EQUITY

Eaton has an ordinary share repurchase program (2013 Program) that authorizes the repurchase of 40 million ordinary shares. During the second quarter of 2014, 1.4 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $99.

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	610			3			613
Other comprehensive income	86			—			86
Cash dividends paid	(467		)	—			(467		)
Issuance of shares under equity-based compensation plans - net	78			—			78
Repurchase of shares	(99		)	—			(99		)
Change in capital	(17		)	(15		)	(32		)
Balance at June 30, 2014	$	16,982		$	60		$	17,042

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	11			3			4			18
Amounts reclassified from Accumulated other comprehensive (loss) income	—			70			(2		)	68
Net current-period other comprehensive (loss) income	11			73			2			86
Balance at June 30, 2014	$	(384	)	$	(1,097	)	$	7		$	(1,474	)

The reclassifications out of Accumulated other comprehensive loss follow:



	Six months ended June 30, 2014			Consolidated Statements of Income classification
Amortization of defined benefit pension items
Actuarial loss	$	(112	)	¹
Tax benefit	42
Total, net of tax	(70		)

Gains (loss) on cash flow hedges
Floating-to-fixed interest rate swaps	(1		)	Interest expense - net
Currency exchange contracts	4			Cost of products sold
	3
Tax expense	(1		)
Total, net of tax	2

Total reclassifications for the period	$	(68	)

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 June 30				Six months ended June 30
(Shares in millions)	2014		2013		2014		2013
Net income attributable to Eaton ordinary shareholders	$	171	$	494	$	610	$	872

Weighted-average number of ordinary shares outstanding - diluted	478.5		476.3		478.7		475.7
Less dilutive effect of equity-based compensation	2.6		2.9		2.8		3.1
Weighted-average number of ordinary shares outstanding - basic	475.9		473.4		475.9		472.6

Net income per ordinary share
Diluted	$	0.36	$	1.04	$	1.27	$	1.83
Basic	0.36		1.04		1.28		1.84

For the second quarter and first six months of 2014, 0.5 million and 0.3 million stock options, respectively, 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. For the second quarter and first six months 2013, 0.2 million and 0.1 million stock options, respectively, 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.