(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) | ||||||||||||||||
(Address of principal executive offices) | (Zip Code) |
(Registrant's telephone number, including area code) | |||||||||||||||||||||||||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | |||||||||||||||||||||||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | |||||||||||||||||||||||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None |
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||
Smaller reporting company | Emerging growth company |
TABLE OF CONTENTS | |||||||||||
(In thousands) | 2022 | ||||
Electrical Americas | 30 | ||||
Electrical Global | 26 | ||||
Aerospace | 13 | ||||
Vehicle | 12 | ||||
eMobility | 2 | ||||
Corporate | 9 | ||||
Total number of persons employed | 92 |
Total Global | Number of women (Global) | Percentage of women (Global) | U.S. total | Number of minorities (U.S. only)1 | Percentage of minorities (U.S. only)1 | |||||||||||||||||||||||||||||||||
Board of directors | 11 | 4 | 36.4 | % | 9 | 4 | 44.4 | % | ||||||||||||||||||||||||||||||
Global leadership team | 25 | 5 | 20.0 | % | 23 | 13 | 56.5 | % | ||||||||||||||||||||||||||||||
Executives | 618 | 140 | 22.7 | % | 429 | 85 | 19.8 | % | ||||||||||||||||||||||||||||||
Managers | 8,202 | 1,998 | 24.4 | % | 4,270 | 871 | 20.4 | % | ||||||||||||||||||||||||||||||
All other employees | 83,079 | 29,276 | 35.2 | % | 22,702 | 8,248 | 36.3 | % | ||||||||||||||||||||||||||||||
All employees | 91,924 | 31,419 | 34.2 | % | 27,424 | 9,217 | 33.6 | % |
Name | Age | Position (Date elected to position) | |||||||||||||||
Craig Arnold | 62 | Chairman of Eaton Corporation plc (June 1, 2016 - present) | |||||||||||||||
Chief Executive Officer of Eaton Corporation (June 1, 2016 - present) | |||||||||||||||||
Director of Eaton Corporation plc (September 1, 2015 - present) | |||||||||||||||||
Thomas B. Okray | 60 | Executive Vice President and Chief Financial Officer of Eaton Corporation | |||||||||||||||
(March 2021 - present) | |||||||||||||||||
Executive Vice President and Chief Financial Officer-Elect of Eaton Corporation | |||||||||||||||||
(January 2021 - March 2021) | |||||||||||||||||
Senior Vice President and Chief Financial Officer of W.W. Grainger, Inc. | |||||||||||||||||
(April 2018 - December 2020) | |||||||||||||||||
Executive Vice President and Chief Financial Officer of Advance Auto Parts, Inc. | |||||||||||||||||
(October 2016 - April 2018) | |||||||||||||||||
Heath B. Monesmith | 52 | President and Chief Operating Officer - Electrical Sector of Eaton Corporation | |||||||||||||||
(July 5, 2022 - present) | |||||||||||||||||
President and Chief Operating Officer - Industrial Sector of Eaton Corporation | |||||||||||||||||
(July 1, 2019 - July 4, 2022) | |||||||||||||||||
Executive Vice President and General Counsel of Eaton Corporation | |||||||||||||||||
(March 1, 2017 - January 6, 2020) | |||||||||||||||||
Paulo Ruiz | 48 | President and Chief Operating Officer - Industrial Sector of Eaton Corporation | |||||||||||||||
(July 5, 2022 - present) | |||||||||||||||||
President Energy Solutions and Services of Eaton Corporation | |||||||||||||||||
(August 2, 2021 - July 5, 2022) | |||||||||||||||||
Hydraulics Group President of Eaton Corporation | |||||||||||||||||
(April 1, 2019 - August 2, 2021) | |||||||||||||||||
Chief Executive Officer of Dresser-Rand, a Siemens Business | |||||||||||||||||
(October 9, 2017 - April 1, 2019) | |||||||||||||||||
Taras Szmagala | 56 | Executive Vice President, Chief Legal Officer of Eaton Corporation | |||||||||||||||
(June 24, 2022 - present) | |||||||||||||||||
Senior Vice President, Public and Community Affairs and Corporate Communications | |||||||||||||||||
(March 20, 2017 - June 24, 2022) | |||||||||||||||||
Senior Vice President, Public and Community Affairs | |||||||||||||||||
(January 1, 2016 - March 19, 2017) | |||||||||||||||||
Ernest W. Marshall, Jr. | 54 | Executive Vice President and Chief Human Resources Officer of Eaton Corporation | |||||||||||||||
(July 1, 2018 - present) | |||||||||||||||||
Vice President - Human Resources, Aviation Division of General Electric | |||||||||||||||||
(August 1, 2013 - June 30, 2018) | |||||||||||||||||
Daniel R. Hopgood | 51 | Senior Vice President and Controller of Eaton Corporation (April 1, 2021 - present) | |||||||||||||||
Senior Vice President Global Financial Services and Systems of Eaton Corporation | |||||||||||||||||
(September 2017 - March 30, 2021) | |||||||||||||||||
Joao V. Faria | 58 | President - Vehicle Group of Eaton Corporation (May 1, 2017 - present) | |||||||||||||||
Nandakumar Cheruvatath | 61 | President - Aerospace Group of Eaton Corporation (September 1, 2015 - present) | |||||||||||||||
Brian S. Brickhouse | 59 | President - Americas Region, Electrical Sector of Eaton Corporation | |||||||||||||||
(July 1, 2019 - present) | |||||||||||||||||
President - Electrical Systems and Services Group of Eaton Corporation | |||||||||||||||||
(July 1, 2018 - June 30, 2019) | |||||||||||||||||
President, Asia Pacific Region, Electrical (May 15, 2015 - June 30, 2018) |
3 (i) | |||||||||||
3 (ii) | |||||||||||
4.1 | |||||||||||
4.2 | |||||||||||
4.3 | |||||||||||
4.4 | |||||||||||
4.5 | |||||||||||
4.6 | |||||||||||
4.7 | |||||||||||
4.8 | |||||||||||
4.9 | |||||||||||
4.10 | |||||||||||
4.11 | Pursuant to Regulation S-K Item 601(b)(4), Eaton agrees to furnish to the SEC, upon request, a copy of the instruments defining the rights of holders of its long-term debt other than those set forth in Exhibits (4.2 - 4.10) hereto | ||||||||||
10 | Material contracts | ||||||||||
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14 | |||||||||||
21 | |||||||||||
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23 | |||||||||||
24 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
32.2 | |||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document * | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document * | ||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* | Submitted electronically herewith. |
EATON CORPORATION plc | |||||||||||
Registrant | |||||||||||
Date: | February 23, 2023 | By: | /s/ Thomas B. Okray | ||||||||
Thomas B. Okray | |||||||||||
(On behalf of the registrant and as Principal Financial Officer) |
Signature | Title | |||||||||||||||||||
/s/ Craig Arnold | /s/ Thomas B. Okray | |||||||||||||||||||
Craig Arnold | Chairman, Principal Executive Officer; Director | Thomas B. Okray | Principal Financial Officer | |||||||||||||||||
/s/ Daniel R. Hopgood | * | |||||||||||||||||||
Daniel R. Hopgood | Principal Accounting Officer | Olivier Leonetti | Director | |||||||||||||||||
* | * | |||||||||||||||||||
Deborah L. McCoy | Director | Silvio Napoli | Director | |||||||||||||||||
* | * | |||||||||||||||||||
Gregory R. Page | Director | Sandra Pianalto | Director | |||||||||||||||||
* | * | |||||||||||||||||||
Robert V. Pragada | Director | Lori J. Ryerkerk | Director | |||||||||||||||||
* | * | |||||||||||||||||||
Gerald B. Smith | Director | Dorothy C. Thompson | Director | |||||||||||||||||
* | ||||||||||||||||||||
Darryl L. Wilson | Director | |||||||||||||||||||
*By | /s/ Thomas B. Okray | |||||||
Thomas B. Okray, Attorney-in-Fact for the officers and directors signing in the capacities indicated |
Unrecognized Income Tax Benefits | |||||
Description of the Matter | As discussed in Note 11 to the consolidated financial statements, the Company had gross unrecognized income tax benefits of $ The balance of unrecognized income tax benefits is comprised of uncertain tax positions which meet the more likely than not standard, but the financial statement tax benefit has been reduced as part of measuring the tax position. Auditing management’s analysis of its uncertain tax positions and resulting unrecognized income tax benefits is complex as each tax position carries unique facts and circumstances that must be evaluated and ultimate resolution is dependent on uncontrollable factors such as the timing of finalizing resolutions of audit disputes through reaching settlement agreements or concluding litigation, or changes in law, and other factors. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of management’s controls related to uncertain tax positions. For example, we tested controls over management’s application of the two-step recognition and measurement principles and management’s review of the inputs and resultant calculations of unrecognized income tax benefits, as well as the identification of uncertain tax positions. We also evaluated the Company’s assessment of its uncertain tax positions. Our audit procedures included, among others, evaluating management’s accounting policies and documentation to assess the appropriateness and consistency of the methods and assumptions used to develop its uncertain tax positions and related unrecognized income tax benefit amounts by jurisdiction. We also tested the completeness and accuracy of the underlying data used by the Company. For example, we compared the unrecognized income tax benefits recorded with similar positions in prior periods and assessed management’s consideration of current tax controversy and litigation, including current year developments with respect to the Company's ongoing litigation and examinations with respect to certain open tax years in the United States. We also assessed the historical accuracy of management’s estimates of its unrecognized income tax benefits with the resolution of those positions. In addition, we involved tax subject matter professionals to evaluate the application of relevant tax laws, regulations, case law, and Company-specific controversy developments in the Company’s recognition determination. We have also evaluated the Company’s income tax disclosures in relation to these matters. |
Valuation of Customer Relationships and Technology Intangible Assets in the Acquisition of Mission Systems | |||||
Description of the Matter | As discussed in Note 2 to the consolidated financial statements, during June 2021, the Company completed the acquisition of Mission Systems for a total purchase price of $ Auditing the Company’s accounting for its acquisition of Mission Systems was complex because the customer relationships and technology intangible assets recognized were material to the consolidated financial statements and the estimates of fair value involved subjectivity. The subjectivity was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business. The Company used discounted cash flow models to measure the intangible assets. The significant assumptions used to estimate the fair value of the intangible assets included the discount rates and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and future EBITDA margins). These significant assumptions are forward looking and could be affected by future economic and market conditions. The fair value of technology intangible assets is also based on the selection of royalty rates used in the valuation model. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over its accounting for the acquisition of Mission Systems, including recognition and measurement of the intangible assets acquired. For example, we tested controls over the recognition and measurement of customer relationships and technology intangible assets, including management’s review of the methods and significant assumptions used to develop the fair value estimates. To test the estimated fair values of the customer relationships and technology intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company's valuation specialist, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, when evaluating the assumptions related to the revenue growth rates and future EBITDA margins, we compared the assumptions to the past performance of Mission Systems and expected industry trends and considered whether they were consistent with evidence obtained in other areas of the audit. We also performed sensitivity analyses to evaluate the changes in the fair value of the customer relationships and technology intangible assets that would result from changes in the significant assumptions. We involved our EY valuation specialists to assist with our evaluation of the methodology used by the Company and certain significant assumptions included in the fair value estimates. |
/s/ Craig Arnold | /s/ Thomas B. Okray | /s/ Daniel R. Hopgood | ||||||||||||
Principal Executive Officer | Principal Financial Officer | Principal Accounting Officer | ||||||||||||
February 23, 2023 |
/s/ Craig Arnold | /s/ Thomas B. Okray | /s/ Daniel R. Hopgood | ||||||||||||
Principal Executive Officer | Principal Financial Officer | Principal Accounting Officer | ||||||||||||
February 23, 2023 |
Year ended December 31 | |||||||||||||||||
(In millions except for per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Cost of products sold | |||||||||||||||||
Selling and administrative expense | |||||||||||||||||
Research and development expense | |||||||||||||||||
Interest expense - net | |||||||||||||||||
Gain on sale of businesses | |||||||||||||||||
Other expense (income) - net | ( | ||||||||||||||||
Income before income taxes | |||||||||||||||||
Income tax expense | |||||||||||||||||
Net income | |||||||||||||||||
Less net income for noncontrolling interests | ( | ( | ( | ||||||||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ | $ | ||||||||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Basic | |||||||||||||||||
Weighted-average number of ordinary shares outstanding | |||||||||||||||||
Diluted | |||||||||||||||||
Basic | |||||||||||||||||
Cash dividends declared per ordinary share | $ | $ | $ |
Year ended December 31 | |||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Less net income for noncontrolling interests | ( | ( | ( | ||||||||||||||
Net income attributable to Eaton ordinary shareholders | |||||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||
Currency translation and related hedging instruments | ( | ||||||||||||||||
Pensions and other postretirement benefits | ( | ||||||||||||||||
Cash flow hedges | ( | ||||||||||||||||
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | ( | ||||||||||||||||
Total comprehensive income attributable to Eaton ordinary shareholders | $ | $ | $ |
December 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable - net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment | |||||||||||
Land and buildings | |||||||||||
Machinery and equipment | |||||||||||
Gross property, plant and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Net property, plant and equipment | |||||||||||
Other noncurrent assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets | |||||||||||
Operating lease assets | |||||||||||
Deferred income taxes | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt | $ | $ | |||||||||
Current portion of long-term debt | |||||||||||
Accounts payable | |||||||||||
Accrued compensation | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Noncurrent liabilities | |||||||||||
Long-term debt | |||||||||||
Pension liabilities | |||||||||||
Other postretirement benefits liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other noncurrent liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Shareholders’ equity | |||||||||||
Ordinary shares ( | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Shares held in trust | ( | ( | |||||||||
Total Eaton shareholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Year ended December 31 | |||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile to net cash provided by operating activities | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Deferred income taxes | ( | ( | ( | ||||||||||||||
Pension and other postretirement benefits expense | |||||||||||||||||
Contributions to pension plans | ( | ( | ( | ||||||||||||||
Contributions to other postretirement benefits plans | ( | ( | ( | ||||||||||||||
Gain on sale of businesses | ( | ( | ( | ||||||||||||||
Changes in working capital | |||||||||||||||||
Accounts receivable - net | ( | ( | |||||||||||||||
Inventory | ( | ( | |||||||||||||||
Accounts payable | |||||||||||||||||
Accrued compensation | ( | ( | |||||||||||||||
Accrued income and other taxes | ( | ( | |||||||||||||||
Other current assets | ( | ( | ( | ||||||||||||||
Other current liabilities | |||||||||||||||||
Other - net | |||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Investing activities | |||||||||||||||||
Capital expenditures for property, plant and equipment | ( | ( | ( | ||||||||||||||
Cash paid for acquisitions of businesses, net of cash acquired | ( | ( | ( | ||||||||||||||
Proceeds from sales of businesses, net of cash sold | |||||||||||||||||
Proceeds from sales of property, plant and equipment | |||||||||||||||||
Investments in associate companies | ( | ( | ( | ||||||||||||||
Sales (purchases) of short-term investments - net | ( | ( | |||||||||||||||
Proceeds from (payments for) settlement of currency exchange contracts not designated as hedges - net | ( | ( | |||||||||||||||
Other - net | ( | ( | ( | ||||||||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||||||||
Financing activities | |||||||||||||||||
Proceeds from borrowings | |||||||||||||||||
Payments on borrowings | ( | ( | ( | ||||||||||||||
Short-term debt, net | ( | ||||||||||||||||
Cash dividends paid | ( | ( | ( | ||||||||||||||
Exercise of employee stock options | |||||||||||||||||
Repurchase of shares | ( | ( | ( | ||||||||||||||
Employee taxes paid from shares withheld | ( | ( | ( | ||||||||||||||
Other - net | ( | ( | ( | ||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
Effect of currency on cash | ( | ( | |||||||||||||||
Total increase (decrease) in cash | ( | ( | |||||||||||||||
Cash at the beginning of the period | |||||||||||||||||
Cash at the end of the period | $ | $ | $ |
Ordinary shares | Capital in excess of par value | Retained earnings | Accumulated other comprehensive loss | Shares held in trust | Total Eaton shareholders' equity | Noncontrolling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Shares | Dollars | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under equity-based compensation plans | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | ( | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under equity-based compensation plans | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | ( | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under equity-based compensation plans | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | ( | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | ( | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Category | Estimated useful life or amortization period | |||||||
Buildings | Generally | |||||||
Machinery and equipment | ||||||||
Software | ||||||||
Customer relationships, certain trademarks, and patents and technology | Weighted-average of |
(In millions) | Preliminary Allocation | Measurement Period Adjustments | Final Allocation | |||||||||||||||||
Short-term investments | $ | $ | $ | |||||||||||||||||
Accounts receivable | ( | |||||||||||||||||||
Inventory | ( | |||||||||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||||||||
Property, plant and equipment | ( | |||||||||||||||||||
Other intangible assets | ( | |||||||||||||||||||
Other assets | ||||||||||||||||||||
Accounts payable | ( | ( | ||||||||||||||||||
Other current liabilities | ( | ( | ( | |||||||||||||||||
Other noncurrent liabilities | ( | ( | ( | |||||||||||||||||
Total identifiable net assets | ( | |||||||||||||||||||
Goodwill | ||||||||||||||||||||
Total consideration, net of cash received | $ | $ | $ |
(In millions) | Preliminary Allocation | Measurement Period Adjustments | Final Allocation | |||||||||||||||||
Accounts receivable | $ | $ | $ | |||||||||||||||||
Inventory | ( | |||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||
Other intangible assets | ( | |||||||||||||||||||
Other assets | ( | |||||||||||||||||||
Accounts payable | ( | ( | ||||||||||||||||||
Other current liabilities | ( | ( | ( | |||||||||||||||||
Other noncurrent liabilities | ( | ( | ( | |||||||||||||||||
Total identifiable net assets | ( | |||||||||||||||||||
Goodwill | ||||||||||||||||||||
Total consideration, net of cash received | $ | $ | $ |
(In millions) | Preliminary Allocation | Measurement Period Adjustments | Final Allocation | |||||||||||||||||
Accounts receivable | $ | $ | ( | $ | ||||||||||||||||
Inventory | ||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||
Other intangible assets | ||||||||||||||||||||
Other assets | ( | |||||||||||||||||||
Accounts payable | ( | ( | ( | |||||||||||||||||
Other current liabilities | ( | ( | ( | |||||||||||||||||
Other noncurrent liabilities | ( | ( | ||||||||||||||||||
Total identifiable net assets | ||||||||||||||||||||
Goodwill | ( | |||||||||||||||||||
Total consideration, net of cash received | $ | $ | ( | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Electrical Americas | |||||||||||||||||
Products | $ | $ | $ | ||||||||||||||
Systems | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Products | $ | $ | $ | ||||||||||||||
Systems | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Hydraulics | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Rest of World | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Aerospace | |||||||||||||||||
Original Equipment Manufacturers | $ | $ | $ | ||||||||||||||
Aftermarket | |||||||||||||||||
Industrial and Other | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Vehicle | |||||||||||||||||
Commercial | $ | $ | $ | ||||||||||||||
Passenger and Light Duty | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
eMobility | $ | $ | $ | ||||||||||||||
Total net sales | $ | $ | $ |
(In millions) | Deferred revenue | ||||
Balance at January 1, 2021 | $ | ||||
Customer deposits and billings | |||||
Revenue recognized in the period | ( | ||||
Deferred revenue from business acquisitions | |||||
Translation and other | ( | ||||
Balance at December 31, 2021 | $ | ||||
Customer deposits and billings | |||||
Revenue recognized in the period | ( | ||||
Translation and other | ( | ||||
Balance at December 31, 2022 | $ |
December 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventory | $ | $ |
(In millions) | January 1, 2021 | Additions | Translation | December 31, 2021 | Additions | Translation | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Electrical Americas | $ | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Electrical Global | ( | ( | |||||||||||||||||||||||||||||||||||||||
Aerospace | ( | ( | |||||||||||||||||||||||||||||||||||||||
Vehicle | ( | ( | |||||||||||||||||||||||||||||||||||||||
eMobility | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | ( | $ |
December 31 | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(In millions) | Historical cost | Accumulated amortization | Historical cost | Accumulated amortization | |||||||||||||||||||
Intangible assets not subject to amortization | |||||||||||||||||||||||
Trademarks | $ | $ | |||||||||||||||||||||
Intangible assets subject to amortization | |||||||||||||||||||||||
Customer relationships | $ | $ | $ | $ | |||||||||||||||||||
Patents and technology | |||||||||||||||||||||||
Trademarks | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total intangible assets subject to amortization | $ | $ | $ | $ |
(In millions) | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Finance lease cost: | |||||||||||||||||
Amortization of lease assets | |||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
Short-term lease cost | |||||||||||||||||
Variable lease cost | |||||||||||||||||
Sublease income | ( | ( | ( | ||||||||||||||
Total lease cost | $ | $ | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash outflows - payments on operating leases | $ | ( | $ | ( | $ | ( | |||||||||||
Operating cash outflows - interest payments on finance leases | ( | ( | ( | ||||||||||||||
Financing cash outflows - payments on finance lease obligations | ( | ( | ( | ||||||||||||||
Lease assets obtained in exchange for new lease obligations, including leases acquired: | |||||||||||||||||
Operating leases | $ | $ | $ | ||||||||||||||
Finance leases |
December 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Operating Leases | |||||||||||
Operating lease assets | $ | $ | |||||||||
Operating lease liabilities | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Finance Leases | |||||||||||
Land and buildings | $ | $ | |||||||||
Machinery and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
$ | $ | ||||||||||
$ | $ | ||||||||||
Total finance lease liabilities | $ | $ |
December 31 | |||||||||||
2022 | 2021 | ||||||||||
Weighted-average remaining lease term | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted-average discount rate | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
(In millions) | Operating Leases | Finance Leases | |||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less imputed interest | |||||||||||
Total present value of lease liabilities | $ | $ |
December 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
$ | $ | ||||||||||
Other | |||||||||||
Total long-term debt | |||||||||||
Less current portion of long-term debt | ( | ( | |||||||||
Long-term debt less current portion | $ | $ |
(In millions) | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 |
(In millions) | |||||
2022 | $ | ||||
2021 | |||||
2020 |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Funded status | |||||||||||||||||||||||||||||||||||
Fair value of plan assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Benefit obligations | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Funded status | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Other assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Other current liabilities | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Pension liabilities and Other postretirement benefits liabilities | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Amounts recognized in Accumulated other comprehensive loss (pre-tax) | |||||||||||||||||||||||||||||||||||
Net actuarial (gain) loss | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Prior service cost (credit) | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ( | $ | ( |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Balance at January 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Service cost | |||||||||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Actuarial (gain) loss | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Gross benefits paid | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Currency translation | ( | ( | ( | ||||||||||||||||||||||||||||||||
Plan amendments | ( | ||||||||||||||||||||||||||||||||||
Acquisitions and divestitures | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Balance at December 31 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Accumulated benefit obligation | $ | $ | $ | $ |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Balance at January 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Actual return on plan assets | ( | ( | ( | ||||||||||||||||||||||||||||||||
Employer contributions | |||||||||||||||||||||||||||||||||||
Gross benefits paid | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Currency translation | ( | ( | |||||||||||||||||||||||||||||||||
Acquisitions and divestitures | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Balance at December 31 | $ | $ | $ | $ | $ | $ |
United States pension liabilities | Non-United States pension liabilities | ||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Accumulated benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
Fair value of plan assets |
United States pension liabilities | Non-United States pension liabilities | ||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Projected benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
Fair value of plan assets |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Balance at January 1 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Prior service cost arising during the year | ( | ||||||||||||||||||||||||||||||||||
Net loss (gain) arising during the year | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Currency translation | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Less amounts included in expense during the year | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Net change for the year | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Balance at December 31 | $ | $ | $ | $ | $ | ( | $ | ( |
United States pension benefit expense (income) | Non-United States pension benefit expense (income) | Other postretirement benefits expense (income) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements, curtailments and special termination benefits | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total expense (income) | $ | $ | ( | $ | $ | $ | $ | $ | $ | $ | ( |
United States pension plans | Non-United States pension plans | ||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Assumptions used to determine benefit obligation at year-end | |||||||||||||||||||||||||||||||||||
Discount rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Rate of compensation increase | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Interest rate used to credit cash balance plans | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Assumptions used to determine expense | |||||||||||||||||||||||||||||||||||
Discount rate used to determine benefit obligation | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Discount rate used to determine service cost | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Discount rate used to determine interest cost | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Expected long-term return on plan assets | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Rate of compensation increase | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Interest rate used to credit cash balance plans | % | % | % | % | % | % |
Other postretirement benefits plans | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Assumptions used to determine benefit obligation at year-end | |||||||||||||||||
Discount rate | % | % | % | ||||||||||||||
Health care cost trend rate assumed for next year | % | % | % | ||||||||||||||
Ultimate health care cost trend rate | % | % | % | ||||||||||||||
Year ultimate health care cost trend rate is achieved | |||||||||||||||||
Assumptions used to determine expense | |||||||||||||||||
Discount rate used to determine benefit obligation | % | % | % | ||||||||||||||
Discount rate used to determine service cost | % | % | % | ||||||||||||||
Discount rate used to determine interest cost | % | % | % | ||||||||||||||
Initial health care cost trend rate | % | % | % | ||||||||||||||
Ultimate health care cost trend rate | % | % | % | ||||||||||||||
Year ultimate health care cost trend rate is achieved |
(In millions) | Expected in 2023 | 2022 | 2021 | 2020 | |||||||||||||||||||
United States plans | $ | $ | $ | $ | |||||||||||||||||||
Non-United States plans | |||||||||||||||||||||||
Total contributions | $ | $ | $ | $ |
Estimated United States pension payments | Estimated non-United States pension payments | Estimated other postretirement benefit payments | |||||||||||||||||||||
(In millions) | Gross | Medicare prescription drug subsidy | |||||||||||||||||||||
2023 | $ | $ | $ | $ | |||||||||||||||||||
2024 | |||||||||||||||||||||||
2025 | |||||||||||||||||||||||
2026 | |||||||||||||||||||||||
2027 | |||||||||||||||||||||||
2028 - 2032 | ( |
(In millions) | Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3)1 | |||||||||||||||||||
2022 | |||||||||||||||||||||||
Common collective trusts | |||||||||||||||||||||||
Non-United States equity and global equities | $ | $ | $ | $ | |||||||||||||||||||
United States equity | |||||||||||||||||||||||
Fixed income | |||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||
United States treasuries | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Exchange traded funds | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Common collective and other trusts measured at net asset value | |||||||||||||||||||||||
Money market funds measured at net asset value | |||||||||||||||||||||||
Pending purchases and sales of plan assets, and interest receivable | ( | ||||||||||||||||||||||
Total pension plan assets | $ | $ | $ | $ |
(In millions) | Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3)1 | |||||||||||||||||||
2021 | |||||||||||||||||||||||
Common collective trusts | |||||||||||||||||||||||
Non-United States equity and global equities | $ | $ | $ | $ | |||||||||||||||||||
United States equity | |||||||||||||||||||||||
Fixed income | |||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||
United States treasuries | |||||||||||||||||||||||
Bank loans | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Exchange traded funds | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Common collective and other trusts measured at net asset value | |||||||||||||||||||||||
Money market funds measured at net asset value | |||||||||||||||||||||||
Pending purchases and sales of plan assets, and interest receivable | ( | ||||||||||||||||||||||
Total pension plan assets | $ | $ | $ | $ |
(In millions) | Real estate | Other | Total | ||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | ||||||||||||||
Actual return on plan assets: | |||||||||||||||||
Gains (losses) relating to assets still held at year-end | |||||||||||||||||
Purchases, sales, settlements - net | |||||||||||||||||
Transfers into or out of Level 3 | |||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||
Actual return on plan assets: | |||||||||||||||||
Gains (losses) relating to assets still held at year-end | ( | ( | |||||||||||||||
Purchases, sales, settlements - net | ( | ||||||||||||||||
Transfers into or out of Level 3 | |||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
(In millions) | Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | |||||||||||||||||||
2022 | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Common collective and other trusts measured at net asset value | |||||||||||||||||||||||
Total other postretirement benefits plan assets | $ | $ | $ | $ |
(In millions) | Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | |||||||||||||||||||
2021 | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Common collective and other trusts measured at net asset value | |||||||||||||||||||||||
Total other postretirement benefits plan assets | $ | $ | $ | $ |
(In millions) | |||||
2022 | $ | ||||
2021 | |||||
2020 |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Balance at January 1 | $ | $ | $ | ||||||||||||||
Provision | |||||||||||||||||
Settled | ( | ( | ( | ||||||||||||||
Warranty accruals from business acquisitions and other | ( | ||||||||||||||||
Warranty accruals reclassified to held for sale | ( | ||||||||||||||||
Balance at December 31 | $ | $ | $ |
Income (loss) before income taxes | |||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Ireland | $ | $ | $ | ( | |||||||||||||
Foreign | |||||||||||||||||
Total income before income taxes | $ | $ | $ |
Income tax expense (benefit) | |||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Current | |||||||||||||||||
Ireland | $ | $ | $ | ||||||||||||||
Foreign | |||||||||||||||||
Total current income tax expense | |||||||||||||||||
Deferred | |||||||||||||||||
Ireland | ( | ||||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
Total deferred income tax expense (benefit) | ( | ( | ( | ||||||||||||||
Total income tax expense | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Income taxes at the applicable statutory rate | % | % | % | ||||||||||||||
Ireland operations | |||||||||||||||||
Ireland tax on trading income | ( | % | ( | % | ( | % | |||||||||||
Nondeductible interest expense | % | % | % | ||||||||||||||
Ireland Other - net | ( | % | ( | % | % | ||||||||||||
Foreign operations | |||||||||||||||||
Tax impact on sale of businesses | % | % | % | ||||||||||||||
Earnings taxed at other than the applicable statutory tax rate | ( | % | ( | % | ( | % | |||||||||||
Other items | % | ( | % | % | |||||||||||||
Worldwide operations | |||||||||||||||||
Adjustments to tax liabilities | ( | % | % | ( | % | ||||||||||||
Adjustments to valuation allowances | % | % | % | ||||||||||||||
Effective income tax expense rate | % | % | % |
(In millions) | |||||
2022 | $ | ||||
2021 | |||||
2020 |
December 31 | |||||||||||
2022 | 2021 | ||||||||||
(In millions) | Noncurrent assets and liabilities | Noncurrent assets and liabilities | |||||||||
Accruals and other adjustments | |||||||||||
Employee benefits | $ | $ | |||||||||
Depreciation and amortization | ( | ( | |||||||||
Other accruals and adjustments | |||||||||||
Ireland income tax loss carryforwards | |||||||||||
Foreign income tax loss carryforwards | |||||||||||
Foreign income tax credit carryforwards | |||||||||||
Valuation allowance for income tax loss and income tax credit carryforwards | ( | ( | |||||||||
Other valuation allowances | ( | ( | |||||||||
Total deferred income taxes | $ | ( | $ | ( | |||||||
(In millions) | 2023 through 2027 | 2028 through 2032 | 2033 through 2037 | 2038 through 2047 | Not subject to expiration | Valuation allowance | |||||||||||||||||||||||||||||
Ireland income tax loss carryforwards | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Ireland deferred income tax assets for income tax loss carryforwards | ( | ||||||||||||||||||||||||||||||||||
Foreign income tax loss carryforwards | |||||||||||||||||||||||||||||||||||
Foreign deferred income tax assets for income tax loss carryforwards | ( | ||||||||||||||||||||||||||||||||||
Foreign deferred income tax assets for income tax loss carryforwards after ASU 2013-11 | ( | ||||||||||||||||||||||||||||||||||
Foreign income tax credit carryforwards | ( | ||||||||||||||||||||||||||||||||||
Foreign income tax credit carryforwards after ASU 2013-11 | ( |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Balance at January 1 | $ | $ | $ | ||||||||||||||
Increases and decreases as a result of positions taken during prior years | |||||||||||||||||
Transfers from valuation allowances | |||||||||||||||||
Other increases, including currency translation | |||||||||||||||||
Other decreases, including currency translation | ( | ( | ( | ||||||||||||||
Increases related to acquired businesses | |||||||||||||||||
Increases as a result of positions taken during the current year | |||||||||||||||||
Decreases relating to settlements with tax authorities | ( | ( | |||||||||||||||
Decreases as a result of a lapse of the applicable statute of limitations | ( | ( | ( | ||||||||||||||
Balance at December 31 | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
(In millions) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | |||||||||||||||||||||||||||||
Currency translation and related hedging instruments | |||||||||||||||||||||||||||||||||||
Gain (loss) from currency translation and related hedging instruments | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
Translation reclassified to earnings | |||||||||||||||||||||||||||||||||||
( | ( | ||||||||||||||||||||||||||||||||||
Pensions and other postretirement benefits | |||||||||||||||||||||||||||||||||||
Prior service credit (cost) arising during the year | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Net gain (loss) arising during the year | ( | ( | |||||||||||||||||||||||||||||||||
Currency translation | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Amortization of actuarial loss and prior service cost reclassified to earnings | |||||||||||||||||||||||||||||||||||
( | ( | ||||||||||||||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Changes in cash flow hedges reclassified to earnings | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | $ | ( | $ | ( | $ | $ | $ | $ |
(In millions) | Currency translation and related hedging instruments | Pensions and other postretirement benefits | Cash flow hedges | Total | |||||||||||||||||||
Balance at January 1, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive loss (income) | ( | ||||||||||||||||||||||
Net current-period Other comprehensive income | ( | ( | |||||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | $ | ( |
(In millions) | December 31, 2022 | Consolidated Statements of Income classification | ||||||||||||
Amortization of defined benefits pensions and other postretirement benefits items | ||||||||||||||
Actuarial loss and prior service cost | $ | ( | 1 | |||||||||||
Tax benefit | ||||||||||||||
Total, net of tax | ( | |||||||||||||
Gains and (losses) on cash flow hedges | ||||||||||||||
Floating-to-fixed interest rate swaps | Interest expense - net | |||||||||||||
Currency exchange contracts | Net sales and Cost of products sold | |||||||||||||
Commodity contracts | ( | Cost of products sold | ||||||||||||
Tax expense | ( | |||||||||||||
Total, net of tax | ||||||||||||||
Total reclassifications for the period | $ | ( |
(In millions except for per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ | $ | ||||||||||||||
Weighted-average number of ordinary shares outstanding - diluted | |||||||||||||||||
Less dilutive effect of equity-based compensation | |||||||||||||||||
Weighted-average number of ordinary shares outstanding - basic | |||||||||||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Basic |
(Restricted stock units and awards in millions) | Number of restricted stock units and awards | Weighted-average fair value per unit and award | |||||||||
Non-vested at January 1 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Non-vested at December 31 | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Pre-tax expense for RSUs and RSAs | $ | $ | $ | ||||||||||||||
After-tax expense for RSUs and RSAs | |||||||||||||||||
Fair value of vested RSUs and RSAs |
2022 | 2021 | 2020 | ||||||||||||||||||
Expected volatility | % | % | % | |||||||||||||||||
Risk-free interest rate | % | % | % | |||||||||||||||||
Weighted-average fair value of PSUs granted | $ | $ | $ |
(Performance share units in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Percent payout | % | % | % | |||||||||||||||||
Shares vested |
(Performance share units in millions) | Number of performance share units | Weighted-average fair value per unit | ||||||||||||
Non-vested at January 1 | $ | |||||||||||||
Granted1 | ||||||||||||||
Adjusted for performance results achieved2 | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested at December 31 | $ |
(In millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Pre-tax expense for PSUs | $ | $ | $ | |||||||||||||||||
After-tax expense for PSUs | ||||||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Expected volatility | % | % | % | ||||||||||||||
Expected option life in years | |||||||||||||||||
Expected dividend yield | % | % | % | ||||||||||||||
Risk-free interest rate | |||||||||||||||||
Weighted-average fair value of stock options granted | $ | $ | $ |
(Options in millions) | Weighted-average exercise price per option | Options | Weighted-average remaining contractual life in years | Aggregate intrinsic value | |||||||||||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited and canceled | ( | ||||||||||||||||||||||
Outstanding at December 31, 2022 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2022 | $ | $ | |||||||||||||||||||||
Reserved for future grants at December 31, 2022 |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Pre-tax expense for stock options | $ | $ | $ | ||||||||||||||
After-tax expense for stock options | |||||||||||||||||
Proceeds from stock options exercised | |||||||||||||||||
Income tax benefit related to stock options exercised | |||||||||||||||||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | |||||||||||||||||
Intrinsic value of stock options exercised | |||||||||||||||||
Total fair value of stock options vested | $ | $ | $ | ||||||||||||||
Stock options exercised |
(In millions) | Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Net derivative contracts | |||||||||||||||||||||||
Contingent future payments from acquisition of Green Motion (Note 2) | ( | ( | |||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Net derivative contracts | |||||||||||||||||||||||
Contingent future payments from acquisition of Green Motion (Note 2) | ( | ( | |||||||||||||||||||||
December 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Time deposits and certificates of deposit with banks | $ | $ | |||||||||
Money market investments | |||||||||||
Investments in marketable equity securities | |||||||||||
Total short-term investments | $ | $ |
(In millions) | Notional amount | Other current assets | Other noncurrent assets | Other current liabilities | Other noncurrent liabilities | Type of hedge | Term | ||||||||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | $ | $ | $ | $ | $ | Cash flow | |||||||||||||||||||||||||||||||||||
Commodity contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Fixed-to-floating interest rate swaps | $ | $ | $ | $ | $ | Fair value | |||||||||||||||||||||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Commodity contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ |
Commodity | December 31, 2022 | Term | ||||||||||||||||||
Aluminum | Millions of pounds | |||||||||||||||||||
Copper | Millions of pounds | |||||||||||||||||||
Gold | Troy ounces | |||||||||||||||||||
Silver | Troy ounces |
(In millions) | Carrying amount of the hedged assets (liabilities) | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a) | |||||||||||||||||||||
Location on Consolidated Balance Sheets | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||||||||
Long-term debt | $ | ( | $ | ( | $ | ( | $ | ( |
2022 | |||||||||||||||||
(In millions) | Net sales | Cost of products sold | Interest expense - net | ||||||||||||||
Amounts from Consolidated Statements of Income | $ | $ | $ | ||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | |||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | |||||||||||||||||
Hedged item | $ | $ | $ | ( | |||||||||||||
Derivative designated as hedging instrument | |||||||||||||||||
Currency exchange contracts | |||||||||||||||||
Hedged item | $ | $ | ( | $ | |||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
Commodity contracts | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
Gain (loss) on derivatives designated as fair value hedges | |||||||||||||||||
Fixed-to-floating interest rate swaps | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
2021 | |||||||||||||||||
(In millions) | Net sales | Cost of products sold | Interest expense - net | ||||||||||||||
Amounts from Consolidated Statements of Income | $ | $ | $ | ||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | |||||||||||||||||
Currency exchange contracts | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
Commodity contracts | |||||||||||||||||
Hedged item | $ | $ | ( | $ | |||||||||||||
Derivative designated as hedging instrument | |||||||||||||||||
Gain (loss) on derivatives designated as fair value hedges | |||||||||||||||||
Fixed-to-floating interest rate swaps | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
2020 | |||||||||||||||||
(In millions) | Net sales | Cost of products sold | Interest expense - net | ||||||||||||||
Amounts from Consolidated Statements of Income | $ | $ | $ | ||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | |||||||||||||||||
Currency exchange contracts | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ( | |||||||||||||||
Commodity contracts | |||||||||||||||||
Hedged item | $ | $ | ( | $ | |||||||||||||
Derivative designated as hedging instrument | |||||||||||||||||
Gain (loss) on derivatives designated as fair value hedges | |||||||||||||||||
Fixed-to-floating interest rate swaps | |||||||||||||||||
Hedged item | $ | $ | $ | ( | |||||||||||||
Derivative designated as hedging instrument | |||||||||||||||||
Gain (loss) recognized in Consolidated Statements of Income | Consolidated Statements of Income classification | ||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Gain (loss) on derivatives not designated as hedges | |||||||||||||||||||||||
Currency exchange contracts | $ | ( | $ | $ | Interest expense - net | ||||||||||||||||||
Commodity contracts | ( | Other expense (income) - net and Cost of products sold (a) | |||||||||||||||||||||
Total | $ | ( | $ | $ | |||||||||||||||||||
Gain (loss) recognized in other comprehensive (loss) income | |||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | $ | $ | $ | ( | |||||||||||||
Currency exchange contracts | ( | ( | |||||||||||||||
Commodity contracts | ( | ||||||||||||||||
Non-derivative designated as net investment hedges | |||||||||||||||||
Foreign currency denominated debt | ( | ||||||||||||||||
Total | $ | $ | $ | ( |
Location of gain (loss) reclassified from Accumulated other comprehensive loss | Gain (loss) reclassified from Accumulated other comprehensive loss | ||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | Interest expense - net | $ | $ | $ | |||||||||||||||||||
Currency exchange contracts | Net sales and Cost of products sold | ( | ( | ||||||||||||||||||||
Commodity contracts | Cost of products sold | ( | |||||||||||||||||||||
Non-derivative designated as net investment hedges | |||||||||||||||||||||||
Foreign currency denominated debt | Interest expense - net | ||||||||||||||||||||||
Total | $ | $ | $ | ( |
(In millions except per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Workforce reductions | $ | ( | $ | $ | |||||||||||||
Plant closing and other | |||||||||||||||||
Total before income taxes1 | |||||||||||||||||
Income tax benefit | |||||||||||||||||
Total after income taxes | $ | $ | $ | ||||||||||||||
Per ordinary share - diluted | $ | $ | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | ( | ||||||||||||||||
eMobility | |||||||||||||||||
Corporate | |||||||||||||||||
Total1 | $ | $ | $ |
(In millions) | Workforce reductions | Plant closing and other | Total | ||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | ||||||||||||||
Liability recognized | |||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ||||||||||||||
Liability recognized | |||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Liability recognized, net1 | ( | ||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Net sales | |||||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Hydraulics | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | |||||||||||||||||
eMobility | |||||||||||||||||
Total net sales | $ | $ | $ | ||||||||||||||
Segment operating profit (loss) | |||||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Hydraulics | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | |||||||||||||||||
eMobility | ( | ( | ( | ||||||||||||||
Total segment operating profit | |||||||||||||||||
Corporate | |||||||||||||||||
Intangible asset amortization expense | ( | ( | ( | ||||||||||||||
Interest expense - net | ( | ( | ( | ||||||||||||||
Pension and other postretirement benefits income (expense) | ( | ||||||||||||||||
Restructuring program charges | ( | ( | ( | ||||||||||||||
Other expense - net | ( | ( | ( | ||||||||||||||
Income before income taxes | |||||||||||||||||
Income tax expense | |||||||||||||||||
Net income | |||||||||||||||||
Less net income for noncontrolling interests | ( | ( | ( | ||||||||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Identifiable assets | |||||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | |||||||||||||||||
eMobility | |||||||||||||||||
Total identifiable assets | |||||||||||||||||
Goodwill | |||||||||||||||||
Other intangible assets | |||||||||||||||||
Corporate | |||||||||||||||||
Assets held for sale | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
Capital expenditures for property, plant and equipment | |||||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Hydraulics | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | |||||||||||||||||
eMobility | |||||||||||||||||
Total | |||||||||||||||||
Corporate | |||||||||||||||||
Total expenditures for property, plant and equipment | $ | $ | $ | ||||||||||||||
Depreciation of property, plant and equipment | |||||||||||||||||
Electrical Americas | $ | $ | $ | ||||||||||||||
Electrical Global | |||||||||||||||||
Aerospace | |||||||||||||||||
Vehicle | |||||||||||||||||
eMobility | |||||||||||||||||
Total | |||||||||||||||||
Corporate | |||||||||||||||||
Total depreciation of property, plant and equipment | $ | $ | $ |
(In millions) | 2022 | 2021 | 2020 | ||||||||||||||
Net sales | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Canada | |||||||||||||||||
Latin America | |||||||||||||||||
Europe | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Long-lived assets | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Canada | |||||||||||||||||
Latin America | |||||||||||||||||
Europe | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Total | $ | $ | $ |
Acquisitions of businesses and investments in associate companies | Date of acquisition | Business segment | ||||||||||||
Power Distribution, Inc. | February 25, 2020 | Electrical Americas | ||||||||||||
A leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. | ||||||||||||||
Tripp Lite | March 17, 2021 | Electrical Americas | ||||||||||||
A leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. | ||||||||||||||
Green Motion SA | March 22, 2021 | Electrical Global | ||||||||||||
A leading designer and manufacturer of electric vehicle charging hardware and related software. | ||||||||||||||
HuanYu High Tech | March 29, 2021 | Electrical Global | ||||||||||||
A 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. | ||||||||||||||
Mission Systems | June 1, 2021 | Aerospace | ||||||||||||
A leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. | ||||||||||||||
Jiangsu YiNeng Electric's busway business | June 25, 2021 | Electrical Global | ||||||||||||
A 50 percent stake in Jiangsu YiNeng Electric's busway business which manufactures and markets busway products in China. | ||||||||||||||
Royal Power Solutions | January 5, 2022 | eMobility | ||||||||||||
A manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. | ||||||||||||||
Jiangsu Huineng Electric Co., Ltd’s circuit breaker business | July 1, 2022 | Electrical Global | ||||||||||||
A 50 percent stake in Jiangsu Huineng Electric Co., Ltd's circuit breaker business which manufactures and markets low-voltage circuit breakers in China. |
Divestitures of businesses | Date of divestiture | Business segment | ||||||||||||
Lighting business | March 2, 2020 | Electrical Americas | ||||||||||||
Hydraulics business | August 2, 2021 | Hydraulics |
(In millions except for per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Net sales | $ | 20,752 | $ | 19,628 | $ | 17,858 | |||||||||||
Net income attributable to Eaton ordinary shareholders | 2,462 | 2,144 | 1,410 | ||||||||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 6.14 | $ | 5.34 | $ | 3.49 |
(In millions except for per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Acquisition integration, divestiture charges and transactions costs | $ | 194 | $ | 349 | $ | 288 | |||||||||||
Gain on the sale of the Hydraulics and Lighting businesses | (24) | (617) | (221) | ||||||||||||||
Total charges (income) before income taxes | 170 | (268) | 67 | ||||||||||||||
Income tax expense (benefit) | (23) | 362 | 66 | ||||||||||||||
Total after income taxes | $ | 147 | $ | 94 | $ | 133 | |||||||||||
Per ordinary share - diluted | $ | 0.37 | $ | 0.23 | $ | 0.33 |
(In millions except for per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Intangible asset amortization expense | $ | 499 | $ | 444 | $ | 354 | |||||||||||
Income tax benefit | 105 | 83 | 82 | ||||||||||||||
Total after income taxes | $ | 394 | $ | 361 | $ | 272 | |||||||||||
Per ordinary share - diluted | $ | 0.99 | $ | 0.90 | $ | 0.67 |
(In millions except for per share data) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 20,752 | 6 | % | $ | 19,628 | 10 | % | $ | 17,858 | |||||||||||||||||||
Gross profit | 6,887 | 9 | % | 6,335 | 16 | % | 5,450 | ||||||||||||||||||||||
Percent of net sales | 33.2 | % | 32.3 | % | 30.5 | % | |||||||||||||||||||||||
Income before income taxes | 2,911 | 1 | % | 2,896 | 66 | % | 1,746 | ||||||||||||||||||||||
Net income | 2,465 | 15 | % | 2,146 | 52 | % | 1,415 | ||||||||||||||||||||||
Less net income for noncontrolling interests | (4) | (2) | (5) | ||||||||||||||||||||||||||
Net income attributable to Eaton ordinary shareholders | 2,462 | 15 | % | 2,144 | 52 | % | 1,410 | ||||||||||||||||||||||
Excluding acquisition and divestiture charges, after-tax | 147 | 94 | 133 | ||||||||||||||||||||||||||
Excluding restructuring program charges, after-tax | 29 | 60 | 170 | ||||||||||||||||||||||||||
Excluding intangible asset amortization expense, after-tax | 394 | 361 | 272 | ||||||||||||||||||||||||||
Adjusted earnings | $ | 3,032 | 14 | % | $ | 2,659 | 34 | % | $ | 1,985 | |||||||||||||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 6.14 | 15 | % | $ | 5.34 | 53 | % | $ | 3.49 | |||||||||||||||||||
Excluding per share impact of acquisition and divestiture charges, after-tax | 0.37 | 0.23 | 0.33 | ||||||||||||||||||||||||||
Excluding per share impact of restructuring program charges, after-tax | 0.07 | 0.15 | 0.42 | ||||||||||||||||||||||||||
Excluding per share impact of intangible asset amortization expense, after-tax | 0.99 | 0.90 | 0.67 | ||||||||||||||||||||||||||
Adjusted earnings per ordinary share | $ | 7.57 | 14 | % | $ | 6.62 | 35 | % | $ | 4.91 |
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 13 | % | 10 | % | |||||||||||||||||||||||||
Acquisitions of businesses | 3 | % | 5 | % | |||||||||||||||||||||||||
Divestiture of business | (7) | % | (6) | % | |||||||||||||||||||||||||
Foreign currency | (3) | % | 1 | % | |||||||||||||||||||||||||
Total increase in Net sales | 6 | % | 10 | % |
2022 | 2021 | 2020 | |||||||||||||||
Effective tax rate | 15.3 | % | 25.9 | % | 19.0 | % | |||||||||||
Tax impact on sale of businesses | — | % | 9.1 | % | 3.9 | % | |||||||||||
15.3 | % | 16.8 | % | 15.1 | % |
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 8,497 | 17 | % | $ | 7,242 | 8 | % | $ | 6,680 | |||||||||||||||||||
Operating profit | $ | 1,913 | 28 | % | $ | 1,495 | 11 | % | $ | 1,352 | |||||||||||||||||||
Operating margin | 22.5 | % | 20.6 | % | 20.2 | % | |||||||||||||||||||||||
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 16 | % | 5 | % | |||||||||||||||||||||||||
Acquisition of Tripp Lite | 1 | % | 7 | % | |||||||||||||||||||||||||
Divestiture of the Lighting business | — | % | (4) | % | |||||||||||||||||||||||||
Total increase in Net sales | 17 | % | 8 | % |
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 5,848 | 6 | % | $ | 5,516 | 17 | % | $ | 4,703 | |||||||||||||||||||
Operating profit | $ | 1,134 | 10 | % | $ | 1,034 | 38 | % | $ | 750 | |||||||||||||||||||
Operating margin | 19.4 | % | 18.7 | % | 15.9 | % | |||||||||||||||||||||||
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 13 | % | 15 | % | |||||||||||||||||||||||||
Foreign currency | (7) | % | 2 | % | |||||||||||||||||||||||||
Total increase in Net sales | 6 | % | 17 | % |
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 3,039 | 15 | % | $ | 2,648 | 19 | % | $ | 2,223 | |||||||||||||||||||
Operating profit | $ | 705 | 22 | % | $ | 580 | 40 | % | $ | 414 | |||||||||||||||||||
Operating margin | 23.2 | % | 21.9 | % | 18.6 | % | |||||||||||||||||||||||
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 11 | % | (2) | % | |||||||||||||||||||||||||
Acquisition of Mission Systems | 8 | % | 20 | % | |||||||||||||||||||||||||
Foreign currency | (4) | % | 1 | % | |||||||||||||||||||||||||
Total increase in Net sales | 15 | % | 19 | % | |||||||||||||||||||||||||
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 2,830 | 10 | % | $ | 2,579 | 22 | % | $ | 2,118 | |||||||||||||||||||
Operating profit | $ | 453 | 1 | % | $ | 449 | 85 | % | $ | 243 | |||||||||||||||||||
Operating margin | 16.0 | % | 17.4 | % | 11.5 | % | |||||||||||||||||||||||
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 12 | % | 21 | % | |||||||||||||||||||||||||
Foreign currency | (2) | % | 1 | % | |||||||||||||||||||||||||
Total increase in Net sales | 10 | % | 22 | % |
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 538 | 57 | % | $ | 343 | 17 | % | $ | 292 | |||||||||||||||||||
Operating profit (loss) | $ | (9) | 69 | % | $ | (29) | (263) | % | $ | (8) | |||||||||||||||||||
Operating margin | (1.6) | % | (8.5) | % | (2.7) | % | |||||||||||||||||||||||
Changes in Net sales are summarized as follows: | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Organic growth | 13 | % | 16 | % | |||||||||||||||||||||||||
Acquisition of Royal Power Solutions | 46 | % | — | % | |||||||||||||||||||||||||
Foreign currency | (2) | % | 1 | % | |||||||||||||||||||||||||
Total increase in Net sales | 57 | % | 17 | % |
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Intangible asset amortization expense | $ | 499 | 12 | % | $ | 444 | 25 | % | $ | 354 | |||||||||||||||||||
Interest expense - net | 144 | — | % | 144 | (3) | % | 149 | ||||||||||||||||||||||
Pension and other postretirement benefits (income) expense | (43) | 34 | % | (65) | (263) | % | 40 | ||||||||||||||||||||||
Restructuring program charges | 33 | (58) | % | 78 | (64) | % | 214 | ||||||||||||||||||||||
Other expense - net | 653 | 212 | % | 209 | (52) | % | 434 | ||||||||||||||||||||||
Total corporate expense | $ | 1,286 | 59 | % | $ | 810 | (32) | % | $ | 1,191 |
Credit Rating Agency (long- /short-term rating) | Rating | Outlook | ||||||||||||
Standard & Poor's | A-/A-2 | Stable outlook | ||||||||||||
Moody's | Baa1/P-2 | Stable outlook | ||||||||||||
(In millions) | 2022 | Change from 2021 | 2021 | Change from 2020 | 2020 | ||||||||||||||||||||||||
Net cash provided by operating activities | $ | 2,533 | $ | 370 | $ | 2,163 | $ | (781) | $ | 2,944 | |||||||||||||||||||
Net cash provided by (used in) investing activities | (1,200) | 564 | (1,764) | (2,161) | 397 | ||||||||||||||||||||||||
Net cash used in financing activities | (1,340) | (805) | (535) | 2,723 | (3,258) | ||||||||||||||||||||||||
Effect of currency on cash | 4 | 9 | (5) | 10 | (15) | ||||||||||||||||||||||||
Total increase (decrease) in cash | $ | (3) | $ | (141) | $ | 68 |
(In millions) | December 31, 2022 | |||||||
Current assets | $ | 3,363 | ||||||
Noncurrent assets | 12,938 | |||||||
Current liabilities | 2,948 | |||||||
Noncurrent liabilities | 10,047 | |||||||
Amounts due to subsidiaries that are non-issuers and non-guarantors - net | 16,285 | |||||||
(In millions) | 2022 | |||||||
Net sales | $ | 11,433 | ||||||
Sales to subsidiaries that are non-issuers and non-guarantors | 911 | |||||||
Cost of products sold | 9,277 | |||||||
Expense from subsidiaries that are non-issuers and non-guarantors - net | 747 | |||||||
Net loss | (26) |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Joslyn Sunbank Company, LLC | California | |||||||
Bussmann International Holdings, LLC | Delaware | |||||||
Bussmann International, Inc. | Delaware | |||||||
CBE Services, Inc. | Delaware | |||||||
Cooper B-Line, Inc. | Delaware | |||||||
Cooper Bussmann, LLC | Delaware | |||||||
Cooper Crouse-Hinds MTL, Inc. | Delaware | |||||||
Cooper Crouse-Hinds, LLC | Delaware | |||||||
Cooper Electrical International, LLC | Delaware | |||||||
Cooper Enterprises LLC | Delaware | |||||||
Cooper Finance USA, Inc. | Delaware | |||||||
Cooper Industries International, LLC | Delaware | |||||||
Cooper Industries Vietnam, LLC | Delaware | |||||||
Cooper Industries, LLC | Delaware | |||||||
Cooper Interconnect, Inc. | Delaware | |||||||
Cooper Notification, Inc. | Delaware | |||||||
Cooper Power Systems, LLC | Delaware | |||||||
Cooper Technologies Company | Delaware | |||||||
Eaton Aerospace LLC | Delaware | |||||||
Eaton Automated Transmission Technologies Corporation | Delaware | |||||||
Eaton Electric Holdings LLC | Delaware | |||||||
Eaton Filtration LLC | Delaware | |||||||
Eaton Industries (Philippines), LLC | Delaware | |||||||
Eaton Industries IX LLC | Delaware | |||||||
Eaton Industries Middle East, LLC | Delaware | |||||||
Eaton Industries VIII LLC | Delaware | |||||||
Horizon Die Company, LLC | Delaware | |||||||
McGraw-Edison Development Corporation | Delaware | |||||||
Mission Systems Davenport AAR Inc. | Delaware | |||||||
Mission Systems Davenport Inc. | Delaware | |||||||
Mission Systems FWB Inc. | Delaware | |||||||
Mission Systems Orchard Park Inc. | Delaware | |||||||
MTL Instruments LLC | Delaware | |||||||
Royal Die & Stamping, LLC | Delaware | |||||||
Royal Precision Holdings Corp. | Delaware | |||||||
Royal Precision Products LLC | Delaware | |||||||
Souriau USA, Inc. | Delaware | |||||||
Wright Line LLC | Delaware | |||||||
Baricide LLC | Illinois | |||||||
Shakespeare Holdings LLC | Illinois | |||||||
Trippe Manufacturing LLC | Illinois | |||||||
Azonix Corporation | Massachusetts |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Eaton Ann Arbor LLC | Michigan | |||||||
Cannon Technologies, Inc. | Minnesota | |||||||
Cooper Wheelock, Inc. | New Jersey | |||||||
Cooper Wiring Devices, Inc. | New York | |||||||
Chagrin Highlands III Ltd. | Ohio | |||||||
Eaton Aeroquip LLC | Ohio | |||||||
Eaton Corporation | Ohio | |||||||
Eaton Leasing Corporation | Ohio | |||||||
Sure Power, Inc. | Oregon | |||||||
Power Distribution, Inc. | Virginia | |||||||
Eaton Industries (Argentina) S.A. | Argentina | |||||||
Eaton Electrical (Australia) Pty Ltd | Australia | |||||||
Eaton Industries Pty. Ltd. | Australia | |||||||
CTI-VIENNA Gesellschaft zur Prüfung elektrotechnischer Industrieprodukte GmbH | Austria | |||||||
Eaton Holding (Austria) G.m.b.H. | Austria | |||||||
Eaton Holding G.m.b.H. | Austria | |||||||
Eaton Industries (Austria) G.m.b.H. | Austria | |||||||
Eaton Electric BV | Belgium | |||||||
Eaton Filtration BV | Belgium | |||||||
Eaton Industries (Belgium) BV | Belgium | |||||||
Eaton Industries Holdings Ltd. | Bermuda Islands | |||||||
Saturn Insurance Company Ltd. | Bermuda Islands | |||||||
Souriau Dominican Republic, Ltd. | Bermuda Islands | |||||||
Cooper Power Systems do Brasil Ltda. | Brazil | |||||||
Crouse Hinds Comercio de Produtos Eletricos Ltda | Brazil | |||||||
Eaton Indústria e Comércio de Produtos Elétricos e Serviços Ltda | Brazil | |||||||
Eaton Ltda. | Brazil | |||||||
Moeller Electric Ltda. | Brazil | |||||||
Moeller Industria de electro-electronicos do Amazonas Ltda. | Brazil | |||||||
Digital Lighting Holdings Limited | British Virgin Islands | |||||||
Phoenixtec International Corp. | British Virgin Islands | |||||||
Senyuan International Investments Limited | British Virgin Islands | |||||||
Silver Light International Limited | British Virgin Islands | |||||||
Eaton Industries EOOD | Bulgaria | |||||||
CLS (Canada) Company | Canada | |||||||
Cooper Industries (Canada) Company | Canada | |||||||
Cooper Industries (Electrical) Inc. | Canada | |||||||
Cyme International T & D Inc. | Canada | |||||||
Eaton Industries (Canada) Company | Canada | |||||||
Tripp Lite of Canada Corp. | Canada | |||||||
Cutler-Hammer Electrical Company | Cayman Islands | |||||||
Cutler-Hammer Industries Ltd. | Cayman Islands | |||||||
Senyuan International Holdings Limited | Cayman Islands | |||||||
Eaton Industries (Chile) S.p.A. | Chile | |||||||
Beijing Yoosung Shinhwa Automobile Parts Co., Ltd. | China | |||||||
Cooper (China) Co., Ltd. | China | |||||||
Cooper (Ningbo) Electric Co., Ltd. | China | |||||||
Cooper Edison (Pingdingshan) Electronic Technologies Co., Ltd. | China |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Cooper Electric (Changzhou) Co., Ltd. | China | |||||||
Cooper Electric (Shanghai) Co., Ltd. | China | |||||||
Cooper Electronic Technologies (Shanghai) Co., Ltd. | China | |||||||
Cooper Shanghai Power Capacitor Co., Ltd. | China | |||||||
Cooper Xi'an Fusegear Co., Ltd. | China | |||||||
Cooper Yuhua (Changzhou) Electric Equipment Manufacturing Co., Ltd. | China | |||||||
Digital Lighting (Dong Guan) Co., Ltd. | China | |||||||
Dongguan Cooper Electronics Co. Ltd. | China | |||||||
Dongguan Wiring Devices Electronics Co., Ltd. | China | |||||||
Eaton (China) Investments Co., Ltd. | China | |||||||
Eaton Electrical Equipment Co Ltd | China | |||||||
Eaton Electrical Ltd. | China | |||||||
Eaton Filtration (Shanghai) Co. Ltd. | China | |||||||
Eaton Fu Li An (Changzhou) Electronics Co., Ltd. | China | |||||||
Eaton Hydraulics Systems (Jining) Co., Ltd. | China | |||||||
Eaton Industries (Jining) Co., Ltd | China | |||||||
Eaton Industries (Wuxi) Co., Ltd. | China | |||||||
Eaton Power (Shanghai) Trading Limited Partnership | China | |||||||
Eaton Power Quality (Shanghai) Co., Ltd. | China | |||||||
Eaton Science & Technology Management (Hainan) Limited Partnership | China | |||||||
Kaicheng Funke+Huster (Tangshan) Mining Electrical Co. Ltd. | China | |||||||
Lian Zheng Electronics (Shenzhen) Co., Ltd. | China | |||||||
Moeller Electric (Shanghai) Co., Ltd. | China | |||||||
Optimum Path Systems (Shanghai) Ltd. | China | |||||||
Phoenixtec Electronics (Shenzhen) Co., Ltd. | China | |||||||
Rizhao Yoosung Shinhwa Automobile Parts Co., Ltd. | China | |||||||
Santak Electronic (Shenzhen) Co., Ltd. | China | |||||||
Cooper Industries Colombia S.A.S. | Colombia | |||||||
Eaton Industries (Colombia) S.A.S. | Colombia | |||||||
Eaton Electrical Srl | Costa Rica | |||||||
Eaton Electric s.r.o. | Czech Republic | |||||||
Eaton Elektrotechnika s.r.o. | Czech Republic | |||||||
Eaton Electric ApS | Denmark | |||||||
Cutler-Hammer, SRL | Dominican Republic | |||||||
Eaton Industries (Egypt) LLC | Egypt | |||||||
Eaton Power Quality OY (Finland) | Finland | |||||||
Cooper Capri S.A.S. | France | |||||||
Cooper Menvier France SARL | France | |||||||
Cooper Securite S.A.S. | France | |||||||
Eaton eMobility France SAS | France | |||||||
Eaton France Holding SAS | France | |||||||
Eaton Industries (France) S.A.S. | France | |||||||
Eaton S.A.S. | France | |||||||
MP Group SAS | France | |||||||
MTL Instruments SARL | France | |||||||
Sefelec SAS | France | |||||||
Souriau S.A.S. | France | |||||||
Technocontact | France |
Consolidated Subsidiaries (A) | Where Organized | |||||||
CEAG Notlichtsysteme GmbH | Germany | |||||||
Cooper Crouse-Hinds GmbH | Germany | |||||||
Cooper Germany Holdings GmbH | Germany | |||||||
Eaton Electric G.m.b.H. | Germany | |||||||
Eaton Electrical IP G.m.b.H. & Co. KG | Germany | |||||||
Eaton Germany G.m.b.H. | Germany | |||||||
Eaton Germany Holdings GmbH | Germany | |||||||
Eaton GmbH & Co. KG | Germany | |||||||
Eaton Holding SE & Co. KG | Germany | |||||||
Eaton Industries G.m.b.H. | Germany | |||||||
Eaton Industries Holding G.m.b.H. | Germany | |||||||
Eaton Production International G.m.b.H. | Germany | |||||||
Eaton Protection Systems IP G.m.b.H. & Co. KG | Germany | |||||||
Eaton SE | Germany | |||||||
Eaton Technologies G.m.b.H. | Germany | |||||||
FHF Bergbautechnik GmbH & Co. KG | Germany | |||||||
FHF Funke+Huster Fernsig GmbH | Germany | |||||||
Funke+Huster GmbH | Germany | |||||||
GeCma Components electronic GmbH | Germany | |||||||
Hein Moeller Stiftung G.m.b.H. | Germany | |||||||
Institute for International Product Safety G.m.b.H. | Germany | |||||||
Martek Power GmbH | Germany | |||||||
Sefelec GmbH | Germany | |||||||
Cooper Univel S.A. | Greece | |||||||
Digital Lighting Co., Limited | Hong Kong | |||||||
Eaton Electric & Engineering Services Limited | Hong Kong | |||||||
Eaton Enterprises Limited | Hong Kong | |||||||
Eaton Power Quality Limited | Hong Kong | |||||||
Riseson International Limited | Hong Kong | |||||||
Santak Electronics Company Limited | Hong Kong | |||||||
Scoremax Limited | Hong Kong | |||||||
Silver Victory Hong Kong Limited | Hong Kong | |||||||
Eaton Enterprises (Hungary) Kft. | Hungary | |||||||
Eaton Industries KFT | Hungary | |||||||
Eaton Manufacturing Hungary Kft. | Hungary | |||||||
Eaton India Innovation Center LLP | India | |||||||
Eaton Industrial Products Pvt. Ltd. | India | |||||||
Eaton Industrial Systems Private Limited | India | |||||||
Eaton Management Services LLP | India | |||||||
Eaton Power Quality Private Limited | India | |||||||
Eaton Technologies Private Limited | India | |||||||
Mission Systems India Private Limited | India | |||||||
MTL Instruments Private Limited | India | |||||||
Souriau India Pvt Ltd | India | |||||||
PT Eaton Industries | Indonesia | |||||||
PT Ulusoy Electric Indonesia | Indonesia | |||||||
PT Ulusoy Electric Industry | Indonesia | |||||||
PT. Fluid Sciences Batam | Indonesia |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Abeiron III Unlimited Company | Ireland | |||||||
Cooper Industries Trading Unlimited Company | Ireland | |||||||
Cooper Industries Unlimited Company | Ireland | |||||||
Eaton Capital Global Holdings Unlimited Company | Ireland | |||||||
Eaton Capital Unlimited Company | Ireland | |||||||
Eaton Domhanda I Limited | Ireland | |||||||
Eaton Domhanda Unlimited Company | Ireland | |||||||
Eaton Industries (Ireland) II Limited | Ireland | |||||||
Eaton Industries (Ireland) Limited | Ireland | |||||||
Eaton Industries II Unlimited Company | Ireland | |||||||
Eaton Industries VII Unlimited Company | Ireland | |||||||
Eaton Industries XII Unlimited Company | Ireland | |||||||
Eaton Industries XX Unlimited Company | Ireland | |||||||
Eaton Intelligent Power Limited | Ireland | |||||||
Eaton Manufacturing Limited | Ireland | |||||||
Eaton Teorainn Limited | Ireland | |||||||
Plumtree I Limited | Ireland | |||||||
Eaton Global Limited | Isle of Man | |||||||
Eaton Global Holdings II Limited | Isle of Man | |||||||
Eaton Global Holdings III Limited | Isle of Man | |||||||
Eaton Global Holdings Limited | Isle of Man | |||||||
Eaton Industries (Israel) Ltd. | Israel | |||||||
T.T.M.C. (2012) Ltd | Israel | |||||||
Cooper Csa Srl | Italy | |||||||
Eaton Filtration (Italy) S.r.l. | Italy | |||||||
Eaton Industries (Italy) S.r.l. | Italy | |||||||
Eaton S.r.l. | Italy | |||||||
Gitiesse S.r.l. | Italy | |||||||
MTL Italia Srl | Italy | |||||||
Souriau Italy Srl | Italy | |||||||
Cooper Industries Japan K.K. | Japan | |||||||
Eaton Electric (Japan) Ltd. | Japan | |||||||
Eaton Filtration Ltd. | Japan | |||||||
Eaton Japan G.K. | Japan | |||||||
Souriau Japan KK | Japan | |||||||
Eaton Electrical (Korea) Limited Liability Company | Korea | |||||||
Eaton Industries (Korea) Ltd. | Korea | |||||||
Eaton Electric S.I.A. | Latvia | |||||||
Cambridge International Sarl | Luxembourg | |||||||
Cooper International Holdings S.a.r.l | Luxembourg | |||||||
Eaton Controls (Luxembourg) S.a.r.l. | Luxembourg | |||||||
Eaton Holding II S.a.r.l. | Luxembourg | |||||||
Eaton Holding IV S.a.r.l. | Luxembourg | |||||||
Eaton Holding S.a.r.l. | Luxembourg | |||||||
Eaton Holding XIII S.a.r.l. | Luxembourg | |||||||
Eaton Moeller S.a.r.l. | Luxembourg | |||||||
Eaton Services S.a.r.L. | Luxembourg | |||||||
Eaton Technologies (Luxembourg) S.a.r.l. | Luxembourg |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Green Holding S.a.r.l. | Luxembourg | |||||||
Eaton Industries Sdn. Bhd. | Malaysia | |||||||
ETN Asia International Limited | Mauritius | |||||||
ETN Holding 1 Limited | Mauritius | |||||||
ETN Holding 2 Limited | Mauritius | |||||||
ETN Holding 3 Limited | Mauritius | |||||||
Bussmann, S. de R.L. de C.V. | Mexico | |||||||
Cooper Crouse-Hinds, S. de R.L. de C.V. | Mexico | |||||||
Cooper Wiring Devices de Mexico, S.A. de C.V. | Mexico | |||||||
Eaton Enterprises, S. de R.L. de C.V. | Mexico | |||||||
Eaton Industries, S. de R.L. de C.V. | Mexico | |||||||
Eaton Solutions, S. de R.L. de C.V. | Mexico | |||||||
Eaton Technologies, S. de R.L. de C.V. | Mexico | |||||||
Eaton Trading Company, S. de R.L. de C.V. | Mexico | |||||||
Eaton Truck Components, S. de R.L. de C.V. | Mexico | |||||||
Electromanufacturas, S. de R.L. de C.V. | Mexico | |||||||
Grupo Desdemona, S. de R.L. de C.V. | Mexico | |||||||
Grupo Otello, S. de R.L. de C.V. | Mexico | |||||||
Martek Power, S.A. de C.V. | Mexico | |||||||
RPTech de Mexico, S de R.L. de C.V. | Mexico | |||||||
Sunbank de Mexico, S. de R.L. de C.V. | Mexico | |||||||
Eaton Electric S.a.r.l. | Morocco | |||||||
Eaton Industries (Morocco) LLC | Morocco | |||||||
Souriau MAROC Sarl | Morocco | |||||||
Cooper Crouse-Hinds B.V. | Netherlands | |||||||
Cooper Industries Finance B.V. | Netherlands | |||||||
Cooper Industries Global B.V. | Netherlands | |||||||
Cooper Safety B.V. | Netherlands | |||||||
Eaton B.V. | Netherlands | |||||||
Eaton Holding (Netherlands) B.V. | Netherlands | |||||||
Eaton Holding I B.V. | Netherlands | |||||||
Eaton Holding III B.V. | Netherlands | |||||||
Eaton Holding Turlock B.V. | Netherlands | |||||||
Eaton Holding V B.V. | Netherlands | |||||||
Eaton Holding VI B.V. | Netherlands | |||||||
Eaton Holding VII B.V. | Netherlands | |||||||
Eaton Industries (Netherlands) B.V. | Netherlands | |||||||
Eaton International B.V. | Netherlands | |||||||
Eaton Moeller B.V. | Netherlands | |||||||
MTL Instruments B.V. | Netherlands | |||||||
Turlock B.V. | Netherlands | |||||||
Eaton Industries Company | New Zealand | |||||||
Eaton International Industries Nigeria Limited | Nigeria | |||||||
Cooper Crouse-Hinds AS | Norway | |||||||
Eaton Electric AS | Norway | |||||||
Hernis Scan Systems A/S | Norway | |||||||
Norex AS | Norway | |||||||
Eaton Trading (FZC) LLC | Oman |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Eaton Industries Panama S.A. | Panama | |||||||
Eaton Industries SAC | Peru | |||||||
Eaton Automotive Components Spolka z o.o. | Poland | |||||||
Eaton Automotive Systems Spolka z o.o. | Poland | |||||||
Eaton Electric Spolka z.o.o. | Poland | |||||||
Eaton Filtration (Poland) Sp. z o.o. | Poland | |||||||
Eaton Truck Components Spolka z o.o. | Poland | |||||||
Cooper Pretronica Unipessoal Lda. | Portugal | |||||||
Cooper Industries Romania SRL | Romania | |||||||
Eaton Electric S.r.l. | Romania | |||||||
Eaton Electro Productie S.r.l. | Romania | |||||||
Cooper Industries Russia LLC | Russia | |||||||
Eaton LLC | Russia | |||||||
Eaton II LP | Scotland | |||||||
Eaton III LP | Scotland | |||||||
Eaton Industries LP | Scotland | |||||||
Eaton IV LP | Scotland | |||||||
Eaton LP | Scotland | |||||||
Eaton Manufacturing LP | Scotland | |||||||
Eaton Electric d.o.o. | Serbia | |||||||
Eaton Electric (Singapore) Pte. Ltd. | Singapore | |||||||
Eaton Industries Pte. Ltd. | Singapore | |||||||
Eaton Electric s.r.o. | Slovak Republic | |||||||
Eaton Electric (South Africa) Pty Ltd. | South Africa | |||||||
Eaton Truck Components (Proprietary) Ltd. | South Africa | |||||||
Aeroquip Iberica S.L. | Spain | |||||||
Cooper Crouse-Hinds, S.A. | Spain | |||||||
Eaton Industries (Spain) S.L. | Spain | |||||||
Productos Eaton Livia S.L. | Spain | |||||||
Eaton Electric AB | Sweden | |||||||
Eaton (Switzerland) Holding I GmbH | Switzerland | |||||||
Eaton (Switzerland) Holding II GmbH | Switzerland | |||||||
Eaton (Switzerland) Holding III G.m.b.H. | Switzerland | |||||||
Eaton Automation G.m.b.H | Switzerland | |||||||
Eaton Automation Holding G.m.b.H. | Switzerland | |||||||
Eaton Industries II G.m.b.H. | Switzerland | |||||||
Eaton Industries Manufacturing G.m.b.H. | Switzerland | |||||||
Eaton Manufacturing G.m.b.H. | Switzerland | |||||||
Eaton Manufacturing II G.m.b.H. | Switzerland | |||||||
Eaton Manufacturing III G.m.b.H. | Switzerland | |||||||
Green Motion SA | Switzerland | |||||||
Eaton Phoenixtec MMPL Co. Ltd. | Taiwan | |||||||
RTE Far East Corporation | Taiwan | |||||||
Eaton Electric (Thailand) Limited | Thailand | |||||||
Eaton Industries (Thailand) Ltd. | Thailand | |||||||
Eaton Elektrik Ticaret Limited Sirketi | Turkey | |||||||
Ulusoy Elektrik Imalat Taahhut ve Ticaret AS | Turkey | |||||||
D.P. Eaton Electric | Ukraine |
Consolidated Subsidiaries (A) | Where Organized | |||||||
Cooper Crouse-Hinds (LLC) | United Arab Emirates | |||||||
Cooper Industries FZE | United Arab Emirates | |||||||
Eaton FZE | United Arab Emirates | |||||||
Eaton Controls (UK) Limited | United Kingdom | |||||||
Eaton Electric Limited | United Kingdom | |||||||
Eaton Electrical Products Limited | United Kingdom | |||||||
Eaton Electrical Systems Limited | United Kingdom | |||||||
Eaton Holding (UK) II Limited | United Kingdom | |||||||
Eaton Holding Limited | United Kingdom | |||||||
Eaton Industries (England) Limited | United Kingdom | |||||||
Eaton Industries (U.K.) Limited | United Kingdom | |||||||
Eaton Limited | United Kingdom | |||||||
Eaton MEDC Limited | United Kingdom | |||||||
Eaton Safety Limited | United Kingdom | |||||||
Flight Refuelling Limited | United Kingdom | |||||||
Mission Systems Wimborne Limited | United Kingdom | |||||||
Souriau UK Ltd | United Kingdom | |||||||
The MTL Instruments Group Limited | United Kingdom | |||||||
Eaton Electrical, S.A. | Venezuela | |||||||
Eaton Electric (Vietnam) Company Limited | Vietnam |
Registered Senior Notes Issued Under | Issuer | Guarantors | ||||||
1994 Indenture 2012 Indenture 2017 Indenture 2022 Indenture | Eaton Corporation | Eaton, Turlock, B.V., Eaton Capital Unlimited Company, Eaton Domhanda Unlimited Company, Cooper Industries Unlimited Company, Eaton Controls (Luxembourg) S.à r.l., Eaton Technologies (Luxembourg) S.à r.l., Eaton Aerospace LLC, Eaton Filtration LLC, Wright Line LLC, Eaton Aeroquip LLC, Eaton Leasing Corporation, Cooper B-Line, Inc., Cooper Bussmann, LLC, Eaton Electric Holdings LLC, Cooper Crouse-Hinds, LLC, Cooper Power Systems, LLC, Cooper Wiring Devices, Inc. |
Registration number | Description | Filing date | ||||||||||||
333-259545 | Form S-3 Registration Statement | September 15, 2021 | ||||||||||||
333-249823 | Form S-8 Registration Statement-2020 Stock Plan | November 3, 2020 | ||||||||||||
333-207689 | Form S-8 Registration Statement-2015 Stock Plan | October 30, 2015 | ||||||||||||
333-202308 | Form S-3 Registration Statement | February 26, 2015 | ||||||||||||
333-185206 | Multiple plans - Form S-8 Registration Statement | November 30, 2012 | ||||||||||||
Amended and Restated 2012 Stock Plan | ||||||||||||||
Second Amended and Restated 2009 Stock Plan | ||||||||||||||
Amended and Restated 2008 Stock Plan | ||||||||||||||
Amended and Restated 2004 Stock Plan | ||||||||||||||
Amended and Restated 2002 Stock Plan | ||||||||||||||
Amended and Restated 1998 Stock Plan | ||||||||||||||
Amended and Restated 1995 Stock Plan | ||||||||||||||
Eaton Incentive Compensation Deferral Plan II | ||||||||||||||
Eaton Corporation Deferred Incentive Compensation Plan II | ||||||||||||||
2005 Non-Employee Director Fee Deferral Plan | ||||||||||||||
Eaton Savings Plan | ||||||||||||||
Eaton Personal Investment Plan | ||||||||||||||
Eaton Puerto Rico Retirement Savings Plan | ||||||||||||||
Cooper Retirement Savings and Stock Ownership Plan | ||||||||||||||
/s/ Ernst & Young LLP | |||||||||||
Cleveland, Ohio | |||||||||||
February 23, 2023 |
/s/ Craig Arnold | /s/ Thomas B. Okray | ||||||||||
Craig Arnold, Chairman; Principal Executive Officer; Director | Thomas B. Okray, Principal Financial Officer | ||||||||||
/s/ Gregory R. Page | |||||||||||
Daniel R. Hopgood, Principal Accounting Officer | Gregory R. Page, Director | ||||||||||
/s/ Olivier Leonetti | /s/ Deborah L. McCoy | ||||||||||
Olivier Leonetti, Director | Deborah L. McCoy, Director | ||||||||||
/s/ Silvio Napoli | /s/ Sandra Pianalto | ||||||||||
Silvio Napoli, Director | Sandra Pianalto, Director | ||||||||||
/s/ Robert V. Pragada | /s/ Lori J. Ryerkerk | ||||||||||
Robert V. Pragada, Director | Lori J. Ryerkerk, Director | ||||||||||
/s/ Gerald B. Smith | /s/ Dorothy C. Thompson | ||||||||||
Gerald B. Smith, Director | Dorothy C. Thompson, Director | ||||||||||
/s/ Darryl L. Wilson | |||||||||||
Darryl L. Wilson, Director | |||||||||||
Date: | February 23, 2023 | /s/ Craig Arnold | ||||||||||||||||||
Craig Arnold | ||||||||||||||||||||
Principal Executive Officer |
Date: | February 23, 2023 | /s/ Thomas B. Okray | ||||||||||||||||||
Thomas B. Okray | ||||||||||||||||||||
Principal Financial Officer |
Date: | February 23, 2023 | /s/ Craig Arnold | ||||||||||||||||||
Craig Arnold | ||||||||||||||||||||
Principal Executive Officer |
Date: | February 23, 2023 | /s/ Thomas B. Okray | ||||||||||||||||||
Thomas B. Okray | ||||||||||||||||||||
Principal Financial Officer |
Audit Information |
12 Months Ended |
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Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Cleveland, Ohio |
Auditor Firm ID | 42 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 2,465 | $ 2,146 | $ 1,415 |
Less net income for noncontrolling interests | (4) | (2) | (5) |
Net income attributable to Eaton ordinary shareholders | 2,462 | 2,144 | 1,410 |
Other comprehensive income (loss), net of tax | |||
Currency translation and related hedging instruments | (647) | 30 | 201 |
Pensions and other postretirement benefits | 175 | 495 | (73) |
Cash flow hedges | 159 | 37 | (33) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (313) | 562 | 95 |
Total comprehensive income attributable to Eaton ordinary shareholders | $ 2,149 | $ 2,706 | $ 1,505 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Ordinary shares outstanding (shares) | 397.8 | 398.8 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Information and Basis of Presentation Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power – today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we're accelerating the planet's transition to renewable energy, helping to solve the world's most urgent power management challenges, and doing what's best for our stakeholders and all of society. Founded in 1911, 2023 marks Eaton's 100th anniversary of being listed on the New York Stock Exchange. We reported revenues of $20.8 billion in 2022 and serve customers in more than 170 countries. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. Investments in associate companies included in Other assets were $788 million and $777 million as of December 31, 2022 and December 31, 2021, respectively, and income from these investments is reported in Other expense (income) - net. Eaton does not have off-balance sheet arrangements with unconsolidated entities. Eaton's reporting currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at exchange rates in effect at the balance sheet date as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. For subsidiaries operating in highly inflationary economies, non-monetary assets and liabilities such as inventory and property, plant and equipment and their related expenses are remeasured at historical exchange rates, while monetary assets and liabilities are remeasured at exchange rates in effect at the balance sheet date. Remeasurement adjustments for these subsidiaries are recognized in income. Certain prior year amounts have been reclassified to conform to the current year presentation. LIBOR Transition In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced it intends to phase out LIBOR. The final publication of rates for certain USD LIBOR tenors is expected to be on June 30, 2023. Various parties, including government agencies, are seeking to identify alternative rates to replace LIBOR. The Company’s new revolving credit facilities discussed in Note 8 do not reference LIBOR and all interest rate swaps that referenced LIBOR have been settled. Based on the Company's evaluation, the impacts of the transition from LIBOR to alternative rates in its contracts will not have a material impact on the consolidated financial statements. Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. The annual goodwill impairment test was performed using a qualitative analysis in 2022 and 2021, except for the eMobility reporting unit which used a quantitative analysis. A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. The results of the qualitative analyses did not indicate a need to perform quantitative analysis. Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Based on these analyses performed in 2022 and 2021, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts and thus, no impairment exists. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2022 and 2021 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows, and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2022 and 2021, the fair value of indefinite lived intangible assets exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 6. Leases The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, Eaton uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. The Company uses the following depreciation and amortization periods:
Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment. Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico, and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10%, depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. The amortization periods on a weighted average basis for United States and Non-United States pension plans are approximately 22 years and 10 years, respectively. The amortization period for other postretirement benefits plans is 8 years. Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value. Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Eaton's policy is to recognize income tax effects from accumulated other comprehensive income when individual units of account are sold, terminated, or extinguished. For additional information about income taxes, see Note 11. Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 15 for additional information about hedges and derivative financial instruments.
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ACQUISITIONS AND DIVESTITURES OF BUSINESSES |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS AND DIVESTITURES OF BUSINESSES | ACQUISITIONS AND DIVESTITURES OF BUSINESSES Acquisition of Power Distribution, Inc. On February 25, 2020, Eaton acquired Power Distribution, Inc. a leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. The company is headquartered in Richmond, Virginia and is reported within the Electrical Americas business segment. Sale of Lighting business On March 2, 2020, Eaton sold its Lighting business to Signify N.V. for a cash purchase price of $1.4 billion. As a result of the sale, the Company recognized a pre-tax gain of $221 million in 2020. The Lighting business, which had sales of $1.6 billion in 2019 as part of the Electrical Americas business segment, served customers in commercial, industrial, residential, and municipal markets. Acquisition of Tripp Lite On March 17, 2021, Eaton acquired Tripp Lite for $1.65 billion, net of cash received. Tripp Lite is a leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. Tripp Lite is reported within the Electrical Americas business segment. The acquisition of Tripp Lite has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in March 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Tripp Lite. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. The estimated fair values of the customer relationships, trademarks and technology intangible assets of $539 million, $33 million, and $32 million, respectively, were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, trademarks and technology intangible assets were 20 years, 15 years, and 5 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2021 Consolidated Financial Statements include Tripp Lite’s results of operations, including segment operating profit of $139 million on sales of $419 million, from the date of acquisition through December 31, 2021. Acquisition of Green Motion SA On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of cash paid at closing and an initial estimate of $57 million for the fair value of contingent future consideration based on 2023 and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a maximum possible undiscounted value of $111 million. As of December 31, 2022, the fair value of the contingent future payments has been reduced to $44 million based primarily on anticipated reductions in projected 2023 revenue compared to the initial estimates at closing. This reduction is presented in Other expense (income) - net on the Consolidated Statements of Income. Acquisition of a 50% stake in HuanYu High Tech On March 29, 2021, Eaton acquired a 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. HuanYu High Tech has production operations in Wenzhou, China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment. Acquisition of Mission Systems On June 1, 2021, Eaton acquired Mission Systems for $2.8 billion, net of cash received. Mission Systems is a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission Systems is reported within the Aerospace business segment. The acquisition of Mission Systems has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in June 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Mission Systems. As a result of the acquisition, goodwill of $572 million recognized in the United States is expected to be deductible for tax purposes. The estimated fair values of the customer relationships, technology, and backlog intangible assets of $764 million, $612 million, and $86 million, respectively, were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The estimated fair value of technology intangibles is also based on the selection of royalty rates used in the valuation model. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, technology, and backlog intangible assets were 22 years, 21 years, and 2 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2021 Consolidated Financial Statements include Mission Systems’ results of operations, including segment operating profit of $128 million on sales of $450 million, from the date of acquisition through December 31, 2021. Acquisition of a 50% stake in Jiangsu YiNeng Electric's busway business On June 25, 2021, Eaton acquired a 50 percent stake in Jiangsu YiNeng Electric's busway business, which manufactures and markets busway products in China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment. Sale of Hydraulics business On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. According to the terms of the sale agreement, the Company finalized negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022. As a result of these negotiations, the Company recognized an additional pre-tax gain of $24 million and received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments. The business had sales of $1.3 billion in 2021 through the date of the sale. Acquisition of Royal Power Solutions On January 5, 2022, Eaton acquired Royal Power Solutions for $610 million, net of cash received. Royal Power Solutions is a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment. The acquisition of Royal Power Solutions has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in December 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Royal Power Solutions. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. The estimated fair values of the customer relationships, technology, trademarks, and other intangible assets of $230 million, $90 million, $16 million, and $5 million, respectively, were determined using either the relief-from-royalty model, the multi-period excess earnings model, or the lost income model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The estimated fair value of technology and trademark intangibles are also based on the selection of royalty rates used in the valuation model. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, technology, trademarks, and other intangible assets were 17 years, 16 years, 15 years, and 2 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2022 Consolidated Financial Statements include Royal Power Solutions' results of operations, including segment operating profit of $21 million on sales of $158 million, from the date of acquisition through December 31, 2022. Russia During the second quarter of 2022, in light of the ongoing war with Ukraine, the Company decided to exit its business operations in Russia and recorded charges of $29 million presented in Other expense (income) - net on the Consolidated Statements of Income. The charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance. Acquisition of a 50% stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business On July 1, 2022, Eaton acquired a 50 percent stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business, which manufactures and markets low-voltage circuit breakers in China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment.
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REVENUE RECOGNITION |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when title and risk and rewards of ownership have transferred to the customer. Sales recognized over time are less than 5% of Eaton’s Consolidated Net Sales. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. Sales for service contracts generally are recognized as the services are provided. For agreements with multiple performance obligations, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, we generally allocate sales price to each distinct obligation based on the price of each item sold in separate transactions. Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a cumulative catch-up basis. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. Eaton does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. Sales, value added, and other taxes collected concurrent with revenue are excluded from sales. Shipping and handling costs are treated as fulfillment costs and are included in Cost of products sold. Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. Accrued rebates of $400 million and $327 million as of December 31, 2022 and 2021, respectively, are generally paid annually and were included in Other current liabilities. Returns are estimated at the time of the sale primarily based on historical experience and are recorded gross on the Consolidated Balance Sheet. Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they are typically earned at the completion of the contract when the customer is invoiced or when the customer pays Eaton. Sales of products and services varies by segment and are discussed in Note 17. In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer. Many of the products and services in power distribution and power quality services in the Electrical Americas and Electrical Global business segments and contracts to develop new products that are fully funded by customers in the Aerospace business segment meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. In the Hydraulics segment, sales contracts were primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts were primarily based on a customer’s purchase order. In this segment, performance obligations were generally satisfied at a point in time when we ship the product from our facility. In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In the eMobility segment, sales contracts are primarily for mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period. The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivables from customers were $3,581 million and $2,896 million at December 31, 2022 and December 31, 2021, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were $233 million and $187 million at December 31, 2022 and December 31, 2021, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased business activity in 2022. Changes in the deferred revenue liabilities are as follows:
Deferred revenue liabilities of $489 million and $395 million as of December 31, 2022 and 2021, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities. A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at December 31, 2022 was approximately $11.4 billion. At December 31, 2022, approximately 82% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.
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CREDIT LOSSES FOR RECEIVABLES |
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Credit Loss [Abstract] | |
CREDIT LOSSES FOR RECEIVABLES | CREDIT LOSSES FOR RECEIVABLES Receivables are exposed to credit risk based on the customers' ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton's receivables are generally short-term in nature with a majority outstanding less than 90 days. Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-off based on historic experience adjusted for market conditions. The Company's segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made. Accounts receivable are net of an allowance for credit losses of $31 million and $42 million at December 31, 2022 and 2021. The change in the allowance for credit losses includes expense and net write-offs, none of which are significant.
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INVENTORY |
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INVENTORY | INVENTORY Inventory is carried at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Cost components include raw materials, purchased components, direct labor, indirect labor, utilities, depreciation, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, and costs of the distribution network. The components of inventory are as follows:
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by segment are as follows:
The 2022 additions to goodwill relate primarily to the anticipated synergies of acquiring Royal Power Solutions and Mission Systems. The 2021 additions to goodwill relate to the anticipated synergies of acquiring Mission Systems, Tripp Lite, and Green Motion SA. A summary of other intangible assets is as follows:
Amortization expense related to intangible assets subject to amortization in 2022, and estimated amortization expense for each of the next five years, is as follows:
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LEASES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. The components of lease expense are as follows:
During 2022, Eaton entered into sale leaseback transactions primarily for certain office and distribution facilities and recorded gains of $81 million in Other expense (income) - net. The terms of the new operating leases ranged from 15 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021 and gains recorded on sale leaseback transactions were $9 million for the year ended December 31, 2020. Supplemental cash flow information related to leases is as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities at December 31, 2022 are as follows:
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LEASES | LEASES Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. The components of lease expense are as follows:
During 2022, Eaton entered into sale leaseback transactions primarily for certain office and distribution facilities and recorded gains of $81 million in Other expense (income) - net. The terms of the new operating leases ranged from 15 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021 and gains recorded on sale leaseback transactions were $9 million for the year ended December 31, 2020. Supplemental cash flow information related to leases is as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities at December 31, 2022 are as follows:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT A summary of long-term debt, including the current portion, is as follows:
Substantially all these long-term debt instruments are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries (the Senior Notes). Further, as of December 31, 2022, all of these long-term debt instruments, except the 0.75% Euro notes due 2024, the 0.70% Euro notes due 2025, the 0.128% Euro notes due 2026, and the 0.577% Euro notes due 2030, are registered by Eaton Corporation under the Securities Act of 1933, as amended (the Registered Senior Notes). On August 23, 2022, Eaton Corporation issued sustainability-linked senior notes (2022 Sustainability-Linked Notes) and senior notes (2022 Senior Notes, and collectively referred to as the 2022 Notes). The 2022 Sustainability-Linked Notes have a face amount of $1.3 billion, mature in 2033, and pay interest semi-annually at an initial interest rate of 4.15% per annum. Beginning in September 2028, the interest rate payable on the 2022 Sustainability-Linked Notes will be increased by an additional 25 basis points per annum if the Scope 1 and Scope 2 greenhouse gas emissions sustainability performance target is not met. The 2022 Senior Notes have a face amount of $700 million, mature in 2052, and pay interest semi-annually at 4.70% per annum. The issuer received proceeds totaling $1.98 billion from the issuance of the 2022 Notes, net of financing costs and discounts. The 2022 Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2022 Notes contain customary optional redemption and par call provisions. They also contain a change of control provision which requires the issuer to make an offer to purchase all or any part of the notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The capitalized deferred financing fees are amortized in Interest expense - net over the respective terms of the 2022 Notes. The 2022 Notes are subject to customary non-financial covenants. On October 3, 2022, the Company replaced its existing $2,000 million five-year revolving credit facility with a new $2,500 million five-year revolving credit facility that will expire on October 1, 2027. On the same date, the Company replaced its existing $500 million 364-day revolving credit facility with a new $500 million 364-day revolving credit facility that will expire on October 2, 2023. The revolving credit facilities totaling $3,000 million are used to support commercial paper borrowings and are fully and unconditionally guaranteed by Eaton and certain of its direct and indirect subsidiaries on an unsubordinated, unsecured basis. In October 2022, the Company also upsized its commercial paper program to $3,000 million. There were no borrowings outstanding under Eaton’s revolving credit facilities at December 31, 2022. The Company had access to the commercial paper markets through its $3,000 million commercial paper program, of which $300 million was outstanding on December 31, 2022. In addition to the revolving credit facilities, the Company also had available lines of credit of $919 million from various banks primarily for the issuance of letters of credit, of which there was $414 million outstanding at December 31, 2022. Borrowings outside the United States are generally denominated in local currencies. Short-term debt of $324 million at December 31, 2022 included $300 million of short-term commercial paper in the United States, which had a weighted average interest rate of 4.67%, and $24 million of short-term debt outside the United States. Eaton is in compliance with each of its debt covenants for all periods presented. Maturities of long-term debt for each of the next five years are as follows:
Interest paid on debt is as follows:
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RETIREMENT BENEFITS PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS Eaton has defined benefits pension plans and other postretirement benefits plans. Obligations and Funded Status
Change in Benefit Obligations
During 2020, the Company announced it was freezing its United States pension plans for its non-union employees. The freeze was effective January 1, 2021 for non-union U.S. employees whose retirement benefit was determined under a cash balance formula and is effective January 1, 2026 for non-union U.S. employees whose retirement benefit is determined under a final average pay formula. Actuarial gains related to changes in the United States and Non-United States benefit obligations in 2022 of $713 million and $817 million, respectively, were primarily due to increases in the discount rates used to measure the obligations. Actuarial gains related to changes in the United States and Non-United States benefit obligations in 2021 of $82 million and $143 million, respectively, were primarily due to increases in the discount rates used to measure the obligations. Change in Plan Assets
The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as follows:
The components of pension plans with a projected benefit obligation in excess of plan assets at December 31 are as follows:
Other postretirement benefit plans with accumulated postretirement benefit obligations in excess of plan assets have been disclosed in the Obligations and Funded Status table. Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss are as follows:
Benefits Expense
Total retirement benefits expense for 2021 of $66 million included $13 million of settlement and curtailment expense related to the sale of the Hydraulics business discussed in Note 2. The components of retirement benefits expense (income) other than service costs are included in Other expense (income) - net. Retirement Benefits Plans Assumptions In 2022, for purposes of determining liabilities related to the majority of its plans in the United States, the Company used the Pri-2012 mortality tables as well as mortality tables that are based on the Company's own experience and generational improvement scales that are based on MP-2021. In 2020 and 2021, the Company used mortality tables that are based on the Company's own experience and generational improvement scales that are based on MP-2020 and MP-2021, respectively. To estimate the service and interest cost components of net periodic benefit cost for the vast majority of its defined benefits pension and other postretirement benefits plans, the Company used a spot rate approach by applying the specific spot rates along the yield curve used to measure the benefit obligation at the beginning of the period to the relevant projected cash flows. Pension Plans
The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical data taking into account each plan's target asset allocation. The expected long-term rates of return on pension assets for United States pension plans and Non-United States pension plans for 2023 are 6.50% and 6.32%, respectively. The discount rates were determined using appropriate bond data for each country. Other Postretirement Benefits Plans Substantially all of the obligation for other postretirement benefits plans relates to United States plans. Assumptions used to determine other postretirement benefits obligations and expense are as follows:
Employer Contributions to Retirement Benefits Plans Contributions to pension plans that Eaton expects to make in 2023, and made in 2022, 2021 and 2020, are as follows:
The following table provides the estimated pension and other postretirement benefit payments for each of the next five years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below.
Pension Plan Assets Investment policies and strategies are developed on a country and plan specific basis. The United States plan, representing 64% of worldwide pension assets, and the United Kingdom plans representing 25% of worldwide pension assets, are invested primarily in debt securities largely for liability hedging, as the majority of the assets are in plans that are well-funded. In general, the plans are primarily allocated to diversified high-quality publicly traded debt, primarily through separately managed accounts and commingled funds in the form of common collective and other trusts. The United States plan's target allocation is 19% United States equities, 13% non-United States equities, 3% public real estate (primarily equity of real estate investment trusts), 54% debt securities and 11% other, including private equity, private debt and cash equivalents. The United Kingdom plans' target asset allocations are 32% equities and the remainder in debt securities, cash equivalents and real estate investments. The equity risk for the plans is managed through broad diversification across industries, geographies, and levels of market capitalization. The majority of debt allocations for these plans are longer duration government and corporate debt. The United States, United Kingdom and Canada pension plans are authorized to use derivatives, including the use of futures, swaps and options, to achieve more economically desired market exposures. Fair Value Measurements Financial instruments included in pension and other postretirement benefits plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology are as follows: Level 1 -Quoted prices (unadjusted) for identical assets in active markets. Level 2 -Quoted prices for similar assets in active markets, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 -Unobservable prices or inputs. Certain investments that are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables to permit a reconciliation to total plan assets. Pension Plans A summary of the fair value of pension plan assets at December 31, 2022 and 2021, is as follows:
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $180 million at December 31, 2022, which will be satisfied by a reallocation of pension plan assets.
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer, and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $192 million at December 31, 2021, which will be satisfied by a reallocation of pension plan assets. The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2021 and 2022 due to the following:
Other Postretirement Benefits Plans A summary of the fair value of other postretirement benefits plan assets at December 31, 2022 and 2021, is as follows:
Valuation Methodologies Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2022 and 2021. Common collective and other trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. The investments in other trusts are predominantly in exchange traded funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective and other trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Fixed income securities - These securities consist of publicly traded United States and non-United States fixed interest obligations (principally corporate and government bonds and debentures). The fair value of corporate and government debt securities is determined through third-party pricing models that consider various assumptions, including time value, yield curves, credit ratings, and current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. Equity securities - These securities consist of comingled funds and direct investments consisting of the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. United States treasuries - Valued at the closing price of each security. Bank loans - These securities consist of senior secured term loans of publicly traded and privately held United States and non-United States floating rate obligations (principally corporations of non-investment grade rating). The fair value is determined through third-party pricing models that primarily utilize dealer quoted current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. Real estate - Consists of direct investments in the stock of publicly traded companies and investments in pooled funds that invest directly in real estate. The publicly traded companies are valued based on the closing price reported in an active market on which the individual securities are traded and as such are classified as Level 1. The pooled funds rely on appraisal-based valuations and as such are classified as Level 3. Cash equivalents - Primarily certificates of deposit, commercial paper, and repurchase agreements. Exchange traded funds - Valued at the closing price of the exchange traded fund's shares. Money market funds - Money market funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Other - These assets consist of private equity, private debt, insurance contracts primarily for international plans, futures contracts, and over-the-counter options. Investments in private equity and private debt are valued at net asset value or estimated fair value based on quarterly financial information received from the investment advisor, third party appraisal or general partner. These estimates incorporate factors such as contributions and distributions, market transactions, market comparables and performance multiples. Futures contracts and options are valued based on the closing prices of contracts or indices as available using third-party sources. For additional information regarding fair value measurements, see Note 14. Defined Contribution Plans The Company has various defined contribution benefit plans, primarily consisting of the plans in the United States. The total contributions related to these plans are charged to expense and are as follows:
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COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Contingencies Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations and indemnity claims, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to legal 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. Environmental Contingencies Eaton has established policies to ensure that its operations are conducted in keeping with good corporate citizenship and with a positive commitment to the protection of the natural and workplace environments. The Company requires that its businesses be certified to ISO 14001, an international standard for environmental management systems. The Company routinely reviews EHS performance at each of its manufacturing facilities and continuously strives to improve its environmental footprint, including carbon, waste, water and related operational profiles consistent with our sustainability goals. Eaton is involved in remedial response and voluntary environmental remediation at a number of sites, including certain of its currently-owned or formerly-owned plants. The Company has also been named a potentially responsible party under the United States federal Superfund law, or the state equivalents thereof, at a number of disposal sites. The Company became involved in these sites as a result of government action or in connection with business acquisitions. At the end of 2022, the Company was involved with a total of 111 sites worldwide, including the Superfund sites mentioned above, with none of these sites being individually significant to the Company. Remediation activities, generally involving soil and/or groundwater contamination, include pre-cleanup activities such as fact finding and investigation, risk assessment, feasibility study, design and action planning, performance (where actions may range from monitoring, to removal of contaminants, to installation of longer-term remediation systems), and operation and maintenance of a remediation system. The extent of expected remediation activities and costs varies by site. A number of factors affect the cost of environmental remediation, including the number of parties involved at a particular site, the determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental regulations, and the continuing advancement of remediation technology. Taking these factors into account, Eaton has estimated the costs of remediation, which will be paid over a period of years. The Company accrues an amount on an undiscounted basis, consistent with the estimates of these costs, when it is probable that a liability has been incurred. Actual results may differ from these estimates. At December 31, 2022 and 2021, the Company had an accrual totaling $73 million and $99 million, respectively, for these costs. Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability by an amount that would have a material effect on its financial position, results of operations or cash flows. Warranty Accruals Product warranty accruals are established at the time the related sale is recognized through a charge to Cost of products sold. Warranty accrual estimates are based primarily on historical warranty claim experience and specific customer contracts. Provisions for warranty accruals are comprised of basic warranties for products sold, as well as accruals for product recalls and other events when they are known and estimable. A summary of the current and long-term warranty accruals is as follows:
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax expense (benefit) are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable.
Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate are as follows:
During 2022, income tax expense of $445 million was recognized (an effective tax rate of 15.3%) compared to income tax expense of $750 million in 2021 (an effective tax rate of 25.9%) and income tax expense of $331 million in 2020 (an effective tax rate of 19.0%). The decrease in the effective tax rate from 25.9% in 2021 to 15.3% in 2022, and the increase in the effective tax rate from 19.0% in 2020 to 25.9% in 2021, were primarily due to the one-time tax expense on the gain from the sale of the Hydraulics business in 2021 discussed in Note 2. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries of approximately $31.6 billion at December 31, 2022, since it is the Company's intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. The Company expects to deploy capital to those markets which offer particularly attractive growth opportunities. The cash that is permanently reinvested is typically used to expand operations either organically or through acquisitions. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings. Worldwide income tax payments, net of tax refunds, are as follows:
Deferred Income Tax Assets and Liabilities Components of noncurrent deferred income taxes are as follows:
In 2022, the Company recorded an increase of $1.0 billion in its deferred tax assets for foreign income tax loss carryforwards related to tax-deductible statutory adjustments in Luxembourg. The Company also recorded a corresponding increase in its valuation allowance for income tax loss carryforwards, since it does not believe that it is more likely than not that the net operating loss is realizable, resulting in no impact to the Consolidated Statements of Income. At December 31, 2022, Eaton Corporation plc and its foreign subsidiaries had income tax loss carryforwards and income tax credit carryforwards that are available to reduce future taxable income or tax liabilities. These carryforwards and their respective expiration dates are summarized below:
Recoverability of Deferred Income Tax Assets Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine its income tax provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and income tax loss carryforwards and income tax credit carryforwards. Management evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If the Company experiences cumulative pre-tax income in a particular jurisdiction in the three-year period including the current and prior two years, management normally concludes that the deferred income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments, or changes in tax laws, would lead management to conclude otherwise. However, if the Company experiences cumulative pre-tax losses in a particular jurisdiction in the three-year period including the current and prior two years, management then considers a series of factors in the determination of whether the deferred income tax assets can be realized. These factors include historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the utilization of certain deferred income tax liabilities, carryback capability under the tax law in the particular country, prudent and feasible tax planning strategies, changes in tax laws, and estimates of future earnings and taxable income using the same assumptions as those used for the Company's goodwill and other impairment testing. After evaluation of these factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific country, management would conclude that no valuation allowance would be required. To the extent that the deferred income tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, management would establish a valuation allowance. Applying the above methodology, valuation allowances have been established for certain deferred income tax assets to the extent they are not expected to be realized within the particular tax carryforward period. Unrecognized Income Tax Benefits A summary of gross unrecognized income tax benefits is as follows:
Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the benefit would be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company evaluates and adjusts the amount of unrecognized income tax benefits based on changes in facts and circumstances. The Company does not enter into any of the United States Internal Revenue Service (IRS) Listed Transactions as set forth in Treasury Regulation 1.6011-4. If all unrecognized income tax benefits were recognized, the net impact on the provision for income tax expense would be $833 million. As of December 31, 2022 and 2021, Eaton had accrued approximately $137 million and $128 million, respectively, for the payment of worldwide interest and penalties, which are not included in the table of unrecognized income tax benefits above. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. The resolution of the majority of Eaton's unrecognized income tax benefits is dependent upon uncontrollable factors such as the timing of finalizing resolutions of audit disputes through reaching settlement agreements or concluding litigation, or changes in law. Therefore, for the majority of Eaton’s unrecognized income tax benefits, it is not reasonably possible to estimate the increase or decrease in the next 12 months. For each of the unrecognized income tax benefits where it is possible to estimate the increase or decrease in the balance within the next 12 months, the Company does not anticipate any significant change. The Company believes that the final resolution of all the assessments discussed below will not have a material impact on its consolidated financial statements. The ultimate outcome of these matters cannot be predicted with certainty given the complex nature of tax controversies. Should the ultimate outcome of any one of these matters deviate from our reasonable expectations, final resolution may have a material adverse impact on the Company’s consolidated financial statements. However, Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct, and that its accrual of unrecognized income tax benefits is appropriate with respect to these matters. Eaton or its subsidiaries file income tax returns in Ireland and many countries around the world. With only a few exceptions, Eaton and its subsidiaries are no longer subject to examinations for years before 2014. Brazil Tax Years 2005-2012 The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $27 million plus $102 million of interest and penalties (translated at the December 31, 2022 exchange rate). The Company is challenging this assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 27, 2022, the Company filed a motion for clarification relating to that decision. On May 20, 2022, the court largely upheld its prior decision without further clarification. On June 9, 2022, the Company filed its notice of appeal to the second level court. The Company intends to continue its challenge of this assessment in the judicial system. As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $31 million plus $110 million of interest and penalties (translated at the December 31, 2022 exchange rate), which the Company is challenging in the judicial system. This case is still pending resolution at the first judicial level. Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of certain assets as security for the alleged deficiencies. As of December 31, 2022, the Company pledged Brazilian real estate assets with net book value of $19 million and provided additional security in the form of bank secured bonds and insurance bonds totaling $116 million and a cash deposit of $18 million (translated at the December 31, 2022 exchange rate). United States Tax Disputes The IRS typically audits large corporate taxpayers on a continuous basis, generally resulting in many open tax years if there are disputed tax positions upon completion of the audits. The IRS has completed its examination of the consolidated income tax returns of the Company’s United States subsidiaries (Eaton US) for 2005 through 2016 and the statuses of the various tax years are discussed below. The IRS has challenged certain tax positions of Eaton US, and the Company is attempting to resolve those issues in litigation and the IRS administrative process, as described in more detail below. The IRS is currently examining tax years 2017 through 2019, and the statute of limitations for those years is open until December 31, 2024. Tax years 2020 and later are subject to future examination by the IRS. Income tax returns of states and localities within the United States will be reopened to the extent of United States federal income tax adjustments, if any, going back to 2005 when those audit years are finalized. The Eaton US tax positions challenged by the IRS are items that recur beyond the tax years for which the IRS has proposed adjustments. Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct. However, if there is a final unfavorable resolution of any of the issues discussed below, it may have a material adverse impact on the Company’s consolidated financial statements. U.S. Tax Years 2005-2006 In 2011, the IRS issued a Statutory Notice of Deficiency for Eaton US for the 2005 and 2006 tax years (the 2005-06 Notice), which Eaton US contested in United States Tax Court. The 2005-06 Notice proposed assessments of $75 million in additional taxes plus $52 million in penalties related primarily to transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the United States. Eaton US has set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. Immediately prior to the 2005-06 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs. The case in Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. The Tax Court’s ruling on the APAs did not have a material impact on Eaton’s consolidated financial statements. On May 24, 2021, the IRS filed a notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals. On August 25, 2022, the Sixth Circuit issued a ruling in favor of Eaton US, confirming that the IRS must abide by the terms of the APAs. The Sixth Circuit’s ruling did not have a material impact on the Company’s consolidated financial statements and resolves U.S. tax years 2005-2006. U.S. Tax Years 2007-2010 In 2014, the IRS issued a Statutory Notice of Deficiency for Eaton US for the 2007 through 2010 tax years (the 2007-10 Notice), which Eaton US contested in Tax Court. The 2007-10 Notice proposed assessments of $190 million in additional taxes plus $72 million in penalties, net of agreed credits and deductions. The proposed assessments pertain to: (i) the same transfer pricing issues and APA for which the Tax Court and Sixth Circuit have issued favorable rulings to Eaton as noted above; and (ii) the separate proposed assessment noted below. The Company believes that the Sixth Circuit Court of Appeals ruling discussed above for tax years 2005-2006 should also resolve the APA cancellation issue for the 2007-2010 years. Eaton and the IRS have recognized that the ruling on the enforceability of the APA did not address a secondary issue regarding the transfer pricing for a certain royalty paid from 2006-2010. Eaton US reported a consistent royalty rate for 2006-2010. The IRS has agreed to the royalty rate as reported by Eaton US in 2006. Although the IRS has not proposed an alternative rate, it has not agreed to apply the same royalty rate in the 2007-2010 years. The 2007-10 Notice also includes a separate proposed assessment involving the recognition of income for several of Eaton US’s controlled foreign corporations. The Company believes that the proposed assessment is without merit and contested the matter in Tax Court. In October 2017, Eaton and the IRS both moved for partial summary judgment on this issue. On February 25, 2019, the Tax Court granted the IRS’s motion for partial summary judgment and denied Eaton’s. The Company intends to appeal the Tax Court’s partial summary judgment decision to the United States Sixth Circuit Court of Appeals. The total potential impact of the Tax Court's partial summary judgment decision on the controlled foreign corporation income recognition issue is not estimable until all matters in the open tax years have been resolved. U.S. Tax Years 2011-2013 In 2018, the IRS completed its examination of Eaton US for tax years 2011 through 2013 and proposed adjustments. Those adjustments were the subject of administrative appeals, which recently concluded without resolution. As a result, on December 21, 2022, the IRS issued Statutory Notices of Deficiency for Eaton US for these tax years (the 2011-2013 Notice) proposing assessments of $749 million in additional taxes plus $110 million in penalties, net of agreed credits and deductions. The proposed assessments pertain to: (i) transfer pricing adjustments similar to those proposed in the 2005-06 and 2007-10 Notices for products manufactured in the Company’s facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the U.S.; (ii) adjustments involving the recognition of income for several of Eaton US’s controlled foreign corporations; (iii) transfer pricing adjustments for products manufactured in one of the Company’s facilities in Mexico and sold to affiliated companies located in the U.S.; and (iv) adjustments challenging the appropriate interest rate on intercompany debt and amount of intercompany fees charged for financial guarantees on external debt. The Company will file its petition to the U.S. Tax Court on or before March 6, 2023, and will vigorously defend its positions through litigation, which will take several years for final resolution. U.S. Tax Years 2014-2016 In 2021, the IRS completed its examination of Eaton US for tax years 2014 through 2016 and has proposed adjustments, including: (i) transfer pricing adjustments similar to those proposed in the 2005-06, 2007-10, and 2011-2013 Notices for products manufactured in the Company’s facilities in Puerto Rico, and the Dominican Republic and sold to affiliated companies located in the U.S.; (ii) transfer pricing adjustments similar to those proposed in the 2011-2013 Notice for products manufactured in one of the Company’s facilities in Mexico and sold to affiliated companies located in the U.S.; and (iii) adjustments similar to those proposed in the 2011-2013 Notice challenging the appropriate interest rate on intercompany debt and amount of intercompany fees charged for financial guarantees on external debt. On November 29, 2021, the case was formally assigned to administrative appeals, and the Company will attempt to resolve certain of the issues in this administrative forum. However, if acceptable resolutions are not achieved, the Company will vigorously defend its positions through litigation, which if undertaken will likely take several years for final resolution. The statute of limitations on these tax years currently remains open until December 31, 2024.
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EATON SHAREHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EATON SHAREHOLDERS' EQUITY | EATON SHAREHOLDERS' EQUITY There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 397.8 million and 398.8 million of which were issued and outstanding at December 31, 2022 and 2021, respectively. Eaton's Memorandum and Articles of Association authorized 40 thousand deferred ordinary shares (€1.00 par value per share) and 10 thousand preferred A shares ($1.00 par value per share), all of which were issued and outstanding at December 31, 2022 and 2021, and 10 million serial preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2022 and 2021. At December 31, 2022, there were 10,034 holders of record of Eaton ordinary shares. Additionally, 14,158 current and former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, or The Eaton Puerto Rico Retirement Savings Plan. On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 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 2022, 2.0 million ordinary shares were repurchased under the 2022 Program in the open market at a total cost of $286 million. During 2021, 0.9 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $122 million. Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $3 million and $4 million of ordinary shares and marketable securities at December 31, 2022 and 2021, respectively, to fund a portion of these liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' equity at historical cost. On February 23, 2023, Eaton's Board of Directors declared a quarterly dividend of $0.86 per ordinary share, a 6% increase over the dividend paid in the fourth quarter of 2022. The dividend is payable on March 24, 2023 to shareholders of record on March 6, 2023. Comprehensive Income (Loss) Comprehensive income (loss) consists primarily of net income, currency translation and related hedging instruments, changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open derivative contracts designated as cash flow hedges. The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss):
The changes in Accumulated other comprehensive loss are as follows:
The reclassifications out of Accumulated other comprehensive loss are as follows:
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 9 for additional information about defined benefits 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 is as follows:
In 2022 and 2020, 0.1 million and 0.6 million of 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. In 2021, all stock options were included in the calculation of diluted net income per share attributable to Eaton ordinary shareholders because they were all dilutive.
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EQUITY-BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service conditions or both service and market conditions are expensed over the period during which an employee is required to provide service in exchange for the award. Awards with both service and performance conditions are expensed over the period an employee is required to provide service based on the number of units for which achievement of the performance objective is probable. The Company estimates forfeitures as part of recording equity-based compensation expense. Restricted Stock Units and Awards Restricted stock units (RSUs) and restricted stock awards (RSAs) have been issued to certain employees and directors. The fair value of RSUs and RSAs are determined based on the closing market price of the Company’s ordinary shares at the date of grant. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three years. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over ten years. A summary of the RSU and RSA activity for 2022 is as follows:
Information related to RSUs and RSAs is as follows:
As of December 31, 2022, total compensation expense not yet recognized related to non-vested RSUs and RSAs was $78 million, and the weighted-average period in which the expense is expected to be recognized is 2.7 years. Excess tax benefit for RSUs and RSAs totaled $5 million, $5 million and $2 million for 2022, 2021, and 2020, respectively. Performance Share Units Performance share units (PSUs) have been issued to certain employees that vest based on the satisfaction of a three-year service period and total shareholder return relative to that of a group of peers. Awards earned at the end of the three-year vesting period range from 0% to 200% of the targeted number of PSUs granted based on the ranking of total shareholder return of the Company, assuming reinvestment of all dividends, relative to a defined peer group of companies. Equity-based compensation expense for these PSUs is recognized over the period during which an employee is required to provide service in exchange for the award. Upon vesting, dividends that have accumulated during the vesting period are paid on earned awards. The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions. The principal assumptions utilized in valuing these PSUs include the expected stock price volatility (based on the most recent 3-year period as of the grant date) and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon bonds with a three-year maturity as of the grant date). A summary of the assumptions used in determining fair value of these PSUs is as follows:
A summary of these PSUs that vested is as follows:
A summary of the 2022 activity for these PSUs is as follows:
1 Performance shares granted assuming the Company will perform at target relative to peers. 2 Adjustments for the number of shares vested under the 2020 awards at the end of the three-year performance period ended December 31, 2022, being higher than the target number of shares. Information related to PSUs is as follows:
As of December 31, 2022, total compensation expense not yet recognized related to non-vested PSUs was $26 million and the weighted-average period in which the expense is to be recognized is 1.7 years. Excess tax benefit for PSUs totaled $10 million, $6 million and $3 million for 2022, 2021, and 2020, respectively. Stock Options Under various plans, stock options have been granted to certain employees and directors to purchase ordinary shares at prices equal to fair market value on the date of grant. Substantially all of these options vest ratably during the three-year period following the date of grant and expire 10 years from the date of grant. Compensation expense is recognized for stock options based on the fair value of the options at the date of grant and amortized on a straight-line basis over the period the employee or director is required to provide service. The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The principal assumptions utilized in valuing stock options include the expected stock price volatility (based on the most recent historical period equal to the expected life of the option); the expected option life (an estimate based on historical experience); the expected dividend yield; and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon with a maturity equal to the expected life of the option). A summary of the assumptions used in determining the fair value of stock options is as follows:
A summary of stock option activity is as follows:
The aggregate intrinsic value in the table above represents the total excess of the $156.95 closing price of Eaton ordinary shares on the last trading day of 2022 over the exercise price of the stock option, multiplied by the related number of options outstanding and exercisable. The aggregate intrinsic value is not recognized for financial accounting purposes and the value changes based on the daily changes in the fair market value of the Company's ordinary shares. Information related to stock options is as follows: As of December 31, 2022, total compensation expense not yet recognized related to non-vested stock options was $9 million, and the weighted-average period in which the expense is expected to be recognized is 1.7 years
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FAIR VALUE MEASUREMENTS |
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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 and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:
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. Other Fair Value Measurements Long-term debt and the current portion of long-term debt had a carrying value of $8,331 million and fair value of $7,625 million at December 31, 2022 compared to $8,566 million and $9,232 million, respectively, at December 31, 2021. The fair value of Eaton's debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement. Short-Term Investments Eaton invests excess cash generated from operations in short-term marketable investments. Investments in marketable equity securities are valued at the closing price of the shares. All other short-term investments are at carrying value, which approximates the fair value due to the short-term maturities of these investments. A summary of short-term investments is as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
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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 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 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 as part of a hedging relationship, is effective and 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 gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income 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 gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income 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 is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these financial instruments are classified in operating activities on the Consolidated Statements of Cash Flows. 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. 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 had a carrying value on an after-tax basis of $2,711 million and $2,880 million at December 31, 2022 and 2021, respectively. See Note 8 for additional information about debt. Interest Rate Risk Eaton enters into fixed-to-floating interest rate swaps to manage interest rate risk of certain long-term debt. These interest rate swaps are accounted for as fair value hedges of certain long-term debt. The maturity of the swap corresponds with the maturity of the debt instrument as noted in the table of long-term debt in Note 8. Eaton also enters into forward starting floating-to-fixed interest rate swaps to manage interest rate risk on future anticipated debt issuances. Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
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 receivables, payables 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 cash flows resulting from the settlement of these derivatives have been classified in investing activities in the Consolidated Statement of Cash Flows. As of December 31, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:
The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:
(a) At December 31, 2022 and 2021, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $48 million and $33 million, respectively. The impact of hedging activities to the Consolidated Statements of Income is as follows:
The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:
(a) In 2022, Eaton changed the presentation of gains and losses associated with derivative contracts for commodities that are not designated as hedges from Cost of product sold to Other expense (income) - net on the Consolidated Statements of Income. Prior period amounts have not been reclassified as they are not material. The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows:
At December 31, 2022, a gain of $19 million of estimated unrealized net gains or losses associated with our cash flow hedges were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next 12 months.
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RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In the second quarter of 2020, Eaton decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company has incurred charges of $325 million. These restructuring activities are expected to be completed in 2023 with total estimated charges of $350 million cumulatively for the entire program. The remaining charges in 2023 are expected to relate primarily to plant closing and other costs. A summary of restructuring program charges (income) is as follows:
Restructuring program charges (income) related to the following segments:
A summary of liabilities related to workforce reductions, plant closing and other associated costs is as follows:
1The restructuring program liability was adjusted by $30 million in the fourth quarter of 2022 related to true-ups for completed workforce reductions and the decision not to close a facility in the Vehicle segment that was previously included in the program. These restructuring program charges (income) were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) - net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 17 for additional information about business segments.
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BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION | BUSINESS SEGMENT AND GEOGRAPHIC REGION 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 segments are as follows: Electrical Americas and Electrical Global The Electrical Americas segment consists of electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The Electrical Global segment consists of electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America; as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The principal markets for these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share certain common global customers, but a large number of customers are located regionally. Sales are made through distributors, resellers, and manufacturers' representatives, as well as directly to original equipment manufacturers, utilities, and certain other end users. Hydraulics On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. The Hydraulics business sold hydraulics components, systems and services for industrial and mobile equipment. The Hydraulics business offered a wide range of power products including pumps, motors and hydraulic power units; a broad range of controls and sensing products including valves, cylinders and electronic controls; a full range of fluid conveyance products including industrial and hydraulic hose, fittings, and assemblies, thermoplastic hose and tubing, couplings, connectors, and assembly equipment; industrial drum and disc brakes. Historically, the principal markets for the Hydraulics business included renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, and power generation. Key manufacturing customers in these markets and other customers were located globally. Products were sold and serviced through a variety of channels. Aerospace The Aerospace segment is a leading global supplier of aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. Products include hydraulic power generation systems for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, couplings, sealing and ducting; fuel systems including air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, valves, adapters and regulators; mission systems including oxygen generation system, payload carriages, and thermal management products; high performance interconnect products including wiring connectors and cables. The Aerospace segment also includes filtration systems including hydraulic filters, bag filters, strainers and cartridges; and golf grips. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers, as well as industrial applications. These manufacturers and other customers operate globally. Products are sold and serviced through a variety of channels. Vehicle The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. Products include transmissions and transmission components, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars and agricultural equipment. eMobility The eMobility segment designs, manufactures, markets, and supplies mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. Products include high voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution, fuel tank isolation valves, and commercial vehicle hybrid systems. The principle markets for the eMobility segment are original equipment manufacturers and aftermarket customers of passenger cars, commercial vehicles, and construction, agriculture, and mining equipment. Other Information No single customer represented greater than 10% of net sales in 2022, 2021 or 2020, respectively. The accounting policies of the business segments are generally the same as the policies described in Note 1, except that, as described further in the following paragraph, certain items are not allocated to the businesses. Intersegment sales and transfers are accounted for at the same prices as if the sales and transfers were made to third parties. These intersegment sales are eliminated in consolidation. Operating profit includes the operating profit from intersegment sales. Corporate includes all the Company's amortization of intangible assets, interest expense-net and restructuring program costs (Note 16) and the non-service cost portion of pensions and other postretirement benefits expense. Other expense - net includes all the Company's costs associated with acquisitions, divestitures, and gains and losses on the sale of certain businesses and other items that are of a corporate or functional governance nature. For purposes of business segment performance measurement, a portion of corporate costs, excluding amortization of intangibles assets, acquisition integration and divestiture costs, and restructuring program charges, are allocated to the businesses. These allocations are periodically adjusted to pass on year-over-year cost savings or increases to the businesses in a manner that is consistent with how the chief operating decision maker assesses performance. Identifiable assets of the business segments exclude goodwill, other intangible assets, and general corporate assets, which principally consist of certain cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets. Business Segment Information
Geographic Region Information Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation Policy | The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. Investments in associate companies included in Other assets were $788 million and $777 million as of December 31, 2022 and December 31, 2021, respectively, and income from these investments is reported in Other expense (income) - net. Eaton does not have off-balance sheet arrangements with unconsolidated entities. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation | Eaton's reporting currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at exchange rates in effect at the balance sheet date as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. For subsidiaries operating in highly inflationary economies, non-monetary assets and liabilities such as inventory and property, plant and equipment and their related expenses are remeasured at historical exchange rates, while monetary assets and liabilities are remeasured at exchange rates in effect at the balance sheet date. Remeasurement adjustments for these subsidiaries are recognized in income. Certain prior year amounts have been reclassified to conform to the current year presentation. LIBOR Transition In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced it intends to phase out LIBOR. The final publication of rates for certain USD LIBOR tenors is expected to be on June 30, 2023. Various parties, including government agencies, are seeking to identify alternative rates to replace LIBOR. The Company’s new revolving credit facilities discussed in Note 8 do not reference LIBOR and all interest rate swaps that referenced LIBOR have been settled. Based on the Company's evaluation, the impacts of the transition from LIBOR to alternative rates in its contracts will not have a material impact on the consolidated financial statements.
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Goodwill and Indefinite Life Intangible Assets | Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. The annual goodwill impairment test was performed using a qualitative analysis in 2022 and 2021, except for the eMobility reporting unit which used a quantitative analysis. A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. The results of the qualitative analyses did not indicate a need to perform quantitative analysis. Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Based on these analyses performed in 2022 and 2021, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts and thus, no impairment exists. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2022 and 2021 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows, and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2022 and 2021, the fair value of indefinite lived intangible assets exceeded the respective carrying value.
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Leases | Leases The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, Eaton uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease.
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Other Long-Lived Assets | Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. The Company uses the following depreciation and amortization periods:
Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment.
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Retirement Benefits Plans | Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico, and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10%, depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. The amortization periods on a weighted average basis for United States and Non-United States pension plans are approximately 22 years and 10 years, respectively. The amortization period for other postretirement benefits plans is 8 years.
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Asset Retirement Obligations | Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value.
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Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Eaton's policy is to recognize income tax effects from accumulated other comprehensive income when individual units of account are sold, terminated, or extinguished. For additional information about income taxes, see Note 11.
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Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 15 for additional information about hedges and derivative financial instruments.
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Revenue Recognition | Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when title and risk and rewards of ownership have transferred to the customer. Sales recognized over time are less than 5% of Eaton’s Consolidated Net Sales. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. Sales for service contracts generally are recognized as the services are provided. For agreements with multiple performance obligations, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, we generally allocate sales price to each distinct obligation based on the price of each item sold in separate transactions. Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a cumulative catch-up basis. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. Eaton does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. Sales, value added, and other taxes collected concurrent with revenue are excluded from sales. Shipping and handling costs are treated as fulfillment costs and are included in Cost of products sold. Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. Accrued rebates of $400 million and $327 million as of December 31, 2022 and 2021, respectively, are generally paid annually and were included in Other current liabilities. Returns are estimated at the time of the sale primarily based on historical experience and are recorded gross on the Consolidated Balance Sheet. Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they are typically earned at the completion of the contract when the customer is invoiced or when the customer pays Eaton. Sales of products and services varies by segment and are discussed in Note 17. In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer. Many of the products and services in power distribution and power quality services in the Electrical Americas and Electrical Global business segments and contracts to develop new products that are fully funded by customers in the Aerospace business segment meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. In the Hydraulics segment, sales contracts were primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts were primarily based on a customer’s purchase order. In this segment, performance obligations were generally satisfied at a point in time when we ship the product from our facility. In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In the eMobility segment, sales contracts are primarily for mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Depreciation and Amortization Periods | The Company uses the following depreciation and amortization periods:
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ACQUISITIONS AND DIVESTITURES OF BUSINESSES (Tables) |
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.
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REVENUE RECOGNITION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Sales | The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:
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Schedule of Changes in Deferred Revenue Liabilities | Changes in the deferred revenue liabilities are as follows:
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INVENTORY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventory | The components of inventory are as follows:
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill by segment are as follows:
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Schedule of Other Intangible Assets | A summary of other intangible assets is as follows:
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Schedule of Amortization Expense of Intangible Assets | Amortization expense related to intangible assets subject to amortization in 2022, and estimated amortization expense for each of the next five years, is as follows:
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense are as follows:
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Schedule of Supplemental Balance Sheet Information related to Leases | Supplemental balance sheet information related to leases is as follows:
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Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities at December 31, 2022 are as follows:
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Schedule of Maturities of Finance Lease Liabilities | Maturities of lease liabilities at December 31, 2022 are as follows:
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DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt, including Current Portion | A summary of long-term debt, including the current portion, is as follows:
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Schedule of Maturities of Long-Term Debt | Maturities of long-term debt for each of the next five years are as follows:
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Schedule of Interest Paid on Debt | Interest paid on debt is as follows:
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RETIREMENT BENEFITS PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Obligations and Funded Status | Obligations and Funded Status
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Schedule of Change in Benefit Obligations | Change in Benefit Obligations
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Schedule of Change in Plan Assets | Change in Plan Assets
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Schedule of Components of Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as follows:
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Schedule of Components of Pension Plans with Projected Benefit Obligations in Excess of Plan Assets | The components of pension plans with a projected benefit obligation in excess of plan assets at December 31 are as follows:
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Schedule of Changes in Pension and Other Postretirement Benefits Liabilities recognized in Accumulated Other Comprehensive Income (Loss) | Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss are as follows:
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Schedule of Benefits Expense | Benefits Expense
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Schedule of Assumptions Used to Determine Pension Plans Expense | Pension Plans
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Schedule of Assumptions Used to Determine Other Postretirement Benefits Obligations and Expense | Assumptions used to determine other postretirement benefits obligations and expense are as follows:
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Schedule of Employer Contributions to Pension Plans | Contributions to pension plans that Eaton expects to make in 2023, and made in 2022, 2021 and 2020, are as follows:
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Schedule of Expected Pension and Other Postretirement Benefit Payments and Expected Subsidy | For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below.
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Schedule of Fair Value of Pension Plan Assets | A summary of the fair value of pension plan assets at December 31, 2022 and 2021, is as follows:
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $180 million at December 31, 2022, which will be satisfied by a reallocation of pension plan assets.
1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer, and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $192 million at December 31, 2021, which will be satisfied by a reallocation of pension plan assets.
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Schedule of Fair Value Measurement of Plan Assets using Significant Unobservable Inputs | The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2021 and 2022 due to the following:
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Schedule of Fair Value of Other Postretirement Benefits Plan Assets | A summary of the fair value of other postretirement benefits plan assets at December 31, 2022 and 2021, is as follows:
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Schedule of Employer Contributions to Defined Contribution Benefit Plans, Charged to Expense | The total contributions related to these plans are charged to expense and are as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Current and Long-Term Warranty Accruals | A summary of the current and long-term warranty accruals is as follows:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income (Loss) before Income Taxes | Income (loss) before income taxes and income tax expense (benefit) are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable.
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Schedule of Income Tax Expense (Benefit) |
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Schedule of Reconciliation of Effective Income Tax Rate | Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate are as follows:
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Schedule of Worldwide Income Tax Payments | Worldwide income tax payments, net of tax refunds, are as follows:
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Schedule of Components of Deferred Income Taxes | Components of noncurrent deferred income taxes are as follows:
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Schedule of Foreign Tax Loss Carryforwards and Income Tax Credit Carryforwards | These carryforwards and their respective expiration dates are summarized below:
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Schedule of Gross Unrecognized Income Tax Benefits | A summary of gross unrecognized income tax benefits is as follows:
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EATON SHAREHOLDERS' EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Pre-Tax and After-Tax Amounts Recognized in Comprehensive Income (Loss) | The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss):
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Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in Accumulated other comprehensive loss are as follows:
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Schedule of Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The reclassifications out of Accumulated other comprehensive loss are as follows:
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 9 for additional information about defined benefits pension and other postretirement benefits items.
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Schedule of Net Income per Share | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders is as follows:
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EQUITY-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of RSU and RSA activity | A summary of the RSU and RSA activity for 2022 is as follows:
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Schedule of Information Related to RSUs and RSAs | Information related to RSUs and RSAs is as follows:
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Schedule of Assumptions Used in Determining Fair Value of PSUs | A summary of the assumptions used in determining fair value of these PSUs is as follows:
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Schedule of PSU Activity | A summary of these PSUs that vested is as follows:
A summary of the 2022 activity for these PSUs is as follows:
1 Performance shares granted assuming the Company will perform at target relative to peers. 2 Adjustments for the number of shares vested under the 2020 awards at the end of the three-year performance period ended December 31, 2022, being higher than the target number of shares.
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Schedule of Information Related to PSUs | Information related to PSUs is as follows:
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Schedule of Assumptions Used in Determining Fair Value of Stock Options | A summary of the assumptions used in determining the fair value of stock options is as follows:
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Schedule of Stock Option Activity | A summary of stock option activity is as follows:
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Schedule of Information Related to Stock Options | Information related to stock options is as follows:
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Recognized at Fair Value | A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:
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Schedule of Carrying Value of Short-Term Investments | A summary of short-term investments is as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Financial Instruments Recognized in Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:
(a) At December 31, 2022 and 2021, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $48 million and $33 million, respectively.
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Schedule of Notional Amounts of Outstanding Derivative Positions and Commodity Contracts | As of December 31, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:
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Schedule of Impact of Hedging Activities to Consolidated Statement of Income | The impact of hedging activities to the Consolidated Statements of Income is as follows:
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Schedule of Amounts Recognized in Net Income | The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:
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Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss) | The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows:
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RESTRUCTURING CHARGES (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Program Charges | A summary of restructuring program charges (income) is as follows:
Restructuring program charges (income) related to the following segments:
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Schedule of Liabilities Related to Restructuring | A summary of liabilities related to workforce reductions, plant closing and other associated costs is as follows:
1The restructuring program liability was adjusted by $30 million in the fourth quarter of 2022 related to true-ups for completed workforce reductions and the decision not to close a facility in the Vehicle segment that was previously included in the program.
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BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Segment Information | Business Segment Information
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Schedule of Identifiable Assets, Capital Expenditures, and Depreciation by Segment |
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Schedule of Geographic Region Information | Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net.
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REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
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Revenue from Contract with Customer [Abstract] | ||
Sales recognized over time, as a percent of Consolidated Net Sales (less than) (as a percent) | 5.00% | |
Accrued rebates | $ 400 | $ 327 |
Accounts receivables from customers | 3,581 | 2,896 |
Unbilled receivables | 233 | 187 |
Deferred revenue liabilities, included in other current liabilities | 489 | $ 395 |
Backlog of unsatisfied or partially satisfied obligations | $ 11,400 | |
Backlog expected to be recognized in the next twelve months (as a percent) | 82.00% |
REVENUE RECOGNITION - Changes in Deferred Revenue Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
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Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | $ 422 | $ 257 |
Customer deposits and billings | 1,656 | 1,267 |
Revenue recognized in the period | (1,541) | (1,192) |
Deferred revenue from business acquisitions | 99 | |
Translation and other | (29) | (9) |
Balance at end of period | $ 508 | $ 422 |
CREDIT LOSSES FOR RECEIVABLES - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Credit Loss [Abstract] | ||
Allowance for credit losses | $ 31 | $ 42 |
INVENTORY - Summary (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,275 | $ 1,096 |
Work-in-process | 781 | 620 |
Finished goods | 1,375 | 1,253 |
Total inventory | $ 3,430 | $ 2,969 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets by Major Class (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Summary of other intangible assets | ||
Intangible assets not subject to amortization | $ 1,201 | $ 1,374 |
Intangible assets subject to amortization | ||
Historical cost | 7,952 | 7,747 |
Accumulated amortization | 3,667 | 3,266 |
Customer relationships | ||
Intangible assets subject to amortization | ||
Historical cost | 4,677 | 4,752 |
Accumulated amortization | 2,156 | 1,974 |
Patents and technology | ||
Intangible assets subject to amortization | ||
Historical cost | 1,987 | 1,879 |
Accumulated amortization | 830 | 712 |
Trademarks | ||
Intangible assets subject to amortization | ||
Historical cost | 1,113 | 951 |
Accumulated amortization | 570 | 518 |
Other | ||
Intangible assets subject to amortization | ||
Historical cost | 175 | 165 |
Accumulated amortization | $ 111 | $ 62 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense of Intangible Assets (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2022
USD ($)
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Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 483 |
2023 | 430 |
2024 | 403 |
2025 | 398 |
2026 | 382 |
2027 | $ 373 |
LEASES - Components of Lease Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Leases [Abstract] | |||
Operating lease cost | $ 179 | $ 164 | $ 184 |
Finance lease cost: Amortization of lease assets | 11 | 12 | 6 |
Finance lease cost: Interest on lease liabilities | 1 | 2 | 1 |
Short-term lease cost | 17 | 15 | 18 |
Variable lease cost | 27 | 16 | 3 |
Sublease income | (1) | (2) | (2) |
Total lease cost | $ 234 | $ 207 | $ 210 |
LEASES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Lessee, Lease, Description [Line Items] | |||
Gain on sale leaseback transactions | $ 81 | $ 0 | $ 9 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 15 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 20 years |
LEASES - Supplemental Cash Flow Information related to Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflows - payments on operating leases | $ (159) | $ (158) | $ (144) |
Operating cash outflows - interest payments on finance leases | (2) | (2) | (1) |
Financing cash outflows - payments on finance lease obligations | (11) | (11) | (8) |
Lease assets obtained in exchange for new lease obligations, including leases acquired: | |||
Operating leases | 245 | 145 | 144 |
Finance leases | $ 10 | $ 14 | $ 16 |
LEASES - Maturities of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
2023 | $ 145 | |
2024 | 118 | |
2025 | 86 | |
2026 | 69 | |
2027 | 54 | |
Thereafter | 209 | |
Total lease payments | 681 | |
Less imputed interest | 95 | |
Total present value of lease liabilities | 586 | $ 457 |
Finance Leases | ||
2023 | 10 | |
2024 | 7 | |
2025 | 4 | |
2026 | 3 | |
2027 | 2 | |
Thereafter | 4 | |
Total lease payments | 30 | |
Less imputed interest | 2 | |
Total present value of lease liabilities | $ 28 | $ 38 |
DEBT - Maturities of Long-term Debt (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
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Debt Disclosure [Abstract] | |
2023 | $ 10 |
2024 | 659 |
2025 | 682 |
2026 | 1,035 |
2027 | $ 702 |
DEBT - Interest Paid on Debt (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Debt Disclosure [Abstract] | |||
Interest paid on debt | $ 250 | $ 207 | $ 216 |
RETIREMENT BENEFITS PLANS - Components of Pension Plans with Accumulated and Projected Benefit Obligation in Excess of Plan Assets (Details) - Pension plans - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
United States | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Accumulated benefit obligation | $ 2,784 | $ 131 |
Fair value of plan assets | 2,635 | 0 |
Components of pension plans with a projected benefit obligation in excess of plan assets | ||
Projected benefit obligation | 2,807 | 147 |
Fair value of plan assets | 2,635 | 0 |
Foreign Plan | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Accumulated benefit obligation | 654 | 894 |
Fair value of plan assets | 173 | 207 |
Components of pension plans with a projected benefit obligation in excess of plan assets | ||
Projected benefit obligation | 722 | 1,290 |
Fair value of plan assets | $ 195 | $ 521 |
RETIREMENT BENEFITS PLANS - Other Postretirement Benefits Plan Assumptions (Details) - Other postretirement benefits plans |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Assumptions used to determine benefit obligation at year-end (as a percent) | |||
Discount rate | 5.46% | 2.79% | 2.37% |
Health care cost trend rate assumed for next year | 7.10% | 7.45% | 7.05% |
Ultimate health care cost trend rate | 4.75% | 4.75% | 4.75% |
Year ultimate health care cost trend rate is achieved | 2031 | 2031 | 2030 |
Assumptions used to determine expense (as a percent) | |||
Discount rate used to determine benefit obligation | 2.79% | 2.44% | 3.13% |
Discount rate used to determine service cost | 3.03% | 2.76% | 3.25% |
Discount rate used to determine interest cost | 2.24% | 1.70% | 2.67% |
Initial health care cost trend rate | 7.45% | 7.38% | 6.95% |
Ultimate health care cost trend rate | 4.75% | 4.75% | 4.75% |
Year ultimate health care cost trend rate is achieved | 2031 | 2030 | 2029 |
RETIREMENT BENEFITS PLANS - Employer Contributions to Retirement Benefits Plans (Details) - Pension plans - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | $ 108 | ||
Employer contributions to pension plans | 116 | $ 343 | $ 122 |
United States | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | 23 | ||
Employer contributions to pension plans | 30 | 237 | 18 |
Foreign Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | 86 | ||
Employer contributions to pension plans | $ 85 | $ 106 | $ 104 |
RETIREMENT BENEFITS PLANS - Estimated Pension and Other Postretirement Benefit Payments (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
---|---|
Pension plans | United States | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2023 | $ 281 |
2024 | 267 |
2025 | 261 |
2026 | 253 |
2027 | 242 |
2028 - 2032 | 1,100 |
Pension plans | Foreign Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2023 | 101 |
2024 | 101 |
2025 | 101 |
2026 | 107 |
2027 | 110 |
2028 - 2032 | 595 |
Other postretirement benefits plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2023 | 20 |
Medicare prescription drug subsidy 2023 | 0 |
2024 | 18 |
Medicare prescription drug subsidy 2024 | 0 |
2025 | 17 |
Medicare prescription drug subsidy 2025 | 0 |
2026 | 16 |
Medicare prescription drug subsidy 2026 | 0 |
2027 | 19 |
Medicare prescription drug subsidy 2027 | 0 |
2028 - 2032 | 84 |
Medicare prescription drug subsidy 2028 - 2032 | $ (1) |
RETIREMENT BENEFITS PLANS - Fair Value of Other Postretirement Benefits Plan Assets (Details) - Other postretirement benefits plans - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | $ 3 | $ 3 |
Common collective and other trusts measured at net asset value | 13 | 16 |
Total other postretirement benefits plan assets | 16 | 19 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 3 | 3 |
Total other postretirement benefits plan assets | 3 | 3 |
Other observable inputs (Level 2) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 0 | 0 |
Total other postretirement benefits plan assets | 0 | 0 |
Unobservable inputs (Level 3) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 0 | 0 |
Total other postretirement benefits plan assets | $ 0 | $ 0 |
RETIREMENT BENEFITS PLANS - Defined Contribution Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Retirement Benefits [Abstract] | |||
Employer contributions to defined contribution plans | $ 182 | $ 171 | $ 111 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
USD ($)
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Dec. 31, 2021
USD ($)
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Commitments and Contingencies Disclosure [Abstract] | ||
Number of environmental remediation sites world wide | 111 | |
Number of environmental remediation sites world wide with individual significance | 0 | |
Accrual for environmental loss contingencies | $ | $ 73 | $ 99 |
Environmental Loss Contingency, Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag | accrual | accrual |
COMMITMENTS AND CONTINGENCIES - Current and Long-Term Warranty Accruals (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Current and long-term warranty accruals [Roll Forward] | |||
Balance at January 1 | $ 125 | $ 151 | $ 187 |
Provision | 83 | 65 | 100 |
Settled | (81) | (112) | (130) |
Warranty accruals from business acquisitions and other | (2) | 21 | 2 |
Warranty accruals reclassified to held for sale | 0 | 0 | (8) |
Balance at December 31 | $ 125 | $ 125 | $ 151 |
INCOME TAXES - Income (Loss) before Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | $ 2,911 | $ 2,896 | $ 1,746 |
Ireland | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | 198 | 153 | (132) |
Foreign | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | $ 2,713 | $ 2,743 | $ 1,878 |
INCOME TAXES - Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current | |||
Ireland | $ 3 | $ 50 | $ 15 |
Foreign | 570 | 730 | 441 |
Total current income tax expense | 573 | 780 | 456 |
Deferred | |||
Ireland | 13 | (2) | 0 |
Foreign | (141) | (28) | (125) |
Total deferred income tax expense (benefit) | (128) | (30) | (125) |
Total income tax expense | $ 445 | $ 750 | $ 331 |
INCOME TAXES- Worldwide Income Tax Payments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 393 | $ 753 | $ 391 |
INCOME TAXES - Components of Deferred Income Taxes (Details) - Noncurrent assets and liabilities - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accruals and other adjustments | ||
Employee benefits | $ 266 | $ 348 |
Depreciation and amortization | (1,067) | (1,087) |
Other accruals and adjustments | 397 | 385 |
Ireland income tax loss carryforwards | 1 | 1 |
Foreign income tax loss carryforwards | 4,151 | 3,127 |
Foreign income tax credit carryforwards | 280 | 263 |
Valuation allowance for income tax loss and income tax credit carryforwards | (4,184) | (3,139) |
Other valuation allowances | (44) | (65) |
Total deferred income taxes | $ (200) | $ (167) |
INCOME TAXES - Gross Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1 | $ 1,120 | $ 1,036 | $ 1,001 |
Increases and decreases as a result of positions taken during prior years | |||
Transfers from valuation allowances | 0 | 6 | 0 |
Other increases, including currency translation | 36 | 22 | 10 |
Other decreases, including currency translation | (16) | (10) | (10) |
Increases related to acquired businesses | 10 | 12 | 7 |
Increases as a result of positions taken during the current year | 97 | 75 | 58 |
Decreases relating to settlements with tax authorities | 0 | (11) | (26) |
Decreases as a result of a lapse of the applicable statute of limitations | (12) | (10) | (4) |
Balance at December 31 | $ 1,235 | $ 1,120 | $ 1,036 |
EATON SHAREHOLDERS' EQUITY - Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Equity [Abstract] | |||
Net income attributable to Eaton ordinary shareholders | $ 2,462 | $ 2,144 | $ 1,410 |
Weighted-average number of ordinary shares outstanding - diluted (shares) | 400.8 | 401.6 | 404.0 |
Less: dilutive effect of equity-based compensation (shares) | 2.1 | 2.9 | 1.8 |
Weighted-average number of ordinary shares outstanding - basic (shares) | 398.7 | 398.7 | 402.2 |
Net income per share attributable to Eaton ordinary shareholders - diluted (USD per share) | $ 6.14 | $ 5.34 | $ 3.49 |
Net income per share attributable to Eaton ordinary shareholders - basic (USD per share) | $ 6.17 | $ 5.38 | $ 3.51 |
EQUITY-BASED COMPENSATION - Restricted Stock Units and Awards Activity (Details) - RSUs and RSAs shares in Millions |
12 Months Ended |
---|---|
Dec. 31, 2022
$ / shares
shares
| |
Number of restricted stock units and awards | |
Non-vested at beginning of period (shares) | shares | 1.3 |
Granted (shares) | shares | 0.5 |
Vested (shares) | shares | (0.7) |
Forfeited (shares) | shares | (0.1) |
Non-vested at end of period (shares) | shares | 1.0 |
Weighted-average fair value per unit and award | |
Non-vested at beginning of period (USD per share) | $ / shares | $ 104.86 |
Granted (USD per share) | $ / shares | 150.28 |
Vested (USD per share) | $ / shares | 104.35 |
Forfeited (USD per share) | $ / shares | 121.36 |
Non-vested at end of period (USD per share) | $ / shares | $ 127.33 |
EQUITY-BASED COMPENSATION - Information Related to Equity Awards other than Options (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
RSUs and RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | $ 65 | $ 61 | $ 58 |
After-tax expense for stock options | 51 | 48 | 46 |
Fair value of vested equity awards | 98 | 92 | 75 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | 21 | 26 | 25 |
After-tax expense for stock options | $ 17 | $ 21 | $ 20 |
EQUITY-BASED COMPENSATION - Assumptions of Market-Based Performance Share Units (Details) - PSUs - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility (as a percent) | 35.00% | 35.00% | 21.00% |
Risk-free interest rate (as a percent) | 1.71% | 0.20% | 1.16% |
Weighted-average fair value of PSUs granted (USD per share) | $ 171.63 | $ 159.74 | $ 121.01 |
EQUITY-BASED COMPENSATION - Restricted Stock Units (Details) - PSUs - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent payout | 178.00% | 189.00% | 178.00% |
Shares vested (in shares) | 400,000 | 500,000 | 400,000 |
EQUITY-BASED COMPENSATION - Stock Options Fair Value Assumptions (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of stock options granted (USD per share) | $ 36.56 | $ 26.11 | $ 15.55 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility (as a percent) | 27.00% | 28.00% | 24.00% |
Expected option life in years (in years) | 6 years 7 months 6 days | 6 years 6 months | 6 years 7 months 6 days |
Expected dividend yield (as a percent) | 2.00% | 3.00% | 3.20% |
Risk-free interest rate, minimum (as a percent) | 0.30% | 0.00% | 0.50% |
Risk-free interest rate, maximum (as a percent) | 3.00% | 1.50% | 1.50% |
EQUITY-BASED COMPENSATION - Information Related to Stock Options (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from stock options exercised | $ 28 | $ 63 | $ 71 |
Income tax benefit related to stock options exercised | |||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | 6 | 13 | 10 |
Intrinsic value of stock options exercised | 29 | 69 | 50 |
Total fair value of stock options vested | $ 11 | $ 14 | $ 9 |
Stock options exercised (in shares) | 0.4 | 0.9 | 1.1 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | $ 11 | $ 14 | $ 9 |
After-tax expense for stock options | 9 | 11 | 7 |
Proceeds from stock options exercised | $ 28 | $ 63 | $ 70 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Long-term debt and current portion of long term debt, carrying value | $ 8,331 | $ 8,566 |
Long-term debt and current portion of long-term debt, fair value | $ 7,625 | $ 9,232 |
FAIR VALUE MEASUREMENTS - Short-Term Investments (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Time deposits and certificates of deposit with banks | $ 248 | $ 221 |
Money market investments | 13 | 43 |
Investments in marketable equity securities | 0 | 7 |
Total short-term investments | $ 261 | $ 271 |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Derivative [Line Items] | ||
Proportion of intercompany balance sheet exposure (as a percent) | 100.00% | |
Cash flow hedge gain (loss) to be reclassified within the next twelve months | $ 19 | |
Non-derivative net investment hedge | ||
Derivative [Line Items] | ||
Foreign currency note payable, noncurrent, after-tax | $ 2,711 | $ 2,880 |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Balance Sheet Related to Fixed-to-Floating Interest Rate Swaps (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fixed-to-floating interest rate swaps | ||
Derivative [Line Items] | ||
Carrying amount of the hedged assets (liabilities) | $ (713) | $ (2,413) |
Long-term debt | ||
Derivative [Line Items] | ||
Discontinued hedge, cumulative adjustment | 48 | 33 |
Long-term debt | Fixed-to-floating interest rate swaps | ||
Derivative [Line Items] | ||
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) | $ (48) | $ (84) |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES- Impact of Derivatives Not Designated as Hedges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | $ (71) | $ 11 | $ 76 |
Currency exchange contracts | Interest expense - net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | (56) | 0 | 72 |
Commodity contracts | Other expense (income) - net and Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | $ (15) | $ 11 | $ 4 |
RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | 33 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2022 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Liability recognized | $ 33 | $ 78 | $ 214 | |
COVID-19 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Liability recognized | $ 325 | |||
Estimated charges | $ 350 | $ 350 |
RESTRUCTURING CHARGES - Restructuring Program Charges (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ 33 | $ 78 | $ 214 |
Income tax benefit | 4 | 18 | 44 |
Total after income taxes | $ 29 | $ 60 | $ 170 |
Per ordinary share - diluted (USD per share) | $ 0.07 | $ 0.15 | $ 0.42 |
Workforce reductions | |||
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ (13) | $ 21 | $ 172 |
Plant closing and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ 47 | $ 57 | $ 42 |
RESTRUCTURING CHARGES - Restructuring Program Charges Related to Segments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | $ 33 | $ 78 | $ 214 |
Operating segments | Electrical Americas | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | 17 | 14 | 18 |
Operating segments | Electrical Global | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | 14 | 18 | 55 |
Operating segments | Aerospace | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | 8 | 8 | 34 |
Operating segments | Vehicle | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | (15) | 21 | 102 |
Operating segments | eMobility | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | 1 | 1 | 1 |
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability recognized | $ 8 | $ 16 | $ 4 |
RESTRUCTURING CHARGES - Liabilities Related to Restructuring (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 104 | $ 142 | $ 0 | |
Liability recognized | 33 | 78 | 214 | |
Payments, utilization and translation | (96) | (116) | (72) | |
Balance at end of period | $ 41 | 41 | 104 | 142 |
Restructuring liability adjustment | 30 | |||
Workforce reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 96 | 139 | 0 | |
Liability recognized | (13) | 21 | 172 | |
Payments, utilization and translation | (45) | (64) | (33) | |
Balance at end of period | 38 | 38 | 96 | 139 |
Plant closing and other | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 8 | 3 | 0 | |
Liability recognized | 47 | 57 | 42 | |
Payments, utilization and translation | (51) | (52) | (39) | |
Balance at end of period | $ 4 | $ 4 | $ 8 | $ 3 |
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