Document and Entity Information
Document and Entity Information Document and Entity Information shares in Millions | 6 Months Ended |
Jun. 30, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Eaton Corp plc |
Trading Symbol | ETN |
Entity Central Index Key | 1,551,182 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2017 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
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 Common Stock, Shares Outstanding (in shares) | 444.8 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 5,132 | $ 5,080 | $ 9,980 | $ 9,893 |
Cost of products sold | 3,450 | 3,419 | 6,760 | 6,710 |
Selling and administrative expense | 902 | 897 | 1,787 | 1,789 |
Research and development expense | 150 | 149 | 293 | 298 |
Interest expense - net | 60 | 57 | 121 | 114 |
Other expense (income) - net | 0 | 5 | (15) | (13) |
Income before income taxes | 570 | 553 | 1,034 | 995 |
Income tax expense | 54 | 61 | 86 | 100 |
Net income | 516 | 492 | 948 | 895 |
Less net income for noncontrolling interests | (1) | (1) | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | $ 515 | $ 491 | $ 947 | $ 895 |
Net income per share attributable to Eaton ordinary shareholders | ||||
Diluted (usd per share) | $ 1.15 | $ 1.07 | $ 2.10 | $ 1.95 |
Basic (usd per share) | $ 1.15 | $ 1.08 | $ 2.12 | $ 1.96 |
Weighted-average number of ordinary shares outstanding | ||||
Diluted (shares) | 448.6 | 458.3 | 449.8 | 459 |
Basic (shares) | 446.3 | 457 | 447.5 | 457.8 |
Cash dividends declared per ordinary share (usd per share) | $ 0.6 | $ 0.57 | $ 1.20 | $ 1.14 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 516 | $ 492 | $ 948 | $ 895 |
Less net income for noncontrolling interests | (1) | (1) | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | 515 | 491 | 947 | 895 |
Other comprehensive income (loss), net of tax | ||||
Currency translation and related hedging instruments | 320 | (296) | 548 | (35) |
Pensions and other postretirement benefits | 4 | 53 | 37 | 87 |
Cash flow hedges | (1) | (12) | 1 | (34) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 323 | (255) | 586 | 18 |
Total comprehensive income attributable to Eaton ordinary shareholders | $ 838 | $ 236 | $ 1,533 | $ 913 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 312 | $ 543 |
Short-term investments | 525 | 203 |
Accounts receivable - net | 3,813 | 3,560 |
Inventory | 2,393 | 2,254 |
Prepaid expenses and other current assets | 444 | 381 |
Total current assets | 7,487 | 6,941 |
Land and buildings | 2,455 | 2,369 |
Machinery and equipment | 5,934 | 5,670 |
Gross property, plant and equipment | 8,389 | 8,039 |
Accumulated depreciation | (4,859) | (4,596) |
Net property, plant and equipment | 3,530 | 3,443 |
Other noncurrent assets | ||
Goodwill | 13,478 | 13,201 |
Other intangible assets | 5,410 | 5,514 |
Deferred income taxes | 443 | 360 |
Other assets | 1,007 | 960 |
Total assets | 31,355 | 30,419 |
Current liabilities | ||
Short-term debt | 846 | 14 |
Current portion of long-term debt | 1,495 | 1,552 |
Accounts payable | 1,885 | 1,718 |
Accrued compensation | 338 | 379 |
Other current liabilities | 1,745 | 1,822 |
Total current liabilities | 6,309 | 5,485 |
Noncurrent liabilities | ||
Long-term debt | 6,264 | 6,711 |
Pension liabilities | 1,578 | 1,659 |
Other postretirement benefits liabilities | 364 | 368 |
Deferred income taxes | 316 | 321 |
Other noncurrent liabilities | 930 | 934 |
Total noncurrent liabilities | 9,452 | 9,993 |
Shareholders’ equity | ||
Eaton shareholders’ equity | 15,552 | 14,897 |
Noncontrolling interests | 42 | 44 |
Total equity | 15,594 | 14,941 |
Total liabilities and equity | $ 31,355 | $ 30,419 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net income | $ 948 | $ 895 |
Adjustments to reconcile to net cash provided by operating activities | ||
Depreciation and amortization | 453 | 467 |
Deferred income taxes | (107) | (74) |
Pension and other postretirement benefits expense | 104 | 116 |
Contributions to pension plans | (160) | (74) |
Contributions to other postretirement benefits plans | (11) | (18) |
Changes in working capital | (376) | (256) |
Other - net | 186 | 77 |
Net cash provided by operating activities | 1,037 | 1,133 |
Investing activities | ||
Capital expenditures for property, plant and equipment | (246) | (246) |
Cash received from acquisitions of businesses, net of cash acquired | 0 | 1 |
Sale (purchases) of short-term investments - net | (309) | 38 |
Other - net | (31) | 3 |
Net cash used in investing activities | (586) | (204) |
Financing activities | ||
Proceeds from borrowings | 832 | 151 |
Payments on borrowings | (543) | (240) |
Cash dividends paid | (537) | (521) |
Exercise of employee stock options | 49 | 37 |
Repurchase of shares | (465) | (295) |
Payments Related to Tax Withholding for Share-based Compensation | (21) | (17) |
Other - net | (4) | 3 |
Net cash used in financing activities | (689) | (882) |
Effect of currency on cash | 7 | 8 |
Total (decrease) increase in cash | (231) | 55 |
Cash at the beginning of the period | 543 | 268 |
Cash at the end of the period | $ 312 | $ 323 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods. This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2016 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission. During the first quarter of 2017, the Company adopted Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, (ASU 2016-09). Upon adoption, the Company recorded deferred tax assets of $48 for all excess tax benefits that had not been previously recognized. This was accomplished through a cumulative-effect adjustment to retained earnings. ASU 2016-09 also requires that all excess tax benefits and deficiencies generated in the current and future periods be recorded as income tax benefit or expense in the reporting period in which they occur. These excess tax benefits and deficiencies, which were previously required to be presented as financing activities on the Company’s Condensed Consolidated Statements of Cash Flows, are now classified as operating activities prospectively. The Company also reclassified $21 and $17 for the first six months of 2017 and 2016, respectively, from operating activities to financing activities on the Company’s Condensed Consolidated Statements of Cash Flows for withholding payments made to taxing authorities from shares withheld from employees. The Company will continue to estimate forfeitures as part of recording equity-based compensation expense. Certain prior year amounts have been reclassified to conform to the current year presentation. 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 to review current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. The implementation team performed a review of samples of customer contracts across the Company’s significant revenue streams. Based on this evaluation, most of the revenue streams will be recorded consistently under both the current and new standards. Certain revenue streams will move from point-in-time or multiple elements to over time because of the continuous transfer of control to customers. The Company is also in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard, including evaluating new qualitative and quantitative disclosures that will include information on the nature, amount, timing and significant judgments impacting revenue from contracts with customers. 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. 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. |
FORMATION OF A JOINT VENTURE
FORMATION OF A JOINT VENTURE | 6 Months Ended |
Jun. 30, 2017 | |
FORMATION OF A JOINT VENTURE [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | FORMATION OF A JOINT VENTURE On July 31, 2017, Eaton and Cummins, Inc. formed a joint venture for automated transmissions for heavy-duty and medium-duty commercial vehicles. The joint venture is named Eaton Cummins Automated Transmission Technologies. Cummins, Inc. and Eaton each own 50% of the new joint venture. Eaton will account for the joint venture on the equity method of accounting. Eaton received $600 in cash from Cummins, Inc. for a 50% interest in the joint venture. The Company is currently assessing the impact of the transaction to the consolidated financial statements. |
ACQUISITION INTEGRATION CHARGES
ACQUISITION INTEGRATION CHARGES | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions Integration Charges [Abstract] | |
ACQUISITION INTEGRATION CHARGES | ACQUISITION INTEGRATION CHARGES Eaton incurs integration charges related to acquired businesses. A summary of these charges follows: Three months ended Six months ended 2017 2016 2017 2016 Electrical Products $ 1 $ 1 $ 2 $ 1 Electrical Systems and Services — — — 1 Total acquisition integration charges before income taxes 1 1 2 2 Income taxes 1 — 1 1 Total after income taxes $ — $ 1 $ 1 $ 1 Per ordinary share - diluted $ — $ — $ — $ — Business segment acquisition integration charges in 2017 related to the integration of Ephesus Lighting, Inc. (Ephesus), which was acquired in 2015. The charges associated with Ephesus were included in Selling and administrative expense. Business segment acquisition integration charges in 2016 related to the integration of Ephesus and Oxalis Group Ltd. (Oxalis), which was acquired in 2015. The charges associated with Ephesus and Oxalis were included in Selling and administrative expense and Cost of products sold, respectively. In Business Segment Information, the charges reduced Operating profit of the related business segment. See Note 13 for additional information about business segments. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | 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 for the three and six months ended June 30, 2017 , were $33 and $53 , respectively, and were $35 and $98 for the three and six months ended June 30, 2016 , respectively. The charges associated with restructuring activities are anticipated to be $100 in 2017 . A summary of restructuring charges by type follows: Three months ended Six months ended 2017 2016 2017 2016 Workforce reductions $ 17 $ 20 $ 25 $ 77 Plant closings and other 16 15 28 21 Total $ 33 $ 35 $ 53 $ 98 A summary of restructuring charges by segment follows: Three months ended Six months ended 2017 2016 2017 2016 Electrical Products $ 11 $ 9 $ 14 $ 26 Electrical Systems & Services 5 3 7 13 Hydraulics 8 18 17 34 Aerospace — — 1 4 Vehicle 3 5 5 17 Corporate 6 — 9 4 Total $ 33 $ 35 $ 53 $ 98 A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows: Workforce reductions Plant closings and other Total 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 Liability recognized 25 28 53 Payments (56 ) (15 ) (71 ) Other adjustments (3 ) (9 ) (12 ) Balance at June 30, 2017 $ 79 $ 5 $ 84 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 13 for additional information about business segments. |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Change in the carrying amount of goodwill by segment follows: Electrical Products Electrical Systems and Services Hydraulics Aerospace Vehicle Total December 31, 2016 $ 6,497 $ 4,203 $ 1,221 $ 938 $ 342 $ 13,201 Translation 166 79 24 5 3 277 June 30, 2017 $ 6,663 $ 4,282 $ 1,245 $ 943 $ 345 $ 13,478 |
RETIREMENT BENEFITS PLANS
RETIREMENT BENEFITS PLANS | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS The components of retirement benefits expense follow: United States Non-United States Other postretirement Three months ended June 30 2017 2016 2017 2016 2017 2016 Service cost $ 24 $ 27 $ 18 $ 17 $ — $ 1 Interest cost 31 32 14 16 4 5 Expected return on plan assets (61 ) (62 ) (23 ) (24 ) (1 ) (2 ) Amortization 21 23 12 8 (3 ) (2 ) 15 20 21 17 — 2 Settlements and special termination benefits 17 18 — — — — Total expense $ 32 $ 38 $ 21 $ 17 $ — $ 2 United States Non-United States Other postretirement Six months ended June 30 2017 2016 2017 2016 2017 2016 Service cost $ 48 $ 55 $ 35 $ 33 $ 1 $ 2 Interest cost 62 63 27 32 7 9 Expected return on plan assets (122 ) (125 ) (46 ) (48 ) (2 ) (3 ) Amortization 41 46 25 17 (6 ) (4 ) 29 39 41 34 — 4 Settlements and special termination benefits 34 39 — — — — Total expense $ 63 $ 78 $ 41 $ 34 $ — $ 4 |
LEGAL CONTINGENCIES
LEGAL CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL 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 and proceedings. 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. 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. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate for second quarter and first six months of 2017 was expense of 10% and 8% , respectively, compared to expense of 11% and 10% for the second quarter and first six months of 2016 . The decreases in the effective tax rate in the second quarter and the first six months of 2017 were due to the resolution of tax contingencies in lower tax jurisdictions and the excess tax benefits recognized for employee share-based payments pursuant to the adoption of ASU 2016-09 as discussed in Note 1. On July 26, 2017, the United States Tax Court issued a ruling in the previously-disclosed dispute between Eaton Corporation, a subsidiary of the Company ( “Eaton Corp”) and the Internal Revenue Service (the "IRS"). As the Company has previously disclosed, the IRS issued a Notice in 2011 for Eaton Corp’s 2005 and 2006 tax years proposing assessments of $75 million in additional taxes plus $52 million in penalties related primarily to transfer pricing adjustments for products manufactured in Eaton Corp’s facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the U.S. As previously disclosed, the IRS also proposed adjustments related to the same transfer pricing issue in another Notice issued in 2014 for the 2007 through 2010 tax years. Eaton Corp has set its transfer prices for products sold between these affiliates at the same prices that it sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton Corp entered into with the IRS. The IRS cancelled the APAs and made the proposed adjustments in the 2011 and 2014 Notices, which Eaton Corp disputed in the Tax Court. The Tax Court case involved both whether the APAs should be enforced and, if not, the appropriate transfer pricing methodology. The Tax Court held a trial for the 2005 and 2006 tax years, the outcome of which also applies to the transfer pricing matter in the 2007 through 2010 tax years. The Tax Court agreed with Eaton Corp that the IRS must abide by the terms of the APAs for the tax years 2005-06, a finding that is also applicable to the 2007-2010 years. The Tax Court’s ruling on the APAs is not expected to have a material impact on Eaton’s consolidated financial statements. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY 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 the first quarter of 2016 , 1.5 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $82 . 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 the three and six months ended June 30, 2017 , 2.7 million and 6.3 million ordinary shares, respectively, were repurchased under the 2016 Program in the open market at a total cost of $210 and $465 , respectively. During the three and six months ended June 30, 2016, 3.7 million and 4.0 million ordinary shares, respectively, were repurchased under the 2016 Program in the open market at a total cost of $224 and $242 , respectively. The changes in Shareholders’ equity follow: Eaton shareholders’ equity Noncontrolling interests Total equity Balance at December 31, 2016 $ 14,897 $ 44 $ 14,941 Cumulative-effect adjustment upon adoption of ASU 2016-09 48 — 48 Net income 947 1 948 Other comprehensive income 586 — 586 Cash dividends paid (537 ) (3 ) (540 ) Issuance of shares under equity-based compensation plans - net 76 — 76 Repurchase of shares (465 ) — (465 ) Balance at June 30, 2017 $ 15,552 $ 42 $ 15,594 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, 2016 $ (3,062 ) $ (1,380 ) $ (6 ) $ (4,448 ) Other comprehensive (loss) income before reclassifications 548 (27 ) (3 ) 518 Amounts reclassified from Accumulated other comprehensive loss (income) — 64 4 68 Net current-period Other comprehensive income (loss) 548 37 1 586 Balance at June 30, 2017 $ (2,514 ) $ (1,343 ) $ (5 ) $ (3,862 ) The reclassifications out of Accumulated other comprehensive loss follow: Six months ended June 30, 2017 Consolidated statements of income classification Amortization of defined benefit pensions and other postretirement benefits items Actuarial loss and prior service cost $ (94 ) 1 Tax benefit 30 Total, net of tax (64 ) Gains and (losses) on cash flow hedges Currency exchange contracts (5 ) Cost of products sold Tax benefit 1 Total, net of tax (4 ) Total reclassifications for the period $ (68 ) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 6 for additional information about 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: Three months ended Six months ended (Shares in millions) 2017 2016 2017 2016 Net income attributable to Eaton ordinary shareholders $ 515 $ 491 $ 947 $ 895 Weighted-average number of ordinary shares outstanding - diluted 448.6 458.3 449.8 459.0 Less dilutive effect of equity-based compensation 2.3 1.3 2.3 1.2 Weighted-average number of ordinary shares outstanding - basic 446.3 457.0 447.5 457.8 Net income per share attributable to Eaton ordinary shareholders Diluted $ 1.15 $ 1.07 $ 2.10 $ 1.95 Basic 1.15 1.08 2.12 1.96 For the second quarter and first six months of 2017 , 0.2 million and 0.7 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. For the second quarter and first six months of 2016, 1.5 million and 1.9 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 | 6 Months Ended |
Jun. 30, 2017 | |
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 Level 1 Level 2 Level 3 June 30, 2017 Cash $ 312 $ 312 $ — $ — Short-term investments 525 525 — — Net derivative contracts 64 — 64 — December 31, 2016 Cash $ 543 $ 543 $ — $ — Short-term investments 203 203 — — Net derivative contracts (3 ) — (3 ) — 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 $7,759 and fair value of $8,093 at June 30, 2017 compared to $8,263 and $8,477 , respectively, at December 31, 2016 . The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities, and are considered a Level 2 fair value measurement. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Jun. 30, 2017 | |
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 Condensed 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. 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 $89 at June 30, 2017 and $86 at December 31, 2016 , and designated on a pre-tax basis was $620 at June 30, 2017 and $572 at December 31, 2016 . Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Condensed Consolidated Balance Sheets follows: Notional amount Other current assets Other noncurrent assets Other current liabilities Other noncurrent liabilities Type of hedge Term June 30, 2017 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,715 $ 3 $ 60 $ 1 $ 7 Fair value 4 months to 18 years Forward starting floating-to-fixed interest rate swaps 450 — 14 — 1 Cash flow 10 years Interest rate locks 350 — 1 — 1 Cash flow 10 to 30 years Currency exchange contracts 849 6 2 21 8 Cash flow 1 to 36 months Total $ 9 $ 77 $ 22 $ 17 Derivatives not designated as hedges Currency exchange contracts $ 2,626 $ 43 $ 26 1 to 12 months Commodity contracts 4 — — 1 to 12 months Total $ 43 $ 26 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 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 Statement 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 Three months ended Three months ended 2017 2016 2017 2016 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ (5 ) $ (10 ) Interest expense - net $ — $ — Currency exchange contracts 2 (10 ) Cost of products sold (1 ) (2 ) Total $ (3 ) $ (20 ) $ (1 ) $ (2 ) Gain (loss) recognized in Location of gain (loss) Gain (loss) reclassified Six months ended Six months ended 2017 2016 2017 2016 Derivatives designated as cash Forward starting floating-to-fixed $ (5 ) $ (19 ) Interest expense - net $ — $ — Currency exchange contracts 1 (32 ) Cost of products sold (5 ) 1 Total $ (4 ) $ (51 ) $ (5 ) $ 1 Amounts recognized in net income follow: Three months ended Six months ended 2017 2016 2017 2016 Derivatives designated as fair value hedges Fixed-to-floating interest rate swaps $ 8 $ 30 $ (3 ) $ 106 Related long-term debt converted to floating interest rates by interest rate swaps (8 ) (30 ) 3 (106 ) $ — $ — $ — $ — Gains and losses described above were recognized in Interest expense - net. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory accounted for using the first-in, first out (FIFO) method is carried at lower of cost or net realizable value. Inventory accounted for using the last-in, first-out (LIFO) method is carried at lower of cost or market. The components of inventory follow: June 30, December 31, Raw materials $ 924 $ 880 Work-in-process 432 396 Finished goods 1,137 1,074 Inventory at FIFO 2,493 2,350 Excess of FIFO over LIFO cost (100 ) (96 ) Total inventory $ 2,393 $ 2,254 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT 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 operating segments are Electrical Products, Electrical Systems and Services, Hydraulics, Aerospace and Vehicle. Operating profit includes the operating profit from intersegment sales. For additional information regarding Eaton’s business segments, see Note 15 to the Consolidated Financial Statements contained in the 2016 Form 10-K. Three months ended Six months ended 2017 2016 2017 2016 Net sales Electrical Products $ 1,802 $ 1,784 $ 3,514 $ 3,464 Electrical Systems and Services 1,414 1,429 2,747 2,771 Hydraulics 633 589 1,220 1,140 Aerospace 437 447 865 892 Vehicle 846 831 1,634 1,626 Total net sales $ 5,132 $ 5,080 $ 9,980 $ 9,893 Segment operating profit Electrical Products $ 314 $ 322 $ 611 $ 593 Electrical Systems and Services 194 178 349 337 Hydraulics 74 59 134 100 Aerospace 81 83 160 163 Vehicle 139 137 247 255 Total segment operating profit 802 779 1,501 1,448 Corporate Amortization of intangible assets (96 ) (98 ) (190 ) (198 ) Interest expense - net (60 ) (57 ) (121 ) (114 ) Pension and other postretirement benefits expense (11 ) (13 ) (22 ) (27 ) Other corporate expense - net (65 ) (58 ) (134 ) (114 ) Income before income taxes 570 553 1,034 995 Income tax expense 54 61 86 100 Net income 516 492 948 895 Less net income for noncontrolling interests (1 ) (1 ) (1 ) — Net income attributable to Eaton ordinary shareholders $ 515 $ 491 $ 947 $ 895 |
CONDENSED CONSOLIDATING FINANCI
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Condensed Consolidating Financial Information [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. 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 2017 and 2016, 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 FOR THE THREE MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 1,696 $ 1,672 $ 3,164 $ (1,400 ) $ 5,132 Cost of products sold — 1,373 1,225 2,248 (1,396 ) 3,450 Selling and administrative expense 34 342 197 329 — 902 Research and development expense — 57 53 40 — 150 Interest expense (income) - net — 58 6 (4 ) — 60 Other expense (income) - net 41 7 (37 ) (11 ) — — Equity in loss (earnings) of subsidiaries, net of tax (704 ) (185 ) (853 ) (114 ) 1,856 — Intercompany expense (income) - net 114 (34 ) 339 (419 ) — — Income (loss) before income taxes 515 78 742 1,095 (1,860 ) 570 Income tax expense (benefit) — 3 3 51 (3 ) 54 Net income (loss) 515 75 739 1,044 (1,857 ) 516 Less net loss (income) for noncontrolling interests — — — (1 ) — (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 515 $ 75 $ 739 $ 1,043 $ (1,857 ) $ 515 Other comprehensive income (loss) $ 323 $ (10 ) $ 322 $ 408 $ (720 ) $ 323 Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 838 $ 65 $ 1,061 $ 1,451 $ (2,577 ) $ 838 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 1,644 $ 1,648 $ 3,057 $ (1,269 ) $ 5,080 Cost of products sold — 1,263 1,203 2,224 (1,271 ) 3,419 Selling and administrative expense 2 351 198 346 — 897 Research and development expense — 55 47 47 — 149 Interest expense (income) - net — 57 6 (7 ) 1 57 Other expense (income) - net — 3 6 (4 ) — 5 Equity in loss (earnings) of subsidiaries, net of tax (594 ) (154 ) (811 ) (132 ) 1,691 — Intercompany expense (income) - net 101 (34 ) 313 (380 ) — — Income (loss) before income taxes 491 103 686 963 (1,690 ) 553 Income tax expense (benefit) — 13 12 36 — 61 Net income (loss) 491 90 674 927 (1,690 ) 492 Less net loss (income) for noncontrolling interests — — — (2 ) 1 (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 491 $ 90 $ 674 $ 925 $ (1,689 ) $ 491 Other comprehensive income (loss) $ (255 ) $ — $ (248 ) $ (319 ) $ 567 $ (255 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 236 $ 90 $ 426 $ 606 $ (1,122 ) $ 236 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 3,268 $ 3,267 $ 6,155 $ (2,710 ) $ 9,980 Cost of products sold — 2,626 2,413 4,429 (2,708 ) 6,760 Selling and administrative expense 66 668 391 662 — 1,787 Research and development expense — 111 100 82 — 293 Interest expense (income) - net — 118 11 (8 ) — 121 Other expense (income) - net 48 7 (38 ) (32 ) — (15 ) Equity in loss (earnings) of subsidiaries, net of tax (1,285 ) (375 ) (1,725 ) (225 ) 3,610 — Intercompany expense (income) - net 224 (73 ) 672 (823 ) — — Income (loss) before income taxes 947 186 1,443 2,070 (3,612 ) 1,034 Income tax expense (benefit) — — 19 68 (1 ) 86 Net income (loss) 947 186 1,424 2,002 (3,611 ) 948 Less net loss (income) for noncontrolling interests — — — (2 ) 1 (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 947 $ 186 $ 1,424 $ 2,000 $ (3,610 ) $ 947 Other comprehensive income (loss) $ 586 $ 50 $ 592 $ 731 $ (1,373 ) $ 586 Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,533 $ 236 $ 2,016 $ 2,731 $ (4,983 ) $ 1,533 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 3,182 $ 3,223 $ 5,930 $ (2,442 ) $ 9,893 Cost of products sold — 2,459 2,403 4,294 (2,446 ) 6,710 Selling and administrative expense 4 716 394 675 — 1,789 Research and development expense — 117 96 85 — 298 Interest expense (income) - net — 110 9 (10 ) 5 114 Other expense (income) - net — 1 4 (18 ) — (13 ) Equity in loss (earnings) of subsidiaries, net of tax (1,098 ) (322 ) (1,484 ) (229 ) 3,133 — Intercompany expense (income) - net 199 (70 ) 568 (697 ) — — Income (loss) before income taxes 895 171 1,233 1,830 (3,134 ) 995 Income tax expense (benefit) — 20 13 67 — 100 Net income (loss) 895 151 1,220 1,763 (3,134 ) 895 Less net loss (income) for noncontrolling interests — — — (2 ) 2 — Net income (loss) attributable to Eaton ordinary shareholders $ 895 $ 151 $ 1,220 $ 1,761 $ (3,132 ) $ 895 Other comprehensive income (loss) $ 18 $ 44 $ 30 $ (10 ) $ (64 ) $ 18 Total comprehensive income (loss) attributable to Eaton $ 913 $ 195 $ 1,250 $ 1,751 $ (3,196 ) $ 913 CONDENSED CONSOLIDATING BALANCE SHEETS JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ — $ 19 $ 5 $ 288 $ — $ 312 Short-term investments — — — 525 — 525 Accounts receivable - net — 525 1,169 2,119 — 3,813 Intercompany accounts receivable 2 752 3,524 3,596 (7,874 ) — Inventory — 332 655 1,487 (81 ) 2,393 Prepaid expenses and other current assets — 108 48 261 27 444 Total current assets 2 1,736 5,401 8,276 (7,928 ) 7,487 Property, plant and equipment - net — 843 696 1,991 — 3,530 Other noncurrent assets Goodwill — 1,355 6,293 5,830 — 13,478 Other intangible assets — 162 3,351 1,897 — 5,410 Deferred income taxes — 927 — 243 (727 ) 443 Investment in subsidiaries 34,028 13,827 74,853 12,886 (135,594 ) — Intercompany loans receivable — 7,695 2,481 57,519 (67,695 ) — Other assets — 504 141 362 — 1,007 Total assets $ 34,030 $ 27,049 $ 93,216 $ 89,004 $ (211,944 ) $ 31,355 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ 811 $ — $ 35 $ — $ 846 Current portion of long-term debt — 1,456 36 3 — 1,495 Accounts payable — 457 266 1,162 — 1,885 Intercompany accounts payable 216 3,232 3,213 1,213 (7,874 ) — Accrued compensation — 78 42 218 — 338 Other current liabilities 1 536 300 910 (2 ) 1,745 Total current liabilities 217 6,570 3,857 3,541 (7,876 ) 6,309 Noncurrent liabilities Long-term debt — 5,310 946 8 — 6,264 Pension liabilities — 531 137 910 — 1,578 Other postretirement benefits liabilities — 194 98 72 — 364 Deferred income taxes — — 680 363 (727 ) 316 Intercompany loans payable 18,261 2,374 45,618 1,442 (67,695 ) — Other noncurrent liabilities — 321 225 384 — 930 Total noncurrent liabilities 18,261 8,730 47,704 3,179 (68,422 ) 9,452 Shareholders’ equity Eaton shareholders' equity 15,552 11,749 41,655 82,247 (135,651 ) 15,552 Noncontrolling interests — — — 37 5 42 Total equity 15,552 11,749 41,655 82,284 (135,646 ) 15,594 Total liabilities and equity $ 34,030 $ 27,049 $ 93,216 $ 89,004 $ (211,944 ) $ 31,355 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 12,577 (132,053 ) — 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 $ 86,917 $ (207,758 ) $ 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 80,285 (132,111 ) 14,897 Noncontrolling interests — — — 38 6 44 Total equity 14,897 11,439 40,387 80,323 (132,105 ) 14,941 Total liabilities and equity $ 32,801 $ 27,125 $ 91,334 $ 86,917 $ (207,758 ) $ 30,419 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ 573 $ (215 ) $ 697 $ 1,489 $ (1,507 ) $ 1,037 Investing activities Capital expenditures for property, plant and equipment — (46 ) (53 ) (147 ) — (246 ) Cash received from sales (paid for acquisitions) of affiliates — — (92 ) 92 — — Sales (purchases) of short-term investments - net — — — (309 ) — (309 ) Investments in affiliates (90 ) — — (90 ) 180 — Return of investments in affiliates — — 20 — (20 ) — Loans to affiliates — (17 ) — (3,853 ) 3,870 — Repayments of loans from affiliates — 290 47 3,276 (3,613 ) — Other - net — (26 ) 7 (12 ) — (31 ) Net cash provided by (used in) investing activities (90 ) 201 (71 ) (1,043 ) 417 (586 ) Financing activities Proceeds from borrowings — 811 — 21 — 832 Payments on borrowings — (250 ) (289 ) (4 ) — (543 ) Proceeds from borrowings from affiliates 1,288 1,873 694 15 (3,870 ) — Payments on borrowings from affiliates (819 ) (2,366 ) (353 ) (75 ) 3,613 — Capital contributions from affiliates — — 90 90 (180 ) — Return of capital to affiliates — — — (20 ) 20 — Other intercompany financing activities — (113 ) 38 75 — — Cash dividends paid (537 ) — — — — (537 ) Cash dividends paid to affiliates — — (800 ) (707 ) 1,507 — Exercise of employee stock options 49 — — — — 49 Repurchase of shares (465 ) — — — — (465 ) Employee taxes paid from shares withheld — (14 ) (4 ) (3 ) — (21 ) Other - net — — (1 ) (3 ) — (4 ) Net cash provided by (used in) financing activities (484 ) (59 ) (625 ) (611 ) 1,090 (689 ) Effect of currency on cash — — — 7 — 7 Total increase (decrease) in cash (1 ) (73 ) 1 (158 ) — (231 ) Cash at the beginning of the period 1 92 4 446 — 543 Cash at the end of the period $ — $ 19 $ 5 $ 288 $ — $ 312 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (156 ) $ 33 $ (298 ) $ 1,554 $ — $ 1,133 Investing activities Capital expenditures for property, plant and equipment — (40 ) (49 ) (157 ) — (246 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — 1 — — 1 Sales (purchases) of short-term — — 2 36 — 38 Investments in affiliates (1,250 ) — (120 ) (1,370 ) 2,740 — Return of investments in affiliates — — 47 — (47 ) — Loans to affiliates — (284 ) (47 ) (4,236 ) 4,567 — Repayments of loans from affiliates — 1,280 — 2,922 (4,202 ) — Other - net — 2 25 (24 ) — 3 Net cash provided by (used in) investing activities (1,250 ) 958 (141 ) (2,829 ) 3,058 (204 ) Financing activities Proceeds from borrowings — 145 — 6 — 151 Payments on borrowings — — (240 ) — — (240 ) Proceeds from borrowings from affiliates 2,203 1,385 786 193 (4,567 ) — Payments on borrowings from affiliates (18 ) (2,493 ) (1,658 ) (33 ) 4,202 — Capital contributions from affiliates — — 1,370 1,370 (2,740 ) — Return of capital to affiliates — — — (47 ) 47 — Other intercompany financing activities — (43 ) 183 (140 ) — — Cash dividends paid (521 ) — — — — (521 ) Exercise of employee stock options 37 — — — — 37 Repurchase of shares (295 ) — — — — (295 ) Employee taxes paid from shares withheld — (10 ) (4 ) (3 ) — (17 ) Other - net — 3 — — — 3 Net cash provided by (used in) financing activities 1,406 (1,013 ) 437 1,346 (3,058 ) (882 ) Effect of currency on cash — — — 8 — 8 Total increase (decrease) in cash — (22 ) (2 ) 79 — 55 Cash at the beginning of the period — 26 7 235 — 268 Cash at the end of the period $ — $ 4 $ 5 $ 314 $ — $ 323 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods. This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2016 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission. |
Share-based Compensation, Option and Incentive Plans Policy | During the first quarter of 2017, the Company adopted Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, (ASU 2016-09). Upon adoption, the Company recorded deferred tax assets of $48 for all excess tax benefits that had not been previously recognized. This was accomplished through a cumulative-effect adjustment to retained earnings. ASU 2016-09 also requires that all excess tax benefits and deficiencies generated in the current and future periods be recorded as income tax benefit or expense in the reporting period in which they occur. These excess tax benefits and deficiencies, which were previously required to be presented as financing activities on the Company’s Condensed Consolidated Statements of Cash Flows, are now classified as operating activities prospectively. The Company also reclassified $21 and $17 for the first six months of 2017 and 2016, respectively, from operating activities to financing activities on the Company’s Condensed Consolidated Statements of Cash Flows for withholding payments made to taxing authorities from shares withheld from employees. The Company will continue to estimate forfeitures as part of recording equity-based compensation expense. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year presentation. |
Recently Issued Accounting Pronouncements | 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 to review current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. The implementation team performed a review of samples of customer contracts across the Company’s significant revenue streams. Based on this evaluation, most of the revenue streams will be recorded consistently under both the current and new standards. Certain revenue streams will move from point-in-time or multiple elements to over time because of the continuous transfer of control to customers. The Company is also in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard, including evaluating new qualitative and quantitative disclosures that will include information on the nature, amount, timing and significant judgments impacting revenue from contracts with customers. 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. 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. |
ACQUISITION INTEGRATION CHARG21
ACQUISITION INTEGRATION CHARGES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions Integration Charges [Abstract] | |
Acquisition Integration Charges | Eaton incurs integration charges related to acquired businesses. A summary of these charges follows: Three months ended Six months ended 2017 2016 2017 2016 Electrical Products $ 1 $ 1 $ 2 $ 1 Electrical Systems and Services — — — 1 Total acquisition integration charges before income taxes 1 1 2 2 Income taxes 1 — 1 1 Total after income taxes $ — $ 1 $ 1 $ 1 Per ordinary share - diluted $ — $ — $ — $ — |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges by Type | A summary of restructuring charges by type follows: Three months ended Six months ended 2017 2016 2017 2016 Workforce reductions $ 17 $ 20 $ 25 $ 77 Plant closings and other 16 15 28 21 Total $ 33 $ 35 $ 53 $ 98 |
Restructuring Charges by Segment | A summary of restructuring charges by segment follows: Three months ended Six months ended 2017 2016 2017 2016 Electrical Products $ 11 $ 9 $ 14 $ 26 Electrical Systems & Services 5 3 7 13 Hydraulics 8 18 17 34 Aerospace — — 1 4 Vehicle 3 5 5 17 Corporate 6 — 9 4 Total $ 33 $ 35 $ 53 $ 98 |
Restructuring Liability Rollforward | A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows: Workforce reductions Plant closings and other Total 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 Liability recognized 25 28 53 Payments (56 ) (15 ) (71 ) Other adjustments (3 ) (9 ) (12 ) Balance at June 30, 2017 $ 79 $ 5 $ 84 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Change in the carrying amount of goodwill by segment follows: Electrical Products Electrical Systems and Services Hydraulics Aerospace Vehicle Total December 31, 2016 $ 6,497 $ 4,203 $ 1,221 $ 938 $ 342 $ 13,201 Translation 166 79 24 5 3 277 June 30, 2017 $ 6,663 $ 4,282 $ 1,245 $ 943 $ 345 $ 13,478 |
RETIREMENT BENEFIT PLANS (Table
RETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Benefits Plans Expense | The components of retirement benefits expense follow: United States Non-United States Other postretirement Three months ended June 30 2017 2016 2017 2016 2017 2016 Service cost $ 24 $ 27 $ 18 $ 17 $ — $ 1 Interest cost 31 32 14 16 4 5 Expected return on plan assets (61 ) (62 ) (23 ) (24 ) (1 ) (2 ) Amortization 21 23 12 8 (3 ) (2 ) 15 20 21 17 — 2 Settlements and special termination benefits 17 18 — — — — Total expense $ 32 $ 38 $ 21 $ 17 $ — $ 2 United States Non-United States Other postretirement Six months ended June 30 2017 2016 2017 2016 2017 2016 Service cost $ 48 $ 55 $ 35 $ 33 $ 1 $ 2 Interest cost 62 63 27 32 7 9 Expected return on plan assets (122 ) (125 ) (46 ) (48 ) (2 ) (3 ) Amortization 41 46 25 17 (6 ) (4 ) 29 39 41 34 — 4 Settlements and special termination benefits 34 39 — — — — Total expense $ 63 $ 78 $ 41 $ 34 $ — $ 4 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Changes in Shareholders' equity | The changes in Shareholders’ equity follow: Eaton shareholders’ equity Noncontrolling interests Total equity Balance at December 31, 2016 $ 14,897 $ 44 $ 14,941 Cumulative-effect adjustment upon adoption of ASU 2016-09 48 — 48 Net income 947 1 948 Other comprehensive income 586 — 586 Cash dividends paid (537 ) (3 ) (540 ) Issuance of shares under equity-based compensation plans - net 76 — 76 Repurchase of shares (465 ) — (465 ) Balance at June 30, 2017 $ 15,552 $ 42 $ 15,594 |
Schedule of Accumulated Other Comprehensive Loss | 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, 2016 $ (3,062 ) $ (1,380 ) $ (6 ) $ (4,448 ) Other comprehensive (loss) income before reclassifications 548 (27 ) (3 ) 518 Amounts reclassified from Accumulated other comprehensive loss (income) — 64 4 68 Net current-period Other comprehensive income (loss) 548 37 1 586 Balance at June 30, 2017 $ (2,514 ) $ (1,343 ) $ (5 ) $ (3,862 ) |
Reclassification Out of Accumulated Other Comprehensive Loss | The reclassifications out of Accumulated other comprehensive loss follow: Six months ended June 30, 2017 Consolidated statements of income classification Amortization of defined benefit pensions and other postretirement benefits items Actuarial loss and prior service cost $ (94 ) 1 Tax benefit 30 Total, net of tax (64 ) Gains and (losses) on cash flow hedges Currency exchange contracts (5 ) Cost of products sold Tax benefit 1 Total, net of tax (4 ) Total reclassifications for the period $ (68 ) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 6 for additional information about pension and other postretirement benefits items. |
Calculation of Net Income Per Ordinary Share Attributable to Shareholders | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows: Three months ended Six months ended (Shares in millions) 2017 2016 2017 2016 Net income attributable to Eaton ordinary shareholders $ 515 $ 491 $ 947 $ 895 Weighted-average number of ordinary shares outstanding - diluted 448.6 458.3 449.8 459.0 Less dilutive effect of equity-based compensation 2.3 1.3 2.3 1.2 Weighted-average number of ordinary shares outstanding - basic 446.3 457.0 447.5 457.8 Net income per share attributable to Eaton ordinary shareholders Diluted $ 1.15 $ 1.07 $ 2.10 $ 1.95 Basic 1.15 1.08 2.12 1.96 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 Level 1 Level 2 Level 3 June 30, 2017 Cash $ 312 $ 312 $ — $ — Short-term investments 525 525 — — Net derivative contracts 64 — 64 — December 31, 2016 Cash $ 543 $ 543 $ — $ — Short-term investments 203 203 — — Net derivative contracts (3 ) — (3 ) — |
DERIVATIVE FINANCIAL INSTRUME27
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments Recognized in Condensed Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Condensed Consolidated Balance Sheets follows: Notional amount Other current assets Other noncurrent assets Other current liabilities Other noncurrent liabilities Type of hedge Term June 30, 2017 Derivatives designated as hedges Fixed-to-floating interest rate swaps $ 3,715 $ 3 $ 60 $ 1 $ 7 Fair value 4 months to 18 years Forward starting floating-to-fixed interest rate swaps 450 — 14 — 1 Cash flow 10 years Interest rate locks 350 — 1 — 1 Cash flow 10 to 30 years Currency exchange contracts 849 6 2 21 8 Cash flow 1 to 36 months Total $ 9 $ 77 $ 22 $ 17 Derivatives not designated as hedges Currency exchange contracts $ 2,626 $ 43 $ 26 1 to 12 months Commodity contracts 4 — — 1 to 12 months Total $ 43 $ 26 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 |
Amounts Recognized in Accumulated Other Comprehensive Loss | The impact of derivative instruments to the Consolidated Statement 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 Three months ended Three months ended 2017 2016 2017 2016 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ (5 ) $ (10 ) Interest expense - net $ — $ — Currency exchange contracts 2 (10 ) Cost of products sold (1 ) (2 ) Total $ (3 ) $ (20 ) $ (1 ) $ (2 ) Gain (loss) recognized in Location of gain (loss) Gain (loss) reclassified Six months ended Six months ended 2017 2016 2017 2016 Derivatives designated as cash Forward starting floating-to-fixed $ (5 ) $ (19 ) Interest expense - net $ — $ — Currency exchange contracts 1 (32 ) Cost of products sold (5 ) 1 Total $ (4 ) $ (51 ) $ (5 ) $ 1 |
Amounts recognized in Net Income | Amounts recognized in net income follow: Three months ended Six months ended 2017 2016 2017 2016 Derivatives designated as fair value hedges Fixed-to-floating interest rate swaps $ 8 $ 30 $ (3 ) $ 106 Related long-term debt converted to floating interest rates by interest rate swaps (8 ) (30 ) 3 (106 ) $ — $ — $ — $ — |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | The components of inventory follow: June 30, December 31, Raw materials $ 924 $ 880 Work-in-process 432 396 Finished goods 1,137 1,074 Inventory at FIFO 2,493 2,350 Excess of FIFO over LIFO cost (100 ) (96 ) Total inventory $ 2,393 $ 2,254 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | Three months ended Six months ended 2017 2016 2017 2016 Net sales Electrical Products $ 1,802 $ 1,784 $ 3,514 $ 3,464 Electrical Systems and Services 1,414 1,429 2,747 2,771 Hydraulics 633 589 1,220 1,140 Aerospace 437 447 865 892 Vehicle 846 831 1,634 1,626 Total net sales $ 5,132 $ 5,080 $ 9,980 $ 9,893 Segment operating profit Electrical Products $ 314 $ 322 $ 611 $ 593 Electrical Systems and Services 194 178 349 337 Hydraulics 74 59 134 100 Aerospace 81 83 160 163 Vehicle 139 137 247 255 Total segment operating profit 802 779 1,501 1,448 Corporate Amortization of intangible assets (96 ) (98 ) (190 ) (198 ) Interest expense - net (60 ) (57 ) (121 ) (114 ) Pension and other postretirement benefits expense (11 ) (13 ) (22 ) (27 ) Other corporate expense - net (65 ) (58 ) (134 ) (114 ) Income before income taxes 570 553 1,034 995 Income tax expense 54 61 86 100 Net income 516 492 948 895 Less net income for noncontrolling interests (1 ) (1 ) (1 ) — Net income attributable to Eaton ordinary shareholders $ 515 $ 491 $ 947 $ 895 |
CONDENSED CONSOLIDATING FINAN30
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Financial Statements | CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 1,696 $ 1,672 $ 3,164 $ (1,400 ) $ 5,132 Cost of products sold — 1,373 1,225 2,248 (1,396 ) 3,450 Selling and administrative expense 34 342 197 329 — 902 Research and development expense — 57 53 40 — 150 Interest expense (income) - net — 58 6 (4 ) — 60 Other expense (income) - net 41 7 (37 ) (11 ) — — Equity in loss (earnings) of subsidiaries, net of tax (704 ) (185 ) (853 ) (114 ) 1,856 — Intercompany expense (income) - net 114 (34 ) 339 (419 ) — — Income (loss) before income taxes 515 78 742 1,095 (1,860 ) 570 Income tax expense (benefit) — 3 3 51 (3 ) 54 Net income (loss) 515 75 739 1,044 (1,857 ) 516 Less net loss (income) for noncontrolling interests — — — (1 ) — (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 515 $ 75 $ 739 $ 1,043 $ (1,857 ) $ 515 Other comprehensive income (loss) $ 323 $ (10 ) $ 322 $ 408 $ (720 ) $ 323 Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 838 $ 65 $ 1,061 $ 1,451 $ (2,577 ) $ 838 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 1,644 $ 1,648 $ 3,057 $ (1,269 ) $ 5,080 Cost of products sold — 1,263 1,203 2,224 (1,271 ) 3,419 Selling and administrative expense 2 351 198 346 — 897 Research and development expense — 55 47 47 — 149 Interest expense (income) - net — 57 6 (7 ) 1 57 Other expense (income) - net — 3 6 (4 ) — 5 Equity in loss (earnings) of subsidiaries, net of tax (594 ) (154 ) (811 ) (132 ) 1,691 — Intercompany expense (income) - net 101 (34 ) 313 (380 ) — — Income (loss) before income taxes 491 103 686 963 (1,690 ) 553 Income tax expense (benefit) — 13 12 36 — 61 Net income (loss) 491 90 674 927 (1,690 ) 492 Less net loss (income) for noncontrolling interests — — — (2 ) 1 (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 491 $ 90 $ 674 $ 925 $ (1,689 ) $ 491 Other comprehensive income (loss) $ (255 ) $ — $ (248 ) $ (319 ) $ 567 $ (255 ) Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 236 $ 90 $ 426 $ 606 $ (1,122 ) $ 236 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 3,268 $ 3,267 $ 6,155 $ (2,710 ) $ 9,980 Cost of products sold — 2,626 2,413 4,429 (2,708 ) 6,760 Selling and administrative expense 66 668 391 662 — 1,787 Research and development expense — 111 100 82 — 293 Interest expense (income) - net — 118 11 (8 ) — 121 Other expense (income) - net 48 7 (38 ) (32 ) — (15 ) Equity in loss (earnings) of subsidiaries, net of tax (1,285 ) (375 ) (1,725 ) (225 ) 3,610 — Intercompany expense (income) - net 224 (73 ) 672 (823 ) — — Income (loss) before income taxes 947 186 1,443 2,070 (3,612 ) 1,034 Income tax expense (benefit) — — 19 68 (1 ) 86 Net income (loss) 947 186 1,424 2,002 (3,611 ) 948 Less net loss (income) for noncontrolling interests — — — (2 ) 1 (1 ) Net income (loss) attributable to Eaton ordinary shareholders $ 947 $ 186 $ 1,424 $ 2,000 $ (3,610 ) $ 947 Other comprehensive income (loss) $ 586 $ 50 $ 592 $ 731 $ (1,373 ) $ 586 Total comprehensive income (loss) attributable to Eaton ordinary shareholders $ 1,533 $ 236 $ 2,016 $ 2,731 $ (4,983 ) $ 1,533 CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net sales $ — $ 3,182 $ 3,223 $ 5,930 $ (2,442 ) $ 9,893 Cost of products sold — 2,459 2,403 4,294 (2,446 ) 6,710 Selling and administrative expense 4 716 394 675 — 1,789 Research and development expense — 117 96 85 — 298 Interest expense (income) - net — 110 9 (10 ) 5 114 Other expense (income) - net — 1 4 (18 ) — (13 ) Equity in loss (earnings) of subsidiaries, net of tax (1,098 ) (322 ) (1,484 ) (229 ) 3,133 — Intercompany expense (income) - net 199 (70 ) 568 (697 ) — — Income (loss) before income taxes 895 171 1,233 1,830 (3,134 ) 995 Income tax expense (benefit) — 20 13 67 — 100 Net income (loss) 895 151 1,220 1,763 (3,134 ) 895 Less net loss (income) for noncontrolling interests — — — (2 ) 2 — Net income (loss) attributable to Eaton ordinary shareholders $ 895 $ 151 $ 1,220 $ 1,761 $ (3,132 ) $ 895 Other comprehensive income (loss) $ 18 $ 44 $ 30 $ (10 ) $ (64 ) $ 18 Total comprehensive income (loss) attributable to Eaton $ 913 $ 195 $ 1,250 $ 1,751 $ (3,196 ) $ 913 CONDENSED CONSOLIDATING BALANCE SHEETS JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Assets Current assets Cash $ — $ 19 $ 5 $ 288 $ — $ 312 Short-term investments — — — 525 — 525 Accounts receivable - net — 525 1,169 2,119 — 3,813 Intercompany accounts receivable 2 752 3,524 3,596 (7,874 ) — Inventory — 332 655 1,487 (81 ) 2,393 Prepaid expenses and other current assets — 108 48 261 27 444 Total current assets 2 1,736 5,401 8,276 (7,928 ) 7,487 Property, plant and equipment - net — 843 696 1,991 — 3,530 Other noncurrent assets Goodwill — 1,355 6,293 5,830 — 13,478 Other intangible assets — 162 3,351 1,897 — 5,410 Deferred income taxes — 927 — 243 (727 ) 443 Investment in subsidiaries 34,028 13,827 74,853 12,886 (135,594 ) — Intercompany loans receivable — 7,695 2,481 57,519 (67,695 ) — Other assets — 504 141 362 — 1,007 Total assets $ 34,030 $ 27,049 $ 93,216 $ 89,004 $ (211,944 ) $ 31,355 Liabilities and shareholders’ equity Current liabilities Short-term debt $ — $ 811 $ — $ 35 $ — $ 846 Current portion of long-term debt — 1,456 36 3 — 1,495 Accounts payable — 457 266 1,162 — 1,885 Intercompany accounts payable 216 3,232 3,213 1,213 (7,874 ) — Accrued compensation — 78 42 218 — 338 Other current liabilities 1 536 300 910 (2 ) 1,745 Total current liabilities 217 6,570 3,857 3,541 (7,876 ) 6,309 Noncurrent liabilities Long-term debt — 5,310 946 8 — 6,264 Pension liabilities — 531 137 910 — 1,578 Other postretirement benefits liabilities — 194 98 72 — 364 Deferred income taxes — — 680 363 (727 ) 316 Intercompany loans payable 18,261 2,374 45,618 1,442 (67,695 ) — Other noncurrent liabilities — 321 225 384 — 930 Total noncurrent liabilities 18,261 8,730 47,704 3,179 (68,422 ) 9,452 Shareholders’ equity Eaton shareholders' equity 15,552 11,749 41,655 82,247 (135,651 ) 15,552 Noncontrolling interests — — — 37 5 42 Total equity 15,552 11,749 41,655 82,284 (135,646 ) 15,594 Total liabilities and equity $ 34,030 $ 27,049 $ 93,216 $ 89,004 $ (211,944 ) $ 31,355 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 12,577 (132,053 ) — 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 $ 86,917 $ (207,758 ) $ 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 80,285 (132,111 ) 14,897 Noncontrolling interests — — — 38 6 44 Total equity 14,897 11,439 40,387 80,323 (132,105 ) 14,941 Total liabilities and equity $ 32,801 $ 27,125 $ 91,334 $ 86,917 $ (207,758 ) $ 30,419 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2017 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ 573 $ (215 ) $ 697 $ 1,489 $ (1,507 ) $ 1,037 Investing activities Capital expenditures for property, plant and equipment — (46 ) (53 ) (147 ) — (246 ) Cash received from sales (paid for acquisitions) of affiliates — — (92 ) 92 — — Sales (purchases) of short-term investments - net — — — (309 ) — (309 ) Investments in affiliates (90 ) — — (90 ) 180 — Return of investments in affiliates — — 20 — (20 ) — Loans to affiliates — (17 ) — (3,853 ) 3,870 — Repayments of loans from affiliates — 290 47 3,276 (3,613 ) — Other - net — (26 ) 7 (12 ) — (31 ) Net cash provided by (used in) investing activities (90 ) 201 (71 ) (1,043 ) 417 (586 ) Financing activities Proceeds from borrowings — 811 — 21 — 832 Payments on borrowings — (250 ) (289 ) (4 ) — (543 ) Proceeds from borrowings from affiliates 1,288 1,873 694 15 (3,870 ) — Payments on borrowings from affiliates (819 ) (2,366 ) (353 ) (75 ) 3,613 — Capital contributions from affiliates — — 90 90 (180 ) — Return of capital to affiliates — — — (20 ) 20 — Other intercompany financing activities — (113 ) 38 75 — — Cash dividends paid (537 ) — — — — (537 ) Cash dividends paid to affiliates — — (800 ) (707 ) 1,507 — Exercise of employee stock options 49 — — — — 49 Repurchase of shares (465 ) — — — — (465 ) Employee taxes paid from shares withheld — (14 ) (4 ) (3 ) — (21 ) Other - net — — (1 ) (3 ) — (4 ) Net cash provided by (used in) financing activities (484 ) (59 ) (625 ) (611 ) 1,090 (689 ) Effect of currency on cash — — — 7 — 7 Total increase (decrease) in cash (1 ) (73 ) 1 (158 ) — (231 ) Cash at the beginning of the period 1 92 4 446 — 543 Cash at the end of the period $ — $ 19 $ 5 $ 288 $ — $ 312 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2016 Eaton Corporation plc Eaton Corporation Guarantors Other subsidiaries Consolidating adjustments Total Net cash provided by (used in) operating activities $ (156 ) $ 33 $ (298 ) $ 1,554 $ — $ 1,133 Investing activities Capital expenditures for property, plant and equipment — (40 ) (49 ) (157 ) — (246 ) Cash received from (paid for) acquisitions of businesses, net of cash acquired — — 1 — — 1 Sales (purchases) of short-term — — 2 36 — 38 Investments in affiliates (1,250 ) — (120 ) (1,370 ) 2,740 — Return of investments in affiliates — — 47 — (47 ) — Loans to affiliates — (284 ) (47 ) (4,236 ) 4,567 — Repayments of loans from affiliates — 1,280 — 2,922 (4,202 ) — Other - net — 2 25 (24 ) — 3 Net cash provided by (used in) investing activities (1,250 ) 958 (141 ) (2,829 ) 3,058 (204 ) Financing activities Proceeds from borrowings — 145 — 6 — 151 Payments on borrowings — — (240 ) — — (240 ) Proceeds from borrowings from affiliates 2,203 1,385 786 193 (4,567 ) — Payments on borrowings from affiliates (18 ) (2,493 ) (1,658 ) (33 ) 4,202 — Capital contributions from affiliates — — 1,370 1,370 (2,740 ) — Return of capital to affiliates — — — (47 ) 47 — Other intercompany financing activities — (43 ) 183 (140 ) — — Cash dividends paid (521 ) — — — — (521 ) Exercise of employee stock options 37 — — — — 37 Repurchase of shares (295 ) — — — — (295 ) Employee taxes paid from shares withheld — (10 ) (4 ) (3 ) — (17 ) Other - net — 3 — — — 3 Net cash provided by (used in) financing activities 1,406 (1,013 ) 437 1,346 (3,058 ) (882 ) Effect of currency on cash — — — 8 — 8 Total increase (decrease) in cash — (22 ) (2 ) 79 — 55 Cash at the beginning of the period — 26 7 235 — 268 Cash at the end of the period $ — $ 4 $ 5 $ 314 $ — $ 323 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred Tax Asset recognized adoption of ASU 2016-09 | $ 48 | |
Reclassifications due to adoption of ASU 2016-09 | $ 21 | $ 17 |
FORMATION OF A JOINT VENTURE (D
FORMATION OF A JOINT VENTURE (Details) $ in Millions | Jun. 30, 2017USD ($) |
Business Acquisition [Line Items] | |
Interest in Joint Venture | 50.00% |
Proceeds from Joint Venture | $ 600 |
ACQUISITION AND INTEGRATION CHA
ACQUISITION AND INTEGRATION CHARGES (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Acquisition integration charges [Line Items] | ||||
Acquisition integration charges | $ 1 | $ 1 | $ 2 | $ 2 |
Income taxes | 1 | 0 | 1 | 1 |
Total after income taxes | $ 0 | $ 1 | $ 1 | $ 1 |
Per ordinary share - diluted (dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Electrical Products [Member] | ||||
Acquisition integration charges [Line Items] | ||||
Acquisition integration charges | $ 1 | $ 1 | $ 2 | $ 1 |
Electrical Systems and Services [Member] | ||||
Acquisition integration charges [Line Items] | ||||
Acquisition integration charges | $ 0 | $ 0 | $ 0 | $ 1 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Liability recognized | $ 33 | $ 35 | $ 53 | $ 98 | $ 211 | |
Employee Severance [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Liability recognized | $ 25 | $ 177 | ||||
Scenario, Forecast [Member] | Employee Severance [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges associated with restructuring activities | $ 100 |
RESTRUCTURING CHARGES - Summary
RESTRUCTURING CHARGES - Summary of Restructuring Charges by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |||||
Workforce reductions | $ 17 | $ 20 | $ 25 | $ 77 | |
Plant closings and other | 16 | 15 | 28 | 21 | |
Total | $ 33 | $ 35 | $ 53 | $ 98 | $ 211 |
RESTRUCTURING CHARGES - Summa36
RESTRUCTURING CHARGES - Summary of Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 33 | $ 35 | $ 53 | $ 98 | $ 211 |
Electrical Products [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 11 | 9 | 14 | 26 | |
Electrical Systems and Services [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 5 | 3 | 7 | 13 | |
Hydraulics [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 8 | 18 | 17 | 34 | |
Aerospace [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 0 | 0 | 1 | 4 | |
Vehicle [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 3 | 5 | 5 | 17 | |
Corporate, Non-Segment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 6 | $ 0 | $ 9 | $ 4 |
RESTRUCTURING CHARGES - Restruc
RESTRUCTURING CHARGES - Restructuring Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | $ 114 | $ 54 | $ 54 | ||
Liability recognized | $ 33 | $ 35 | 53 | 98 | 211 |
Payments | (71) | (129) | |||
Other adjustments | (12) | (22) | |||
Ending balance | 84 | 84 | 114 | ||
Workforce reductions [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 113 | 54 | 54 | ||
Liability recognized | 25 | 177 | |||
Payments | (56) | (116) | |||
Other adjustments | (3) | (2) | |||
Ending balance | 79 | 79 | 113 | ||
Plant closings and other [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 1 | $ 0 | 0 | ||
Liability recognized | 28 | 34 | |||
Payments | (15) | (13) | |||
Other adjustments | (9) | (20) | |||
Ending balance | $ 5 | $ 5 | $ 1 |
GOODWILL (Details)
GOODWILL (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 13,201 |
Translation | 277 |
Ending balance | 13,478 |
Electrical Products [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 6,497 |
Translation | 166 |
Ending balance | 6,663 |
Electrical Systems and Services [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 4,203 |
Translation | 79 |
Ending balance | 4,282 |
Hydraulics [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 1,221 |
Translation | 24 |
Ending balance | 1,245 |
Aerospace [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 938 |
Translation | 5 |
Ending balance | 943 |
Vehicle [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 342 |
Translation | 3 |
Ending balance | $ 345 |
RETIREMENT BENEFIT PLANS (Detai
RETIREMENT BENEFIT PLANS (Details) BRL in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017BRL | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Pension plan | United States pension benefit expense | |||||
Retirement benefits plans expense | |||||
Service cost | $ 24 | $ 27 | $ 48 | $ 55 | |
Interest cost | 31 | 32 | 62 | 63 | |
Expected return on plan assets | (61) | (62) | (122) | (125) | |
Amortization | 21 | 23 | 41 | 46 | |
Defined Benefit Plan, Cost of Providing Special and Contractual Termination Benefits | 17 | 18 | 34 | 39 | |
Total | 15 | 20 | 29 | 39 | |
Total expense | 32 | 38 | 63 | 78 | |
Pension plan | Non-United States pension benefit expense | |||||
Retirement benefits plans expense | |||||
Service cost | 18 | 17 | 35 | 33 | |
Interest cost | 14 | 16 | 27 | 32 | |
Expected return on plan assets | (23) | (24) | (46) | (48) | |
Amortization | 12 | 8 | 25 | 17 | |
Defined Benefit Plan, Cost of Providing Special and Contractual Termination Benefits | 0 | 0 | BRL 0 | 0 | |
Total | 21 | 17 | 41 | 34 | |
Total expense | 21 | 17 | 41 | 34 | |
Other postretirement benefits expense | |||||
Retirement benefits plans expense | |||||
Service cost | 0 | 1 | 1 | 2 | |
Interest cost | 4 | 5 | 7 | 9 | |
Expected return on plan assets | (1) | (2) | (2) | (3) | |
Amortization | (3) | (2) | (6) | (4) | |
Defined Benefit Plan, Cost of Providing Special and Contractual Termination Benefits | 0 | 0 | 0 | 0 | |
Total | 0 | 2 | 0 | 4 | |
Total expense | $ 0 | $ 2 | $ 0 | $ 4 |
LEGAL CONTINGENCIES (Details)
LEGAL CONTINGENCIES (Details) BRL in Millions, $ in Millions | Jun. 30, 2016USD ($) | Mar. 31, 2016BRL |
Raysul [Member] | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 31 | BRL 100 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 10.00% | 11.00% | 8.00% | 10.00% |
2011 Notice [Member] | ||||
Income Tax Contingency [Line Items] | ||||
IRS Statutory Notice of Deficiency proposed assessment of additional federal taxes | $ 75 | $ 75 | ||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | $ 52 | $ 52 |
EQUITY - Changes in Shareholder
EQUITY - Changes in Shareholders's Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 | 1.5 | 0.7 | 1.9 |
Changes in Shareholders' equity | ||||
Beginning balance | $ 14,941 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 48 | 48 | ||
Net income (loss) | 516 | $ 492 | 948 | $ 895 |
Other comprehensive income | 323 | $ (255) | 586 | $ 18 |
Cash dividends paid | (540) | |||
Issuance of shares under equity-based compensation plans - net | 76 | |||
Repurchase of shares | (465) | |||
Ending balance | 15,594 | 15,594 | ||
Parent [Member] | ||||
Changes in Shareholders' equity | ||||
Beginning balance | 14,897 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | 48 | 48 | ||
Net income (loss) | 947 | |||
Other comprehensive income | 586 | |||
Cash dividends paid | (537) | |||
Issuance of shares under equity-based compensation plans - net | 76 | |||
Repurchase of shares | (465) | |||
Ending balance | 15,552 | 15,552 | ||
Noncontrolling Interest [Member] | ||||
Changes in Shareholders' equity | ||||
Beginning balance | 44 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | 0 | 0 | ||
Net income (loss) | 1 | |||
Other comprehensive income | 0 | |||
Cash dividends paid | (3) | |||
Issuance of shares under equity-based compensation plans - net | 0 | |||
Repurchase of shares | 0 | |||
Ending balance | $ 42 | $ 42 | ||
2013 Program [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Ordinary shares purchased (in shares) | 1.5 | |||
Changes in Shareholders' equity | ||||
Repurchase of shares | $ (82) | |||
2016 Program [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Ordinary shares purchased (in shares) | 2.7 | 3.7 | 6.3 | 4 |
Amount of shares repurchased (up to) | $ 2,500 | $ 2,500 | ||
Changes in Shareholders' equity | ||||
Repurchase of shares | $ (210) | $ (224) | $ (465) | $ (242) |
EQUITY - Changes in Accumulated
EQUITY - Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Amounts reclassified from Accumulated other comprehensive loss (income) | $ 68 | |||
Net current-period Other comprehensive income (loss) | $ 323 | $ (255) | 586 | $ 18 |
Currency translation and related hedging instruments [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (3,062) | |||
Other comprehensive (loss) income before reclassifications | 548 | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | 0 | |||
Net current-period Other comprehensive income (loss) | 548 | |||
Ending balance | (2,514) | (2,514) | ||
Pensions and other postretirement benefits [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,380) | |||
Other comprehensive (loss) income before reclassifications | (27) | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | 64 | |||
Net current-period Other comprehensive income (loss) | 37 | |||
Ending balance | (1,343) | (1,343) | ||
Cash flow hedges [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (6) | |||
Other comprehensive (loss) income before reclassifications | (3) | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | 4 | |||
Net current-period Other comprehensive income (loss) | 1 | |||
Ending balance | (5) | (5) | ||
Total AOCI Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (4,448) | |||
Other comprehensive (loss) income before reclassifications | 518 | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | 68 | |||
Net current-period Other comprehensive income (loss) | 586 | |||
Ending balance | $ (3,862) | $ (3,862) |
EQUITY - Reclassifications Out
EQUITY - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2017USD ($) | ||
Stockholders' Equity Note [Abstract] | ||
Actuarial loss and prior service cost | $ (94) | [1] |
Tax benefit | 30 | |
Total, net of tax | (64) | |
Currency exchange contracts | (5) | |
Tax benefit | 1 | |
Total, net of tax | (4) | |
Total reclassifications for the period | $ (68) | |
[1] | These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 6 for additional information about pension and other postretirement benefits items. |
EQUITY - Calculation of Net Inc
EQUITY - Calculation of Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Calculation of net income per ordinary share attributable to ordinary shareholders | ||||
Net income attributable to Eaton ordinary shareholders | $ 515 | $ 491 | $ 947 | $ 895 |
Weighted-average number of ordinary shares outstanding - diluted (shares) | 448.6 | 458.3 | 449.8 | 459 |
Less dilutive effect of equity-based compensation (shares) | 2.3 | 1.3 | 2.3 | 1.2 |
Weighted-average number of ordinary shares outstanding - basic (shares) | 446.3 | 457 | 447.5 | 457.8 |
Net income per share attributable to Eaton ordinary shareholders | ||||
Diluted (usd per share) | $ 1.15 | $ 1.07 | $ 2.10 | $ 1.95 |
Basic (usd per share) | $ 1.15 | $ 1.08 | $ 2.12 | $ 1.96 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 | 1.5 | 0.7 | 1.9 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Instruments at Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||||
Cash | $ 312 | $ 543 | $ 323 | $ 268 |
Short-term investments | 525 | 203 | ||
Net derivative contracts | 64 | (3) | ||
Level 1 [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||||
Cash | 312 | 543 | ||
Short-term investments | 525 | 203 | ||
Net derivative contracts | 0 | 0 | ||
Level 2 [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||||
Cash | 0 | 0 | ||
Short-term investments | 0 | 0 | ||
Net derivative contracts | 64 | (3) | ||
Level 3 [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||||
Cash | 0 | 0 | ||
Short-term investments | 0 | 0 | ||
Net derivative contracts | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Other
FAIR VALUE MEASUREMENTS - Other Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Other Fair Value Measurements [Line Items] | ||
Carrying value of long-term debt and current portion of long-term debt | $ 7,759 | $ 8,263 |
Level 2 [Member] | ||
Other Fair Value Measurements [Line Items] | ||
Fair value of long-term debt and current portion of long-term debt | $ 8,093 | $ 8,477 |
DERIVATIVE FINANCIAL INSTRUME48
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Financial Instrument Recognized in the Consolidated Balance sheet (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Foreign Currency Note Payable, Noncurrent, after-tax | $ 89 | $ 86 |
Foreign Currency Note Payable, Noncurrent, pre-tax | $ 620 | 572 |
Derivatives not designated as hedges | ||
Percentage of intercompany balance sheet exposure | 100.00% | |
Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 9 | 12 |
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, asset, at fair value | 43 | 33 |
Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 77 | 85 |
Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 22 | 22 |
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, liability, at fair value | 26 | 85 |
Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 17 | 26 |
Currency exchange contracts [Member] | Other current assets [Member] | ||
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, asset, at fair value | 43 | 31 |
Currency exchange contracts [Member] | Other current liabilities [Member] | ||
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, liability, at fair value | 26 | 85 |
Commodity contracts [Member] | Other current assets [Member] | ||
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, asset, at fair value | 0 | 2 |
Commodity contracts [Member] | Other current liabilities [Member] | ||
Derivatives not designated as hedges | ||
Derivative instruments not designated as hedging instruments, liability, at fair value | 0 | 0 |
Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | ||
Derivatives designated as hedges | ||
Notional amount | 3,715 | 3,765 |
Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 3 | 1 |
Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 60 | 65 |
Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 1 | 0 |
Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 7 | 8 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | ||
Derivatives designated as hedges | ||
Notional amount | 450 | 450 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 14 | 19 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 1 | 1 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | ||
Derivatives designated as hedges | ||
Notional amount | 350 | |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 1 | |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 1 | |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | ||
Derivatives designated as hedges | ||
Notional amount | 849 | 802 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 6 | 11 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 2 | 1 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 21 | 22 |
Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 8 | 17 |
Derivatives not designated as hedges [Member] | Currency exchange contracts [Member] | ||
Derivatives designated as hedges | ||
Notional amount | 2,626 | 5,333 |
Derivatives not designated as hedges [Member] | Commodity contracts [Member] | ||
Derivatives designated as hedges | ||
Notional amount | $ 4 | $ 10 |
Minimum [Member] | Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 4 months | 3 months |
Minimum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 10 years | 11 years |
Minimum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 10 years | |
Minimum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 1 month | 1 month |
Minimum [Member] | Derivatives not designated as hedges [Member] | Currency exchange contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 1 month | 1 month |
Minimum [Member] | Derivatives not designated as hedges [Member] | Commodity contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 1 month | 1 month |
Maximum [Member] | Derivatives designated as hedges [Member] | Fair value hedging [Member] | Fixed-to-floating interest rate swaps [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 18 years | 18 years |
Maximum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 10 years | 11 years |
Maximum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 30 years | |
Maximum [Member] | Derivatives designated as hedges [Member] | Cash Flow Hedging [Member] | Currency exchange contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 36 months | 36 months |
Maximum [Member] | Derivatives not designated as hedges [Member] | Currency exchange contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 12 months | 12 months |
Maximum [Member] | Derivatives not designated as hedges [Member] | Commodity contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 12 months | 12 months |
DERIVATIVE FINANCIAL INSTRUME49
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recognized in Accumulated Other Comprehensive Income (Details) - Cash flow hedges [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest expense - net [Member] | Forward Starting Floating-to-Fixed Interest Rate Swap [Domain] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive (loss) income | $ (5) | $ (10) | $ (5) | $ (19) |
Gain (loss) reclassified from Accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Cost of products sold [Member] | Currency exchange contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive (loss) income | 2 | (10) | 1 | (32) |
Gain (loss) reclassified from Accumulated other comprehensive loss | (1) | (2) | (5) | 1 |
Cost of products sold or Interest expense - net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive (loss) income | (3) | (20) | (4) | (51) |
Gain (loss) reclassified from Accumulated other comprehensive loss | $ (1) | $ (2) | $ (5) | $ 1 |
DERIVATIVE FINANCIAL INSTRUME50
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recognized in Net Income (Details) - Interest expense - net [Member] - Fair value hedging [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts recognized in net income | $ 0 | $ 0 | $ 0 | $ 0 |
Fixed-to-floating interest rate swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts recognized in net income | 8 | 30 | (3) | 106 |
Related long-term debt converted to floating interest rates by interest rate swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts recognized in net income | $ (8) | $ (30) | $ 3 | $ (106) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 924 | $ 880 |
Work-in-process | 432 | 396 |
Finished goods | 1,137 | 1,074 |
Inventory at FIFO | 2,493 | 2,350 |
Excess of FIFO over LIFO cost | (100) | (96) |
Total inventory | $ 2,393 | $ 2,254 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Segment Information | ||||
Net sales | $ 5,132 | $ 5,080 | $ 9,980 | $ 9,893 |
Corporate | ||||
Interest expense - net | 60 | 57 | 121 | 114 |
Pension and other postretirement benefits expense | (104) | (116) | ||
Other corporate expense - net | 0 | 5 | (15) | (13) |
Income before income taxes | 570 | 553 | 1,034 | 995 |
Income tax expense | 54 | 61 | 86 | 100 |
Net income | 516 | 492 | 948 | 895 |
Less net income for noncontrolling interests | (1) | (1) | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | 515 | 491 | 947 | 895 |
Total business segments [Member] | ||||
Business Segment Information | ||||
Net sales | 5,132 | 5,080 | 9,980 | 9,893 |
Segment operating profit | 802 | 779 | 1,501 | 1,448 |
Total business segments [Member] | Electrical Products [Member] | ||||
Business Segment Information | ||||
Net sales | 1,802 | 1,784 | 3,514 | 3,464 |
Segment operating profit | 314 | 322 | 611 | 593 |
Total business segments [Member] | Electrical Systems and Services [Member] | ||||
Business Segment Information | ||||
Net sales | 1,414 | 1,429 | 2,747 | 2,771 |
Segment operating profit | 194 | 178 | 349 | 337 |
Total business segments [Member] | Hydraulics [Member] | ||||
Business Segment Information | ||||
Net sales | 633 | 589 | 1,220 | 1,140 |
Segment operating profit | 74 | 59 | 134 | 100 |
Total business segments [Member] | Aerospace [Member] | ||||
Business Segment Information | ||||
Net sales | 437 | 447 | 865 | 892 |
Segment operating profit | 81 | 83 | 160 | 163 |
Total business segments [Member] | Vehicle [Member] | ||||
Business Segment Information | ||||
Net sales | 846 | 831 | 1,634 | 1,626 |
Segment operating profit | 139 | 137 | 247 | 255 |
Corporate [Member] | ||||
Corporate | ||||
Amortization of intangible assets | (96) | (98) | (190) | (198) |
Interest expense - net | (60) | (57) | (121) | (114) |
Pension and other postretirement benefits expense | (11) | (13) | (22) | (27) |
Other corporate expense - net | $ (65) | $ (58) | $ (134) | $ (114) |
CONDENSED CONSOLIDATING FINAN53
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Narrative (Details) | Nov. 14, 2013 |
Condensed Consolidating Financial Information [Abstract] | |
Eaton and certain other 100% owned subsidiaries guarantee of Senior Debt | 100.00% |
CONDENSED CONSOLIDATING FINAN54
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | $ 5,132 | $ 5,080 | $ 9,980 | $ 9,893 |
Cost of products sold | 3,450 | 3,419 | 6,760 | 6,710 |
Selling and administrative expense | 902 | 897 | 1,787 | 1,789 |
Research and development expense | 150 | 149 | 293 | 298 |
Interest expense (income) - net | 60 | 57 | 121 | 114 |
Other expense (income) - net | 0 | 5 | (15) | (13) |
Equity in loss (earnings) of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Intercompany expense (income) - net | 0 | 0 | 0 | 0 |
Income before income taxes | 570 | 553 | 1,034 | 995 |
Income tax expense (benefit) | 54 | 61 | 86 | 100 |
Net income | 516 | 492 | 948 | 895 |
Less net loss (income) for noncontrolling interests | (1) | (1) | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | 515 | 491 | 947 | 895 |
Other comprehensive income | 323 | (255) | 586 | 18 |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | 838 | 236 | 1,533 | 913 |
Other subsidiaries [Member] | ||||
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | 3,164 | 3,057 | 6,155 | 5,930 |
Cost of products sold | 2,248 | 2,224 | 4,429 | 4,294 |
Selling and administrative expense | 329 | 346 | 662 | 675 |
Research and development expense | 40 | 47 | 82 | 85 |
Interest expense (income) - net | (4) | (7) | (8) | (10) |
Other expense (income) - net | (11) | (4) | 32 | (18) |
Equity in loss (earnings) of subsidiaries, net of tax | (114) | (132) | (225) | (229) |
Intercompany expense (income) - net | (419) | (380) | (823) | (697) |
Income before income taxes | 1,095 | 963 | 2,070 | 1,830 |
Income tax expense (benefit) | 51 | 36 | 68 | 67 |
Net income | 1,044 | 927 | 2,002 | 1,763 |
Less net loss (income) for noncontrolling interests | (1) | (2) | (2) | (2) |
Net income attributable to Eaton ordinary shareholders | 1,043 | 925 | 2,000 | 1,761 |
Other comprehensive income | 408 | (319) | 731 | (10) |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | 1,451 | 606 | 2,731 | 1,751 |
Guarantors | ||||
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | 1,672 | 1,648 | 3,267 | 3,223 |
Cost of products sold | 1,225 | 1,203 | 2,413 | 2,403 |
Selling and administrative expense | 197 | 198 | 391 | 394 |
Research and development expense | 53 | 47 | 100 | 96 |
Interest expense (income) - net | 6 | 6 | 11 | 9 |
Other expense (income) - net | (37) | 6 | (38) | 4 |
Equity in loss (earnings) of subsidiaries, net of tax | (853) | (811) | (1,725) | (1,484) |
Intercompany expense (income) - net | 339 | 313 | 672 | 568 |
Income before income taxes | 742 | 686 | 1,443 | 1,233 |
Income tax expense (benefit) | 3 | 12 | 19 | 13 |
Net income | 739 | 674 | 1,424 | 1,220 |
Less net loss (income) for noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 739 | 674 | 1,424 | 1,220 |
Other comprehensive income | 322 | (248) | 592 | 30 |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | 1,061 | 426 | 2,016 | 1,250 |
Eaton Corporation plc [Member] | ||||
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 | 0 |
Selling and administrative expense | 34 | 2 | 66 | 4 |
Research and development expense | 0 | 0 | 0 | 0 |
Interest expense (income) - net | 0 | 0 | 0 | 0 |
Other expense (income) - net | 41 | 0 | 48 | 0 |
Equity in loss (earnings) of subsidiaries, net of tax | (704) | (594) | (1,285) | (1,098) |
Intercompany expense (income) - net | 114 | 101 | 224 | 199 |
Income before income taxes | 515 | 491 | 947 | 895 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Net income | 515 | 491 | 947 | 895 |
Less net loss (income) for noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 515 | 491 | 947 | 895 |
Other comprehensive income | 323 | (255) | 586 | 18 |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | 838 | 236 | 1,533 | 913 |
Eaton Corporation [Member] | ||||
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | 1,696 | 1,644 | 3,268 | 3,182 |
Cost of products sold | 1,373 | 1,263 | 2,626 | 2,459 |
Selling and administrative expense | 342 | 351 | 668 | 716 |
Research and development expense | 57 | 55 | 111 | 117 |
Interest expense (income) - net | 58 | 57 | 118 | 110 |
Other expense (income) - net | 7 | 3 | 7 | 1 |
Equity in loss (earnings) of subsidiaries, net of tax | (185) | (154) | (375) | (322) |
Intercompany expense (income) - net | (34) | (34) | (73) | (70) |
Income before income taxes | 78 | 103 | 186 | 171 |
Income tax expense (benefit) | 3 | 13 | 0 | 20 |
Net income | 75 | 90 | 186 | 151 |
Less net loss (income) for noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 75 | 90 | 186 | 151 |
Other comprehensive income | (10) | 0 | 50 | 44 |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | 65 | 90 | 236 | 195 |
Consolidating adjustments [Member] | ||||
Consolidating Statements of Comprehensive Income, Captions [Line Items] | ||||
Net sales | (1,400) | (1,269) | (2,710) | (2,442) |
Cost of products sold | (1,396) | (1,271) | (2,708) | (2,446) |
Selling and administrative expense | 0 | 0 | 0 | 0 |
Research and development expense | 0 | 0 | 0 | 0 |
Interest expense (income) - net | 0 | 1 | 0 | 5 |
Other expense (income) - net | 0 | 0 | 0 | 0 |
Equity in loss (earnings) of subsidiaries, net of tax | 1,856 | 1,691 | 3,610 | 3,133 |
Intercompany expense (income) - net | 0 | 0 | 0 | 0 |
Income before income taxes | (1,860) | (1,690) | (3,612) | (3,134) |
Income tax expense (benefit) | (3) | 0 | (1) | 0 |
Net income | (1,857) | (1,690) | (3,611) | (3,134) |
Less net loss (income) for noncontrolling interests | 0 | 1 | 1 | 2 |
Net income attributable to Eaton ordinary shareholders | (1,857) | (1,689) | (3,610) | (3,132) |
Other comprehensive income | (720) | 567 | (1,373) | (64) |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | $ (2,577) | $ (1,122) | $ (4,983) | $ (3,196) |
CONDENSED CONSOLIDATING FINAN55
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets | ||||
Cash | $ 312 | $ 543 | $ 323 | $ 268 |
Short-term investments | 525 | 203 | ||
Accounts receivable - net | 3,813 | 3,560 | ||
Intercompany accounts receivable | 0 | 0 | ||
Inventory | 2,393 | 2,254 | ||
Prepaid expenses and other current assets | 444 | 381 | ||
Total current assets | 7,487 | 6,941 | ||
Property, plant and equipment - net | 3,530 | 3,443 | ||
Other noncurrent assets | ||||
Goodwill | 13,478 | 13,201 | ||
Other intangible assets | 5,410 | 5,514 | ||
Deferred income taxes | 443 | 360 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany loans receivables | 0 | 0 | ||
Other assets | 1,007 | 960 | ||
Total assets | 31,355 | 30,419 | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 846 | 14 | ||
Current portion of long-term debt | 1,495 | 1,552 | ||
Accounts payable | 1,885 | 1,718 | ||
Intercompany accounts payable | 0 | 0 | ||
Accrued compensation | 338 | 379 | ||
Other current liabilities | 1,745 | 1,822 | ||
Total current liabilities | 6,309 | 5,485 | ||
Noncurrent liabilities | ||||
Long-term debt | 6,264 | 6,711 | ||
Pension liabilities | 1,578 | 1,659 | ||
Other postretirement benefits liabilities | 364 | 368 | ||
Deferred income taxes | 316 | 321 | ||
Intercompany loans payable | 0 | 0 | ||
Other noncurrent liabilities | 930 | 934 | ||
Total noncurrent liabilities | 9,452 | 9,993 | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | 15,552 | 14,897 | ||
Noncontrolling interests | 42 | 44 | ||
Total equity | 15,594 | 14,941 | ||
Total liabilities and equity | 31,355 | 30,419 | ||
Consolidation, Eliminations [Member] | ||||
Current assets | ||||
Cash | 0 | 0 | 0 | 0 |
Short-term investments | 0 | 0 | ||
Accounts receivable - net | 0 | 0 | ||
Intercompany accounts receivable | (7,874) | (8,615) | ||
Inventory | (81) | (79) | ||
Prepaid expenses and other current assets | 27 | 25 | ||
Total current assets | (7,928) | (8,669) | ||
Property, plant and equipment - net | 0 | 0 | ||
Other noncurrent assets | ||||
Goodwill | 0 | 0 | ||
Other intangible assets | 0 | 0 | ||
Deferred income taxes | (727) | (772) | ||
Investment in subsidiaries | (135,594) | (132,053) | ||
Intercompany loans receivables | (67,695) | (66,264) | ||
Other assets | 0 | 0 | ||
Total assets | (211,944) | (207,758) | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Intercompany accounts payable | (7,874) | (8,615) | ||
Accrued compensation | 0 | 0 | ||
Other current liabilities | (2) | (2) | ||
Total current liabilities | (7,876) | (8,617) | ||
Noncurrent liabilities | ||||
Long-term debt | 0 | 0 | ||
Pension liabilities | 0 | 0 | ||
Other postretirement benefits liabilities | 0 | 0 | ||
Deferred income taxes | (727) | (772) | ||
Intercompany loans payable | (67,695) | (66,264) | ||
Other noncurrent liabilities | 0 | 0 | ||
Total noncurrent liabilities | (68,422) | (67,036) | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | (135,651) | (132,111) | ||
Noncontrolling interests | 5 | 6 | ||
Total equity | (135,646) | (132,105) | ||
Total liabilities and equity | (211,944) | (207,758) | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets | ||||
Cash | 288 | 446 | 314 | 235 |
Short-term investments | 525 | 203 | ||
Accounts receivable - net | 2,119 | 1,975 | ||
Intercompany accounts receivable | 3,596 | 3,633 | ||
Inventory | 1,487 | 1,349 | ||
Prepaid expenses and other current assets | 261 | 237 | ||
Total current assets | 8,276 | 7,843 | ||
Property, plant and equipment - net | 1,991 | 1,880 | ||
Other noncurrent assets | ||||
Goodwill | 5,830 | 5,553 | ||
Other intangible assets | 1,897 | 1,903 | ||
Deferred income taxes | 243 | 228 | ||
Investment in subsidiaries | 12,886 | 12,577 | ||
Intercompany loans receivables | 57,519 | 56,598 | ||
Other assets | 362 | 335 | ||
Total assets | 89,004 | 86,917 | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 35 | 6 | ||
Current portion of long-term debt | 3 | 6 | ||
Accounts payable | 1,162 | 1,093 | ||
Intercompany accounts payable | 1,213 | 1,349 | ||
Accrued compensation | 218 | 223 | ||
Other current liabilities | 910 | 941 | ||
Total current liabilities | 3,541 | 3,618 | ||
Noncurrent liabilities | ||||
Long-term debt | 8 | 8 | ||
Pension liabilities | 910 | 888 | ||
Other postretirement benefits liabilities | 72 | 71 | ||
Deferred income taxes | 363 | 361 | ||
Intercompany loans payable | 1,442 | 1,252 | ||
Other noncurrent liabilities | 384 | 396 | ||
Total noncurrent liabilities | 3,179 | 2,976 | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | 82,247 | 80,285 | ||
Noncontrolling interests | 37 | 38 | ||
Total equity | 82,284 | 80,323 | ||
Total liabilities and equity | 89,004 | 86,917 | ||
Guarantors [Member] | ||||
Current assets | ||||
Cash | 5 | 4 | 5 | 7 |
Short-term investments | 0 | 0 | ||
Accounts receivable - net | 1,169 | 1,049 | ||
Intercompany accounts receivable | 3,524 | 4,023 | ||
Inventory | 655 | 642 | ||
Prepaid expenses and other current assets | 48 | 42 | ||
Total current assets | 5,401 | 5,760 | ||
Property, plant and equipment - net | 696 | 706 | ||
Other noncurrent assets | ||||
Goodwill | 6,293 | 6,293 | ||
Other intangible assets | 3,351 | 3,442 | ||
Deferred income taxes | 0 | 0 | ||
Investment in subsidiaries | 74,853 | 72,938 | ||
Intercompany loans receivables | 2,481 | 2,061 | ||
Other assets | 141 | 134 | ||
Total assets | 93,216 | 91,334 | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 0 | 8 | ||
Current portion of long-term debt | 36 | 296 | ||
Accounts payable | 266 | 252 | ||
Intercompany accounts payable | 3,213 | 3,115 | ||
Accrued compensation | 42 | 58 | ||
Other current liabilities | 300 | 291 | ||
Total current liabilities | 3,857 | 4,020 | ||
Noncurrent liabilities | ||||
Long-term debt | 946 | 936 | ||
Pension liabilities | 137 | 161 | ||
Other postretirement benefits liabilities | 98 | 99 | ||
Deferred income taxes | 680 | 732 | ||
Intercompany loans payable | 45,618 | 44,788 | ||
Other noncurrent liabilities | 225 | 211 | ||
Total noncurrent liabilities | 47,704 | 46,927 | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | 41,655 | 40,387 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 41,655 | 40,387 | ||
Total liabilities and equity | 93,216 | 91,334 | ||
Eaton Corporation [Member] | ||||
Current assets | ||||
Cash | 19 | 92 | 4 | 26 |
Short-term investments | 0 | 0 | ||
Accounts receivable - net | 525 | 536 | ||
Intercompany accounts receivable | 752 | 954 | ||
Inventory | 332 | 342 | ||
Prepaid expenses and other current assets | 108 | 77 | ||
Total current assets | 1,736 | 2,001 | ||
Property, plant and equipment - net | 843 | 857 | ||
Other noncurrent assets | ||||
Goodwill | 1,355 | 1,355 | ||
Other intangible assets | 162 | 169 | ||
Deferred income taxes | 927 | 904 | ||
Investment in subsidiaries | 13,827 | 13,743 | ||
Intercompany loans receivables | 7,695 | 7,605 | ||
Other assets | 504 | 491 | ||
Total assets | 27,049 | 27,125 | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 811 | 0 | ||
Current portion of long-term debt | 1,456 | 1,250 | ||
Accounts payable | 457 | 372 | ||
Intercompany accounts payable | 3,232 | 3,870 | ||
Accrued compensation | 78 | 98 | ||
Other current liabilities | 536 | 591 | ||
Total current liabilities | 6,570 | 6,181 | ||
Noncurrent liabilities | ||||
Long-term debt | 5,310 | 5,767 | ||
Pension liabilities | 531 | 610 | ||
Other postretirement benefits liabilities | 194 | 198 | ||
Deferred income taxes | 0 | 0 | ||
Intercompany loans payable | 2,374 | 2,603 | ||
Other noncurrent liabilities | 321 | 327 | ||
Total noncurrent liabilities | 8,730 | 9,505 | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | 11,749 | 11,439 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 11,749 | 11,439 | ||
Total liabilities and equity | 27,049 | 27,125 | ||
Eaton Corporation plc [Member] | ||||
Current assets | ||||
Cash | 0 | 1 | $ 0 | $ 0 |
Short-term investments | 0 | 0 | ||
Accounts receivable - net | 0 | 0 | ||
Intercompany accounts receivable | 2 | 5 | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | 2 | 6 | ||
Property, plant and equipment - net | 0 | 0 | ||
Other noncurrent assets | ||||
Goodwill | 0 | 0 | ||
Other intangible assets | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Investment in subsidiaries | 34,028 | 32,795 | ||
Intercompany loans receivables | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | 34,030 | 32,801 | ||
Liabilities and shareholders’ equity | ||||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Accounts payable | 0 | 1 | ||
Intercompany accounts payable | 216 | 281 | ||
Accrued compensation | 0 | 0 | ||
Other current liabilities | 1 | 1 | ||
Total current liabilities | 217 | 283 | ||
Noncurrent liabilities | ||||
Long-term debt | 0 | 0 | ||
Pension liabilities | 0 | 0 | ||
Other postretirement benefits liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Intercompany loans payable | 18,261 | 17,621 | ||
Other noncurrent liabilities | 0 | 0 | ||
Total noncurrent liabilities | 18,261 | 17,621 | ||
Shareholders’ equity | ||||
Eaton shareholders' equity | 15,552 | 14,897 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 15,552 | 14,897 | ||
Total liabilities and equity | $ 34,030 | $ 32,801 |
CONDENSED CONSOLIDATING FINAN56
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ 1,037 | $ 1,133 |
Investing activities | ||
Capital expenditures for property, plant and equipment | (246) | (246) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 1 |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |
Sales (purchases) of short-term investments - net | (309) | 38 |
Investments in affiliates | 0 | 0 |
Return of capital contributions from affiliates | 0 | 0 |
Loans to affiliates | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 |
Other - net | (31) | 3 |
Net cash used in investing activities | (586) | (204) |
Financing activities | ||
Proceeds from borrowings | 832 | 151 |
Payments on borrowings | (543) | (240) |
Proceeds from borrowings from affiliates | 0 | 0 |
Payments on borrowings from affiliates | 0 | 0 |
Capital contributions from affiliates | 0 | 0 |
Return of capital contributions to affiliates | 0 | 0 |
Other intercompany financing activities | 0 | 0 |
Cash dividends paid | (537) | (521) |
Payments of Distributions to Affiliates | 0 | |
Exercise of employee stock options | 49 | 37 |
Repurchase of shares | (465) | (295) |
Payments Related to Tax Withholding for Share-based Compensation | (21) | (17) |
Other - net | (4) | 3 |
Net cash used in financing activities | (689) | (882) |
Effect of currency on cash | 7 | 8 |
Total increase (decrease) in cash | (231) | 55 |
Cash at the beginning of the period | 543 | 268 |
Cash at the end of the period | 312 | 323 |
Guarantors [Member] | ||
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 697 | (298) |
Investing activities | ||
Capital expenditures for property, plant and equipment | (53) | (49) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 1 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | (92) | |
Sales (purchases) of short-term investments - net | 0 | 2 |
Investments in affiliates | 0 | (120) |
Return of capital contributions from affiliates | 20 | 47 |
Loans to affiliates | 0 | (47) |
Repayments of loans from affiliates | 47 | 0 |
Other - net | 7 | 25 |
Net cash used in investing activities | (71) | (141) |
Financing activities | ||
Proceeds from borrowings | 0 | 0 |
Payments on borrowings | (289) | (240) |
Proceeds from borrowings from affiliates | 694 | 786 |
Payments on borrowings from affiliates | (353) | (1,658) |
Capital contributions from affiliates | 90 | 1,370 |
Return of capital contributions to affiliates | 0 | 0 |
Other intercompany financing activities | 38 | 183 |
Cash dividends paid | 0 | 0 |
Payments of Distributions to Affiliates | (800) | |
Exercise of employee stock options | 0 | 0 |
Repurchase of shares | 0 | 0 |
Payments Related to Tax Withholding for Share-based Compensation | (4) | (4) |
Other - net | (1) | 0 |
Net cash used in financing activities | (625) | 437 |
Effect of currency on cash | 0 | 0 |
Total increase (decrease) in cash | 1 | (2) |
Cash at the beginning of the period | 4 | 7 |
Cash at the end of the period | 5 | 5 |
Other subsidiaries [Member] | ||
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 1,489 | 1,554 |
Investing activities | ||
Capital expenditures for property, plant and equipment | (147) | (157) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 92 | |
Sales (purchases) of short-term investments - net | (309) | 36 |
Investments in affiliates | (90) | (1,370) |
Return of capital contributions from affiliates | 0 | 0 |
Loans to affiliates | (3,853) | (4,236) |
Repayments of loans from affiliates | 3,276 | 2,922 |
Other - net | (12) | (24) |
Net cash used in investing activities | (1,043) | (2,829) |
Financing activities | ||
Proceeds from borrowings | 21 | 6 |
Payments on borrowings | (4) | 0 |
Proceeds from borrowings from affiliates | 15 | 193 |
Payments on borrowings from affiliates | (75) | (33) |
Capital contributions from affiliates | 90 | 1,370 |
Return of capital contributions to affiliates | (20) | (47) |
Other intercompany financing activities | 75 | (140) |
Cash dividends paid | 0 | 0 |
Payments of Distributions to Affiliates | (707) | |
Exercise of employee stock options | 0 | 0 |
Repurchase of shares | 0 | 0 |
Payments Related to Tax Withholding for Share-based Compensation | (3) | (3) |
Other - net | (3) | 0 |
Net cash used in financing activities | (611) | 1,346 |
Effect of currency on cash | 7 | 8 |
Total increase (decrease) in cash | (158) | 79 |
Cash at the beginning of the period | 446 | 235 |
Cash at the end of the period | 288 | 314 |
Eaton Corporation plc [Member] | ||
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 573 | (156) |
Investing activities | ||
Capital expenditures for property, plant and equipment | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |
Sales (purchases) of short-term investments - net | 0 | 0 |
Investments in affiliates | (90) | (1,250) |
Return of capital contributions from affiliates | 0 | 0 |
Loans to affiliates | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 |
Other - net | 0 | 0 |
Net cash used in investing activities | (90) | (1,250) |
Financing activities | ||
Proceeds from borrowings | 0 | 0 |
Payments on borrowings | 0 | 0 |
Proceeds from borrowings from affiliates | 1,288 | 2,203 |
Payments on borrowings from affiliates | (819) | (18) |
Capital contributions from affiliates | 0 | 0 |
Return of capital contributions to affiliates | 0 | 0 |
Other intercompany financing activities | 0 | 0 |
Cash dividends paid | (537) | (521) |
Payments of Distributions to Affiliates | 0 | |
Exercise of employee stock options | 49 | 37 |
Repurchase of shares | (465) | (295) |
Payments Related to Tax Withholding for Share-based Compensation | 0 | 0 |
Other - net | 0 | 0 |
Net cash used in financing activities | (484) | 1,406 |
Effect of currency on cash | 0 | 0 |
Total increase (decrease) in cash | (1) | 0 |
Cash at the beginning of the period | 1 | 0 |
Cash at the end of the period | 0 | 0 |
Eaton Corporation [Member] | ||
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (215) | 33 |
Investing activities | ||
Capital expenditures for property, plant and equipment | (46) | (40) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |
Sales (purchases) of short-term investments - net | 0 | 0 |
Investments in affiliates | 0 | 0 |
Return of capital contributions from affiliates | 0 | 0 |
Loans to affiliates | (17) | (284) |
Repayments of loans from affiliates | 290 | 1,280 |
Other - net | (26) | 2 |
Net cash used in investing activities | 201 | 958 |
Financing activities | ||
Proceeds from borrowings | 811 | 145 |
Payments on borrowings | (250) | 0 |
Proceeds from borrowings from affiliates | 1,873 | 1,385 |
Payments on borrowings from affiliates | (2,366) | (2,493) |
Capital contributions from affiliates | 0 | 0 |
Return of capital contributions to affiliates | 0 | 0 |
Other intercompany financing activities | (113) | (43) |
Cash dividends paid | 0 | 0 |
Payments of Distributions to Affiliates | 0 | |
Exercise of employee stock options | 0 | 0 |
Repurchase of shares | 0 | 0 |
Payments Related to Tax Withholding for Share-based Compensation | (14) | (10) |
Other - net | 0 | 3 |
Net cash used in financing activities | (59) | (1,013) |
Effect of currency on cash | 0 | 0 |
Total increase (decrease) in cash | (73) | (22) |
Cash at the beginning of the period | 92 | 26 |
Cash at the end of the period | 19 | 4 |
Consolidation, Eliminations [Member] | ||
Condensed Consolidating Statements of Cash Flows, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (1,507) | 0 |
Investing activities | ||
Capital expenditures for property, plant and equipment | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |
Sales (purchases) of short-term investments - net | 0 | 0 |
Investments in affiliates | 180 | 2,740 |
Return of capital contributions from affiliates | (20) | (47) |
Loans to affiliates | 3,870 | 4,567 |
Repayments of loans from affiliates | (3,613) | (4,202) |
Other - net | 0 | 0 |
Net cash used in investing activities | 417 | 3,058 |
Financing activities | ||
Proceeds from borrowings | 0 | 0 |
Payments on borrowings | 0 | 0 |
Proceeds from borrowings from affiliates | (3,870) | (4,567) |
Payments on borrowings from affiliates | 3,613 | 4,202 |
Capital contributions from affiliates | (180) | (2,740) |
Return of capital contributions to affiliates | 20 | 47 |
Other intercompany financing activities | 0 | 0 |
Cash dividends paid | 0 | 0 |
Payments of Distributions to Affiliates | 1,507 | |
Exercise of employee stock options | 0 | 0 |
Repurchase of shares | 0 | 0 |
Payments Related to Tax Withholding for Share-based Compensation | 0 | 0 |
Other - net | 0 | 0 |
Net cash used in financing activities | 1,090 | (3,058) |
Effect of currency on cash | 0 | 0 |
Total increase (decrease) in cash | 0 | 0 |
Cash at the beginning of the period | 0 | 0 |
Cash at the end of the period | $ 0 | $ 0 |