 2015 2014 2016 2015 2014 Assumptions used to determine benefit obligation at year-end Discount rate 4.12 % 4.22 % 3.97 % 2.63 % 3.46 % 3.33 % Rate of compensation increase 3.15 % 3.18 % 3.16 % 3.13 % 3.12 % 3.13 % Assumptions used to determine expense Discount rate used to determine benefit obligation 4.22 % 3.97 % 4.67 % 3.46 % 3.33 % 4.20 % Discount rate used to determine service cost 4.35 % 3.97 % 4.67 % 4.13 % 3.33 % 4.20 % Discount rate used to determine interest cost 3.42 % 3.97 % 4.67 % 3.07 % 3.33 % 4.20 % Expected long-term return on plan assets 8.50 % 8.50 % 8.40 % 6.62 % 6.92 % 7.00 % Rate of compensation increase 3.18 % 3.16 % 3.16 % 3.12 % 3.13 % 3.12 % |
Assumptions used to determine other postretirement benefits obligations and expense | Assumptions used to determine other postretirement benefits obligations and expense follow: Other postretirement benefits plans 2016 2015 2014 Assumptions used to determine benefit obligation at year-end Discount rate 3.96 % 4.04 % 3.79 % Health care cost trend rate assumed for next year 7.35 % 7.10 % 6.31 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.77 % Year ultimate health care cost trend rate is achieved 2026 2025 2024 Assumptions used to determine expense Discount rate used to determine benefit obligation 4.04 % 3.79 % 4.48 % Discount rate used to determine service cost 4.26 % 3.79 % 4.48 % Discount rate used to determine interest cost 3.12 % 3.79 % 4.48 % Initial health care cost trend rate 7.10 % 6.31 % 6.64 % Ultimate health care cost trend rate 4.75 % 4.77 % 4.77 % Year ultimate health care cost trend rate is achieved 2025 2024 2023 |
1-percentage change in the assumed health care cost trend rates | A 1-percentage point change in the assumed health care cost trend rates would have the following effects: 1% increase 1% decrease Effect on total service and interest cost $ 1 $ (1 ) Effect on other postretirement liabilities 17 (15 ) |
Employer contributions to pension plans | Contributions to pension plans that Eaton expects to make in 2017 , and made in 2016 , 2015 and 2014 , follow: 2017 2016 2015 2014 United States plans $ 125 $ 160 $ 221 $ 248 Non-United States plans 90 102 109 114 Total contributions $ 215 $ 262 $ 330 $ 362 |
Expected pension and other postretirement benefit payments and expected subsidy | For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below. Estimated United States pension payments Estimated non-United States pension payments Estimated other postretirement benefit payments Gross Medicare prescription drug subsidy 2017 $ 309 $ 77 $ 53 $ (5 ) 2018 279 80 50 (5 ) 2019 278 83 46 (4 ) 2020 281 86 42 (4 ) 2021 289 88 36 (3 ) 2022 - 2026 1,460 495 156 (9 ) |
Fair value of pension plan assets | A summary of the fair value of pension plan assets at December 31, 2016 and 2015 , follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Common collective trusts Non-United States equity and global equities $ 413 $ — $ 413 $ — United States equity 94 — 94 — Fixed income 422 — 422 — Fixed income securities 359 — 359 — United States treasuries 123 123 — — Bank loans 150 — 150 — Real estate securities 201 195 — 6 Equity securities 104 104 — — Cash equivalents 276 21 255 — Exchange traded funds 55 55 — — Other 109 — 14 95 Common collective and other trusts measured at net asset value 2,038 Hedge funds measured at net asset value 85 Money market funds measured at net asset value 18 Total pension plan assets $ 4,447 $ 498 $ 1,707 $ 101 Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2015 Common collective trusts Non-United States equity and global equities $ 415 $ — $ 415 $ — United States equity 96 — 96 — Fixed income 418 — 418 — Fixed income securities 357 — 357 — United States treasuries 105 105 — — Bank loans 136 — 136 — Real estate securities 251 244 — 7 Equity securities 98 98 — — Cash equivalents 227 17 210 — Exchange traded funds 49 49 — — Other 100 — 14 86 Common collective and other trusts measured at net asset value 2,043 Hedge funds measured at net asset value 92 Money market funds measured at net asset value 19 Total pension plan assets $ 4,406 $ 513 $ 1,646 $ 93 |
Fair value measurement of plan assets using significant unobservable inputs | The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2015 and 2016 due to the following: Real estate securities Other Total Balance at December 31, 2014 $ 6 $ 60 $ 66 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 1 (2 ) (1 ) Purchases, sales, settlements - net — 37 37 Transfers into or out of Level 3 — (9 ) (9 ) Balance at December 31, 2015 7 86 93 Actual return on plan assets: Gains (losses) relating to assets still held at year-end — (6 ) (6 ) Purchases, sales, settlements - net (1 ) 15 14 Transfers into or out of Level 3 — — — Balance at December 31, 2016 $ 6 $ 95 $ 101 |
Fair value of other postretirement benefits plan assets | A summary of the fair value of other postretirement benefits plan assets at December 31, 2016 and 2015 , follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Cash equivalents $ 8 $ 8 $ — $ — Common collective and other trusts measured at net asset value 66 Total other postretirement benefits plan assets $ 74 $ 8 $ — $ — Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2015 Fixed income securities 18 — 18 — United States treasuries 20 20 — — Cash equivalents 11 11 — — Common collective and other trusts measured at net asset value 44 Total other postretirement benefits plan assets $ 93 $ 31 $ 18 $ — |
Employer contributions to defined contribution benefit plans, charged to expense | The total contributions related to these plans are charged to expense and were as follows: 2016 $ 72 2015 137 2014 141 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Current and long-term warranty accruals | A summary of the current and long-term warranty accruals follows: 2016 2015 2014 Balance at January 1 $ 195 $ 213 $ 189 Provision 117 104 125 Settled (130 ) (114 ) (120 ) Other (2 ) (8 ) 19 Balance at December 31 $ 180 $ 195 $ 213 |
Future minimum rental commitments for noncancelable operating leases | A summary of minimum rental commitments at December 31, 2016 under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, for each of the next five years and thereafter in the aggregate, follow: 2017 $ 163 2018 127 2019 85 2020 58 2021 40 Thereafter 63 Total noncancelable lease commitments $ 536 |
Rental expense | A summary of rental expense follows: 2016 $ 220 2015 225 2014 244 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of RSU and RSA activity | A summary of the RSU and RSA activity for 2016 follows: (Restricted stock units and awards in millions) Number of restricted stock units and awards Weighted-average fair value per unit and award Non-vested at January 1 2.1 $ 65.06 Granted 1.6 52.80 Vested (0.9 ) 64.11 Forfeited (0.2 ) 59.89 Non-vested at December 31 2.6 $ 57.87 |
Information Related to RSUs and RSAs | Information related to RSUs and RSAs follows: 2016 2015 2014 Pretax expense for RSUs and RSAs $ 65 $ 68 $ 81 After-tax expense for RSUs and RSAs 42 44 53 Fair value of vested RSUs and RSAs 71 110 105 |
Schedule of Share-based Payment Award, Performance Share Units (Market-Based), Valuation Assumptions | A summary of the assumptions used in determining fair value of these PSUs follows: 2016 Expected volatility 24 % Risk-free interest rate 0.88 % Weighted-average fair value of PSUs granted $ 76.41 |
(Performance share units in millions) | A summary of the 2016 activity for these PSUs follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 — $ — Granted 1 0.6 76.41 Vested — — Forfeited (0.1 ) 76.41 Non-vested at December 31 0.5 $ 76.41 1 Performance shares granted assuming the Company will perform at target relative to peers. |
Share-based Compensation, Performance Shares Award Outstanding Activity | A summary of the 2016 activity for these PSUs follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 0.8 $ 71.72 Granted 0.1 56.55 Vested — — Forfeited (0.2 ) 71.72 Non-vested at December 31 0.7 $ 68.23 |
Information Related to PSUs | Information related to PSUs follows: 2016 2015 Pretax expense for PSUs $ 13 $ 2 After-tax expense for PSUs 8 1 |
Assumptions used in determining fair value of stock options | A summary of the assumptions used in determining the fair value of stock options follows: 2016 2015 2014 Expected volatility 27 % 29 % 34 % Expected option life in years 5.5 5.5 5.5 Expected dividend yield 2.5 % 2.6 % 2.4 % Risk-free interest rate 1.2 to 1.5% 1.6 to 1.5% 1.7 to 1.5% Weighted-average fair value of stock options granted $ 11.80 $ 15.25 $ 19.46 |
Summary of stock option activity | A summary of stock option activity follows: (Options in millions) Weighted-average exercise price per option Options Weighted-average remaining contractual life in years Aggregate intrinsic value Outstanding at January 1, 2016 $ 51.94 6.2 Granted 56.73 1.3 Exercised 40.32 (1.9 ) Forfeited and canceled 65.74 (0.1 ) Outstanding at December 31, 2016 $ 56.75 5.5 5.6 $ 64.5 Exercisable at December 31, 2016 $ 54.28 3.7 4.0 $ 51.3 Reserved for future grants at December 31, 2016 18.6 |
Information related to stock options | Information related to stock options follows: 2016 2015 2014 Pretax expense for stock options $ 14 $ 12 $ 12 After-tax expense for stock options 9 8 8 Proceeds from stock options exercised 74 52 54 Income tax benefit related to stock options exercised Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows 5 4 4 Excess tax benefit classified in financing activities in the Consolidated Statements of Cash Flows 1 1 15 Intrinsic value of stock options exercised 42 44 55 Total fair value of stock options vested $ 14 $ 12 $ 12 Stock options exercised, in millions of options 1.9 1.4 1.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income (loss) before income taxes | Income (loss) before income taxes 2016 2015 2014 Ireland $ (923 ) $ (608 ) $ (332 ) Foreign 3,050 2,753 2,093 Total income before income taxes $ 2,127 $ 2,145 $ 1,761 |
Income tax (benefit) expense | Income tax expense (benefit) 2016 2015 2014 Current Ireland $ 2 $ 8 $ (13 ) United States Federal 95 88 87 State and local (2 ) 22 41 Foreign - other 209 240 239 Total current income tax expense 304 358 354 Deferred Ireland 2 1 2 United States Federal (72 ) (65 ) (224 ) State and local (2 ) (6 ) (49 ) Foreign - other (30 ) (124 ) (125 ) Total deferred income tax benefit (102 ) (194 ) (396 ) Total income tax expense (benefit) $ 202 $ 164 $ (42 ) |
Reconciliations of income taxes from the appropriate statutory rate | Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate follow: 2016 2015 2014 Income taxes at the applicable statutory rate 25.0 % 25.0 % 25.0 % Ireland operations Ireland tax on trading income (0.3 )% (0.4 )% (0.1 )% Nondeductible interest expense 11.5 % 7.9 % 4.8 % United States operations United States (loss) income 0.2 % (0.4 )% (2.8 )% Nondeductible goodwill - Aerospace divestitures — % — % 1.4 % Credit for research activities (0.8 )% (0.8 )% (1.0 )% Other - net 2.5 % 5.4 % 1.5 % Other foreign operations United States foreign tax credit 0.6 % (0.8 )% (1.1 )% Other foreign operations (earnings taxed at other than the applicable statutory tax rate) (26.8 )% (25.1 )% (24.8 )% Other foreign operations - other items 0.9 % (0.5 )% (1.0 )% Worldwide operations Adjustments to tax liabilities (2.5 )% (1.4 )% (1.7 )% Adjustments to valuation allowances (0.8 )% (1.2 )% (2.6 )% Effective income tax expense (benefit) rate 9.5 % 7.7 % (2.4 )% |
Worldwide income tax payments | Worldwide income tax payments, net of tax refunds, follow: 2016 $ 272 2015 302 2014 258 |
Components of current and long-term deferred income taxes | Components of current and noncurrent deferred income taxes follow: 2016 2015 Noncurrent assets and liabilities Noncurrent assets and liabilities Accruals and other adjustments Employee benefits $ 761 $ 808 Depreciation and amortization (1,823 ) (1,824 ) Other accruals and adjustments 796 717 United States federal income tax loss carryforwards 51 20 United States federal income tax credit carryforwards 182 183 United States state and local tax loss carryforwards and tax credit carryforwards 63 63 Other foreign tax loss carryforwards 1,715 2,265 Other foreign income tax credit carryforwards 63 70 Valuation allowance for income tax loss and income tax credit carryforwards (1,728 ) (2,315 ) Other valuation allowances (41 ) (15 ) Total deferred income taxes $ 39 $ (28 ) |
United States state and local tax loss carryforwards and tax credit carryforwards and expiration dates | summarized below: 2017 2022 2027 2032 2037 Not subject to expiration Valuation allowance United States federal income tax loss carryforwards $ — $ 15 $ 20 $ 618 $ — $ — $ — United States federal deferred income tax assets for income tax loss carryforwards — 5 7 172 — — (12 ) United States federal deferred income tax assets for income tax loss carryforwards after ASU 2013-11 — 5 7 39 — — (12 ) United States federal income tax credit carryforwards 62 36 39 115 — 29 (44 ) United States federal income tax credit carryforwards after ASU 2013-11 62 36 8 76 — — (44 ) |
Non-United States subsidiaries tax loss carryforwards and income tax credit carryforwards and expiration dates | These carryforwards and their respective expiration dates are summarized below: 2017 through 2021 2022 through 2026 2027 through 2031 2032 through 2036 Not subject to expiration Valuation allowance Ireland and Non-U.S. income tax loss carryforwards $ 652 $ 7,476 $ 3 $ — $ 3,685 $ — Ireland and Non-U.S. deferred income tax assets for income tax loss carryforwards 76 688 1 — 950 (1,607 ) Ireland and Non-U.S. income tax credit carryforwards 10 21 2 — 30 (31 ) |
Summary of gross unrecognized income tax benefits | A summary of gross unrecognized income tax benefits follows: 2016 2015 2014 Balance at January 1 $ 584 $ 493 $ 479 Increases and decreases as a result of positions taken during prior years Transfers from valuation allowances — — (3 ) Other increases, including currency translation 21 34 37 Other decreases, including currency translation (24 ) (34 ) (3 ) Balances related to acquired businesses — (1 ) (3 ) Increases as a result of positions taken during the current year 90 109 65 Decreases relating to settlements with tax authorities (19 ) — (51 ) Decreases as a result of a lapse of the applicable statute of limitations (23 ) (17 ) (28 ) Balance at December 31 $ 629 $ 584 $ 493 |
Deferred Tax Assets Income Tax Loss Carryforwards And Income Tax Credit Carryforwards State And Local [Table Text Block] | are summarized below: 2017 2022 2027 2032 2037 Not subject to expiration Valuation allowance United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect $ 8 $ 17 $ 11 $ 8 $ — $ — $ (17 ) United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect after ASU 2013-11 — 12 11 8 — — (17 ) United States state and local income tax credit carryforwards - net of federal tax effect 11 11 7 4 5 — (17 ) United States state and local income tax credit carryforwards - net of federal tax effect after ASU 2013-11 8 11 6 2 5 — (17 ) |
Eaton Shareholders' Equity (Tab
Eaton Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Comprehensive Income (Loss) | The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss): 2016 2015 2014 Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Currency translation and related hedging instruments $ (562 ) $ (570 ) $ (1,080 ) $ (1,078 ) $ (1,014 ) $ (1,019 ) Pensions and other postretirement benefits Prior service credit (cost) arising during the year (2 ) (2 ) 1 1 82 51 Net (loss) gain arising during the year (247 ) (197 ) (123 ) (89 ) (718 ) (519 ) Currency translation 74 62 62 46 56 47 Other — (2 ) — (3 ) — (4 ) Amortization of actuarial loss and prior service cost reclassified to earnings 201 133 237 156 168 110 26 (6 ) 177 111 (412 ) (315 ) Cash flow hedges Gain (loss) on derivatives designated as cash flow hedges (21 ) (14 ) 20 13 (3 ) (2 ) Changes in cash flow hedges reclassified to earnings 8 5 (16 ) (10 ) (5 ) (3 ) Cash flow hedges, net of reclassification adjustments (13 ) (9 ) 4 3 (8 ) (5 ) Other comprehensive income (loss) income attributable to Eaton ordinary shareholders $ (549 ) $ (585 ) $ (899 ) $ (964 ) $ (1,434 ) $ (1,339 ) |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The changes in Accumulated other comprehensive loss follow: Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow hedges Total Balance at December 31, 2015 $ (2,492 ) $ (1,374 ) $ 3 $ (3,863 ) Other comprehensive (loss) income before reclassifications (570 ) (139 ) (14 ) (723 ) Amounts reclassified from Accumulated other comprehensive loss (income) — 133 5 138 Net current-period Other comprehensive (loss) income (570 ) (6 ) (9 ) (585 ) Balance at December 31, 2016 $ (3,062 ) $ (1,380 ) $ (6 ) $ (4,448 ) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The reclassifications out of Accumulated other comprehensive loss follow: December 31, 2016 Consolidated Statements of Income classification Amortization of defined benefit pension and other postretirement benefits items Actuarial loss and prior service cost $ (201 ) 1 Tax benefit 68 Total, net of tax (133 ) Gains and (losses) on cash flow hedges Currency exchange contracts (8 ) Cost of products sold Tax benefit 3 Total, net of tax (5 ) Total reclassifications for the period $ (138 ) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about defined benefit pension and other postretirement benefits items. |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows: (Shares in millions) 2016 2015 2014 Net income attributable to Eaton ordinary shareholders $ 1,922 $ 1,979 $ 1,793 Weighted-average number of ordinary shares outstanding - diluted 456.5 467.1 476.8 Less dilutive effect of equity-based compensation 1.5 1.6 2.7 Weighted-average number of ordinary shares outstanding - basic 455.0 465.5 474.1 Net income per share attributable to Eaton ordinary shareholders Diluted $ 4.21 $ 4.23 $ 3.76 Basic 4.22 4.25 3.78 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of financial instruments recognized at fair value and fair value measurement used | A summary of financial instruments recognized at fair value, and the fair value measurements used, follows: Total Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Unobservable inputs (Level 3) 2016 Cash $ 543 $ 543 $ — $ — Short-term investments 203 203 — — Net derivative contracts (3 ) — (3 ) — Long-term debt converted to floating interest rates by interest rate swaps - net (58 ) — (58 ) — 2015 Cash $ 268 $ 268 $ — $ — Short-term investments 177 177 — — Net derivative contracts 86 — 86 — Long-term debt converted to floating interest rates by interest rate swaps - net (94 ) — (94 ) — |
Summary of carrying value of short-term investments | A summary of the carrying value of short-term investments follows: 2016 2015 Time deposits, certificates of deposit and demand deposits with banks $ 149 $ 122 Money market investments 54 55 Total short-term investments $ 203 $ 177 |
Derivative Financial Instrume36
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of interest rate swaps | A summary of interest rate swaps outstanding at December 31, 2016 , follows: Fixed-to-Floating Interest Rate Swaps Notional amount Fixed interest rate received Floating interest rate paid Basis for contracted floating interest rate paid $ 150 5.30% 4.75% 1 month LIBOR + 4.26% 750 1.50% 0.95% 1 month LIBOR + 0.46% 415 5.60% 4.26% 6 month LIBOR + 3.18% 300 6.95% 5.85% 3 month LIBOR + 5.07% 25 8.88% 4.96% 6 month LIBOR + 3.84% 150 3.88% 2.61% 1 month LIBOR + 2.12% 275 3.47% 2.23% 1 month LIBOR + 1.74% 1,400 2.75% 1.07% 1 month LIBOR + 0.58% 200 3.68% 1.56% 1 month LIBOR + 1.07% 25 7.63% 3.55% 6 month LIBOR + 2.48% 50 7.65% 3.65% 6 month LIBOR + 2.57% 25 5.45% 1.36% 6 month LIBOR + 0.28% Forward Starting Floating-to-Fixed Interest Rate Swaps Notional amount Floating interest Fixed interest Basis for contracted floating interest rate received $ 50 —% 2.52% 3 month LIBOR + 0.00% 50 —% 2.38% 3 month LIBOR + 0.00% 50 —% 2.19% 3 month LIBOR + 0.00% 50 —% 2.19% 3 month LIBOR + 0.00% 50 —% 1.95% 3 month LIBOR + 0.00% 50 —% 1.80% 3 month LIBOR + 0.00% 50 —% 1.67% 3 month LIBOR + 0.00% 50 —% 1.66% 3 month LIBOR + 0.00% 50 —% 1.53% 3 month LIBOR + 0.00% |
Fair value of derivative financial instruments recognized in the Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows: Notional amount Other current assets Other noncurrent assets Other current liabilities Other noncurrent liabilities Type of hedge Term December 31, 2016 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,765 $ 1 $ 65 $ — $ 8 Fair value 3 months to 18 years Forward starting floating-to-fixed interest rate swaps 450 — 19 — 1 Cash flow 11 years Currency exchange contracts 802 11 1 22 17 Cash flow 1 to 36 months Total $ 12 $ 85 $ 22 $ 26 Derivatives not designated as hedges Currency exchange contracts $ 5,333 $ 31 $ 85 1 to 12 months Commodity contracts 10 2 — 1 to 12 months Total $ 33 $ 85 December 31, 2015 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,715 $ — $ 96 $ — $ 2 Fair value 2 to 19 years Forward starting floating-to-fixed interest rate swaps 50 — — — — Cash flow 12 years Currency exchange contracts 724 18 1 8 6 Cash flow 1 to 36 months Commodity contracts 1 — — — — Cash flow 1 to 12 months Total $ 18 $ 97 $ 8 $ 8 Derivatives not designated as hedges Currency exchange contracts $ 4,198 $ 27 $ 40 1 to 12 months Total $ 27 $ 40 |
Impact of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income | The impact of derivative instruments to the Consolidated Statements of Income and Comprehensive Income follow: Gain (loss) recognized in other comprehensive (loss) income Location of gain (loss) reclassified from Accumulated other comprehensive loss Gain (loss) reclassified from Accumulated other comprehensive loss 2016 2015 2016 2015 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ 18 $ — Interest expense - net $ — $ — Currency exchange contracts (39 ) 20 Cost of products sold (8 ) 16 Total $ (21 ) $ 20 $ (8 ) $ 16 |
Amounts recognized in net income | Amounts recognized in net income follow: 2016 2015 Derivatives designated as fair value hedges Fixed-to-floating interest rate swaps $ (36 ) $ 20 Related long-term debt converted to floating interest rates by interest rate swaps 36 (20 ) $ — $ — |
Accounts Receivable and Inven37
Accounts Receivable and Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable and Inventory [Abstract] | |
Components of inventory | The components of inventory follow: 2016 2015 Raw materials $ 880 $ 885 Work-in-process 396 412 Finished goods 1,074 1,131 Inventory at FIFO 2,350 2,428 Excess of FIFO over LIFO cost (96 ) (105 ) Total inventory $ 2,254 $ 2,323 |
Business Segment and Geograph38
Business Segment and Geographic Region Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information - Net sales, Segment operating profit and Corporate | 2016 2015 2014 Net sales Electrical Products $ 6,957 $ 6,976 $ 7,254 Electrical Systems and Services 5,662 5,931 6,457 Hydraulics 2,222 2,459 2,975 Aerospace 1,753 1,807 1,860 Vehicle 3,153 3,682 4,006 Total net sales $ 19,747 $ 20,855 $ 22,552 Segment operating profit Electrical Products $ 1,240 $ 1,156 $ 1,184 Electrical Systems and Services 711 776 843 Hydraulics 198 246 367 Aerospace 335 310 273 Vehicle 474 645 645 Total segment operating profit 2,958 3,133 3,312 Corporate Litigation settlements — — (644 ) Amortization of intangible assets (392 ) (406 ) (431 ) Interest expense - net (233 ) (232 ) (227 ) Pension and other postretirement benefits expense (60 ) (130 ) (138 ) Other corporate expense - net (146 ) (220 ) (111 ) Income before income taxes 2,127 2,145 1,761 Income tax expense (benefit) 202 164 (42 ) Net income 1,925 1,981 1,803 Less net income for noncontrolling interests (3 ) (2 ) (10 ) Net income attributable to Eaton ordinary shareholders $ 1,922 $ 1,979 $ 1,793 |
Business Segment Information - Acquisition integration charges | Business segment operating profit was reduced by acquisition integration charges as follows: 2016 2015 2014 Electrical Products $ 3 $ 25 $ 66 Electrical Systems and Services 1 15 51 Hydraulics — 2 12 Total $ 4 $ 42 $ 129 |
Business Segment Information - Identifiable assets, Capital expenditures for property, plant, and equipment, and Depreciation of property, plant, and equipment | 2016 2015 2014 Identifiable assets Electrical Products $ 2,363 $ 2,538 $ 3,012 Electrical Systems and Services 2,222 2,285 2,512 Hydraulics 1,188 1,138 1,315 Aerospace 830 841 832 Vehicle 1,549 1,579 1,668 Total identifiable assets 8,152 8,381 9,339 Goodwill 13,201 13,479 13,893 Other intangible assets 5,514 6,014 6,556 Corporate 3,552 3,122 3,699 Total assets $ 30,419 $ 30,996 $ 33,487 Capital expenditures for property, plant and equipment Electrical Products $ 134 $ 137 $ 170 Electrical Systems and Services 78 94 147 Hydraulics 92 61 79 Aerospace 28 33 28 Vehicle 142 119 160 Total 474 444 584 Corporate 23 62 48 Total expenditures for property, plant and equipment $ 497 $ 506 $ 632 Depreciation of property, plant and equipment Electrical Products $ 141 $ 137 $ 148 Electrical Systems and Services 82 82 90 Hydraulics 64 67 67 Aerospace 27 28 28 Vehicle 109 113 130 Total 423 427 463 Corporate 63 52 51 Total depreciation of property, plant and equipment $ 486 $ 479 $ 514 |
Geographic Region Information - Net sales and long-lived assets | Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net. 2016 2015 2014 Net sales United States $ 10,937 $ 11,396 $ 11,701 Canada 898 969 1,113 Latin America 1,448 1,726 1,988 Europe 4,228 4,379 5,074 Asia Pacific 2,236 2,385 2,676 Total $ 19,747 $ 20,855 $ 22,552 Long-lived assets United States $ 1,924 $ 1,982 $ 1,988 Canada 19 19 25 Latin America 281 243 306 Europe 681 734 799 Asia Pacific 538 587 632 Total $ 3,443 $ 3,565 $ 3,750 |
Condensed Consolidating Finan39
Condensed Consolidating Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,447 $ 6,351 $ 11,961 $ (5,012 ) $ 19,747 Cost of products sold — 5,078 4,686 8,649 (5,013 ) 13,400 Selling and administrative expense 141 1,155 760 1,449 — 3,505 Research and development expense — 235 186 168 — 589 Interest expense (income) - net — 230 18 (14 ) (1 ) 233 Other expense (income) - net (35 ) (48 ) 42 (66 ) — (107 ) Equity in loss (earnings) of subsidiaries, net of tax (2,439 ) (741 ) (3,322 ) (898 ) 7,400 — Intercompany expense (income) - net 411 (157 ) 1,230 (1,484 ) — — Income (loss) before income taxes 1,922 695 2,751 4,157 (7,398 ) 2,127 Income tax expense (benefit) — 34 28 139 1 202 Net income (loss) 1,922 661 2,723 4,018 (7,399 ) 1,925 Less net loss (income) for noncontrolling interests — — — (5 ) 2 (3 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,922 $ 661 $ 2,723 $ 4,013 $ (7,397 ) $ 1,922 Other comprehensive income (loss) (585 ) 53 (567 ) (803 ) 1,317 (585 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,337 $ 714 $ 2,156 $ 3,210 $ (6,080 ) $ 1,337 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,925 $ 6,659 $ 12,533 $ (5,262 ) $ 20,855 Cost of products sold — 5,508 5,036 8,981 (5,233 ) 14,292 Selling and administrative expense 141 1,223 738 1,494 — 3,596 Research and development expense — 266 197 162 — 625 Interest expense (income) - net — 222 21 (13 ) 2 232 Other expense (income) - net — — 24 (59 ) — (35 ) Equity in loss (earnings) of subsidiaries, net of tax (2,456 ) (789 ) (3,285 ) (689 ) 7,219 — Intercompany expense (income) - net 336 (425 ) 1,218 (1,129 ) — — Income (loss) before income taxes 1,979 920 2,710 3,786 (7,250 ) 2,145 Income tax expense (benefit) — 103 (69 ) 141 (11 ) 164 Net income (loss) 1,979 817 2,779 3,645 (7,239 ) 1,981 Less net loss (income) for noncontrolling interests — — — (3 ) 1 (2 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,979 $ 817 $ 2,779 $ 3,642 $ (7,238 ) $ 1,979 Other comprehensive income (loss) (964 ) 6 (952 ) (1,179 ) 2,125 (964 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,015 $ 823 $ 1,827 $ 2,463 $ (5,113 ) $ 1,015 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2014 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 6,990 $ 6,885 $ 13,521 $ (4,844 ) $ 22,552 Cost of products sold — 5,519 5,075 9,882 (4,830 ) 15,646 Selling and administrative expense 171 1,246 742 1,651 — 3,810 Litigation settlements — 644 — — — 644 Research and development expense — 240 202 205 — 647 Interest expense (income) - net — 225 25 (29 ) 6 227 Other expense (income) - net — (17 ) (81 ) (85 ) — (183 ) Equity in loss (earnings) of subsidiaries, net of tax (2,191 ) (657 ) (2,660 ) (295 ) 5,803 — Intercompany expense (income) - net 227 (263 ) 855 (819 ) — — Income (loss) before income taxes 1,793 53 2,727 3,011 (5,823 ) 1,761 Income tax expense (benefit) — (100 ) 79 (14 ) (7 ) (42 ) Net income (loss) 1,793 153 2,648 3,025 (5,816 ) 1,803 Less net loss (income) for noncontrolling interests — — — (8 ) (2 ) (10 ) Net income (loss) attributable to Eaton ordinary shareholders $ 1,793 $ 153 $ 2,648 $ 3,017 $ (5,818 ) $ 1,793 Other comprehensive income (loss) (1,339 ) (191 ) (1,370 ) (1,646 ) 3,207 (1,339 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 454 $ (38 ) $ 1,278 $ 1,371 $ (2,611 ) $ 454 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ 1 $ 92 $ 4 $ 446 $ — $ 543 Short-term investments — — — 203 — 203 Accounts receivable - net — 536 1,049 1,975 — 3,560 Intercompany accounts receivable 5 954 4,023 3,633 (8,615 ) — Inventory — 342 642 1,349 (79 ) 2,254 Prepaid expenses and other current assets — 77 42 237 25 381 Total current assets 6 2,001 5,760 7,843 (8,669 ) 6,941 Property, plant and equipment - net — 857 706 1,880 — 3,443 Other noncurrent assets Goodwill — 1,355 6,293 5,553 — 13,201 Other intangible assets — 169 3,442 1,903 — 5,514 Deferred income taxes — 904 — 228 (772 ) 360 Investment in subsidiaries 32,795 13,743 72,938 12,516 (131,992 ) — Intercompany loans receivable — 7,605 2,061 56,598 (66,264 ) — Other assets — 491 134 335 — 960 Total assets $ 32,801 $ 27,125 $ 91,334 $ 86,856 $ (207,697 ) $ 30,419 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ — $ 8 $ 6 $ — $ 14 Current portion of long-term debt — 1,250 296 6 — 1,552 Accounts payable 1 372 252 1,093 — 1,718 Intercompany accounts payable 281 3,870 3,115 1,349 (8,615 ) — Accrued compensation — 98 58 223 — 379 Other current liabilities 1 591 291 941 (2 ) 1,822 Total current liabilities 283 6,181 4,020 3,618 (8,617 ) 5,485 Noncurrent liabilities Long-term debt — 5,767 936 8 — 6,711 Pension liabilities — 610 161 888 — 1,659 Other postretirement benefits liabilities — 198 99 71 — 368 Deferred income taxes — — 732 361 (772 ) 321 Intercompany loans payable 17,621 2,603 44,788 1,252 (66,264 ) — Other noncurrent liabilities — 327 211 396 — 934 Total noncurrent liabilities 17,621 9,505 46,927 2,976 (67,036 ) 9,993 Shareholders’ equity Eaton shareholders’ equity 14,897 11,439 40,387 80,224 (132,050 ) 14,897 Noncontrolling interests — — — 38 6 44 Total equity 14,897 11,439 40,387 80,262 (132,044 ) 14,941 Total liabilities and equity $ 32,801 $ 27,125 $ 91,334 $ 86,856 $ (207,697 ) $ 30,419 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ — $ 26 $ 7 $ 235 $ — $ 268 Short-term investments — — 2 175 — 177 Accounts receivable - net — 512 1,036 1,931 — 3,479 Intercompany accounts receivable 1 842 3,903 3,033 (7,779 ) — Inventory — 357 658 1,388 (80 ) 2,323 Prepaid expenses and other current assets — 77 41 228 23 369 Total current assets 1 1,814 5,647 6,990 (7,836 ) 6,616 Property, plant and equipment - net — 930 751 1,884 — 3,565 Other noncurrent assets Goodwill — 1,355 6,295 5,829 — 13,479 Other intangible assets — 182 3,634 2,198 — 6,014 Deferred income taxes — 1,016 — 218 (872 ) 362 Investment in subsidiaries 29,627 12,931 60,216 9,968 (112,742 ) — Intercompany loans receivable — 8,641 1,573 44,835 (55,049 ) — Other assets — 492 122 346 — 960 Total assets $ 29,628 $ 27,361 $ 78,238 $ 72,268 $ (176,499 ) $ 30,996 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ 408 $ — $ 18 $ — $ 426 Current portion of long-term debt — 1 240 1 — 242 Accounts payable — 392 266 1,100 — 1,758 Intercompany accounts payable 219 4,009 2,380 1,171 (7,779 ) — Accrued compensation — 77 53 236 — 366 Other current liabilities 1 644 319 874 (5 ) 1,833 Total current liabilities 220 5,531 3,258 3,400 (7,784 ) 4,625 Noncurrent liabilities Long-term debt — 7,053 675 17 1 7,746 Pension liabilities — 639 165 782 — 1,586 Other postretirement benefits liabilities — 245 118 77 — 440 Deferred income taxes — — 818 444 (872 ) 390 Intercompany loans payable 14,222 2,962 36,436 1,429 (55,049 ) — Other noncurrent liabilities — 346 200 432 — 978 Total noncurrent liabilities 14,222 11,245 38,412 3,181 (55,920 ) 11,140 Shareholders’ equity Eaton shareholders’ equity 15,186 10,585 36,568 65,650 (112,803 ) 15,186 Noncontrolling interests — — — 37 8 45 Total equity 15,186 10,585 36,568 65,687 (112,795 ) 15,231 Total liabilities and equity $ 29,628 $ 27,361 $ 78,238 $ 72,268 $ (176,499 ) $ 30,996 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (253 ) $ (215 ) $ (236 ) $ 3,256 $ — $ 2,552 Investing activities Capital expenditures for property, plant and equipment — (92 ) (114 ) (291 ) — (497 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — 1 — — 1 Sales (purchases) of short-term investment - net — — 2 (42 ) — (40 ) Investments in affiliates (1,250 ) — (120 ) (1,370 ) 2,740 — Return of investments in affiliates — — 47 — (47 ) — Loans to affiliates — (337 ) (655 ) (8,208 ) 9,200 — Repayments of loans from affiliates — 1,293 — 5,893 (7,186 ) — Other - net — (9 ) 41 (25 ) — 7 Net cash provided by (used in) investing activities (1,250 ) 855 (798 ) (4,043 ) 4,707 (529 ) Financing activities Proceeds from borrowings — 21 610 — — 631 Payments on borrowings — (408 ) (231 ) (14 ) — (653 ) Proceeds from borrowings from affiliates 3,843 4,045 1,120 192 (9,200 ) — Payments on borrowings from affiliates (646 ) (4,655 ) (1,844 ) (41 ) 7,186 — Capital contribution from affiliates — — 1,370 1,370 (2,740 ) — Return of investments in affiliates — — — (47 ) 47 — Other intercompany financing activities — 422 10 (432 ) — — Cash dividends paid (1,037 ) — — — — (1,037 ) Cash dividends paid to affiliates — — — — — — Exercise of employee stock options 74 — — — — 74 Repurchase of shares (730 ) — — — — (730 ) Excess tax benefit from equity-based compensation — 1 — — — 1 Other - net — — (4 ) (2 ) — (6 ) Net cash provided by (used in) financing activities 1,504 (574 ) 1,031 1,026 (4,707 ) (1,720 ) Effect of currency on cash — — — (28 ) — (28 ) Total increase (decrease) in cash 1 66 (3 ) 211 — 275 Cash at the beginning of the period — 26 7 235 — 268 Cash at the end of the period $ 1 $ 92 $ 4 $ 446 $ — $ 543 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2015 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (137 ) $ (46 ) $ (288 ) $ 2,846 $ (4 ) $ 2,371 Investing activities Capital expenditures for property, plant and equipment — (94 ) (146 ) (266 ) — (506 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — (35 ) (37 ) — (72 ) Sales (purchases) of short-term investments - net — — (2 ) 39 — 37 Investments in affiliates (1,482 ) — (1,176 ) (1,482 ) 4,140 — Loans to affiliates — (1,235 ) (39 ) (10,608 ) 11,882 — Repayments of loans from affiliates — 342 359 7,148 (7,849 ) — Proceeds from the sales of businesses — — — 1 — 1 Other - net — (50 ) 47 (32 ) — (35 ) Net cash provided by (used in) investing activities (1,482 ) (1,037 ) (992 ) (5,237 ) 8,173 (575 ) Financing activities Proceeds from borrowings — 408 — 17 — 425 Payments on borrowings — (724 ) (301 ) (2 ) — (1,027 ) Proceeds from borrowings from affiliates 3,322 6,885 997 678 (11,882 ) — Payments on borrowings from affiliates (48 ) (6,122 ) (1,282 ) (397 ) 7,849 — Capital contribution from affiliates — 1,176 1,482 1,482 (4,140 ) — Other intercompany financing activities — (688 ) 378 310 — — Cash dividends paid (1,026 ) — — — — (1,026 ) Cash dividends received from affiliates — — — (4 ) 4 — Exercise of employee stock options 52 — — — — 52 Repurchase of shares (682 ) — — — — (682 ) Excess tax benefit from equity-based compensation — 1 — — — 1 Other - net — — — (10 ) — (10 ) Net cash provided by (used in) financing activities 1,618 936 1,274 2,074 (8,169 ) (2,267 ) Effect of currency on cash — — — (42 ) — (42 ) Total increase (decrease) in cash (1 ) (147 ) (6 ) (359 ) — (513 ) Cash at the beginning of the period 1 173 13 594 — 781 Cash at the end of the period $ — $ 26 $ 7 $ 235 $ — $ 268 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2014 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (93 ) $ (411 ) $ (218 ) $ 2,568 $ 32 $ 1,878 Investing activities Capital expenditures for property, plant and equipment — (127 ) (168 ) (337 ) — (632 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — — 2 — 2 Sales (purchases) of short-term investments - net — — 133 389 — 522 Investments in affiliates (753 ) — — (753 ) 1,506 — Loans to affiliates — (354 ) (162 ) (10,546 ) 11,062 — Repayments of loans from affiliates — 978 212 8,451 (9,641 ) — Proceeds from the sales of businesses — 93 175 14 — 282 Other - net — (47 ) 44 (28 ) — (31 ) Net cash provided by (used in) investing activities (753 ) 543 234 (2,808 ) 2,927 143 Financing activities Proceeds from borrowings — — — — — — Payments on borrowings — (553 ) (1 ) (28 ) — (582 ) Proceeds from borrowings from affiliates 2,628 7,599 808 27 (11,062 ) — Payments on borrowings from affiliates (476 ) (6,907 ) (1,875 ) (383 ) 9,641 — Issuance of stock to affiliates — — 753 753 (1,506 ) — Other intercompany financing activities 217 (169 ) 302 (350 ) — — Cash dividends paid (929 ) — — — — (929 ) Cash dividends paid to affiliates — — — 32 (32 ) — Exercise of employee stock options 54 — — — — 54 Repurchase of shares (650 ) — — — — (650 ) Excess tax benefit from equity-based compensation — 20 — — — 20 Other - net — — — (43 ) — (43 ) Net cash provided by (used in) financing activities 844 (10 ) (13 ) 8 (2,959 ) (2,130 ) Effect of currency on cash — — — (25 ) — (25 ) Total increase (decrease) in cash (2 ) 122 3 (257 ) — (134 ) Cash at the beginning of the period 3 51 10 851 — 915 Cash at the end of the period $ 1 $ 173 $ 13 $ 594 $ — $ 781 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - General Information and Basis of Presentation (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | |||
Net sales | $ 19,747 | $ 20,855 | $ 22,552 |
Number of Eaton employees | 95,000 | ||
Countries of operation, over | over 60 | ||
Countries where products are sold | 175 | ||
Minimum [Member] | |||
Investments in associate companies [Line Items] | |||
Equity method of accounting, ownership interest (in percentage) | 20.00% | ||
Maximum [Member] | |||
Investments in associate companies [Line Items] | |||
Equity method of accounting, ownership interest (in percentage) | 50.00% |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Long-Lived Assets (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Patents and technology [Member] | |
Long-Lived Assets [Line Items] | |
Weighted average amortization period for intangible assets (in years) | 17 years |
Customer relationships [Member] | |
Long-Lived Assets [Line Items] | |
Weighted average amortization period for intangible assets (in years) | 17 years |
Trademarks [Member] | |
Long-Lived Assets [Line Items] | |
Weighted average amortization period for intangible assets (in years) | 16 years |
Buildings [Member] | |
Long-Lived Assets [Line Items] | |
Property, plant and equipment useful life (in years) | 40 years |
Machinery and equipment [Member] | Minimum [Member] | |
Long-Lived Assets [Line Items] | |
Property, plant and equipment useful life (in years) | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Long-Lived Assets [Line Items] | |
Property, plant and equipment useful life (in years) | 10 years |
Software [Member] | Maximum [Member] | |
Long-Lived Assets [Line Items] | |
Property, plant and equipment useful life (in years) | 10 years |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Equity-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity-based compensation, vesting period (in years) | 3 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Basis of Presentation (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt [Member] | |
Reclassification of Debt Issuance Costs [Line Items] | |
Reclassification of Debt Issuance Costs | $ 35 |
Acquisitions and Sales of Bus44
Acquisitions and Sales of Businesses - Narrative (Details) - USD ($) $ in Millions | May 09, 2014 | Sep. 30, 2015 | Dec. 31, 2014 |
Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses [Member] | Aerospace [Member] | |||
Business Acquisition [Line Items] | |||
Agreement to sell the Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to Safran USA Inc. | $ 270 | ||
Gain on sale of businesses, pre-tax | $ 154 | ||
Ephesus Lighting, Inc. [Member] | Electrical Products [Member] | |||
Business Acquisition [Line Items] | |||
Revenue reported for last annual period of acquired entity | $ 23 | ||
Oxalis Group Ltd. [Member] | Electrical Systems and Services [Member] | |||
Business Acquisition [Line Items] | |||
Revenue reported for last annual period of acquired entity | $ 9 |
Acquisition Integration Charg45
Acquisition Integration Charges - Transaction Costs (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition Integration Charges and Transaction Costs [Line Items] | |||
Severance Costs | $ 177 | $ 112 | |
Acquisition Integration Charges | |||
Business segment acquisition integration pretax charges | 4 | 42 | $ 129 |
Transaction costs [Abstract] | |||
Total acquisition integration charges and transaction costs before income taxes | 4 | 47 | 154 |
Income Tax Effect on Acquisition Integration Charges | 1 | 16 | 52 |
Total acquisition integration charges and transaction costs after income taxes | $ 3 | $ 31 | $ 102 |
Per ordinary share - diluted | $ 0.01 | $ 0.07 | $ 0.21 |
Electrical Products [Member] | |||
Acquisition Integration Charges | |||
Business segment acquisition integration pretax charges | $ 3 | $ 25 | $ 66 |
Electrical Systems and Services [Member] | |||
Acquisition Integration Charges | |||
Business segment acquisition integration pretax charges | 1 | 15 | 51 |
Hydraulics [Member] | |||
Acquisition Integration Charges | |||
Business segment acquisition integration pretax charges | 0 | 2 | 12 |
Total business segments [Member] | |||
Acquisition Integration Charges | |||
Business segment acquisition integration pretax charges | 4 | 42 | 129 |
Corporate [Member] | |||
Acquisition Integration Charges | |||
Corporate acquisition integration charges | $ 0 | 5 | 25 |
Restructuring activities related to the acquisition and integration of Cooper Industries plc [Member] | |||
Acquisition Integration Charges and Transaction Costs [Line Items] | |||
Severance Costs | 1 | 69 | |
Transaction costs [Abstract] | |||
Other Restructuring Costs | $ 19 | $ 26 |
Acquisition Integration Charg46
Acquisition Integration Charges - Restructuring Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | $ 211 | $ 129 | |
Severance costs | 177 | 112 | |
Restructuring activities related to the acquisition and integration of Cooper Industries plc [Member] | |||
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | 20 | $ 95 | |
Severance costs | 1 | 69 | |
Other restructuring costs | 19 | 26 | |
Electrical Products [Member] | |||
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | 44 | 12 | |
Electrical Products [Member] | Restructuring activities related to the acquisition and integration of Cooper Industries plc [Member] | |||
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | 14 | 53 | |
Electrical Systems and Services [Member] | |||
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | $ 49 | 29 | |
Electrical Systems and Services [Member] | Restructuring activities related to the acquisition and integration of Cooper Industries plc [Member] | |||
Acquisition Integration Charges [Line Items] | |||
Restructuring charges | $ 6 | $ 42 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 211 | $ 129 | |
Severance costs | 177 | 112 | |
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 177 | 112 | |
Scenario, Forecast [Member] | Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring activities anticipated for 2017 | $ 100 | ||
Hydraulics [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 67 | 31 | |
Aerospace [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 4 | 5 | |
Vehicle [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 35 | 34 | |
Corporate, Non-Segment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 12 | $ 18 |
Restructuring Charges - Segment
Restructuring Charges - Segments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 211 | $ 129 |
Electrical Products [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 44 | 12 |
Electrical Systems and Services [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 49 | 29 |
Hydraulics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 67 | 31 |
Aerospace [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 4 | 5 |
Vehicle [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 35 | 34 |
Corporate, Non-Segment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 12 | $ 18 |
Restructuring Charges - Restruc
Restructuring Charges - Restructuring Roll Forward (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | $ 54 | $ 0 |
Liability recognized | 211 | 129 |
Payments for Restructuring | (129) | (62) |
Other adjustments | (22) | (13) |
Restructuring Reserve | 114 | 54 |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | 54 | 0 |
Liability recognized | 177 | 112 |
Payments for Restructuring | (116) | (59) |
Other adjustments | (2) | 1 |
Restructuring Reserve | 113 | 54 |
Other Restructuring [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | 0 | 0 |
Liability recognized | 34 | 17 |
Payments for Restructuring | (13) | (3) |
Other adjustments | (20) | (14) |
Restructuring Reserve | $ 1 | $ 0 |
Restructuring Charges - Restr50
Restructuring Charges - Restructuring Charges by Type (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | $ 211 | $ 129 |
Severance costs | 177 | 112 |
Restructuring payments for plant closing and other | 34 | 17 |
Electrical Products [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | 44 | 12 |
Electrical Systems and Services [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | 49 | 29 |
Hydraulics [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | 67 | 31 |
Aerospace [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | 4 | 5 |
Vehicle [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | 35 | 34 |
Corporate, Non-Segment [Member] | ||
Restructuring Charges by Type [Line Items] | ||
Restructuring charges | $ 12 | $ 18 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets - Schedule of Goodwill by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Goodwill | $ 13,479 | $ 13,893 |
Additions | 51 | |
Reclassifications | 0 | |
Translation | (278) | (465) |
Goodwill | 13,201 | 13,479 |
Electrical Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 6,642 | 6,940 |
Additions | 31 | |
Reclassifications | (106) | |
Translation | (145) | (223) |
Goodwill | 6,497 | 6,642 |
Electrical Systems and Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 4,279 | 4,314 |
Additions | 20 | |
Reclassifications | 106 | |
Translation | (76) | (161) |
Goodwill | 4,203 | 4,279 |
Hydraulics [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 1,259 | 1,327 |
Additions | 0 | |
Reclassifications | 0 | |
Translation | (38) | (68) |
Goodwill | 1,221 | 1,259 |
Aerospace [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 956 | 962 |
Additions | 0 | |
Reclassifications | 0 | |
Translation | (18) | (6) |
Goodwill | 938 | 956 |
Vehicle [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 343 | 350 |
Additions | 0 | |
Reclassifications | 0 | |
Translation | (1) | (7) |
Goodwill | $ 342 | $ 343 |
Goodwill and Other Intangible52
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets by Major Class (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of other intangible assets | ||
Intangible assets not subject to amortization - trademarks | $ 1,637 | $ 1,661 |
Intangible assets subject to amortization | ||
Historical cost | 5,999 | 6,207 |
Accumulated amortization | 2,122 | 1,854 |
Customer relationships [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 3,456 | 3,544 |
Accumulated amortization | 1,199 | 1,010 |
Patents and technology [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 1,342 | 1,447 |
Accumulated amortization | 519 | 511 |
Trademarks [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 1,104 | 1,113 |
Accumulated amortization | 378 | 311 |
Other [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 97 | 103 |
Accumulated amortization | $ 26 | $ 22 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Intangible Assets Amortization Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 392 |
2,017 | 375 |
2,018 | 355 |
2,019 | 348 |
2,020 | 343 |
2,021 | $ 334 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 8,263 | $ 7,988 | |
Less current portion of long-term debt | (1,552) | (242) | |
Long-term debt less current portion | $ 6,711 | $ 7,746 | |
Senior notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate (in percentage) | 0.00% | 0.75% | |
Debt instrument, maturity date | Jun. 20, 2024 | ||
Notes [Member] | Debentures due 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate (in percentage) | 2.38% | ||
Notes [Member] | Notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 250 | $ 250 | |
Debt instrument, stated interest rate (in percentage) | 5.30% | 5.30% | |
Debt instrument, maturity date | Mar. 15, 2017 | Mar. 15, 2017 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 150 | ||
Notes [Member] | Notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 450 | $ 450 | |
Debt instrument, stated interest rate (in percentage) | 5.60% | 5.60% | |
Debt instrument, maturity date | May 15, 2018 | May 15, 2018 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 415 | ||
Notes [Member] | Notes due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 300 | $ 300 | |
Debt instrument, stated interest rate (in percentage) | 6.95% | 6.95% | |
Debt instrument, maturity date | Mar. 20, 2019 | Mar. 20, 2019 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 300 | ||
Notes [Member] | Notes due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 300 | $ 300 | |
Debt instrument, stated interest rate (in percentage) | 3.47% | 3.47% | |
Debt instrument, maturity date | Jun. 28, 2021 | Jun. 28, 2021 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 275 | ||
Notes [Member] | Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 300 | $ 300 | |
Debt instrument, stated interest rate (in percentage) | 3.68% | 3.68% | |
Debt instrument, maturity date | Jun. 28, 2023 | Jun. 28, 2023 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 200 | ||
Notes [Member] | Senior notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | 580 | $ 0 | |
Notes [Member] | Notes due 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 240 | $ 240 | |
Debt instrument, stated interest rate (in percentage) | 5.80% | 5.80% | |
Debt instrument, maturity date | Mar. 15, 2037 | Mar. 15, 2037 | |
Notes [Member] | Notes due from 2018 to 2035 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 239 | $ 239 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 50 | $ 50 | |
Notes ranging from 5.25% to 8.875%, Interest Rate, Stated Percentage Rate Range, Minimum | 5.25% | 5.25% | |
Notes ranging from 5.25% to 8.875%, Interest Rate, Stated Percentage Rate Range, Maximum | 8.875% | 8.875% | |
Notes maturing from 2018 to 2035, Maturity Date Range, Start | Mar. 20, 2014 | Mar. 20, 2014 | |
Notes maturing from 2018 to 2035, Maturity Date Range, End | Jun. 15, 2035 | Jun. 15, 2035 | |
Japanese Yen notes payable [Member] | Japanese Yen notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Notes | $ 86 | $ 83 | |
Debt instrument, stated interest rate (in percentage) | 4.215% | 4.215% | |
Debt instrument, maturity date | Dec. 17, 2018 | Dec. 17, 2018 | |
Senior Notes [Member] | Senior notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 1,000 | $ 1,000 | |
Debt instrument, stated interest rate (in percentage) | 1.50% | 1.50% | |
Debt instrument, maturity date | Nov. 2, 2017 | Nov. 2, 2017 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 750 | ||
Senior Notes [Member] | Senior notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 1,600 | $ 1,600 | |
Debt instrument, stated interest rate (in percentage) | 2.75% | 2.75% | |
Debt instrument, maturity date | Nov. 2, 2022 | Nov. 2, 2022 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 1,400 | ||
Senior Notes [Member] | Senior notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate (in percentage) | 0.75% | ||
Senior Notes [Member] | Senior notes due 2032 [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 700 | $ 700 | |
Debt instrument, stated interest rate (in percentage) | 4.00% | 4.00% | |
Debt instrument, maturity date | Nov. 2, 2032 | Nov. 2, 2032 | |
Senior Notes [Member] | Senior notes due 2042 [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 1,000 | $ 1,000 | |
Debt instrument, stated interest rate (in percentage) | 4.15% | 4.15% | |
Debt instrument, maturity date | Nov. 2, 2042 | Nov. 2, 2042 | |
Debenture [Member] | Debentures due 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 0 | $ 240 | |
Debt instrument, stated interest rate (in percentage) | 2.375% | ||
Debt instrument, maturity date | Jan. 15, 2016 | Jan. 15, 2016 | |
Debenture [Member] | Debentures due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 289 | $ 289 | |
Debt instrument, stated interest rate (in percentage) | 6.10% | 6.10% | |
Debt instrument, maturity date | Jul. 1, 2017 | Jul. 1, 2017 | |
Debenture [Member] | Debentures due 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 239 | $ 239 | |
Debt instrument, stated interest rate (in percentage) | 3.875% | 3.875% | |
Debt instrument, maturity date | Dec. 15, 2020 | Dec. 15, 2020 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 150 | ||
Debenture [Member] | Debentures due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 100 | $ 100 | |
Debt instrument, stated interest rate (in percentage) | 8.10% | 8.10% | |
Debt instrument, maturity date | Aug. 15, 2022 | Aug. 15, 2022 | |
Debenture [Member] | Debentures due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 145 | $ 145 | |
Debt instrument, stated interest rate (in percentage) | 6.50% | 6.50% | |
Debt instrument, maturity date | Jun. 1, 2025 | Jun. 1, 2025 | |
Debenture [Member] | Debentures due 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 200 | $ 200 | |
Debt instrument, stated interest rate (in percentage) | 7.65% | 7.65% | |
Debt instrument, maturity date | Nov. 15, 2029 | Nov. 15, 2029 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 50 | ||
Debenture [Member] | Debentures due 2034 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt debentures | $ 136 | $ 136 | |
Debt instrument, stated interest rate (in percentage) | 5.45% | 5.45% | |
Debt instrument, maturity date | Oct. 15, 2034 | Oct. 15, 2034 | |
Related long term debt converted to floating interest rates by interest rate swaps | $ 25 | ||
Other long-term debt [Member] | |||
Debt Instrument [Line Items] | |||
Other | $ 109 | $ 177 |
Debt - Narrative (Details)
Debt - Narrative (Details) € in Millions | Oct. 14, 2021USD ($) | Oct. 03, 2019USD ($) | Oct. 03, 2018USD ($) | Oct. 14, 2016USD ($) | Nov. 02, 2015USD ($) | Jun. 15, 2015USD ($) | Apr. 01, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Repayments of Debt | $ 653,000,000 | $ 1,027,000,000 | $ 582,000,000 | |||||||||
Short-term Debt | 14,000,000 | $ 426,000,000 | ||||||||||
Senior notes due 2024 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 0.00% | 0.75% | 0.75% | |||||||||
Debenture [Member] | Debentures due 2016 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 2.375% | |||||||||||
Long term debt debentures | $ 0 | $ 240,000,000 | ||||||||||
Debenture [Member] | Debenture due 2015 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 5.45% | |||||||||||
Repayments of Debt | $ 300,000,000 | |||||||||||
Notes [Member] | Debentures due 2016 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 2.38% | |||||||||||
Notes [Member] | Notes due 2015 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 4.65% | |||||||||||
Repayments of Debt | $ 100,000,000 | |||||||||||
Notes [Member] | Senior notes due 2024 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt debentures | $ 580,000,000 | 0 | ||||||||||
Senior Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Issuance of senior notes | € 550 | $ 615,000,000 | ||||||||||
Proceeds from issuance of senior notes | € 544 | $ 609,000,000 | ||||||||||
Senior Notes [Member] | Senior notes due 2015 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 0.95% | |||||||||||
Repayments of Debt | $ 600,000,000 | |||||||||||
Senior Notes [Member] | Senior notes due 2024 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, stated interest rate (in percentage) | 0.75% | 0.75% | ||||||||||
Refinanced five-year revolving credit facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 750,000,000 | |||||||||||
Revolving credit facility, term (in years) | 5 years | |||||||||||
Four-year revolving credit facility, expires October 3, 2018 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 500,000,000 | |||||||||||
Revolving credit facility, term (in years) | 4 years | |||||||||||
Five-year revolving credit facility, expires October 3, 2019 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 750,000,000 | |||||||||||
Revolving credit facility, term (in years) | 5 years | 5 years | ||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 2,000,000,000 | |||||||||||
Long-term line of credit | 0 | $ 0 | ||||||||||
Letter of Credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | 823,000,000 | |||||||||||
Letters of credit outstanding, amount | $ 285,000,000 | |||||||||||
Scenario, Actual [Member] | Subsequent Event [Member] | Five-year revolving credit facility, expires October 14, 2021 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 750,000,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 1,552 |
2,018 | 573 |
2,019 | 340 |
2,020 | 241 |
2,021 | $ 302 |
Debt - Interest Paid on Debt (D
Debt - Interest Paid on Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
Interest paid on debt | $ 266 | $ 271 | $ 296 |
Retirement Benefits Plans - Obl
Retirement Benefits Plans - Obligations and Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Funded status | |||
Fair value of plan assets | $ 4,447 | $ 4,406 | |
United States pension liabilities [Member] | |||
Funded status | |||
Fair value of plan assets | 2,969 | 2,934 | $ 3,086 |
Benefit obligations | (3,771) | (3,829) | (4,047) |
Funded status | (802) | (895) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Current liabilities | 34 | 11 | |
Current liabilities | (24) | (57) | |
Non-current liabilities | (812) | (849) | |
Total | (802) | (895) | |
Amounts recognized in Accumulated other comprehensive loss (pretax) | |||
Net actuarial loss | 1,232 | 1,322 | |
Prior service cost (credit) | 3 | 5 | |
Total | 1,235 | 1,327 | 1,382 |
Non-United States pension liabilities [Member] | |||
Funded status | |||
Fair value of plan assets | 1,478 | 1,472 | 1,535 |
Benefit obligations | (2,314) | (2,175) | (2,337) |
Funded status | (836) | (703) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Current liabilities | 33 | 57 | |
Current liabilities | (22) | (23) | |
Non-current liabilities | (847) | (737) | |
Total | (836) | (703) | |
Amounts recognized in Accumulated other comprehensive loss (pretax) | |||
Net actuarial loss | 771 | 644 | |
Prior service cost (credit) | 8 | 9 | |
Total | 779 | 653 | 706 |
Other postretirement liabilities [Member] | |||
Funded status | |||
Fair value of plan assets | 74 | 93 | 116 |
Benefit obligations | (473) | (575) | (676) |
Funded status | (399) | (482) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Current liabilities | 0 | 0 | |
Current liabilities | (31) | (42) | |
Non-current liabilities | (368) | (440) | |
Total | (399) | (482) | |
Amounts recognized in Accumulated other comprehensive loss (pretax) | |||
Net actuarial loss | 21 | 95 | |
Prior service cost (credit) | (60) | (74) | |
Total | $ (39) | $ 21 | $ 90 |
Retirement Benefits Plans - Cha
Retirement Benefits Plans - Change in Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
United States pension liabilities [Member] | |||
Change in benefit obligations | |||
Balance at January 1 | $ 3,829 | $ 4,047 | |
Service cost | 111 | 123 | $ 117 |
Interest cost | 125 | 156 | 162 |
Actuarial (gain) loss | 52 | (179) | |
Gross benefits paid | (346) | (318) | |
Currency translation | 0 | 0 | |
Plan amendments | 0 | 0 | |
Other | 0 | 0 | |
Balance at December 31 | 3,771 | 3,829 | 4,047 |
Accumulated benefit obligation | 3,620 | 3,672 | |
Non-United States pension liabilities [Member] | |||
Change in benefit obligations | |||
Balance at January 1 | 2,175 | 2,337 | |
Service cost | 63 | 71 | 66 |
Interest cost | 62 | 72 | 85 |
Actuarial (gain) loss | 355 | (23) | |
Gross benefits paid | (94) | (100) | |
Currency translation | (245) | (182) | |
Plan amendments | 2 | 0 | |
Other | (4) | 0 | |
Balance at December 31 | 2,314 | 2,175 | 2,337 |
Accumulated benefit obligation | 2,189 | 2,049 | |
Other postretirement liabilities [Member] | |||
Change in benefit obligations | |||
Balance at January 1 | 575 | 676 | |
Service cost | 4 | 6 | 13 |
Interest cost | 17 | 24 | 32 |
Actuarial (gain) loss | (72) | (66) | |
Gross benefits paid | (79) | (86) | |
Currency translation | 1 | (8) | |
Plan amendments | 0 | (1) | |
Other | 27 | 30 | |
Balance at December 31 | $ 473 | $ 575 | $ 676 |
Retirement Benefits Plans - C60
Retirement Benefits Plans - Change in Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Change in plan assets | |||
Balance at January 1 | $ 4,406 | ||
Balance at December 31 | 4,447 | $ 4,406 | |
United States pension liabilities [Member] | |||
Change in plan assets | |||
Balance at January 1 | 2,934 | 3,086 | |
Actual return on plan assets | 221 | (55) | |
Employer contributions | 160 | 221 | $ 248 |
Gross benefits paid | (346) | (318) | |
Currency translation | 0 | 0 | |
Other | 0 | 0 | |
Balance at December 31 | 2,969 | 2,934 | 3,086 |
Non-United States pension liabilities [Member] | |||
Change in plan assets | |||
Balance at January 1 | 1,472 | 1,535 | |
Actual return on plan assets | 212 | 29 | |
Employer contributions | 102 | 109 | 114 |
Gross benefits paid | (94) | (100) | |
Currency translation | (211) | (101) | |
Other | (3) | 0 | |
Balance at December 31 | 1,478 | 1,472 | 1,535 |
Other postretirement liabilities [Member] | |||
Change in plan assets | |||
Balance at January 1 | 93 | 116 | |
Actual return on plan assets | 3 | 1 | |
Employer contributions | 30 | 31 | |
Gross benefits paid | (79) | (86) | |
Currency translation | 0 | 0 | |
Other | 27 | 31 | |
Balance at December 31 | $ 74 | $ 93 | $ 116 |
Retirement Benefits Plans - Com
Retirement Benefits Plans - Components of Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
United States pension liabilities [Member] | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | $ 3,342 | $ 3,376 |
Accumulated benefit obligation | 3,190 | 3,219 |
Fair value of plan assets | 2,505 | 2,470 |
Non-United States pension liabilities [Member] | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | 1,902 | 1,387 |
Accumulated benefit obligation | 1,824 | 1,328 |
Fair value of plan assets | $ 1,066 | $ 650 |
Retirement Benefits Plans - C62
Retirement Benefits Plans - Changes in Pension and Other Postretirement Liabilities Recognized in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | |||
Prior service cost arising during the year | $ 2 | $ (1) | $ (82) |
Less amounts included in expense during the year | 247 | 123 | 718 |
Net change for the year | 0 | 0 | 0 |
United States pension liabilities [Member] | |||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | |||
Balance at January 1 | 1,327 | 1,382 | |
Prior service cost arising during the year | 0 | 0 | |
Net loss (gain) arising during the year | 81 | 138 | |
Currency translation | 0 | 0 | |
Less amounts included in expense during the year | (173) | (193) | |
Net change for the year | (92) | (55) | |
Balance at December 31 | 1,235 | 1,327 | 1,382 |
Non-United States pension liabilities [Member] | |||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | |||
Balance at January 1 | 653 | 706 | |
Prior service cost arising during the year | 2 | 0 | |
Net loss (gain) arising during the year | 235 | 47 | |
Currency translation | (75) | (58) | |
Less amounts included in expense during the year | (36) | (42) | |
Net change for the year | 126 | (53) | |
Balance at December 31 | 779 | 653 | 706 |
Other postretirement liabilities [Member] | |||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | |||
Balance at January 1 | 21 | 90 | |
Prior service cost arising during the year | 0 | (1) | |
Net loss (gain) arising during the year | (69) | (62) | |
Currency translation | 1 | (4) | |
Less amounts included in expense during the year | 8 | (2) | |
Net change for the year | (60) | (69) | |
Balance at December 31 | $ (39) | $ 21 | $ 90 |
Retirement Benefits Plans - Ben
Retirement Benefits Plans - Benefits Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
United States pension plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | $ 111 | $ 123 | $ 117 |
Interest cost | 125 | 156 | 162 |
Expected return on plan assets | (250) | (262) | (246) |
Amortization | 92 | 119 | 93 |
Benefit plans | 78 | 136 | 126 |
Settlements, curtailments and other | 81 | 74 | 71 |
Total expense | 159 | 210 | 197 |
Non-United States pension plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | 63 | 71 | 66 |
Interest cost | 62 | 72 | 85 |
Expected return on plan assets | (92) | (99) | (98) |
Amortization | 33 | 40 | 27 |
Benefit plans | 66 | 84 | 80 |
Settlements, curtailments and other | 3 | 2 | 2 |
Total expense | 69 | 86 | 82 |
Other postretirement benefits plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | 4 | 6 | 13 |
Interest cost | 17 | 24 | 32 |
Expected return on plan assets | (6) | (5) | (6) |
Amortization | (9) | 2 | 6 |
Benefit plans | 6 | 27 | 45 |
Settlements, curtailments and other | 1 | 0 | (31) |
Total expense | $ 7 | $ 27 | $ 14 |
Retirement Benefits Plans - Est
Retirement Benefits Plans - Estimated Future Pretax Amounts Recognized From AOCI to Net Periodic Benefit Cost (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
United States pension liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | $ 142 |
Prior service cost (credit) | 1 |
Total | 143 |
Non-United States pension liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | 54 |
Prior service cost (credit) | 1 |
Total | 55 |
Other postretirement liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | 2 |
Prior service cost (credit) | (14) |
Total | $ (12) |
Retirement Benefits Plans - Dis
Retirement Benefits Plans - Discount Rates (Details) - Scenario, Forecast [Member] $ in Millions | Dec. 31, 2016USD ($) |
Retirement Benefits Plans - Discount Rates [Line Items] | |
Service Cost Reduction | $ 3 |
Interest Cost Reduction | $ 42 |
Retirement Benefits Plans - Pen
Retirement Benefits Plans - Pension Plans Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
United States pension plans [Member] | |||
Assumptions used to determine benefit obligation at year-end | |||
Discount rate | 4.12% | 4.22% | 3.97% |
Rate of compensation increase | 3.15% | 3.18% | 3.16% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Benefit Obligation | 4.22% | 3.97% | 4.67% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Service Costs | 4.35% | 3.97% | 4.67% |
Assumptions used to determine expense | |||
Discount rate | 3.42% | 3.97% | 4.67% |
Expected long-term return on plan assets | 8.50% | 8.50% | 8.40% |
Rate of compensation increase | 3.18% | 3.16% | 3.16% |
Non-United States pension plans [Member] | |||
Assumptions used to determine benefit obligation at year-end | |||
Discount rate | 2.63% | 3.46% | 3.33% |
Rate of compensation increase | 3.13% | 3.12% | 3.13% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Benefit Obligation | 3.46% | 3.33% | 4.20% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Service Costs | 4.13% | 3.33% | 4.20% |
Assumptions used to determine expense | |||
Discount rate | 3.07% | 3.33% | 4.20% |
Expected long-term return on plan assets | 6.62% | 6.92% | 7.00% |
Rate of compensation increase | 3.12% | 3.13% | 3.12% |
Retirement Benefits Plans - Oth
Retirement Benefits Plans - Other Postretirement Benefits Plan Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract] | |||
Effect on total service and interest cost, 1% increase | $ 1 | ||
Effect on total service and interest cost, 1% decrease | (1) | ||
Effect on other postretirement liabilities, 1% increase | 17 | ||
Effect on other postretirement liabilities, 1% decrease | $ (15) | ||
Other postretirement benefits plans [Member] | |||
Assumptions used to determine benefit obligation at year-end | |||
Discount rate | 3.96% | 4.04% | 3.79% |
Health care cost trend rate assumed for next year | 7.35% | 7.10% | 6.31% |
Ultimate health care cost trend rate | 4.75% | 4.75% | 4.77% |
Year ultimate health care cost trend rate is achieved | 2,026 | 2,025 | 2,024 |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Benefit Obligation | 4.04% | 3.79% | 4.48% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Service Costs | 4.26% | 3.79% | 4.48% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate To Determine Interest Costs | 3.12% | 3.79% | 4.48% |
Assumptions used to determine expense | |||
Initial health care cost trend rate | 7.10% | 6.31% | 6.64% |
Ultimate health care cost trend rate | 4.75% | 4.77% | 4.77% |
Year ultimate health care cost trend rate is achieved | 2,025 | 2,024 | 2,023 |
Retirement Benefits Plans - Emp
Retirement Benefits Plans - Employer Contributions to Retirement Benefits Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
United States pension plans [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | $ 125 | |||
Employer contributions to pension plans | $ 160 | $ 221 | $ 248 | |
Non-United States pension plans [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | 90 | |||
Employer contributions to pension plans | 102 | 109 | 114 | |
Total contributions [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | $ 215 | |||
Employer contributions to pension plans | $ 262 | $ 330 | $ 362 |
- Estimated Pension and Other P
- Estimated Pension and Other Postretirement Benefit Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
United States pension plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2,017 | $ 309 |
2,018 | 279 |
2,019 | 278 |
2,020 | 281 |
2,021 | 289 |
2022 - 2026 | 1,460 |
Non-United States pension plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2,017 | 77 |
2,018 | 80 |
2,019 | 83 |
2,020 | 86 |
2,021 | 88 |
2022 - 2026 | 495 |
Other postretirement benefits plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2,017 | 53 |
Medicare prescription drug subsidy 2017 | (5) |
2,018 | 50 |
Medicare prescription drug subsidy 2018 | (5) |
2,019 | 46 |
Medicare prescription drug subsidy 2019 | (4) |
2,020 | 42 |
Medicare prescription drug subsidy 2020 | (4) |
2,021 | 36 |
Medicare prescription drug subsidy 2021 | (3) |
2022 - 2026 | 156 |
Medicare prescription drug subsidy 2022 - 2026 | $ (9) |
Retirement Benefits Plans - Fai
Retirement Benefits Plans - Fair Value of Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | $ 4,447 | $ 4,406 |
United States pension plans percentage of worldwide pension assets | 67.00% | |
United Kingdom pension plans percentage of worldwide pension assets | 27.00% | |
United States pension plans' target allocation of United States equities | 33.00% | |
United States pension plans' target allocation of non-United States equities | 32.00% | |
United States pension plans' target allocation of real estate | 8.00% | |
United State pension plans' target allocation of debt securities | 22.00% | |
United States pension plans' target allocation of other, including hedge funds and cash equivalents | 5.00% | |
United Kingdom pension plans' target allocation of equities | 57.00% | |
Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | $ 498 | 513 |
Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 1,707 | 1,646 |
Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 101 | 93 |
Hedge Funds, Equity [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 85 | 92 |
Non-United States Equity and Global Equities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 413 | 415 |
Non-United States Equity and Global Equities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | |
Non-United States Equity and Global Equities [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 413 | 415 |
Non-United States Equity and Global Equities [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | |
United States Equity [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 94 | 96 |
United States Equity [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States Equity [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 94 | 96 |
United States Equity [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | |
Fixed Income [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 422 | 418 |
Fixed Income [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed Income [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 422 | 418 |
Fixed Income [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | |
Fixed Income Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 359 | 357 |
Fixed Income Securities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed Income Securities [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 359 | 357 |
Fixed Income Securities [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States treasuries [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 123 | 105 |
United States treasuries [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 123 | 105 |
United States treasuries [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States treasuries [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Bank Loans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 150 | 136 |
Bank Loans [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Bank Loans [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 150 | 136 |
Bank Loans [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Real Estate Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 201 | 251 |
Real Estate Securities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 195 | 244 |
Real Estate Securities [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Real Estate Securities [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 6 | 7 |
Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 104 | 98 |
Equity Securities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 104 | 98 |
Equity Securities [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Equity Securities [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 276 | 227 |
Cash Equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 21 | 17 |
Cash Equivalents [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 255 | 210 |
Cash Equivalents [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Exchange Traded Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 55 | 49 |
Exchange Traded Funds [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 55 | 49 |
Exchange Traded Funds [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Exchange Traded Funds [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Other Pension Plan Asset [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 109 | 100 |
Other Pension Plan Asset [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Other Pension Plan Asset [Member] | Other observable inputs (Level 2) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 14 | 14 |
Other Pension Plan Asset [Member] | Unobservable inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 95 | 86 |
Fair Value, Concentration of Risk, Market Risk Management, Effects on Income or Net Assets [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 2,038 | 2,043 |
Money Market Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | $ 18 | $ 19 |
Retirement Benefits Plans - C71
Retirement Benefits Plans - Change in Plan Level 3 Assets (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | $ 93 | $ 66 |
Gains (losses) relating to assets still held at year-end | (6) | (1) |
Purchases, sales, settlements - net | 14 | 37 |
Transfers into or out of Level 3 | 0 | (9) |
Beginning balance | 101 | 93 |
Real Estate Funds [Member] | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 7 | 6 |
Gains (losses) relating to assets still held at year-end | 0 | 1 |
Purchases, sales, settlements - net | (1) | 0 |
Transfers into or out of Level 3 | 0 | 0 |
Beginning balance | 6 | 7 |
Other Pension Plan Assets [Member] | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 86 | 60 |
Gains (losses) relating to assets still held at year-end | (6) | (2) |
Purchases, sales, settlements - net | 15 | 37 |
Transfers into or out of Level 3 | 0 | (9) |
Beginning balance | $ 95 | $ 86 |
Retirement Benefits Plans - F72
Retirement Benefits Plans - Fair Value of Other Postretirement Benefits Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | |||
Total pension plan assets | $ 4,447 | $ 4,406 | |
VEBA target trust allocation in diversified global equities | 53.00% | ||
VEBA target trust allocation in fixed income securities | 47.00% | ||
Other postretirement benefits plans [Member] | |||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | |||
Total pension plan assets | $ 74 | 93 | $ 116 |
Fixed income securities | 18 | ||
United States treasuries | 20 | ||
Cash equivalents | 8 | 11 | |
Common Collective Trusts, Fixed Income | 66 | 44 | |
Total other postretirement benefits plan assets | 74 | 93 | |
Other postretirement benefits plans [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | |||
Total pension plan assets | 8 | 31 | |
Fixed income securities | 0 | ||
United States treasuries | 20 | ||
Cash equivalents | 8 | 11 | |
Other postretirement benefits plans [Member] | Other observable inputs (Level 2) [Member] | |||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | |||
Total pension plan assets | 0 | 18 | |
Fixed income securities | 18 | ||
United States treasuries | 0 | ||
Cash equivalents | 0 | 0 | |
Other postretirement benefits plans [Member] | Unobservable inputs (Level 3) [Member] | |||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | |||
Total pension plan assets | 0 | 0 | |
Fixed income securities | 0 | ||
United States treasuries | 0 | ||
Cash equivalents | $ 0 | $ 0 |
Retirement Benefits Plans - Def
Retirement Benefits Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Employer contributions to defined contribution plans | $ 72 | $ 137 | $ 141 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) BRL in Millions, $ in Millions | Jul. 16, 2014USD ($) | Jul. 08, 2014USD ($) | Jun. 23, 2014USD ($) | Jun. 18, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2016BRL |
Loss Contingency Accrual [Roll Forward] | |||||||||
Raysul total loss contingency accrual | $ 31 | BRL 100 | |||||||
Loss Contingencies [Line Items] | |||||||||
Settlement amount | $ 644 | ||||||||
Environmental contingencies | |||||||||
Number of environmental remediation sites world wide | 121 | ||||||||
Accrual for environmental loss contingencies | $ 124 | $ 131 | |||||||
Current and long-term warranty accruals [Table] | |||||||||
Balance at January 1 | 195 | 213 | 189 | ||||||
Provision | 117 | 104 | 125 | ||||||
Settled | (130) | (114) | (120) | ||||||
Other | (2) | (8) | 19 | ||||||
Balance at December 31 | 180 | 195 | 213 | ||||||
Minimum rental commitments under noncancelable operating leases | |||||||||
2,017 | 163 | ||||||||
2,018 | 127 | ||||||||
2,019 | 85 | ||||||||
2,020 | 58 | ||||||||
2,021 | 40 | ||||||||
Thereafter | 63 | ||||||||
Total noncancelable lease commitments | 536 | ||||||||
Summary of Rental Expense | |||||||||
Rental expense | $ 220 | $ 225 | $ 244 | ||||||
Meritor [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
loss contingency, expected loss | $ 500 | ||||||||
Settlement amount | $ 500 | ||||||||
Triumph [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
loss contingency, expected loss | $ 147.5 | ||||||||
Settlement amount | $ 147.5 |
Equity-Based Compensation Restr
Equity-Based Compensation Restricted Stock Units and Awards Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
Weighted-average fair value per unit and award | ||
Compensation expense not yet recognized related to non-vested RSUs and RSAs | $ 87 | |
Non-vested stock options weighted-average period for total compensation expense to be recognized ( in years) | 1 year 10 months 24 days | |
Excess tax benefit for equity-based compensation | $ 5 | |
Restricted Stock Units (RSUs) [Member] | ||
Number of restricted stock units and awards | ||
Non-vested at January 1 (shares) | 2.1 | |
Granted (shares) | 1.6 | |
Vested (shares) | (0.9) | |
Forfeited (shares) | (0.2) | |
Non-vested at December 31 (shares) | 2.6 | |
Weighted-average fair value per unit and award | ||
Non-vested at January 1 (usd per share) | $ 65.06 | |
Granted (usd per share) | 52.80 | |
Vested (usd per share) | 64.11 | |
Forfeited (usd per share) | 59.89 | |
Non-vested at December 31 (usd per share) | $ 57.87 | |
Non-vested stock options weighted-average period for total compensation expense to be recognized ( in years) | 2 years 6 months |
Equity-Based Compensation Infor
Equity-Based Compensation Information Related to Restricted Stock Units and Awards (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Pretax expense for RSUs and RSAs | $ 65 | $ 68 | $ 81 |
After-tax expense for RSUs and RSAs | 42 | 44 | 53 |
Fair value of vested RSUs and RSAs | $ 71 | $ 110 | $ 105 |
Equity-Based Compensation Perfo
Equity-Based Compensation Performance Share Units (Market Based) (Details) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award Performance Share Units (Market-Based), Fair Value Assumptions, Expected Volatility Rate | 24.00% |
Share-based Compensation Arrangment by Share-based Payment Award Performance Share Units (Market-Based), Fair Value Assumptions, Risk Free Interest Rate | 0.88% |
Share-based Compensation Arrangement by Share-based Payment Award Performance Share Units (Market-Based), Weighted Average Grant Date Fair Value | $ 76 |
Equity-Based Compensation Per78
Equity-Based Compensation Performance Share Units (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted-average fair value per unit and award | ||
Pretax expense for PSUs | $ 13 | $ 2 |
After-tax expense for PSUs | 8 | $ 1 |
Total compensation cost not yet recognized, PSUs | $ 30 | |
Non-vested stock options weighted-average period for total compensation expense to be recognized ( in years) | 1 year 10 months 24 days | |
Performance Shares [Member] | ||
Number of restricted stock units and awards | ||
Non-vested at January 1 (shares) | 0 | |
Granted (shares) | 0.6 | |
Vested (shares) | 0 | |
Forfeited (shares) | (0.1) | |
Non-vested at December 31 (shares) | 0.5 | 0 |
Weighted-average fair value per unit and award | ||
Non-vested at January 1 (usd per share) | $ 0 | |
Granted (usd per share) | 76.41 | |
Vested (usd per share) | 0 | |
Forfeited (usd per share) | 76.41 | |
Non-vested at December 31 (usd per share) | $ 76.41 | $ 0 |
Performance Share Unit [Member] | ||
Number of restricted stock units and awards | ||
Non-vested at January 1 (shares) | 0.8 | |
Granted (shares) | 0.1 | |
Vested (shares) | 0 | |
Forfeited (shares) | (0.2) | |
Non-vested at December 31 (shares) | 0.7 | 0.8 |
Weighted-average fair value per unit and award | ||
Non-vested at January 1 (usd per share) | $ 71.72 | |
Granted (usd per share) | 56.55 | |
Vested (usd per share) | 0 | |
Forfeited (usd per share) | 71.72 | |
Non-vested at December 31 (usd per share) | $ 68.23 | $ 71.72 |
Non-vested stock options weighted-average period for total compensation expense to be recognized ( in years) | 2 years | |
Minimum [Member] | Performance Shares [Member] | ||
Weighted-average fair value per unit and award | ||
Range of PSU Award | 0.00% | |
Maximum [Member] | Performance Shares [Member] | ||
Weighted-average fair value per unit and award | ||
Range of PSU Award | 200.00% |
Equity-Based Compensation Stock
Equity-Based Compensation Stock Options Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected volatility (in percentage) | 27.00% | 29.00% | 34.00% |
Expected option life in years (in years) | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Expected dividend yield (in percentage) | 2.50% | 2.60% | 2.40% |
Risk-free interest rate minimum (in percentage) | 1.20% | 1.50% | 1.50% |
Risk-free interest rate maximum (in percentage) | 1.50% | 1.60% | 1.70% |
Weighted-average fair value of stock options granted (in usd per share) | $ 11.80 | $ 15.25 | $ 19.46 |
Stock option vesting period (in years) | 3 years | ||
Stock option expiration date after date of grant | 10 years |
Equity-Based Compensation Sto80
Equity-Based Compensation Stock Options Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Options | |
Closing price of Eaton ordinary shares on last trading day | $ / shares | $ 67.09 |
Weighted-average exercise price per option [Member] | |
Weighted-average exercise price per option | |
Opening balance (usd per share) | $ / shares | 51.94 |
Granted (usd per share) | $ / shares | 56.73 |
Exercised (usd per share) | $ / shares | 40.32 |
Forfeited and cancelled (usd per share) | $ / shares | 65.74 |
Closing balance (usd per share) | $ / shares | 56.75 |
Exercisable at December 31, 2016 | $ / shares | $ 54.28 |
Stock Options [Member] | |
Options | |
Outstanding at January 1, 2016, shares | shares | 6.2 |
Granted, shares | shares | 1.3 |
Exercised, shares | shares | (1.9) |
Forfeited and cancelled, shares | shares | (0.1) |
Outstanding at December 31, 2016, shares | shares | 5.5 |
Exercisable at December 31, 2016, shares | shares | 3.7 |
Reserved for future grants at December 31, 2016, shares | shares | 18.6 |
Weighted-average remaining contractual life in years [Member] | |
Options | |
Outstanding at December 31, 2016 | 5 years 7 months 6 days |
Exercisable at December 31, 2016 | 4 years |
Aggregate Intrinsic Value [Member] | |
Options | |
Outstanding at December 31, 2016 | $ | $ 64.5 |
Exercisable at December 31, 2016 | $ | $ 51.3 |
Equity-Based Compensation Inf81
Equity-Based Compensation Information Related to Stock Options (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Pretax expense for stock options | $ 14 | $ 12 | $ 12 |
After-tax expense for stock options | 9 | 8 | 8 |
Proceeds from stock options exercised | 74 | 52 | 54 |
Income tax benefit related to stock options exercised | |||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | 5 | 4 | 4 |
Excess tax benefit classified in financing activities in the Consolidated Statements of Cash Flows | 1 | 1 | 15 |
Intrinsic value of stock options exercised | 42 | 44 | 55 |
Total fair value of stock options vested | $ 14 | $ 12 | $ 12 |
Stock options exercised, in millions of options | 1.9 | 1.4 | 1.5 |
Non-vested stock option compensation expense not yet recognized | $ 11 | ||
Non-vested stock options weighted-average period for total compensation expense to be recognized ( in years) | 1 year 10 months 24 days |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | $ 2,127 | $ 2,145 | $ 1,761 |
Ireland [Member] | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | (923) | (608) | (332) |
Foreign [Member] | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | $ 3,050 | $ 2,753 | $ 2,093 |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current Income Tax Expense (Benefit) [Abstract] | |||
Total current income tax expense | $ 304 | $ 358 | $ 354 |
Deferred Income Tax Benefit [Abstract] | |||
Total deferred income tax benefit | (102) | (194) | (396) |
Income tax expense (benefit) | 202 | 164 | (42) |
Ireland [Member] | |||
Current Income Tax Expense (Benefit) [Abstract] | |||
Ireland | 2 | 8 | (13) |
Deferred Income Tax Benefit [Abstract] | |||
Ireland | 2 | 1 | 2 |
United States - Federal [Member] | |||
Current Income Tax Expense (Benefit) [Abstract] | |||
United States - Federal | 95 | 88 | 87 |
Deferred Income Tax Benefit [Abstract] | |||
United States - Federal | (72) | (65) | (224) |
State and Local Jurisdiction [Member] | |||
Current Income Tax Expense (Benefit) [Abstract] | |||
United States - State and local | (2) | 22 | 41 |
Deferred Income Tax Benefit [Abstract] | |||
United States - State and local | (2) | (6) | (49) |
Foreign - other [Member] | |||
Current Income Tax Expense (Benefit) [Abstract] | |||
Foreign - other | 209 | 240 | 239 |
Deferred Income Tax Benefit [Abstract] | |||
Foreign - other | $ (30) | $ (124) | $ (125) |
Income Taxes - Reconciliations
Income Taxes - Reconciliations of Income Taxes from the Appropriate Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Effective income tax rate reconciliation, at Ireland statutory income tax rate, percent | 25.00% | 25.00% | 25.00% |
Income taxes at the applicable statutory rate | 25.00% | 25.00% | 25.00% |
Effective income tax (benefit) expense rate | 9.50% | (7.70%) | 2.40% |
Ireland Operations [Member] | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Ireland tax on trading income | (0.30%) | (0.40%) | (0.10%) |
Nondeductible interest expense | 11.50% | 7.90% | 4.80% |
United States operations [Member] | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
United States (loss) income | 0.20% | (0.40%) | (2.80%) |
Nondeductible goodwill - Aerospace divestitures | 0.00% | 0.00% | 1.40% |
Credit for research activities | (0.80%) | (0.80%) | (1.00%) |
Other | 2.50% | 5.40% | 1.50% |
Other foreign operations [Member] | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Other | 0.90% | (0.50%) | (1.00%) |
United States foreign tax credit | 0.60% | (0.80%) | (1.10%) |
Other foreign operations (earnings taxed at other than the applicable statutory tax rate) | (26.80%) | (25.10%) | (24.80%) |
Worldwide Operations [Member] | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Adjustments to tax liabilities | (2.50%) | (1.40%) | (1.70%) |
Adjustments to valuation allowance | (0.80%) | (1.20%) | (2.60%) |
Effective Income Tax Rate [Member] | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Effective income tax (benefit) expense rate | 9.50% | 7.70% | (2.40%) |
Income Taxes - Worldwide Income
Income Taxes - Worldwide Income Tax Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 272 | $ 302 | $ 258 |
Income Taxes - Components of Cu
Income Taxes - Components of Current and Long-Term Deferred Income Taxes (Details) - Long-term assets and liabilities [Member] - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals [Abstract] | ||
Employee benefits | $ 761 | $ 808 |
Depreciation and amortization | (1,823) | (1,824) |
Other accruals and adjustments | 796 | 717 |
Deferred Tax Assets, Net, Classification [Abstract] | ||
United States federal income tax loss carryforwards | 51 | 20 |
United States federal income tax credit carryforward | 182 | 183 |
United States state and local tax loss carryforwards and tax credit carryforwards | 63 | 63 |
Other foreign tax loss carryforward | 1,715 | 2,265 |
Other foreign income tax credit carryforwards | 63 | 70 |
Valuation allowance for income tax loss and income tax credit carryforwards | (1,728) | (2,315) |
Other valuation allowance | (41) | (15) |
Deferred tax liabilities, net | $ 39 | $ (28) |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Tax Credit Carryforwards, Foreign, By Expiration Dates (Details) $ in Millions | Dec. 31, 2016USD ($) |
2017 through 2021 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | $ 652 |
2022 through 2026 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | 7,476 |
2027 through 2031 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | 3 |
2032 through 2036 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | 0 |
Related valuation allowance [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | 0 |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | (1,607) |
2017 through 2021 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 10 |
2022 through 2026 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 21 |
2027 through 2031 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 2 |
2032 through 2036 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 0 |
Not subject to expiration [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 30 |
Not subject to expiration [Member] | Not subject to expiration [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Income Tax Loss Carryforwards, Foreign | 3,685 |
Related valuation allowance [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | (31) |
2017 through 2021 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 76 |
2022 through 2026 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 688 |
2027 through 2031 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 1 |
2032 through 2036 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 0 |
Not subject to expiration [Member] | Not subject to expiration [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | $ 950 |
Income Taxes - Operating Loss88
Income Taxes - Operating Loss and Tax Credit Carryforwards, Domestic, By Expiration Dates (Details) $ in Millions | Dec. 31, 2016USD ($) |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | 2017 through 2021 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | $ 62 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | 2022 through 2026 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | 36 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | 2027 through 2031 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | 8 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | 2032 through 2036 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | 76 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | 2037 through 2041 [Member] | 2037 through 2041 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | 0 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Not subject to expiration [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | 0 |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Valuation allowance [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal income tax credit carryforwards | (44) |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2017 through 2021 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 0 |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
United States federal income tax credit carryforwards | 62 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2017 through 2021 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2022 through 2026 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 15 |
United States federal deferred income tax assets for income tax loss carryforwards | 5 |
United States federal income tax credit carryforwards | 36 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2022 through 2026 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 5 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2027 through 2031 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 20 |
United States federal deferred income tax assets for income tax loss carryforwards | 7 |
United States federal income tax credit carryforwards | 39 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2027 through 2031 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 7 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2032 through 2036 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 618 |
United States federal deferred income tax assets for income tax loss carryforwards | 172 |
United States federal income tax credit carryforwards | 115 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2032 through 2036 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 39 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2037 through 2041 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2037 through 2041 [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | 2037 through 2041 [Member] | 2037 through 2041 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 0 |
United States federal income tax credit carryforwards | 0 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | Not subject to expiration [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 0 |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
United States federal income tax credit carryforwards | 29 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | Not subject to expiration [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | 0 |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | Valuation allowance [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating Loss Carryforwards | 0 |
United States federal deferred income tax assets for income tax loss carryforwards | (12) |
United States federal income tax credit carryforwards | (44) |
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | Valuation allowance [Member] | After ASU 2013-11 [Member] | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
United States federal deferred income tax assets for income tax loss carryforwards | $ (12) |
Income Taxes - Income Tax Loss
Income Taxes - Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect, By Expiration Dates (Details) - Domestic Tax Authority [Member] - State and Local Jurisdiction [Member] $ in Millions | Dec. 31, 2016USD ($) |
2017 through 2021 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 8 |
2022 through 2026 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 17 |
2027 through 2031 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 11 |
2032 through 2036 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 8 |
2037 through 2041 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 0 |
Not subject to expiration [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 0 |
Related valuation allowance [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | (17) |
2017 through 2021 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 11 |
2017 through 2021 [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 0 |
United States and local income tax credit carryforwards - net of federal tax effect | 8 |
2022 through 2026 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 11 |
2022 through 2026 [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 12 |
United States and local income tax credit carryforwards - net of federal tax effect | 11 |
2027 through 2031 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 7 |
2027 through 2031 [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 11 |
United States and local income tax credit carryforwards - net of federal tax effect | 6 |
2032 through 2036 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 4 |
2032 through 2036 [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 8 |
United States and local income tax credit carryforwards - net of federal tax effect | 2 |
2037 through 2041 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 5 |
2037 through 2041 [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 0 |
United States and local income tax credit carryforwards - net of federal tax effect | 5 |
Not subject to expiration [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | 0 |
Not subject to expiration [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 0 |
United States and local income tax credit carryforwards - net of federal tax effect | 0 |
Related valuation allowance [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
United States and local income tax credit carryforwards - net of federal tax effect | (17) |
Related valuation allowance [Member] | After ASU 2013-11 [Member] | |
Income Tax Loss and Tax Credit Carryforwards, State and Local, Net of Federal Tax Effect [Line Items] | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | (17) |
United States and local income tax credit carryforwards - net of federal tax effect | $ (17) |
Income Taxes - Summary of Gross
Income Taxes - Summary of Gross Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Balance at January 1 | $ 584 | $ 493 | $ 479 |
Increases and decreases as a result of positions taken during prior years | |||
Transfers from valuation allowances | 0 | 0 | (3) |
Other increases, including currency translation | 21 | 34 | 37 |
Other decreases, including currency translation | (24) | (34) | (3) |
Balances related to acquired businesses | 0 | (1) | (3) |
Increases as a result of positions taken during the current year | 90 | 109 | 65 |
Decreases relating to settlements with tax authorities | (19) | 0 | (51) |
Decreases as a result of a lapse of the applicable statute of limitations | (23) | (17) | (28) |
Balance at December 31 | $ 629 | $ 584 | $ 493 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Income Taxes [Abstract] | |||
Income tax expense (benefit) | $ 202 | $ 164 | $ (42) |
Effective income tax (benefit) expense rate | 9.50% | (7.70%) | 2.40% |
Income Tax Rate excluding net tax benefit of litigation settlements, related legal costs and gain on sale of the Aerospace businesses | 7.60% | ||
Effective Income Tax Rate Continuing Operations, Excluding Litigation Settlement Benefit, Percentage | 5.20% | ||
Undistributed earnings of United States and other foreign subsidiaries where no provision has been made | $ 17,300 | ||
Unrecognized tax benefits netted against deferred tax asset for a loss or other carryforward under ASU 2013-11 | 331 | $ 262 | |
Unrecognized tax benefits that would impact effective tax rate | 529 | ||
Income tax examination, penalties and interest accrued | $ 94 | $ 108 | |
Recoverability of Deferred Income Tax Assets [Abstract] | |||
Number of years of cumulative pretax income in a particular jurisdiction to determine deferred tax assets will not be recognized | P3Y | ||
Number of years of cumulative pretax losses in particular jurisdiction to determine if deferred tax assets can be recognized | P3Y | ||
Number of years estimated to resolve Brazilian tax assessment | 10 | ||
2011 Notice [Member] | |||
Income Taxes [Abstract] | |||
IRS Statutory Notice of Deficiency proposed assessment of additional taxes | $ 75 | ||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | 52 | ||
2014 Notice [Member] | |||
Income Taxes [Abstract] | |||
IRS Statutory Notice of Deficiency proposed assessment of additional taxes | 190 | ||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | 72 | ||
2010 Notice [Member] | |||
Income Taxes [Abstract] | |||
Brazil tax assessment, plus interest and penalties | 51 | ||
2014 Notice [Member] | |||
Income Taxes [Abstract] | |||
Brazil tax assessment, plus interest and penalties | $ 39 |
Eaton Shareholders' Equity - Ot
Eaton Shareholders' Equity - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Currency translation and related hedging instuments pre-tax | $ (562) | $ (1,080) | $ (1,014) |
Currency translation and related hedging instruments after-tax | (570) | (1,078) | (1,019) |
Pension and Other Postretirement Benefits [Abstract] | |||
Prior service credit (cost) arising during the year pre-tax | (2) | 1 | 82 |
Prior service credit (cost) arising during the year after-tax | (2) | 1 | 51 |
Net (loss) gain arising during the year pre-tax | (247) | (123) | (718) |
Net (loss) gain arising during the year after-tax | (197) | (89) | (519) |
Currency translation pre-tax | 74 | 62 | 56 |
Currency translation after-tax | 62 | 46 | 47 |
Other pre-tax | 0 | 0 | 0 |
Other after-tax | (2) | (3) | (4) |
Amortization of actuarial loss and prior service cost reclassified to earnings pre-tax | 201 | 237 | 168 |
Amortization of actuarial loss and prior service cost reclassified to earnings after-tax | 133 | 156 | 110 |
Total pensions and other postretirement benefits included in other comprehensive income (loss), pre-tax | 26 | 177 | (412) |
Total pensions and other postretirement benefits included in other comprehensive income (loss), after-tax | (6) | 111 | (315) |
Other Accumulated Comprehensive Income (Loss) Cash Flow Hedges | |||
Gain (loss) on derivatives designated as cash flow hedges pre-tax | (21) | 20 | (3) |
Gain (loss) on derivatives designated as cash flow hedges after-tax | (14) | 13 | (2) |
Changes in cash flow hedges reclassified to earnings pre-tax | 8 | (16) | (5) |
Changes in cash flow hedges reclassified to earnings after-tax | 5 | (10) | (3) |
Cash flow hedges, net of reclassification adjustments pre-tax | (13) | 4 | (8) |
Cash flow hedges, net of reclassification adjustments after-tax | (9) | 3 | (5) |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders pre-tax | (549) | (899) | (1,434) |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders after-tax | $ (585) | $ (964) | $ (1,339) |
Eaton Shareholders' Equity - Ac
Eaton Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in accumulated other comprehensive income (loss) [Line Items] | |||
Opening Balance | $ (3,863) | ||
Net current-period Other comprehensive (loss) income | (585) | $ (964) | $ (1,339) |
Closing Balance | (4,448) | (3,863) | |
Currency translation and related hedging instruments [Member] | |||
Changes in accumulated other comprehensive income (loss) [Line Items] | |||
Opening Balance | (2,492) | ||
Other comprehensive (loss) income before reclassifications | (570) | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | 0 | ||
Net current-period Other comprehensive (loss) income | (570) | ||
Closing Balance | (3,062) | (2,492) | |
Pensions and Other Postretirement Benefits [Member] | |||
Changes in accumulated other comprehensive income (loss) [Line Items] | |||
Opening Balance | (1,374) | ||
Other comprehensive (loss) income before reclassifications | (139) | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | 133 | ||
Net current-period Other comprehensive (loss) income | (6) | ||
Closing Balance | (1,380) | (1,374) | |
Cash Flow Hedges [Member] | |||
Changes in accumulated other comprehensive income (loss) [Line Items] | |||
Opening Balance | 3 | ||
Other comprehensive (loss) income before reclassifications | (14) | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | 5 | ||
Net current-period Other comprehensive (loss) income | (9) | ||
Closing Balance | (6) | 3 | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Changes in accumulated other comprehensive income (loss) [Line Items] | |||
Opening Balance | (3,863) | ||
Other comprehensive (loss) income before reclassifications | (723) | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | 138 | ||
Net current-period Other comprehensive (loss) income | (585) | ||
Closing Balance | $ (4,448) | $ (3,863) |
Eaton Shareholders' Equity - Re
Eaton Shareholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Currency exchange contracts | $ 13,400 | $ 14,292 | $ 15,646 | |
Tax benefit (expense) | (202) | (164) | 42 | |
Total reclassifications, net of tax | 1,922 | $ 1,979 | $ 1,793 | |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total reclassifications, net of tax | (138) | |||
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Amortization of defined benefit pension and other postretirement benefits items [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Actuarial loss and prior service cost | [1] | (201) | ||
Tax benefit (expense) | 68 | |||
Total reclassifications, net of tax | (133) | |||
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Gains and losses on cash flow hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Tax benefit (expense) | 3 | |||
Total reclassifications, net of tax | (5) | |||
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Currency exchange contracts [Member] | Gains and losses on cash flow hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Currency exchange contracts | $ (8) | |||
[1] | These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about defined benefit pension and other postretirement benefits items. |
Eaton Shareholders' Equity - Ne
Eaton Shareholders' Equity - Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Net income attributable to Eaton ordinary shareholders | $ 1,922 | $ 1,979 | $ 1,793 |
Weighted-average number of ordinary shares outstanding - diluted (shares) | 456.5 | 467.1 | 476.8 |
Less dilutive effect of equity-based compensation | 1.5 | 1.6 | 2.7 |
Weighted-average number of ordinary shares outstanding - basic (shares) | 455 | 465.5 | 474.1 |
Net income per ordinary share - diluted (usd per share) | $ 4.21 | $ 4.23 | $ 3.76 |
Net income per ordinary share - basic (usd per share) | $ 4.22 | $ 4.25 | $ 3.78 |
Eaton Shareholders' Equity (Tex
Eaton Shareholders' Equity (Textuals) (Details) | Feb. 22, 2017$ / shares | Feb. 24, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Mar. 17, 2017$ / shares | Dec. 31, 2016€ / shares |
Subsequent Event [Line Items] | |||||||
Quarterly dividends payable, amount per share | $ / shares | $ 0.60 | ||||||
Quarterly dividends, per share, declared (usd per share) | $ / shares | $ 0.60 | $ 2.28 | $ 2.20 | $ 1.96 | |||
Shareholders Equity Textuals Abstract | |||||||
Ordinary shares authorized | 750,000,000 | ||||||
Eaton Corporation plc ordinary share par value | $ / shares | $ 0.01 | ||||||
Ordinary shares issued and outstanding (shares) | 449,400,000 | 458,800,000 | |||||
Deferred ordinary shares authorized | 40,000 | ||||||
Deferred ordinary shares par value | € / shares | € 1 | ||||||
Deferred ordinary shares, shares issued and outstanding | 40,000 | 40,000 | |||||
Preferred A Shares authorized | 10,000 | ||||||
Preferred A Shares par value | $ / shares | $ 1 | ||||||
Preferred A Shares, Shares Issued | 10,000 | 10,000 | |||||
Preferred A Shares, Shares Outstanding | 10,000 | 10,000 | |||||
Serial preferred shares authorized | 10,000,000 | ||||||
Serial preferred share par value per share | $ / shares | $ 0.01 | ||||||
Serial preferred shares, shares issued and outstanding | 0 | 0 | |||||
Number of holders of record of Eaton ordinary shares | 17,627 | ||||||
Number of current and former employees who were shareholders through various Eaton plans | 21,235 | ||||||
Stock Repurchased During Period, Shares | 0 | ||||||
Disclosure of Repurchase Agreements [Abstract] | |||||||
2013 Share repurchase program, shares repurchased | 1,500,000 | 11,300,000 | 9,600,000 | ||||
2013 Share repurchase program - cost | $ | $ 82,000,000 | $ 682,000,000 | $ 650,000,000 | ||||
2016 Share repurchase program, shares repurchased during period | 10,300,000 | ||||||
2016 share repurchase program- cost | $ | $ 648,000,000 | ||||||
Employee Trust [Abstract] | |||||||
Deferred compensation plan trust of shares and marketable secutities | $ | $ 13,000,000 | $ 16,000,000 | |||||
Earnings Per Share, Diluted, Other Disclosures [Abstract] | |||||||
Antidilutive securities excluded from computation of net income per ordinary share | 1,700,000 | 1,600,000 | 500,000 | ||||
2016 Program [Member] | |||||||
Disclosure of Repurchase Agreements [Abstract] | |||||||
2016 Share Repurchase Program, Authorized Dollar Amount | $ | $ 2,500,000,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | $ 543 | $ 268 |
Short-term investments | 203 | 177 |
Net derivative contracts | (3) | 86 |
Long-term debt converted to floating interest rates by interest rate swaps - net | (58) | (94) |
Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 543 | 268 |
Short-term investments | 203 | 177 |
Net derivative contracts | 0 | 0 |
Long-term debt converted to floating interest rates by interest rate swaps - net | 0 | 0 |
Other observable inputs (Level 2) [Member] | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | (3) | 86 |
Long-term debt converted to floating interest rates by interest rate swaps - net | (58) | (94) |
Unobservable inputs (Level 3) [Member] | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 0 | 0 |
Long-term debt converted to floating interest rates by interest rate swaps - net | $ 0 | $ 0 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Details 1) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Time deposits, certificates of deposit and demand deposits with banks | $ 149 | $ 122 |
Money market investments | 54 | 55 |
Total short-term investments | $ 203 | $ 177 |
Fair Value Measurements Fair 99
Fair Value Measurements Fair Value Measurements (Details Textuals) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Long-term debt and current portion of long term debt, carrying value | $ 8,263 | $ 7,988 |
Long-term debt and current portion of long-term debt, fair value | $ 8,477 | $ 8,231 |
Derivative Financial Instrum100
Derivative Financial Instruments and Hedging Activities - Gain on Commodity Hedge Contracts (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity contracts | $ 7 |
Derivative Financial Instrum101
Derivative Financial Instruments and Hedging Activities - Derivative Financial Statement Impacts (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 33 | $ 27 |
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 12 | 18 |
Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 85 | 97 |
Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 85 | 40 |
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 22 | 8 |
Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 26 | 8 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | ||
Derivatives designated as hedges | ||
Notional amount | $ 3,765 | $ 3,715 |
Derivative, lower remaining maturity range | 3 months | 2 years |
Derivative, higher remaining maturity range | 18 years | 19 years |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 1 | $ 0 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 65 | 96 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | $ 8 | $ 2 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Floating-to-fixed interest rate swaps | ||
Derivatives designated as hedges | ||
Derivative, higher remaining maturity range | 11 years | 12 years |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | ||
Derivatives designated as hedges | ||
Notional amount | $ 450 | $ 50 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 19 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 1 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | ||
Derivatives designated as hedges | ||
Notional amount | $ 802 | $ 724 |
Derivative, lower remaining maturity range | 1 month | 1 month |
Derivative, higher remaining maturity range | 36 months | 36 months |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 11 | $ 18 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 1 | 1 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 22 | 8 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | $ 17 | 6 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | ||
Derivatives designated as hedges | ||
Notional amount | $ 1 | |
Derivative, lower remaining maturity range | 1 month | 1 month |
Derivative, higher remaining maturity range | 12 months | 12 months |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | ||
Derivatives designated as hedges | ||
Notional amount | $ 5,333 | $ 4,198 |
Derivative, lower remaining maturity range | 1 month | 1 month |
Derivative, higher remaining maturity range | 12 months | 12 months |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 31 | $ 27 |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 85 | 40 |
Not Designated as Hedging Instrument [Member] | Commodity contracts | ||
Derivatives designated as hedges | ||
Notional amount | 10 | |
Not Designated as Hedging Instrument [Member] | Commodity contracts | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 2 | |
Not Designated as Hedging Instrument [Member] | Commodity contracts | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 0 | |
Japanese Yen notes due 2018 [Member] | Japanese Yen notes payable [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Debt denominated in foreign currency designated as non-derivative net investment hedging instrument | 86 | 83 |
Japanese Yen notes due 2018 [Member] | Japanese Yen notes payable [Member] | Non-derivative net investment hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Debt denominated in foreign currency designated as non-derivative net investment hedging instrument | $ 86 | $ 83 |
Derivative Financial Instrum102
Derivative Financial Instruments and Hedging Activities - Fixed-to-Floating Interest Rate Swaps (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Notes due 2017 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 150 |
Fixed interest rate received (percentage) | 5.30% |
Floating interest rate paid (percentage) | 4.75% |
Senior notes due 2017 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 750 |
Fixed interest rate received (percentage) | 1.50% |
Floating interest rate paid (percentage) | 0.95% |
Notes due 2018 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 415 |
Fixed interest rate received (percentage) | 5.60% |
Floating interest rate paid (percentage) | 4.26% |
Notes due 2019 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 300 |
Fixed interest rate received (percentage) | 6.95% |
Floating interest rate paid (percentage) | 5.85% |
Debentures due 2019 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received (percentage) | 8.88% |
Floating interest rate paid (percentage) | 4.96% |
Debentures due 2020 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 150 |
Fixed interest rate received (percentage) | 3.875% |
Floating interest rate paid (percentage) | 2.61% |
Notes due 2021 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 275 |
Fixed interest rate received (percentage) | 3.47% |
Floating interest rate paid (percentage) | 2.23% |
Senior notes due 2022 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 1,400 |
Fixed interest rate received (percentage) | 2.75% |
Floating interest rate paid (percentage) | 1.07% |
Notes due 2023 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 200 |
Fixed interest rate received (percentage) | 3.68% |
Floating interest rate paid (percentage) | 1.56% |
Debentures due 2024 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received (percentage) | 7.625% |
Floating interest rate paid (percentage) | 3.55% |
Debentures due 2029 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Fixed interest rate received (percentage) | 7.65% |
Floating interest rate paid (percentage) | 3.65% |
Debentures due 2034 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received (percentage) | 5.45% |
Floating interest rate paid (percentage) | 1.36% |
London Interbank Offered Rate (LIBOR) [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 3 months |
Basis spread on variable rate (percentage) | 0.00% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2017 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 4.26% |
London Interbank Offered Rate (LIBOR) [Member] | Senior notes due 2017 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 0.46% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2018 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 6 months |
Basis spread on variable rate (percentage) | 3.18% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2019 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 3 months |
Basis spread on variable rate (percentage) | 5.07% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2019 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 6 months |
Basis spread on variable rate (percentage) | 3.84% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2020 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 2.12% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2021 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 1.74% |
London Interbank Offered Rate (LIBOR) [Member] | Senior notes due 2022 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 0.58% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2023 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 1 month |
Basis spread on variable rate (percentage) | 1.07% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2024 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 6 months |
Basis spread on variable rate (percentage) | 2.48% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2029 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 6 months |
Basis spread on variable rate (percentage) | 2.57% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2034 [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 6 months |
Basis spread on variable rate (percentage) | 0.28% |
Derivative Financial Instrum103
Derivative Financial Instruments and Hedging Activities - Forward Starting Floating-to-Fixed Interest Rate Swaps (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
London Interbank Offered Rate (LIBOR) [Member] | |
Derivative [Line Items] | |
Debt instrument, term (in years) | 3 months |
Basis spread on variable rate (percentage) | 0.00% |
Notes due 2017 with Two Point Five Two Percent Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 2.52% |
Notes due 2017 with Two Point Thirty Eight Percent Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 2.38% |
Notes due 2017 with Two Point One Nine Percent Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 2.19% |
Notes due 2017 with One Point Ninety Five Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 1.95% |
Notes due 2017 with One Point Eighty Percent Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 1.80% |
Notes due 2017 with One Point Sixty Seven Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 1.67% |
Notes due 2017 with One Point Sixty Six Fixed Interest Rate [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 1.66% |
Notes due 2017 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Floating interest rate received (percentage) | 0.00% |
Fixed interest rate received (percentage) | 1.53% |
Derivative Financial Instrum104
Derivative Financial Instruments and Hedging Activities - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amounts recognized in accumulated other comprehensive income | ||
Eaton's target percentage of managing intercompany balance sheet exposure | 100.00% | |
Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | $ (21) | $ 20 |
Gain (loss) reclassified from Accumulated other comprehensive loss | (8) | 16 |
Floating-to-fixed interest rate swaps | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | 18 | 0 |
Floating-to-fixed interest rate swaps | Interest expense - net [Member] | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) reclassified from Accumulated other comprehensive loss | 0 | 0 |
Currency exchange contracts | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | (39) | 20 |
Currency exchange contracts | Cost of products sold [Member] | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) reclassified from Accumulated other comprehensive loss | $ (8) | $ 16 |
Derivative Financial Instrum105
Derivative Financial Instruments and Hedging Activities - Amounts Recognized in Net income (Details) - Interest expense - net [Member] - Fair Value Hedging [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | $ 0 | $ 0 |
Interest Rate Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | (36) | 20 |
Related Long Term Debt Converted To Floating Interest Rates By Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | $ 36 | $ (20) |
Accounts Receivable and Inve106
Accounts Receivable and Inventory - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable and Inventory [Abstract] | ||
Allowance for doubtful accounts receivable | $ 50 | |
Percentage of inventory at FIFO accounted for using the LIFO method (percentage) | 44.00% | 43.00% |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 880 | $ 885 |
Work-in-process | 396 | 412 |
Finished goods | 1,074 | 1,131 |
Inventory at FIFO | 2,350 | 2,428 |
Excess of FIFO over LIFO cost | (96) | (105) |
Total inventory | $ 2,254 | $ 2,323 |
Business Segment and Geograp107
Business Segment and Geographic Region Information - Business Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Segment Information | |||
Net sales | $ 19,747 | $ 20,855 | $ 22,552 |
Segment operating profit | 2,958 | 3,133 | 3,312 |
Litigation settlements | 0 | 0 | (644) |
Amortization of intangible assets | (392) | ||
Interest expense - net | (233) | (232) | (227) |
Income before income taxes | 2,127 | 2,145 | 1,761 |
Income tax expense (benefit) | 202 | 164 | (42) |
Net income | 1,925 | 1,981 | 1,803 |
Less net income for noncontrolling interests | (3) | (2) | (10) |
Net income attributable to Eaton ordinary shareholders | 1,922 | 1,979 | 1,793 |
Business segment acquisition integration pretax charges | 4 | 42 | 129 |
Entity-wide revenue, major customer, amount | 0 | 0 | 0 |
Electrical Products [Member] | |||
Business Segment Information | |||
Net sales | 6,957 | 6,976 | 7,254 |
Segment operating profit | 1,240 | 1,156 | 1,184 |
Business segment acquisition integration pretax charges | 3 | 25 | 66 |
Electrical Systems and Services [Member] | |||
Business Segment Information | |||
Net sales | 5,662 | 5,931 | 6,457 |
Segment operating profit | 711 | 776 | 843 |
Business segment acquisition integration pretax charges | 1 | 15 | 51 |
Hydraulics [Member] | |||
Business Segment Information | |||
Net sales | 2,222 | 2,459 | 2,975 |
Segment operating profit | 198 | 246 | 367 |
Business segment acquisition integration pretax charges | 0 | 2 | 12 |
Aerospace [Member] | |||
Business Segment Information | |||
Net sales | 1,753 | 1,807 | 1,860 |
Segment operating profit | 335 | 310 | 273 |
Vehicle [Member] | |||
Business Segment Information | |||
Net sales | 3,153 | 3,682 | 4,006 |
Segment operating profit | 474 | 645 | 645 |
All Segments [Member] | |||
Business Segment Information | |||
Business segment acquisition integration pretax charges | 4 | 42 | 129 |
Corporate [Member] | |||
Business Segment Information | |||
Litigation settlements | 0 | 0 | (644) |
Amortization of intangible assets | (392) | (406) | (431) |
Interest expense - net | (233) | (232) | (227) |
Pension and other postretirement benefits expense | (60) | (130) | (138) |
Other corporate expense - net | (146) | (220) | (111) |
Corporate acquisition integration charges | $ 0 | $ 5 | $ 25 |
Business Segment and Geograp108
Business Segment and Geographic Region Information - Identifiable Assets, Capital Expenditures for PPE, and Depreciation of PPE by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Total assets | $ 30,419 | $ 30,996 | $ 33,487 |
Goodwill | 13,201 | 13,479 | 13,893 |
Other intangible assets | 5,514 | 6,014 | 6,556 |
Capital expenditures for property, plant and equipment | 497 | 506 | 632 |
Depreciation of property, plant and equipment | 486 | 479 | 514 |
Electrical Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,363 | 2,538 | 3,012 |
Goodwill | 6,497 | 6,642 | 6,940 |
Capital expenditures for property, plant and equipment | 134 | 137 | 170 |
Depreciation of property, plant and equipment | 141 | 137 | 148 |
Electrical Systems and Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,222 | 2,285 | 2,512 |
Goodwill | 4,203 | 4,279 | 4,314 |
Capital expenditures for property, plant and equipment | 78 | 94 | 147 |
Depreciation of property, plant and equipment | 82 | 82 | 90 |
Hydraulics [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,188 | 1,138 | 1,315 |
Goodwill | 1,221 | 1,259 | 1,327 |
Capital expenditures for property, plant and equipment | 92 | 61 | 79 |
Depreciation of property, plant and equipment | 64 | 67 | 67 |
Aerospace [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 830 | 841 | 832 |
Goodwill | 938 | 956 | 962 |
Capital expenditures for property, plant and equipment | 28 | 33 | 28 |
Depreciation of property, plant and equipment | 27 | 28 | 28 |
Vehicle [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,549 | 1,579 | 1,668 |
Goodwill | 342 | 343 | 350 |
Capital expenditures for property, plant and equipment | 142 | 119 | 160 |
Depreciation of property, plant and equipment | 109 | 113 | 130 |
All Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 8,152 | 8,381 | 9,339 |
Capital expenditures for property, plant and equipment | 474 | 444 | 584 |
Depreciation of property, plant and equipment | 423 | 427 | 463 |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 3,552 | 3,122 | 3,699 |
Capital expenditures for property, plant and equipment | 23 | 62 | 48 |
Depreciation of property, plant and equipment | $ 63 | $ 52 | $ 51 |
Business Segment and Geograp109
Business Segment and Geographic Region Information - Geographic Region Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 19,747 | $ 20,855 | $ 22,552 |
Net property, plant and equipment | 3,443 | 3,565 | 3,750 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 10,937 | 11,396 | 11,701 |
Net property, plant and equipment | 1,924 | 1,982 | 1,988 |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 898 | 969 | 1,113 |
Net property, plant and equipment | 19 | 19 | 25 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,448 | 1,726 | 1,988 |
Net property, plant and equipment | 281 | 243 | 306 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 4,228 | 4,379 | 5,074 |
Net property, plant and equipment | 681 | 734 | 799 |
Asia Pacific [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 2,236 | 2,385 | 2,676 |
Net property, plant and equipment | $ 538 | $ 587 | $ 632 |
Condensed Consolidating Fina110
Condensed Consolidating Financial Statements - Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Income Statements, Captions [Line Items] | |||
Net sales | $ 19,747 | $ 20,855 | $ 22,552 |
Cost of products sold | 13,400 | 14,292 | 15,646 |
Selling and administrative expense | 3,505 | 3,596 | 3,810 |
Settlement amount | 644 | ||
Litigation settlements | 0 | 0 | 644 |
Research and development expense | 589 | 625 | 647 |
Interest expense (income) - net | 233 | 232 | 227 |
Other expense (income) - net | (107) | (35) | (183) |
Equity in (earnings) loss of subsidiaries, net of tax | 0 | 0 | 0 |
Intercompany expense (income) - net | 0 | 0 | 0 |
Income before income taxes | 2,127 | 2,145 | 1,761 |
Income tax (benefit) expense | 202 | 164 | (42) |
Net income | 1,925 | 1,981 | 1,803 |
Less net income for noncontrolling interests | (3) | (2) | (10) |
Net income attributable to Eaton ordinary shareholders | 1,922 | 1,979 | 1,793 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (585) | (964) | (1,339) |
Total comprehensive income attributable to Eaton ordinary shareholders | 1,337 | 1,015 | 454 |
Eaton Corporation plc [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 |
Selling and administrative expense | 141 | 141 | 171 |
Settlement amount | 0 | ||
Research and development expense | 0 | 0 | 0 |
Interest expense (income) - net | 0 | 0 | 0 |
Other expense (income) - net | (35) | 0 | 0 |
Equity in (earnings) loss of subsidiaries, net of tax | (2,439) | (2,456) | (2,191) |
Intercompany expense (income) - net | 411 | 336 | 227 |
Income before income taxes | 1,922 | 1,979 | 1,793 |
Income tax (benefit) expense | 0 | 0 | 0 |
Net income | 1,922 | 1,979 | 1,793 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 1,922 | 1,979 | 1,793 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (585) | (964) | (1,339) |
Total comprehensive income attributable to Eaton ordinary shareholders | 1,337 | 1,015 | 454 |
Eaton Corporation [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 6,447 | 6,925 | 6,990 |
Cost of products sold | 5,078 | 5,508 | 5,519 |
Selling and administrative expense | 1,155 | 1,223 | 1,246 |
Settlement amount | 644 | ||
Research and development expense | 235 | 266 | 240 |
Interest expense (income) - net | 230 | 222 | 225 |
Other expense (income) - net | (48) | 0 | (17) |
Equity in (earnings) loss of subsidiaries, net of tax | (741) | (789) | (657) |
Intercompany expense (income) - net | (157) | (425) | (263) |
Income before income taxes | 695 | 920 | 53 |
Income tax (benefit) expense | 34 | 103 | (100) |
Net income | 661 | 817 | 153 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 661 | 817 | 153 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | 53 | 6 | (191) |
Total comprehensive income attributable to Eaton ordinary shareholders | 714 | 823 | (38) |
Guarantors [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 6,351 | 6,659 | 6,885 |
Cost of products sold | 4,686 | 5,036 | 5,075 |
Selling and administrative expense | 760 | 738 | 742 |
Settlement amount | 0 | ||
Research and development expense | 186 | 197 | 202 |
Interest expense (income) - net | 18 | 21 | 25 |
Other expense (income) - net | 42 | 24 | (81) |
Equity in (earnings) loss of subsidiaries, net of tax | (3,322) | (3,285) | (2,660) |
Intercompany expense (income) - net | 1,230 | 1,218 | 855 |
Income before income taxes | 2,751 | 2,710 | 2,727 |
Income tax (benefit) expense | 28 | (69) | 79 |
Net income | 2,723 | 2,779 | 2,648 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 2,723 | 2,779 | 2,648 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (567) | (952) | (1,370) |
Total comprehensive income attributable to Eaton ordinary shareholders | 2,156 | 1,827 | 1,278 |
Other Subsidiaries [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 11,961 | 12,533 | 13,521 |
Cost of products sold | 8,649 | 8,981 | 9,882 |
Selling and administrative expense | 1,449 | 1,494 | 1,651 |
Settlement amount | 0 | ||
Research and development expense | 168 | 162 | 205 |
Interest expense (income) - net | (14) | (13) | (29) |
Other expense (income) - net | (66) | (59) | (85) |
Equity in (earnings) loss of subsidiaries, net of tax | (898) | (689) | (295) |
Intercompany expense (income) - net | (1,484) | (1,129) | (819) |
Income before income taxes | 4,157 | 3,786 | 3,011 |
Income tax (benefit) expense | 139 | 141 | (14) |
Net income | 4,018 | 3,645 | 3,025 |
Less net income for noncontrolling interests | (5) | (3) | (8) |
Net income attributable to Eaton ordinary shareholders | 4,013 | 3,642 | 3,017 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (803) | (1,179) | (1,646) |
Total comprehensive income attributable to Eaton ordinary shareholders | 3,210 | 2,463 | 1,371 |
Consolidating Adjustments [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | (5,012) | (5,262) | (4,844) |
Cost of products sold | (5,013) | (5,233) | (4,830) |
Selling and administrative expense | 0 | 0 | 0 |
Settlement amount | 0 | ||
Research and development expense | 0 | 0 | 0 |
Interest expense (income) - net | (1) | 2 | 6 |
Other expense (income) - net | 0 | 0 | 0 |
Equity in (earnings) loss of subsidiaries, net of tax | 7,400 | 7,219 | 5,803 |
Intercompany expense (income) - net | 0 | 0 | 0 |
Income before income taxes | (7,398) | (7,250) | (5,823) |
Income tax (benefit) expense | 1 | (11) | (7) |
Net income | (7,399) | (7,239) | (5,816) |
Less net income for noncontrolling interests | 2 | 1 | (2) |
Net income attributable to Eaton ordinary shareholders | (7,397) | (7,238) | (5,818) |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | 1,317 | 2,125 | 3,207 |
Total comprehensive income attributable to Eaton ordinary shareholders | $ (6,080) | $ (5,113) | $ (2,611) |
Condensed Consolidating Fina111
Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 20, 2012 |
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | $ 543 | $ 268 | $ 781 | $ 915 | |
Short-term investments | 203 | 177 | |||
Accounts receivable - net | 3,560 | 3,479 | |||
Intercompany accounts receivable | 0 | 0 | |||
Inventory | 2,254 | 2,323 | |||
Prepaid expenses and other current assets | 381 | 369 | |||
Total current assets | 6,941 | 6,616 | |||
Property, plant and equipment - net | 3,443 | 3,565 | 3,750 | ||
Goodwill | 13,201 | 13,479 | 13,893 | ||
Other intangible assets | 5,514 | 6,014 | 6,556 | ||
Deferred income taxes | 360 | 362 | |||
Investment in subsidiaries | 0 | 0 | |||
Intercompany loans receivable | 0 | 0 | |||
Other assets | 960 | 960 | |||
Total assets | 30,419 | 30,996 | 33,487 | ||
Short-term debt | 14 | 426 | |||
Current portion of long-term debt | 1,552 | 242 | |||
Accounts payable | 1,718 | 1,758 | |||
Intercompany accounts payable | 0 | 0 | |||
Accrued compensation | 379 | 366 | |||
Other current liabilities | 1,822 | 1,833 | |||
Total current liabilities | 5,485 | 4,625 | |||
Long-term debt | 6,711 | 7,746 | |||
Pension liabilities | 1,659 | 1,586 | |||
Other postretirement benefits liabilities | 368 | 440 | |||
Deferred income taxes | 321 | 390 | |||
Intercompany loans payable | 0 | 0 | |||
Other noncurrent liabilities | 934 | 978 | |||
Total noncurrent liabilities | 9,993 | 11,140 | |||
Eaton shareholders' equity | 14,897 | 15,186 | |||
Noncontrolling interests | 44 | 45 | |||
Total equity | 14,941 | 15,231 | 15,839 | 16,863 | |
Total liabilities and equity | 30,419 | 30,996 | |||
Eaton and certain other of Eaton's principal 100% owned subsidiaries full and unconditional guarantee of the Senior Notes, on a joint and several basis | 100.00% | ||||
Eaton Corporation plc [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 1 | 0 | 1 | 3 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 0 | 0 | |||
Intercompany accounts receivable | 5 | 1 | |||
Inventory | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | |||
Total current assets | 6 | 1 | |||
Property, plant and equipment - net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Investment in subsidiaries | 32,795 | 29,627 | |||
Intercompany loans receivable | 0 | 0 | |||
Other assets | 0 | 0 | |||
Total assets | 32,801 | 29,628 | |||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable | 1 | 0 | |||
Intercompany accounts payable | 281 | 219 | |||
Accrued compensation | 0 | 0 | |||
Other current liabilities | 1 | 1 | |||
Total current liabilities | 283 | 220 | |||
Long-term debt | 0 | 0 | |||
Pension liabilities | 0 | 0 | |||
Other postretirement benefits liabilities | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany loans payable | 17,621 | 14,222 | |||
Other noncurrent liabilities | 0 | 0 | |||
Total noncurrent liabilities | 17,621 | 14,222 | |||
Eaton shareholders' equity | 14,897 | 15,186 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 14,897 | 15,186 | |||
Total liabilities and equity | 32,801 | 29,628 | |||
Eaton Corporation [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 92 | 26 | 173 | 51 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 536 | 512 | |||
Intercompany accounts receivable | 954 | 842 | |||
Inventory | 342 | 357 | |||
Prepaid expenses and other current assets | 77 | 77 | |||
Total current assets | 2,001 | 1,814 | |||
Property, plant and equipment - net | 857 | 930 | |||
Goodwill | 1,355 | 1,355 | |||
Other intangible assets | 169 | 182 | |||
Deferred income taxes | 904 | 1,016 | |||
Investment in subsidiaries | 13,743 | 12,931 | |||
Intercompany loans receivable | 7,605 | 8,641 | |||
Other assets | 491 | 492 | |||
Total assets | 27,125 | 27,361 | |||
Short-term debt | 0 | 408 | |||
Current portion of long-term debt | 1,250 | 1 | |||
Accounts payable | 372 | 392 | |||
Intercompany accounts payable | 3,870 | 4,009 | |||
Accrued compensation | 98 | 77 | |||
Other current liabilities | 591 | 644 | |||
Total current liabilities | 6,181 | 5,531 | |||
Long-term debt | 5,767 | 7,053 | |||
Pension liabilities | 610 | 639 | |||
Other postretirement benefits liabilities | 198 | 245 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany loans payable | 2,603 | 2,962 | |||
Other noncurrent liabilities | 327 | 346 | |||
Total noncurrent liabilities | 9,505 | 11,245 | |||
Eaton shareholders' equity | 11,439 | 10,585 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 11,439 | 10,585 | |||
Total liabilities and equity | 27,125 | 27,361 | |||
Guarantors [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 4 | 7 | 13 | 10 | |
Short-term investments | 0 | 2 | |||
Accounts receivable - net | 1,049 | 1,036 | |||
Intercompany accounts receivable | 4,023 | 3,903 | |||
Inventory | 642 | 658 | |||
Prepaid expenses and other current assets | 42 | 41 | |||
Total current assets | 5,760 | 5,647 | |||
Property, plant and equipment - net | 706 | 751 | |||
Goodwill | 6,293 | 6,295 | |||
Other intangible assets | 3,442 | 3,634 | |||
Deferred income taxes | 0 | 0 | |||
Investment in subsidiaries | 72,938 | 60,216 | |||
Intercompany loans receivable | 2,061 | 1,573 | |||
Other assets | 134 | 122 | |||
Total assets | 91,334 | 78,238 | |||
Short-term debt | 8 | 0 | |||
Current portion of long-term debt | 296 | 240 | |||
Accounts payable | 252 | 266 | |||
Intercompany accounts payable | 3,115 | 2,380 | |||
Accrued compensation | 58 | 53 | |||
Other current liabilities | 291 | 319 | |||
Total current liabilities | 4,020 | 3,258 | |||
Long-term debt | 936 | 675 | |||
Pension liabilities | 161 | 165 | |||
Other postretirement benefits liabilities | 99 | 118 | |||
Deferred income taxes | 732 | 818 | |||
Intercompany loans payable | 44,788 | 36,436 | |||
Other noncurrent liabilities | 211 | 200 | |||
Total noncurrent liabilities | 46,927 | 38,412 | |||
Eaton shareholders' equity | 40,387 | 36,568 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 40,387 | 36,568 | |||
Total liabilities and equity | 91,334 | 78,238 | |||
Other Subsidiaries [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 446 | 235 | 594 | 851 | |
Short-term investments | 203 | 175 | |||
Accounts receivable - net | 1,975 | 1,931 | |||
Intercompany accounts receivable | 3,633 | 3,033 | |||
Inventory | 1,349 | 1,388 | |||
Prepaid expenses and other current assets | 237 | 228 | |||
Total current assets | 7,843 | 6,990 | |||
Property, plant and equipment - net | 1,880 | 1,884 | |||
Goodwill | 5,553 | 5,829 | |||
Other intangible assets | 1,903 | 2,198 | |||
Deferred income taxes | 228 | 218 | |||
Investment in subsidiaries | 12,516 | 9,968 | |||
Intercompany loans receivable | 56,598 | 44,835 | |||
Other assets | 335 | 346 | |||
Total assets | 86,856 | 72,268 | |||
Short-term debt | 6 | 18 | |||
Current portion of long-term debt | 6 | 1 | |||
Accounts payable | 1,093 | 1,100 | |||
Intercompany accounts payable | 1,349 | 1,171 | |||
Accrued compensation | 223 | 236 | |||
Other current liabilities | 941 | 874 | |||
Total current liabilities | 3,618 | 3,400 | |||
Long-term debt | 8 | 17 | |||
Pension liabilities | 888 | 782 | |||
Other postretirement benefits liabilities | 71 | 77 | |||
Deferred income taxes | 361 | 444 | |||
Intercompany loans payable | 1,252 | 1,429 | |||
Other noncurrent liabilities | 396 | 432 | |||
Total noncurrent liabilities | 2,976 | 3,181 | |||
Eaton shareholders' equity | 80,224 | 65,650 | |||
Noncontrolling interests | 38 | 37 | |||
Total equity | 80,262 | 65,687 | |||
Total liabilities and equity | 86,856 | 72,268 | |||
Consolidating Adjustments [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 0 | 0 | $ 0 | $ 0 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 0 | 0 | |||
Intercompany accounts receivable | (8,615) | (7,779) | |||
Inventory | (79) | (80) | |||
Prepaid expenses and other current assets | 25 | 23 | |||
Total current assets | (8,669) | (7,836) | |||
Property, plant and equipment - net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Deferred income taxes | (772) | (872) | |||
Investment in subsidiaries | (131,992) | (112,742) | |||
Intercompany loans receivable | (66,264) | (55,049) | |||
Other assets | 0 | 0 | |||
Total assets | (207,697) | (176,499) | |||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable | 0 | 0 | |||
Intercompany accounts payable | (8,615) | (7,779) | |||
Accrued compensation | 0 | 0 | |||
Other current liabilities | (2) | (5) | |||
Total current liabilities | (8,617) | (7,784) | |||
Long-term debt | 0 | 1 | |||
Pension liabilities | 0 | 0 | |||
Other postretirement benefits liabilities | 0 | 0 | |||
Deferred income taxes | (772) | (872) | |||
Intercompany loans payable | (66,264) | (55,049) | |||
Other noncurrent liabilities | 0 | 0 | |||
Total noncurrent liabilities | (67,036) | (55,920) | |||
Eaton shareholders' equity | (132,050) | (112,803) | |||
Noncontrolling interests | 6 | 8 | |||
Total equity | (132,044) | (112,795) | |||
Total liabilities and equity | $ (207,697) | $ (176,499) |
Condensed Consolidating Fina112
Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | $ 2,552 | $ 2,371 | $ 1,878 |
Capital expenditures for property, plant and equipment | (497) | (506) | (632) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 1 | (72) | 2 |
Sales (purchases) of short-term investments - net | (40) | 37 | 522 |
Return of capital contributions from affiliates | 0 | ||
Investment in affiliates | 0 | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | ||
Loans to affiliates | 0 | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 | 0 |
Proceeds from sales of businesses | 0 | 1 | 282 |
Other - net | 7 | (35) | (31) |
Net cash (used in) provided by investing activities | (529) | (575) | 143 |
Proceeds from borrowings | 631 | 425 | 0 |
Payments on borrowings | (653) | (1,027) | (582) |
Proceeds from borrowings from affiliates | 0 | 0 | 0 |
Payments on borrowings from affiliates | 0 | 0 | 0 |
Stock Issued | 0 | ||
Capital contribution from affiliates | 0 | 0 | |
Return of capital contributions to affiliates | 0 | ||
Other intercompany financing activities | 0 | 0 | 0 |
Cash dividends paid | (1,037) | (1,026) | (929) |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 74 | 52 | 54 |
Repurchase of shares | (730) | (682) | (650) |
Excess tax benefit from equity-based compensation | 1 | 1 | 20 |
Other - net | (6) | (10) | (43) |
Net cash used in financing activities | (1,720) | (2,267) | (2,130) |
Effect of currency on cash | (28) | (42) | (25) |
Total increase (decrease) in cash | 275 | (513) | (134) |
Cash at the beginning of the period | 268 | 781 | 915 |
Cash at the end of the period | 543 | 268 | 781 |
Eaton Corporation plc [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (253) | (137) | (93) |
Capital expenditures for property, plant and equipment | 0 | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 0 |
Return of capital contributions from affiliates | 753 | ||
Investment in affiliates | (1,250) | (1,482) | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | ||
Loans to affiliates | 0 | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 | 0 |
Proceeds from sales of businesses | 0 | 0 | |
Other - net | 0 | 0 | 0 |
Net cash (used in) provided by investing activities | (1,250) | (1,482) | (753) |
Proceeds from borrowings | 0 | 0 | 0 |
Payments on borrowings | 0 | 0 | 0 |
Proceeds from borrowings from affiliates | 3,843 | 3,322 | 2,628 |
Payments on borrowings from affiliates | (646) | (48) | (476) |
Stock Issued | 0 | ||
Capital contribution from affiliates | 0 | 0 | |
Return of capital contributions to affiliates | 0 | ||
Other intercompany financing activities | 0 | 0 | 217 |
Cash dividends paid | (1,037) | (1,026) | (929) |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 74 | 52 | 54 |
Repurchase of shares | (730) | (682) | (650) |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash used in financing activities | 1,504 | 1,618 | 844 |
Effect of currency on cash | 0 | 0 | 0 |
Total increase (decrease) in cash | 1 | (1) | (2) |
Cash at the beginning of the period | 0 | 1 | 3 |
Cash at the end of the period | 1 | 0 | 1 |
Consolidating Adjustments [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Proceeds from borrowings | 0 | ||
Repurchase of shares | 0 | ||
Eaton Corporation [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (215) | (46) | (411) |
Capital expenditures for property, plant and equipment | (92) | (94) | (127) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 0 |
Return of capital contributions from affiliates | 0 | ||
Investment in affiliates | 0 | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | ||
Loans to affiliates | (337) | (1,235) | (354) |
Repayments of loans from affiliates | 1,293 | 342 | 978 |
Proceeds from sales of businesses | 0 | 93 | |
Other - net | (9) | (50) | (47) |
Net cash (used in) provided by investing activities | 855 | (1,037) | 543 |
Proceeds from borrowings | 21 | 408 | 0 |
Payments on borrowings | (408) | (724) | (553) |
Proceeds from borrowings from affiliates | 4,045 | 6,885 | 7,599 |
Payments on borrowings from affiliates | (4,655) | (6,122) | (6,907) |
Stock Issued | 0 | ||
Capital contribution from affiliates | 0 | 1,176 | |
Return of capital contributions to affiliates | 0 | ||
Other intercompany financing activities | 422 | (688) | (169) |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 0 | 0 | 0 |
Repurchase of shares | 0 | 0 | 0 |
Excess tax benefit from equity-based compensation | 1 | 1 | 20 |
Other - net | 0 | 0 | 0 |
Net cash used in financing activities | (574) | 936 | (10) |
Effect of currency on cash | 0 | 0 | 0 |
Total increase (decrease) in cash | 66 | (147) | 122 |
Cash at the beginning of the period | 26 | 173 | 51 |
Cash at the end of the period | 92 | 26 | 173 |
Guarantors [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (236) | (288) | (218) |
Capital expenditures for property, plant and equipment | (114) | (146) | (168) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 1 | 35 | 0 |
Sales (purchases) of short-term investments - net | 2 | (2) | 133 |
Return of capital contributions from affiliates | 0 | ||
Investment in affiliates | (120) | (1,176) | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | (47) | ||
Loans to affiliates | (655) | (39) | (162) |
Repayments of loans from affiliates | 0 | 359 | 212 |
Proceeds from sales of businesses | 0 | 175 | |
Other - net | 41 | 47 | 44 |
Net cash (used in) provided by investing activities | (798) | (992) | 234 |
Proceeds from borrowings | 610 | 0 | 0 |
Payments on borrowings | (231) | (301) | (1) |
Proceeds from borrowings from affiliates | 1,120 | 997 | 808 |
Payments on borrowings from affiliates | (1,844) | (1,282) | (1,875) |
Stock Issued | (753) | ||
Capital contribution from affiliates | 1,370 | 1,482 | |
Return of capital contributions to affiliates | 0 | ||
Other intercompany financing activities | 10 | 378 | 302 |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 0 | 0 | 0 |
Repurchase of shares | 0 | 0 | 0 |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | (4) | 0 | 0 |
Net cash used in financing activities | 1,031 | 1,274 | (13) |
Effect of currency on cash | 0 | 0 | 0 |
Total increase (decrease) in cash | (3) | (6) | 3 |
Cash at the beginning of the period | 7 | 13 | 10 |
Cash at the end of the period | 4 | 7 | 13 |
Other Subsidiaries [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | 3,256 | 2,846 | 2,568 |
Capital expenditures for property, plant and equipment | (291) | (266) | (337) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | (37) | 2 |
Sales (purchases) of short-term investments - net | (42) | 39 | 389 |
Return of capital contributions from affiliates | 753 | ||
Investment in affiliates | (1,370) | (1,482) | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | ||
Loans to affiliates | (8,208) | (10,608) | (10,546) |
Repayments of loans from affiliates | 5,893 | 7,148 | 8,451 |
Proceeds from sales of businesses | 1 | 14 | |
Other - net | (25) | (32) | (28) |
Net cash (used in) provided by investing activities | (4,043) | (5,237) | (2,808) |
Proceeds from borrowings | 0 | 17 | 0 |
Payments on borrowings | (14) | (2) | (28) |
Proceeds from borrowings from affiliates | 192 | 678 | 27 |
Payments on borrowings from affiliates | (41) | (397) | (383) |
Stock Issued | (753) | ||
Capital contribution from affiliates | 1,370 | 1,482 | |
Return of capital contributions to affiliates | (47) | ||
Other intercompany financing activities | (432) | 310 | (350) |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | (4) | 32 |
Exercise of employee stock options | 0 | 0 | 0 |
Repurchase of shares | 0 | 0 | 0 |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | (2) | (10) | (43) |
Net cash used in financing activities | 1,026 | 2,074 | 8 |
Effect of currency on cash | (28) | (42) | (25) |
Total increase (decrease) in cash | 211 | (359) | (257) |
Cash at the beginning of the period | 235 | 594 | 851 |
Cash at the end of the period | 446 | 235 | 594 |
Consolidating Adjustments [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | 0 | (4) | 32 |
Capital expenditures for property, plant and equipment | 0 | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 0 |
Return of capital contributions from affiliates | (1,506) | ||
Investment in affiliates | 2,740 | 4,140 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 47 | ||
Loans to affiliates | 9,200 | 11,882 | 11,062 |
Repayments of loans from affiliates | (7,186) | (7,849) | (9,641) |
Proceeds from sales of businesses | 0 | 0 | |
Other - net | 0 | 0 | 0 |
Net cash (used in) provided by investing activities | 4,707 | 8,173 | 2,927 |
Proceeds from borrowings | 0 | 0 | |
Payments on borrowings | 0 | 0 | 0 |
Proceeds from borrowings from affiliates | (9,200) | (11,882) | (11,062) |
Payments on borrowings from affiliates | 7,186 | 7,849 | 9,641 |
Stock Issued | 1,506 | ||
Capital contribution from affiliates | (2,740) | (4,140) | |
Return of capital contributions to affiliates | 47 | ||
Other intercompany financing activities | 0 | 0 | 0 |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | 4 | (32) |
Exercise of employee stock options | 0 | 0 | 0 |
Repurchase of shares | 0 | 0 | |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash used in financing activities | (4,707) | (8,169) | (2,959) |
Effect of currency on cash | 0 | 0 | 0 |
Total increase (decrease) in cash | 0 | 0 | 0 |
Cash at the beginning of the period | 0 | 0 | 0 |
Cash at the end of the period | $ 0 | $ 0 | $ 0 |