Equity

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

EQUITY

EQUITY

The changes in Shareholders’ equity follow:

	Eaton shareholders’ equity			Noncontrolling interests		Total equity
Balance at December 31, 2013	$	16,791		$	72	$	16,863
Net income	439			2		441
Other comprehensive income	3			—		3
Cash dividends paid and accrued	(234		)	—		(234		)
Issuance of shares under equity-based compensation plans - net	38			—		38
Balance at March 31, 2014	$	17,037		$	74	$	17,111

The changes in Accumulated other comprehensive (loss) income follow:

	Currency translation and related hedging instruments			Pensions and other postretirement benefits			Cash flow hedges			Total
Balance at December 31, 2013	$	(395	)	$	(1,170	)	$	5		$	(1,560	)
Other comprehensive (loss) income     before reclassifications	(47		)	9			1			(37		)
Amounts reclassified from Accumulated other    comprehensive (loss) income	—			41			(1		)	40
Net current-period other comprehensive    (loss) income	(47		)	50			—			3
Balance at March 31, 2014	$	(442	)	$	(1,120	)	$	5		$	(1,557	)

The reclassifications out of Accumulated other comprehensive loss follow:

	Three months ended March 31, 2014			Consolidated Statements of Income classification
Amortization of defined benefit pension items
Actuarial loss	$	(66	)	1
Tax benefit	25
Total, net of tax	(41		)
Loss on cash flow hedges
Currency exchange contracts	2			Cost of products sold
Tax expense	(1		)
Total, net of tax	1
Total reclassifications for the period	$	(40	)

¹ These components of Accumulated other comprehensive loss are included in the computation of net periodic pension cost. See Note 5 for additional information about defined benefit pension items.

Net Income per Ordinary Share

A summary of the calculation of net income per ordinary share attributable to shareholders follows:

	Three months ended March 31
(Shares in millions)	2014		2013
Net income attributable to Eaton ordinary shareholders	$	439	$	378
Weighted-average number of ordinary shares outstanding - diluted	478.8		475.1
Less dilutive effect of equity-based compensation	3.0		3.2
Weighted-average number of ordinary shares outstanding - basic	475.8		471.9
Net income per ordinary share
Diluted	$	0.92	$	0.79
Basic	0.92		0.80

For the first quarter 2014 and 2013, 0.1 million stock options were excluded from the calculation of diluted net income per ordinary share 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.