XML 59 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Equity
 9 Months Ended
Sep. 30, 2014
Stockholders' Equity Note [Abstract]  
EQUITY
EQUITY
Eaton has an ordinary share repurchase program (2013 Program) that authorizes the repurchase of 40 million ordinary shares. During the third quarter of 2014, 3.4 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $225. During the first nine months of 2014, 4.8 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $324.
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
1,212

 
6

 
1,218

Other comprehensive loss
(481
)
 
—

 
(481
)
Cash dividends paid
(700
)
 
(2
)
 
(702
)
Issuance of shares under equity-based compensation plans - net
106

 
—

 
106

Repurchase of shares
(324
)
 
—

 
(324
)
Change in capital
(17
)
 
(18
)
 
(35
)
Balance at September 30, 2014
$
16,587

 
$
58

 
$
16,645


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
(598
)
 
19

 
2

 
(577
)
Amounts reclassified from Accumulated other
   comprehensive (loss) income
—

 
99

 
(3
)
 
96

Net current-period other comprehensive
   (loss) income
(598
)
 
118

 
(1
)
 
(481
)
Balance at September 30, 2014
$
(993
)
 
$
(1,052
)
 
$
4

 
$
(2,041
)

The reclassifications out of Accumulated other comprehensive loss follow:
 
Nine months ended
September 30, 2014
 
Consolidated Statements
of Income classification
Amortization of pensions and other postretirement benefits items
 
 
 
Actuarial loss
$
(157
)
 
1 
Tax benefit
58

 
 
Total, net of tax
(99
)
 
 
 
 
 
 
(Losses) gains on cash flow hedges
 
 
 
Floating-to-fixed interest rate swaps
(1
)
 
Interest expense - net
Currency exchange contracts
5

 
Cost of products sold
 
4

 
 
Tax expense
(1
)
 
 
Total, net of tax
3

 
 
 
 
 
 
Total reclassifications for the period
$
(96
)
 
 

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 items.
Net Income per Ordinary Share
A summary of the calculation of net income per ordinary share attributable to shareholders follows:
 
Three months ended
September 30
 
Nine months ended
September 30
(Shares in millions)
2014
 
2013
 
2014
 
2013
Net income attributable to Eaton ordinary shareholders
$
602

 
$
510

 
$
1,212

 
$
1,382

 
 
 
 
 
 
 
 
Weighted-average number of ordinary shares outstanding - diluted
477.2

 
477.2

 
478.2

 
476.2

Less dilutive effect of equity-based compensation
2.4

 
3.2

 
2.7

 
3.1

Weighted-average number of ordinary shares outstanding - basic
474.8

 
474.0

 
475.5

 
473.1

 
 
 
 
 
 
 
 
Net income per ordinary share
 
 
 
 
 
 
 
Diluted
$
1.26

 
$
1.07

 
$
2.53

 
$
2.90

Basic
1.27

 
1.08

 
2.55

 
2.92


For the third quarter and first nine 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 third quarter and first nine months 2013, 0.2 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.