Condensed Consolidating Financial Information (Notes)

6 Months Ended

Jun. 30, 2014

Condensed Financial Statements, Captions [Line Items]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS [Text Block]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

On November 20, 2012, Eaton Corporation issued senior notes (the Senior Notes) totaling $4,900 to finance part of the cash portion of the acquisition of Cooper. Eaton and certain other of Eaton's principal 100% owned 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.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2014
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	1,750		$	1,779		$	3,354		$	(1,116	)	$	5,767
Cost of products sold	—			1,378			1,288			2,473			(1,114		)	4,025
Selling and administrative expense	(2		)	370			193			423			—			984
Litigation settlements	—			644			—			—			—			644
Research and development expense	—			62			52			54			—			168
Interest expense (income) - net	—			55			6			(8		)	2			55
Other income - net	—			(50		)	(95		)	(21		)	—			(166		)
Equity in (earnings) loss of    subsidiaries, net of tax	(231		)	(258		)	(269		)	167			591			—
Intercompany expense (income) - net	62			(46		)	147			(163		)	—			—
Income (loss) before income taxes	171			(405		)	457			429			(595		)	57
Income tax (benefit) expense	—			(229		)	78			37			(1		)	(115		)
Net income (loss)	171			(176		)	379			392			(594		)	172
Less net income for    noncontrolling interests	—			—			—			(1		)	—			(1		)
Net income (loss) attributable to    Eaton ordinary shareholders	$	171		$	(176	)	$	379		$	391		$	(594	)	$	171
Other comprehensive income	$	83		$	36		$	88		$	126		$	(250	)	$	83
Total comprehensive income    (loss) attributable to    Eaton ordinary shareholders	$	254		$	(140	)	$	467		$	517		$	(844	)	$	254

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2013
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	1,743		$	1,626		$	3,420		$	(1,187	)	$	5,602
Cost of products sold	—			1,353			1,179			2,525			(1,187		)	3,870
Selling and administrative expense	2			360			183			415			—			960
Research and development expense	—			64			51			46			—			161
Interest expense (income) - net	—			69			7			(5		)	—			71
Other expense (income) - net	—			19			14			(27		)	—			6
Equity in (earnings) loss of    subsidiaries, net of tax	(569		)	(299		)	395			(239		)	712			—
Intercompany expense (income) - net	61			(112		)	(860		)	911			—			—
Income (loss) before income taxes	506			289			657			(206		)	(712		)	534
Income tax expense (benefit)	12			(43		)	20			48			—			37
Net income (loss)	494			332			637			(254		)	(712		)	497
Less net income for    noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to    Eaton ordinary shareholders	$	494		$	332		$	637		$	(257	)	$	(712	)	$	494
Other comprehensive loss	$	(72	)	$	(42	)	$	(70	)	$	(180	)	$	292		$	(72	)
Total comprehensive income    (loss) attributable to    Eaton ordinary shareholders	$	422		$	290		$	567		$	(437	)	$	(420	)	$	422

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2014
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	3,417		$	3,420		$	6,645		$	(2,223	)	$	11,259
Cost of products sold	—			2,720			2,506			4,865			(2,208		)	7,883
Selling and administrative expense	—			731			393			822			—			1,946
Litigation settlements	—			644			—			—			—			644
Research and development expense	—			122			102			106			—			330
Interest expense (income) - net	—			114			13			(14		)	4			117
Other income - net	—			(45		)	(92		)	(34		)	—			(171		)
Equity in (earnings) loss of    subsidiaries, net of tax	(700		)	(465		)	(754		)	(34		)	1,953			—
Intercompany expense (income) - net	90			(117		)	267			(240		)	—			—
Income (loss) before income taxes	610			(287		)	985			1,174			(1,972		)	510
Income tax (benefit) expense	—			(254		)	71			86			(6		)	(103		)
Net income (loss)	610			(33		)	914			1,088			(1,966		)	613
Less net income for    noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to    Eaton ordinary shareholders	$	610		$	(33	)	$	914		$	1,085		$	(1,966	)	$	610
Other comprehensive income	$	86		$	64		$	111		$	111		$	(286	)	$	86
Total comprehensive income   attributable to Eaton   ordinary shareholders	$	696		$	31		$	1,025		$	1,196		$	(2,252	)	$	696

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2013
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net sales	$	—		$	3,331		$	3,199		$	6,693		$	(2,311	)	$	10,912
Cost of products sold	—			2,592			2,374			4,950			(2,311		)	7,605
Selling and administrative expense	4			701			381			832			—			1,918
Research and development expense	—			122			98			93			—			313
Interest expense (income) - net	—			143			14			(11		)	—			146
Other expense (income) - net	—			14			22			(40		)	—			(4		)
Equity in (earnings) loss of    subsidiaries, net of tax	(1,013		)	(608		)	(172		)	(405		)	2,198			—
Intercompany expense (income) - net	125			(214		)	(684		)	773			—			—
Income before income taxes	884			581			1,166			501			(2,198		)	934
Income tax expense (benefit)	12			(45		)	(17		)	107			—			57
Net income	872			626			1,183			394			(2,198		)	877
Less net income for    noncontrolling interests	—			—			—			(5		)	—			(5		)
Net income attributable to    Eaton ordinary shareholders	$	872		$	626		$	1,183		$	389		$	(2,198	)	$	872
Other comprehensive loss	$	(306	)	$	(64	)	$	(303	)	$	(571	)	$	938		$	(306	)
Total comprehensive income    (loss) attributable to    Eaton ordinary shareholders	$	566		$	562		$	880		$	(182	)	$	(1,260	)	$	566

CONDENSED CONSOLIDATING BALANCE SHEETS JUNE 30, 2014
	Eaton Corporation plc		Eaton Corporation		Guarantors		Other subsidiaries		Consolidating adjustments			Total
Assets
Current assets
Cash	$	20	$	45	$	20	$	546	$	—		$	631
Short-term investments	—		—		289		345		—			634
Accounts receivable - net	—		530		1,026		2,454		—			4,010
Intercompany accounts    receivable	12		708		3,557		6,027		(10,304		)	—
Inventory	—		384		651		1,550		(51		)	2,534
Prepaid expenses and    other current assets	—		480		135		398		16			1,029
Total current assets	32		2,147		5,678		11,320		(10,339		)	8,838
Property, plant and    equipment - net	—		960		754		2,079		—			3,793
Other noncurrent assets
Goodwill	—		1,355		6,243		6,779		—			14,377
Other intangible assets	—		203		3,902		2,871		—			6,976
Deferred income taxes	—		1,024		7		149		(938		)	242
Investment in subsidiaries	25,743		9,333		41,553		9,000		(85,629		)	—
Intercompany loans receivable	—		8,037		2,399		20,279		(30,715		)	—
Other assets	—		449		141		442		—			1,032
Total assets	$	25,775	$	23,508	$	60,677	$	52,919	$	(127,621	)	$	35,258
Liabilities and    shareholders’ equity
Current liabilities
Short-term debt	$	—	$	—	$	—	$	2	$	—		$	2
Current portion of    long-term debt	—		103		310		3		—			416
Accounts payable	—		491		406		1,147		—			2,044
Intercompany accounts payable	35		3,861		3,155		3,253		(10,304		)	—
Accrued compensation	—		62		50		261		—			373
Other current liabilities	1		1,313		326		1,070		(2		)	2,708
Total current liabilities	36		5,830		4,247		5,736		(10,306		)	5,543
Noncurrent liabilities
Long-term debt	—		7,659		942		16		(2		)	8,615
Pension liabilities	—		382		82		758		—			1,222
Other postretirement    benefits liabilities	—		402		171		95		—			668
Deferred income taxes	—		—		1,265		720		(938		)	1,047
Intercompany loans payable	8,757		2,869		18,228		861		(30,715		)	—
Other noncurrent liabilities	—		500		158		463		—			1,121
Total noncurrent liabilities	8,757		11,812		20,846		2,913		(31,655		)	12,673
Shareholders’ equity
Eaton shareholders' equity	16,982		5,866		35,584		44,216		(85,666		)	16,982
Noncontrolling interests	—		—		—		54		6			60
Total equity	16,982		5,866		35,584		44,270		(85,660		)	17,042
Total liabilities and equity	$	25,775	$	23,508	$	60,677	$	52,919	$	(127,621	)	$	35,258

CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2013
	Eaton Corporation plc		Eaton Corporation		Guarantors		Other subsidiaries		Consolidating adjustments			Total
Assets
Current assets
Cash	$	3	$	51	$	10	$	851	$	—		$	915
Short-term investments	—		—		134		660		—			794
Accounts receivable - net	—		473		922		2,253		—			3,648
Intercompany accounts    receivable	5		471		3,368		4,470		(8,314		)	—
Inventory	—		344		609		1,466		(37		)	2,382
Prepaid expenses and    other current assets	—		458		175		350		9			992
Total current assets	8		1,797		5,218		10,050		(8,342		)	8,731
Property, plant and    equipment - net	—		982		761		2,090		—			3,833
Other noncurrent assets
Goodwill	—		1,382		6,350		6,763		—			14,495
Other intangible assets	—		211		3,996		2,979		—			7,186
Deferred income taxes	—		839		3		145		(747		)	240
Investment in subsidiaries	24,940		8,853		40,776		8,473		(83,042		)	—
Intercompany loans receivable	—		8,019		2,518		18,776		(29,313		)	—
Other assets	—		450		186		370		—			1,006
Total assets	$	24,948	$	22,533	$	59,808	$	49,646	$	(121,444	)	$	35,491
Liabilities and    shareholders’ equity
Current liabilities
Short-term debt	$	—	$	—	$	—	$	13	$	—		$	13
Current portion of    long-term debt	—		552		—		15		—			567
Accounts payable	—		440		380		1,140		—			1,960
Intercompany accounts payable	4		3,751		3,288		1,271		(8,314		)	—
Accrued compensation	—		140		37		284		—			461
Other current liabilities	5		547		400		965		(4		)	1,913
Total current liabilities	9		5,430		4,105		3,688		(8,318		)	4,914
Noncurrent liabilities
Long-term debt	—		7,693		1,266		16		(6		)	8,969
Pension liabilities	—		546		131		788		—			1,465
Other postretirement    benefits liabilities	—		402		171		95		—			668
Deferred income taxes	—		—		1,303		757		(747		)	1,313
Intercompany loans payable	8,148		2,113		18,207		845		(29,313		)	—
Other noncurrent liabilities	—		652		162		485		—			1,299
Total noncurrent liabilities	8,148		11,406		21,240		2,986		(30,066		)	13,714
Shareholders’ equity
Eaton shareholders' equity	16,791		5,697		34,463		42,906		(83,066		)	16,791
Noncontrolling interests	—		—		—		66		6			72
Total equity	16,791		5,697		34,463		42,972		(83,060		)	16,863
Total liabilities and equity	$	24,948	$	22,533	$	59,808	$	49,646	$	(121,444	)	$	35,491

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2014
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net cash provided by (used in)    operating activities	$	52		$	(273	)	$	7		$	859		$	—		$	645
Investing activities
Capital expenditures for property,    plant and equipment	—			(51		)	(61		)	(124		)	—			(236		)
(Purchases) sales of short-term    investments - net	—			—			(155		)	317			—			162
Loans to affiliates	—			(151		)	—			(3,191		)	3,342			—
Repayments of loans from affiliates	—			176			187			2,454			(2,817		)	—
Proceeds from sale of business	—			93			175			5			—			273
Other - net	—			(26		)	5			(30		)	—			(51		)
Net cash provided by (used in)    investing activities	—			41			151			(569		)	525			148
Financing activities
Payments on borrowings	—			(551		)	(1		)	(24		)	—			(576		)
Proceeds from borrowings from    affiliates	327			2,754			254			7			(3,342		)	—
Payments on borrowings from    affiliates	(15		)	(2,125		)	(320		)	(357		)	2,817			—
Other intercompany    financing activities	219			84			(81		)	(222		)	—			—
Cash dividends paid	(467		)	—			—			—			—			(467		)
Exercise of employee stock options	—			44			—			—			—			44
Repurchase of shares	(99		)	—			—			—			—			(99		)
Excess tax benefit from    equity-based compensation	—			20			—			—			—			20
Net cash (used in) provided by    financing activities	(35		)	226			(148		)	(596		)	(525		)	(1,078		)
Effect of currency on cash	—			—			—			1			—			1
Total increase (decrease) in cash	17			(6		)	10			(305		)	—			(284		)
Cash at the beginning of the period	3			51			10			851			—			915
Cash at the end of the period	$	20		$	45		$	20		$	546		$	—		$	631

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2013
	Eaton Corporation plc			Eaton Corporation			Guarantors			Other subsidiaries			Consolidating adjustments			Total
Net cash provided by (used in)    operating activities	$	71		$	234		$	557		$	(151	)	$	(2	)	$	709
Investing activities
Capital expenditures for property,    plant and equipment	—			(86		)	(34		)	(131		)	—			(251		)
Sales of short-term investments - net	—			25			21			102			—			148
Loans to affiliates	—			(50		)	—			(1,912		)	1,962			—
Repayments of loans from affiliates	—			28			88			1,876			(1,992		)	—
Proceeds from sale of business	—			—			—			761			—			761
Other - net	—			(18		)	(13		)	(21		)	—			(52		)
Net cash (used in) provided by    investing activities	—			(101		)	62			675			(30		)	606
Financing activities
Proceeds from borrowings	—			17			—			11			—			28
Payments on borrowings	—			(972		)	(1		)	(4		)	—			(977		)
Proceeds from borrowings from    affiliates	—			1,560			352			50			(1,962		)	—
Payments on borrowings from    affiliates	—			(1,688		)	(188		)	(116		)	1,992			—
Other intercompany    financing activities	323			840			(789		)	(374		)	—			—
Cash dividends paid	(397		)	—			—			—			—			(397		)
Cash dividends paid to affiliates	—			—			—			(2		)	2			—
Exercise of employee stock options	—			78			—			—			—			78
Excess tax benefit from    equity-based compensation	—			22			—			—			—			22
Other - net	—			—			—			(4		)	—			(4		)
Net cash used in financing activities	(74		)	(143		)	(626		)	(439		)	32			(1,250		)
Effect of currency on cash	—			—			—			(14		)	—			(14		)
Total (decrease) increase in cash	(3		)	(10		)	(7		)	71			—			51
Cash at the beginning of the period	7			54			14			502			—			577
Cash at the end of the period	$	4		$	44		$	7		$	573		$	—		$	628