Cover Page
Cover Page shares in Millions | 3 Months Ended |
Mar. 31, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2021 |
Entity File Number | 000-54863 |
Entity Registrant Name | EATON CORPORATION plc |
Entity Incorporation, State or Country Code | L2 |
Entity Tax Identification Number | 98-1059235 |
Entity Address, Address Line One | Eaton House, |
Entity Address, Address Line Two | 30 Pembroke Road, |
Entity Address, City or Town | Dublin 4, |
Entity Address, Country | IE |
Entity Address, Postal Zip Code | D04 Y0C2 |
City Area Code | +353 |
Local Phone Number | 1637 2900 |
Title of 12(b) Security | Ordinary shares ($0.01 par value) |
Trading Symbol | ETN |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 398.5 |
Entity Central Index Key | 0001551182 |
Amendment Flag | false |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Document Quarterly Report | true |
Document Transition Report | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 4,692 | $ 4,789 |
Cost of products sold | 3,184 | 3,302 |
Selling and administrative expense | 795 | 865 |
Research and development expense | 148 | 153 |
Interest expense - net | 38 | 34 |
Gain on sale of business | 0 | 221 |
Other (income) expense - net | (11) | 35 |
Income before income taxes | 538 | 621 |
Income tax expense | 79 | 183 |
Net income | 459 | 438 |
Less net income for noncontrolling interests | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | $ 458 | $ 438 |
Net income per share attributable to Eaton ordinary shareholders | ||
Diluted (USD per share) | $ 1.14 | $ 1.07 |
Basic (USD per share) | $ 1.15 | $ 1.07 |
Weighted-average number of ordinary shares outstanding | ||
Diluted (shares) | 400.9 | 411.1 |
Basic (shares) | 398.3 | 409.3 |
Cash dividends declared per ordinary share (USD per share) | $ 0.76 | $ 0.73 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 459 | $ 438 |
Less net income for noncontrolling interests | (1) | 0 |
Net income attributable to Eaton ordinary shareholders | 458 | 438 |
Other comprehensive income (loss), net of tax | ||
Currency translation and related hedging instruments | (172) | (609) |
Pensions and other postretirement benefits | 47 | 86 |
Cash flow hedges | 95 | (153) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (30) | (676) |
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | $ 428 | $ (238) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 438 | |
Short-term investments | $ 945 | 664 |
Accounts receivable - net | 3,065 | 2,904 |
Inventory | 2,399 | 2,109 |
Assets held for sale | 2,537 | 2,487 |
Prepaid expenses and other current assets | 605 | 576 |
Total current assets | 9,905 | 9,178 |
Property, plant and equipment | ||
Land and buildings | 2,181 | 2,184 |
Machinery and equipment | 5,363 | 5,404 |
Gross property, plant and equipment | 7,544 | 7,588 |
Accumulated depreciation | (4,622) | (4,624) |
Net property, plant and equipment | 2,922 | 2,964 |
Other noncurrent assets | ||
Goodwill | 13,757 | 12,903 |
Other intangible assets | 4,722 | 4,175 |
Operating lease assets | 429 | 428 |
Deferred income taxes | 436 | 426 |
Other assets | 1,909 | 1,750 |
Total assets | 34,080 | 31,824 |
Current liabilities | ||
Short-term debt | 464 | 1 |
Current portion of long-term debt | 1,012 | 1,047 |
Accounts payable | 2,172 | 1,987 |
Accrued compensation | 334 | 351 |
Liabilities held for sale | 501 | 468 |
Other current liabilities | 2,098 | 2,027 |
Total current liabilities | 6,581 | 5,881 |
Noncurrent liabilities | ||
Long-term debt | 8,682 | 7,010 |
Pension liabilities | 1,283 | 1,588 |
Other postretirement benefits liabilities | 326 | 330 |
Operating lease liabilities | 328 | 326 |
Deferred income taxes | 445 | 277 |
Other noncurrent liabilities | 1,398 | 1,439 |
Total noncurrent liabilities | 12,462 | 10,970 |
Shareholders’ equity | ||
Ordinary shares (398.5 million outstanding in 2021 and 398.1 million in 2020) | 4 | 4 |
Capital in excess of par value | 12,335 | 12,329 |
Retained earnings | 6,883 | 6,794 |
Accumulated other comprehensive loss | (4,225) | (4,195) |
Shares held in trust | (2) | (2) |
Total Eaton shareholders’ equity | 14,995 | 14,930 |
Noncontrolling interests | 42 | 43 |
Total equity | 15,037 | 14,973 |
Total liabilities and equity | $ 34,080 | $ 31,824 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Ordinary shares outstanding (shares) | 398.5 | 398.1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net income | $ 459 | $ 438 |
Adjustments to reconcile to net cash provided by operating activities | ||
Depreciation and amortization | 208 | 199 |
Deferred income taxes | (39) | (16) |
Pension and other postretirement benefits expense | 14 | 54 |
Contributions to pension plans | (243) | (38) |
Contributions to other postretirement benefits plans | (6) | (4) |
Gain on sale of business | 0 | (91) |
Changes in working capital | (108) | (246) |
Other - net | (25) | 27 |
Net cash provided by operating activities | 260 | 323 |
Investing activities | ||
Capital expenditures for property, plant and equipment | (119) | (112) |
Cash paid for acquisitions of businesses, net of cash acquired | (1,700) | (195) |
Proceeds from sale of business | 0 | 1,402 |
Sales (purchases) of short-term investments - net | (280) | 30 |
Payments for settlement of currency exchange contracts not designated as hedges - net | (17) | (16) |
Other - net | (85) | (9) |
Net cash provided by (used in) investing activities | (2,201) | 1,100 |
Financing activities | ||
Proceeds from borrowings | 2,261 | 83 |
Payments on borrowings | (3) | (4) |
Cash dividends paid | (300) | (291) |
Exercise of employee stock options | 21 | 14 |
Repurchase of shares | (59) | (1,300) |
Employee taxes paid from shares withheld | (37) | (29) |
Other - net | (8) | (3) |
Net cash provided by (used in) financing activities | 1,875 | (1,530) |
Effect of currency on cash | (11) | (23) |
Less: Increase in cash classified as held for sale | (7) | (1) |
Decrease in cash | (84) | (131) |
Cash at the beginning of the period | 438 | 370 |
Cash at the end of the period | $ 354 | $ 239 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods. This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2020 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission. |
ACQUISITIONS AND DIVESTITURES O
ACQUISITIONS AND DIVESTITURES OF BUSINESSES | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [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 had 2019 sales of $125. Power Distribution, Inc. 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 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. Pending sale of Hydraulics business On January 21, 2020, Eaton entered into an agreement to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3 billion in cash. Eaton’s Hydraulics business is a global leader in hydraulics components, systems, and services for industrial and mobile equipment. The business had sales of $1.8 billion in 2020. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2021. During the first quarter of 2020, the Company determined the Hydraulics business met the criteria to be classified as held for sale. Therefore, assets and liabilities of the business have been presented as held for sale in the Consolidated Balance Sheets as of December 31, 2020 and March 31, 2021. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. No write-down has been required as fair value of the Hydraulics business assets less the costs to sell exceed their respective carrying values. Depreciation and amortization expense is not recorded for the period in which Other long-lived assets are classified as held for sale. The Company used the relative fair value method to allocate goodwill to the Hydraulics business. The fair value of the Hydraulics business was estimated based on a combination of the price paid to Eaton by Danfoss A/S and 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 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. The assets and liabilities classified as held for sale for the Hydraulics business on the March 31, 2021 and December 31, 2020 Consolidated Balance Sheets are as follows: March 31, 2021 December 31, 2020 Cash $ 7 $ — Accounts receivable - net 397 345 Inventory 378 369 Prepaid expenses and other current assets 9 18 Net property, plant and equipment 505 504 Goodwill 909 920 Other intangible assets 247 248 Operating lease assets 63 61 Deferred income taxes 5 6 Other noncurrent assets 17 16 Assets held for sale - current $ 2,537 $ 2,487 Accounts payable $ 276 $ 241 Accrued compensation 25 26 Other current liabilities 105 101 Pension liabilities 57 60 Operating lease liabilities 32 35 Deferred income taxes 4 3 Other noncurrent liabilities 2 2 Liabilities held for sale - current $ 501 $ 468 The Hydraulics business did not meet the criteria to be classified as discontinued operations as the sale does not represent a strategic shift that will have a major effect on the Company's operations. Agreement to Acquire Cobham Mission Systems On January 31, 2021, Eaton signed an agreement to acquire Cobham Mission Systems (CMS), a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Under the terms of the agreement, Eaton will pay $2.83 billion. CMS had sales of over $700 in 2020. The transaction is subject to customary closing conditions and is expected to close the beginning of the fourth quarter of 2021. CMS will be reported within the Aerospace business segment. 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 had sales of over $400 in 2020. 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. The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, further information becomes available and additional analyses are performed, and these differences could have a material impact on Eaton's preliminary purchase price allocation. March 17, 2021 Short-term investments $ 5 Accounts receivable 94 Inventory 184 Prepaid expenses and other current assets 6 Property, plant and equipment 6 Other intangible assets 630 Accounts payable (13) Other current liabilities (32) Other noncurrent liabilities (157) Total identifiable net assets 723 Goodwill 928 Total consideration, net of cash received $ 1,651 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. Other intangible assets of $630 are expected to include customer relationships, trademarks and technology. Given the timing of the acquisition, Eaton utilized a benchmarking approach based on similar acquisitions to determine the preliminary fair values for intangible assets. See Note 6 for additional information about goodwill. Eaton's 2021 Condensed Consolidated Financial Statements include Tripp Lite’s results of operations, including sales of $26, from date the of acquisition through March 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 $105, including $49 of cash paid at closing and $56 of estimated 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 $109. Green Motion SA is reported within the Electrical Global business segment. 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 had 2019 sales of $106 and 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. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2021 | |
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. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market. Three months ended March 31, 2021 Net sales Products Systems Total Electrical Americas $ 520 $ 1,102 $ 1,622 Electrical Global 713 540 1,253 United States Rest of World Hydraulics $ 222 $ 339 561 Original Equipment Manufacturers Aftermarket Industrial and Other Aerospace $ 208 $ 146 $ 165 519 Commercial Passenger and Light Duty Vehicle $ 342 $ 312 654 eMobility 83 Total $ 4,692 Three months ended March 31, 2020 Net sales Products Systems Total Electrical Americas $ 724 $ 1,064 $ 1,788 Electrical Global 657 487 1,144 United States Rest of World Hydraulics $ 227 $ 280 507 Original Equipment Manufacturers Aftermarket Industrial and Other Aerospace $ 325 $ 220 $ 135 680 Commercial Passenger and Light Duty Vehicle $ 292 $ 306 598 eMobility 72 Total $ 4,789 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 $2,708 and $2,539 at March 31, 2021 and December 31, 2020, 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 $106 and $90 at March 31, 2021 and December 31, 2020, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized and not yet billed during the quarter. Changes in the deferred revenue liabilities are as follows: Deferred Revenue Balance at January 1, 2021 $ 257 Customer deposits and billings 276 Revenue recognized in the period (262) Translation and other (3) Balance at March 31, 2021 $ 268 Deferred Revenue Balance at January 1, 2020 $ 234 Customer deposits and billings 245 Revenue recognized in the period (240) Translation (4) Deferred revenue reclassified to held for sale (11) Balance at March 31, 2020 $ 224 |
CREDIT LOSSES FOR RECEIVABLES
CREDIT LOSSES FOR RECEIVABLES | 3 Months Ended |
Mar. 31, 2021 | |
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-offs 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. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory is carried at lower of cost or net realizable value. The components of inventory follow: March 31, December 31, Raw materials $ 824 $ 803 Work-in-process 530 498 Finished goods 1,045 808 Total inventory $ 2,399 $ 2,109 |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Change in the carrying amount of goodwill by segment follows: January 1, Additions Translation March 31, Electrical Americas $ 6,456 $ 928 $ (3) $ 7,381 Electrical Global 4,295 61 (101) 4,255 Aerospace 1,777 — (28) 1,749 Vehicle 293 — (2) 291 eMobility 82 — (1) 81 Total $ 12,903 $ 989 $ (135) $ 13,757 The 2021 additions to goodwill relate to the anticipated synergies of acquiring Tripp Lite and Green Motion SA. The allocations of the purchase price from these acquisitions are preliminary and will be completed during the measurement periods. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTOn March 8, 2021, a subsidiary of Eaton issued Euro denominated notes (2021 Euro Notes) with a face value of €1,500 ($1,798), in accordance with Regulation S promulgated under the Securities Act of 1933, as amended. The 2021 Euro Notes are comprised of two tranches of €900 and €600, which mature in 2026 and 2030, respectively, with interest payable annually at a respective rate of 0.128% and 0.577%. The issuer received proceeds totaling €1,494 ($1,790) from the issuance, net of financing costs and discounts. The senior 2021 Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2021 Euro Notes contain customary optional redemption and par call provisions. The 2021 Euro Notes also contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2021 Euro 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 2021 Euro Notes. The 2021 Euro Notes are subject to customary non-financial covenants. |
RETIREMENT BENEFITS PLANS
RETIREMENT BENEFITS PLANS | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS The components of retirement benefits expense (income) follow: United States Non-United States Other postretirement Three months ended March 31 2021 2020 2021 2020 2021 2020 Service cost $ 10 $ 24 $ 19 $ 18 $ — $ — Interest cost 17 26 10 11 2 2 Expected return on plan assets (56) (57) (30) (27) — — Amortization 10 25 19 15 (1) (3) (19) 18 18 17 1 (1) Settlements, curtailments and special termination benefits 14 17 — 3 — — Total expense (income) $ (5) $ 35 $ 18 $ 20 $ 1 $ (1) 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. The components of retirement benefits expense (income) other than service costs are included in Other (income) expense - net. |
LEGAL CONTINGENCIES
LEGAL CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL CONTINGENCIES | LEGAL CONTINGENCIESEaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to asbestos 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate for the first quarter of 2021 was expense of 14.7% compared to expense of 29.5% for the first quarter of 2020. The decrease in the effective tax rate in the first quarter of 2021 was primarily due to the tax impact on the gain from the sale of the Lighting business in 2020 described in Note 2. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5,000 of ordinary shares (2019 Program). Under the 2019 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 the three months ended March 31, 2021 and 2020, 0.5 million and 14.2 million ordinary shares, respectively, were repurchased under the 2019 Program in the open market at a total cost of $59 and $1,300, respectively. The changes in Shareholders’ equity follow: 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, 2021 398.1 $ 4 $ 12,329 $ 6,794 $ (4,195) $ (2) $ 14,930 $ 43 $ 14,973 Net income — — — 458 — — 458 1 459 Other comprehensive loss, net of tax (30) (30) — (30) Cash dividends paid and accrued — — — (309) — — (309) — (309) Issuance of shares under equity-based compensation plans 0.9 — 6 (1) — — 5 — 5 Changes in noncontrolling interest of consolidated subsidiaries - net — — — — — — — (2) (2) Repurchase of shares (0.5) — — (59) — — (59) — (59) Balance at March 31, 2021 398.5 $ 4 $ 12,335 $ 6,883 $ (4,225) $ (2) $ 14,995 $ 42 $ 15,037 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 413.3 $ 4 $ 12,200 $ 8,170 $ (4,290) $ (2) $ 16,082 $ 51 $ 16,133 Net income — — — 438 — — 438 — 438 Other comprehensive loss, net of tax (676) (676) — (676) Cash dividends paid and accrued — — — (300) — — (300) (5) (305) Issuance of shares under equity-based compensation plans 0.9 — 3 (1) — (1) 1 — 1 Changes in noncontrolling interest of consolidated subsidiaries - net — — — — — — — (3) (3) Repurchase of shares (14.2) — — (1,300) — — (1,300) — (1,300) Balance at March 31, 2020 400.0 $ 4 $ 12,203 $ 7,007 $ (4,966) $ (3) $ 14,245 $ 43 $ 14,288 The changes in Accumulated other comprehensive loss follow: Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow Total Balance at January 1, 2021 $ (2,647) $ (1,481) $ (67) $ (4,195) Other comprehensive (loss) income (173) 13 94 (66) Amounts reclassified from Accumulated other 1 34 1 36 Net current-period Other comprehensive (172) 47 95 (30) Balance at March 31, 2021 $ (2,819) $ (1,434) $ 28 $ (4,225) The reclassifications out of Accumulated other comprehensive loss follow: Three months ended March 31, 2021 Consolidated statements Currency translation losses Sale of shares in associate company $ (1) Other (income) expense - net Tax benefit — Total, net of tax (1) Amortization of defined benefit pensions and other postretirement benefits items Actuarial loss and prior service cost (42) 1 Tax benefit 8 Total, net of tax (34) Gains and (losses) on cash flow hedges Currency exchange contracts (4) Net sales and Cost of products sold Commodity contracts 2 Cost of products sold Tax benefit 1 Total, net of tax (1) Total reclassifications for the period $ (36) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 8 for additional information about 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 follows: Three months ended (Shares in millions) 2021 2020 Net income attributable to Eaton ordinary shareholders $ 458 $ 438 Weighted-average number of ordinary shares outstanding - diluted 400.9 411.1 Less dilutive effect of equity-based compensation 2.6 1.8 Weighted-average number of ordinary shares outstanding - basic 398.3 409.3 Net income per share attributable to Eaton ordinary shareholders Diluted $ 1.14 $ 1.07 Basic 1.15 1.07 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
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, follows: Total Level 1 Level 2 Level 3 March 31, 2021 Cash $ 354 $ 354 $ — $ — Short-term investments 945 945 — — Net derivative contracts 105 — 105 — Contingent consideration from acquisition of Green Motion (Note 2) (56) — — (56) December 31, 2020 Cash $ 438 $ 438 $ — $ — Short-term investments 664 664 — — Net derivative contracts 31 — 31 — 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 $9,694 and fair value of $10,337 at March 31, 2021 compared to $8,057 and $9,075, respectively, at December 31, 2020. The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities, and are considered a Level 2 fair value measurement. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2021 | |
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, and is effective, as part of a hedging relationship and, if so, as to 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 Condensed 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 a non-derivative net investment hedging instruments had a carrying value on an after-tax basis of $2,973 at March 31, 2021 and $2,020 at December 31, 2020. Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows: Notional Other Other Other Other Type of Term March 31, 2021 Derivatives designated as hedges Fixed-to-floating interest rate $ 2,075 $ 1 $ 82 $ — $ — Fair value 3 months to 13 years Forward starting floating-to-fixed 900 — 67 — 29 Cash flow 11 to 31 years Currency exchange contracts 1,295 15 6 25 1 Cash flow 1 to 36 months Commodity contracts 23 5 — — — Cash flow 1 to 11 months Total $ 21 $ 155 $ 25 $ 30 Derivatives not designated as Currency exchange contracts $ 5,667 $ 29 $ 47 1 to 12 months Commodity contracts 37 2 — 1 month Total $ 31 $ 47 December 31, 2020 Derivatives designated as hedges Fixed-to-floating interest rate $ 2,075 $ 2 $ 100 $ — $ — Fair value 6 months to 14 years Forward starting floating-to-fixed 900 — 17 — 108 Cash flow 12 to 32 years Currency exchange contracts 946 20 6 20 1 Cash flow 1 to 36 months Commodity contracts 24 4 — — — Cash flow 1 to 12 months Total $ 26 $ 123 $ 20 $ 109 Derivatives not designated as Currency exchange contracts $ 5,227 $ 43 $ 34 1 to 12 months Commodity contracts 18 2 — 1 month Total $ 45 $ 34 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 Condensed Consolidated Statements of Cash Flows. As of March 31, 2021, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions: Commodity March 31, 2021 Term Copper 6 millions of pounds 1 to 11 months Gold 1,346 Troy ounces 1 to 11 months The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps: 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 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Long-term debt $ (2,688) $ (2,688) $ (119) $ (139) (a) At March 31, 2021 and December 31, 2020, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $36 and $37, respectively. The impact of hedging activities to the Consolidated Statements of Income are as follow: Three months ended March 31, 2021 Net Sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 4,692 $ 3,184 $ 38 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ 3 $ 1 $ — Derivative designated as hedging instrument (3) (1) — Commodity contracts Hedged item $ — $ (2) $ — Derivative designated as hedging instrument — 2 — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 19 Derivative designated as hedging instrument — — (19) Three months ended March 31, 2020 Net Sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 4,789 $ 3,302 $ 34 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ — $ (3) $ — Derivative designated as hedging instrument — 3 — 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 $ — $ — $ (68) Derivative designated as hedging instrument — — 68 The impact of derivatives not designated as hedges to the Consolidated Statements of Income are as follow: Gain (loss) recognized in Consolidated Statements of Income Consolidated Statements of Income classification Three months ended 2021 2020 Gain (loss) on derivatives not designated as hedges Currency exchange contracts $ (63) $ (149) Interest expense - net Commodity Contracts 2 — Cost of products sold Total $ (61) $ (149) The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income follow: Gain (loss) recognized in Location of gain (loss) Gain (loss) reclassified Three months ended Three months ended 2021 2020 2021 2020 Derivatives designated as cash Forward starting floating-to-fixed $ 129 $ (147) Interest expense - net $ — $ — Currency exchange contracts (13) (42) Net sales and Cost of products sold (4) 3 Commodity contracts 3 (2) Cost of products sold 2 — Non-derivative designated as net Foreign currency denominated debt 144 43 Interest expense - net — — Total $ 263 $ (148) $ (2) $ 3 |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 3 Months Ended |
Mar. 31, 2021 | |
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. Restructuring charges incurred under this program were $214 in 2020 and $16 for the three months ended March 31, 2021. These restructuring activities are expected to incur additional expenses of $45 in 2021, and $5 in 2022, primarily comprised of plant closing costs and other costs, resulting in total estimated charges of $280 for the entire program. A summary of restructuring program charges by type follows: Three months ended March 31, 2021 Workforce reductions $ 2 Plant closing and other 14 Total before income taxes 16 Income tax benefit 4 Total after income taxes $ 12 Per ordinary share - diluted $ 0.03 Restructuring program charges related to the following segments: Three months ended March 31, 2021 Electrical Americas $ 5 Electrical Global 2 Aerospace 1 Vehicle 6 Corporate 2 Total $ 16 A summary of liabilities related to workforce reductions, plant closing and other associated costs follows: Workforce reductions Plant closing and other Total Balance at January 1, 2020 $ — $ — $ — Liability recognized 172 42 214 Payments, utilization and translation (33) (39) (72) Balance at December 31, 2020 139 3 142 Liability recognized 2 14 16 Payments, utilization and translation (25) (6) (31) Balance at March 31, 2021 $ 116 $ 11 $ 127 These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other (income) expense - net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 15 for additional information about business segments. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT 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 operating segments are Electrical Americas, Electrical Global, Hydraulics, Aerospace, Vehicle, and eMobility. Operating profit includes the operating profit from intersegment sales. For additional information regarding Eaton's business segments, see Note 17 to the Consolidated Financial Statements contained in the 2020 Form 10-K. Three months ended 2021 2020 Net sales Electrical Americas $ 1,622 $ 1,788 Electrical Global 1,253 1,144 Hydraulics 561 507 Aerospace 519 680 Vehicle 654 598 eMobility 83 72 Total net sales $ 4,692 $ 4,789 Segment operating profit (loss) Electrical Americas $ 332 $ 308 Electrical Global 213 166 Hydraulics 84 55 Aerospace 96 147 Vehicle 113 81 eMobility (7) 1 Total segment operating profit 831 758 Corporate Intangible asset amortization expense (92) (87) Interest expense - net (38) (34) Pension and other postretirement benefits income (expense) 14 (8) Restructuring program charges (16) — Other expense - net (161) (8) Income before income taxes 538 621 Income tax expense 79 183 Net income 459 438 Less net income for noncontrolling interests (1) — Net income attributable to Eaton ordinary shareholders $ 458 $ 438 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods. This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2020 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission. |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES OF BUSINESSES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Assets and Liabilities Classified as Held-for-Sale | The assets and liabilities classified as held for sale for the Hydraulics business on the March 31, 2021 and December 31, 2020 Consolidated Balance Sheets are as follows: March 31, 2021 December 31, 2020 Cash $ 7 $ — Accounts receivable - net 397 345 Inventory 378 369 Prepaid expenses and other current assets 9 18 Net property, plant and equipment 505 504 Goodwill 909 920 Other intangible assets 247 248 Operating lease assets 63 61 Deferred income taxes 5 6 Other noncurrent assets 17 16 Assets held for sale - current $ 2,537 $ 2,487 Accounts payable $ 276 $ 241 Accrued compensation 25 26 Other current liabilities 105 101 Pension liabilities 57 60 Operating lease liabilities 32 35 Deferred income taxes 4 3 Other noncurrent liabilities 2 2 Liabilities held for sale - current $ 501 $ 468 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, further information becomes available and additional analyses are performed, and these differences could have a material impact on Eaton's preliminary purchase price allocation. March 17, 2021 Short-term investments $ 5 Accounts receivable 94 Inventory 184 Prepaid expenses and other current assets 6 Property, plant and equipment 6 Other intangible assets 630 Accounts payable (13) Other current liabilities (32) Other noncurrent liabilities (157) Total identifiable net assets 723 Goodwill 928 Total consideration, net of cash received $ 1,651 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Sales | The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market. Three months ended March 31, 2021 Net sales Products Systems Total Electrical Americas $ 520 $ 1,102 $ 1,622 Electrical Global 713 540 1,253 United States Rest of World Hydraulics $ 222 $ 339 561 Original Equipment Manufacturers Aftermarket Industrial and Other Aerospace $ 208 $ 146 $ 165 519 Commercial Passenger and Light Duty Vehicle $ 342 $ 312 654 eMobility 83 Total $ 4,692 Three months ended March 31, 2020 Net sales Products Systems Total Electrical Americas $ 724 $ 1,064 $ 1,788 Electrical Global 657 487 1,144 United States Rest of World Hydraulics $ 227 $ 280 507 Original Equipment Manufacturers Aftermarket Industrial and Other Aerospace $ 325 $ 220 $ 135 680 Commercial Passenger and Light Duty Vehicle $ 292 $ 306 598 eMobility 72 Total $ 4,789 |
Schedule of Changes in Deferred Revenue Liabilities | Changes in the deferred revenue liabilities are as follows: Deferred Revenue Balance at January 1, 2021 $ 257 Customer deposits and billings 276 Revenue recognized in the period (262) Translation and other (3) Balance at March 31, 2021 $ 268 Deferred Revenue Balance at January 1, 2020 $ 234 Customer deposits and billings 245 Revenue recognized in the period (240) Translation (4) Deferred revenue reclassified to held for sale (11) Balance at March 31, 2020 $ 224 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory follow: March 31, December 31, Raw materials $ 824 $ 803 Work-in-process 530 498 Finished goods 1,045 808 Total inventory $ 2,399 $ 2,109 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Change in the carrying amount of goodwill by segment follows: January 1, Additions Translation March 31, Electrical Americas $ 6,456 $ 928 $ (3) $ 7,381 Electrical Global 4,295 61 (101) 4,255 Aerospace 1,777 — (28) 1,749 Vehicle 293 — (2) 291 eMobility 82 — (1) 81 Total $ 12,903 $ 989 $ (135) $ 13,757 |
RETIREMENT BENEFIT PLANS (Table
RETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of Retirement Benefits Expense | The components of retirement benefits expense (income) follow: United States Non-United States Other postretirement Three months ended March 31 2021 2020 2021 2020 2021 2020 Service cost $ 10 $ 24 $ 19 $ 18 $ — $ — Interest cost 17 26 10 11 2 2 Expected return on plan assets (56) (57) (30) (27) — — Amortization 10 25 19 15 (1) (3) (19) 18 18 17 1 (1) Settlements, curtailments and special termination benefits 14 17 — 3 — — Total expense (income) $ (5) $ 35 $ 18 $ 20 $ 1 $ (1) |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Changes in Shareholders' Equity | The changes in Shareholders’ equity follow: 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, 2021 398.1 $ 4 $ 12,329 $ 6,794 $ (4,195) $ (2) $ 14,930 $ 43 $ 14,973 Net income — — — 458 — — 458 1 459 Other comprehensive loss, net of tax (30) (30) — (30) Cash dividends paid and accrued — — — (309) — — (309) — (309) Issuance of shares under equity-based compensation plans 0.9 — 6 (1) — — 5 — 5 Changes in noncontrolling interest of consolidated subsidiaries - net — — — — — — — (2) (2) Repurchase of shares (0.5) — — (59) — — (59) — (59) Balance at March 31, 2021 398.5 $ 4 $ 12,335 $ 6,883 $ (4,225) $ (2) $ 14,995 $ 42 $ 15,037 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 413.3 $ 4 $ 12,200 $ 8,170 $ (4,290) $ (2) $ 16,082 $ 51 $ 16,133 Net income — — — 438 — — 438 — 438 Other comprehensive loss, net of tax (676) (676) — (676) Cash dividends paid and accrued — — — (300) — — (300) (5) (305) Issuance of shares under equity-based compensation plans 0.9 — 3 (1) — (1) 1 — 1 Changes in noncontrolling interest of consolidated subsidiaries - net — — — — — — — (3) (3) Repurchase of shares (14.2) — — (1,300) — — (1,300) — (1,300) Balance at March 31, 2020 400.0 $ 4 $ 12,203 $ 7,007 $ (4,966) $ (3) $ 14,245 $ 43 $ 14,288 |
Schedule of Accumulated Other Comprehensive Loss | The changes in Accumulated other comprehensive loss follow: Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow Total Balance at January 1, 2021 $ (2,647) $ (1,481) $ (67) $ (4,195) Other comprehensive (loss) income (173) 13 94 (66) Amounts reclassified from Accumulated other 1 34 1 36 Net current-period Other comprehensive (172) 47 95 (30) Balance at March 31, 2021 $ (2,819) $ (1,434) $ 28 $ (4,225) |
Schedule of Reclassifications of Accumulated Other Comprehensive Loss | The reclassifications out of Accumulated other comprehensive loss follow: Three months ended March 31, 2021 Consolidated statements Currency translation losses Sale of shares in associate company $ (1) Other (income) expense - net Tax benefit — Total, net of tax (1) Amortization of defined benefit pensions and other postretirement benefits items Actuarial loss and prior service cost (42) 1 Tax benefit 8 Total, net of tax (34) Gains and (losses) on cash flow hedges Currency exchange contracts (4) Net sales and Cost of products sold Commodity contracts 2 Cost of products sold Tax benefit 1 Total, net of tax (1) Total reclassifications for the period $ (36) 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 8 for additional information about pension and other postretirement benefits items. |
Schedule of Net Income per Ordinary Share Attributable to Shareholders | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows: Three months ended (Shares in millions) 2021 2020 Net income attributable to Eaton ordinary shareholders $ 458 $ 438 Weighted-average number of ordinary shares outstanding - diluted 400.9 411.1 Less dilutive effect of equity-based compensation 2.6 1.8 Weighted-average number of ordinary shares outstanding - basic 398.3 409.3 Net income per share attributable to Eaton ordinary shareholders Diluted $ 1.14 $ 1.07 Basic 1.15 1.07 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Recognized at Fair Value and Fair Value Measurements Used | A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, follows: Total Level 1 Level 2 Level 3 March 31, 2021 Cash $ 354 $ 354 $ — $ — Short-term investments 945 945 — — Net derivative contracts 105 — 105 — Contingent consideration from acquisition of Green Motion (Note 2) (56) — — (56) December 31, 2020 Cash $ 438 $ 438 $ — $ — Short-term investments 664 664 — — Net derivative contracts 31 — 31 — |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instruments Recognized in Condensed Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows: Notional Other Other Other Other Type of Term March 31, 2021 Derivatives designated as hedges Fixed-to-floating interest rate $ 2,075 $ 1 $ 82 $ — $ — Fair value 3 months to 13 years Forward starting floating-to-fixed 900 — 67 — 29 Cash flow 11 to 31 years Currency exchange contracts 1,295 15 6 25 1 Cash flow 1 to 36 months Commodity contracts 23 5 — — — Cash flow 1 to 11 months Total $ 21 $ 155 $ 25 $ 30 Derivatives not designated as Currency exchange contracts $ 5,667 $ 29 $ 47 1 to 12 months Commodity contracts 37 2 — 1 month Total $ 31 $ 47 December 31, 2020 Derivatives designated as hedges Fixed-to-floating interest rate $ 2,075 $ 2 $ 100 $ — $ — Fair value 6 months to 14 years Forward starting floating-to-fixed 900 — 17 — 108 Cash flow 12 to 32 years Currency exchange contracts 946 20 6 20 1 Cash flow 1 to 36 months Commodity contracts 24 4 — — — Cash flow 1 to 12 months Total $ 26 $ 123 $ 20 $ 109 Derivatives not designated as Currency exchange contracts $ 5,227 $ 43 $ 34 1 to 12 months Commodity contracts 18 2 — 1 month Total $ 45 $ 34 |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of March 31, 2021, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions: Commodity March 31, 2021 Term Copper 6 millions of pounds 1 to 11 months Gold 1,346 Troy ounces 1 to 11 months |
Schedule of Derivative Instruments Recorded in Balance Sheet | The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps: 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 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Long-term debt $ (2,688) $ (2,688) $ (119) $ (139) (a) At March 31, 2021 and December 31, 2020, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $36 and $37, respectively. |
Schedule of Impact of Hedging Activities to Consolidated Statement of Income | The impact of hedging activities to the Consolidated Statements of Income are as follow: Three months ended March 31, 2021 Net Sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 4,692 $ 3,184 $ 38 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ 3 $ 1 $ — Derivative designated as hedging instrument (3) (1) — Commodity contracts Hedged item $ — $ (2) $ — Derivative designated as hedging instrument — 2 — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 19 Derivative designated as hedging instrument — — (19) Three months ended March 31, 2020 Net Sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 4,789 $ 3,302 $ 34 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ — $ (3) $ — Derivative designated as hedging instrument — 3 — 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 $ — $ — $ (68) Derivative designated as hedging instrument — — 68 |
Schedule of Amounts Recognized in Net Income | The impact of derivatives not designated as hedges to the Consolidated Statements of Income are as follow: Gain (loss) recognized in Consolidated Statements of Income Consolidated Statements of Income classification Three months ended 2021 2020 Gain (loss) on derivatives not designated as hedges Currency exchange contracts $ (63) $ (149) Interest expense - net Commodity Contracts 2 — Cost of products sold Total $ (61) $ (149) |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income | The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income follow: Gain (loss) recognized in Location of gain (loss) Gain (loss) reclassified Three months ended Three months ended 2021 2020 2021 2020 Derivatives designated as cash Forward starting floating-to-fixed $ 129 $ (147) Interest expense - net $ — $ — Currency exchange contracts (13) (42) Net sales and Cost of products sold (4) 3 Commodity contracts 3 (2) Cost of products sold 2 — Non-derivative designated as net Foreign currency denominated debt 144 43 Interest expense - net — — Total $ 263 $ (148) $ (2) $ 3 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Program Charges | A summary of restructuring program charges by type follows: Three months ended March 31, 2021 Workforce reductions $ 2 Plant closing and other 14 Total before income taxes 16 Income tax benefit 4 Total after income taxes $ 12 Per ordinary share - diluted $ 0.03 Restructuring program charges related to the following segments: Three months ended March 31, 2021 Electrical Americas $ 5 Electrical Global 2 Aerospace 1 Vehicle 6 Corporate 2 Total $ 16 |
Schedule of Liabilities Related to Restructuring | A summary of liabilities related to workforce reductions, plant closing and other associated costs follows: Workforce reductions Plant closing and other Total Balance at January 1, 2020 $ — $ — $ — Liability recognized 172 42 214 Payments, utilization and translation (33) (39) (72) Balance at December 31, 2020 139 3 142 Liability recognized 2 14 16 Payments, utilization and translation (25) (6) (31) Balance at March 31, 2021 $ 116 $ 11 $ 127 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Business Segment Information | Three months ended 2021 2020 Net sales Electrical Americas $ 1,622 $ 1,788 Electrical Global 1,253 1,144 Hydraulics 561 507 Aerospace 519 680 Vehicle 654 598 eMobility 83 72 Total net sales $ 4,692 $ 4,789 Segment operating profit (loss) Electrical Americas $ 332 $ 308 Electrical Global 213 166 Hydraulics 84 55 Aerospace 96 147 Vehicle 113 81 eMobility (7) 1 Total segment operating profit 831 758 Corporate Intangible asset amortization expense (92) (87) Interest expense - net (38) (34) Pension and other postretirement benefits income (expense) 14 (8) Restructuring program charges (16) — Other expense - net (161) (8) Income before income taxes 538 621 Income tax expense 79 183 Net income 459 438 Less net income for noncontrolling interests (1) — Net income attributable to Eaton ordinary shareholders $ 458 $ 438 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES OF BUSINESSES - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Mar. 22, 2021 | Mar. 17, 2021 | Jan. 31, 2021 | Mar. 02, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 29, 2021 | Jan. 21, 2020 |
Divestiture of Business [Abstract] | |||||||||||
Cash purchase price, net of cash received | $ 1,700 | $ 195 | |||||||||
Contingent consideration expected to be paid to former shareholders | $ 56 | $ 56 | |||||||||
Lighting Business | Disposed of by Sale | |||||||||||
Divestiture of Business [Abstract] | |||||||||||
Cash purchase price | $ 1,400 | ||||||||||
Pre-tax gain (loss) on disposal | $ 221 | ||||||||||
Sales of business sold | $ 1,600 | ||||||||||
Hydraulics Business | Held-for-sale | |||||||||||
Divestiture of Business [Abstract] | |||||||||||
Cash purchase price | $ 3,300 | ||||||||||
Sales of business sold | $ 1,800 | ||||||||||
Power Distribution, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenue reported by acquiree for last annual period (more than in 2020) | 125 | ||||||||||
Cobham Mission Systems | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenue reported by acquiree for last annual period (more than in 2020) | 700 | ||||||||||
Divestiture of Business [Abstract] | |||||||||||
Consideration to be transferred in acquisition | $ 2,830 | ||||||||||
Tripp Lite | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenue reported by acquiree for last annual period (more than in 2020) | $ 400 | ||||||||||
Divestiture of Business [Abstract] | |||||||||||
Cash purchase price, net of cash received | $ 1,650 | ||||||||||
Intangible assets acquired | $ 630 | ||||||||||
Revenue of acquiree since acquisition date | $ 26 | ||||||||||
Green Motion, SA | |||||||||||
Divestiture of Business [Abstract] | |||||||||||
Total consideration to be transferred for acquisition | $ 105 | ||||||||||
Cash purchase price | 49 | ||||||||||
Contingent consideration expected to be paid to former shareholders | 56 | ||||||||||
Maximum potential payments based on future revenue performance | $ 109 | ||||||||||
HuanYu High Tech | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenue reported by acquiree for last annual period (more than in 2020) | $ 106 | ||||||||||
Divestiture of Business [Abstract] | |||||||||||
Ownership interest acquired (as a percent) | 50.00% |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES OF BUSINESSES - Sale of Businesses (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale - current | $ 2,537 | $ 2,487 |
Hydraulics Business | Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | 7 | 0 |
Accounts receivable - net | 397 | 345 |
Inventory | 378 | 369 |
Prepaid expenses and other current assets | 9 | 18 |
Net property, plant and equipment | 505 | 504 |
Goodwill | 909 | 920 |
Other intangible assets | 247 | 248 |
Operating lease assets | 63 | 61 |
Deferred income taxes | 5 | 6 |
Other noncurrent assets | 17 | 16 |
Assets held for sale - current | 2,537 | 2,487 |
Accounts payable | 276 | 241 |
Accrued compensation | 25 | 26 |
Other current liabilities | 105 | 101 |
Pension liabilities | 57 | 60 |
Operating lease liabilities | 32 | 35 |
Deferred income taxes | 4 | 3 |
Other noncurrent liabilities | 2 | 2 |
Liabilities held for sale - current | $ 501 | $ 468 |
ACQUISITIONS AND DIVESTITURES_5
ACQUISITIONS AND DIVESTITURES OF BUSINESSES - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Mar. 17, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 13,757 | $ 12,903 | |
Tripp Lite | |||
Business Acquisition [Line Items] | |||
Short-term investments | $ 5 | ||
Accounts receivable | 94 | ||
Inventory | 184 | ||
Prepaid expenses and other current assets | 6 | ||
Property, plant and equipment | 6 | ||
Other intangible assets | 630 | ||
Accounts payable | (13) | ||
Other current liabilities | (32) | ||
Other noncurrent liabilities | (157) | ||
Total identifiable net assets | 723 | ||
Goodwill | 928 | ||
Total consideration, net of cash received | $ 1,651 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)operating_segment | Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | operating_segment | 6 | |
Accounts receivables from customers | $ 2,708 | $ 2,539 |
Unbilled receivables | 106 | $ 90 |
Backlog of unsatisfied or partially satisfied obligations | $ 6,400 | |
Backlog expected to be recognized in the next twelve months (as a percent) | 88.00% |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Sales (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,692 | $ 4,789 |
Electrical Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,622 | 1,788 |
Electrical Americas | Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 520 | 724 |
Electrical Americas | Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,102 | 1,064 |
Electrical Global | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,253 | 1,144 |
Electrical Global | Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 713 | 657 |
Electrical Global | Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 540 | 487 |
Hydraulics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 561 | 507 |
Hydraulics | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 222 | 227 |
Hydraulics | Rest of World | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 339 | 280 |
Aerospace | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 519 | 680 |
Aerospace | Original Equipment Manufacturers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 208 | 325 |
Aerospace | Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 146 | 220 |
Aerospace | Industrial and Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 165 | 135 |
Vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 654 | 598 |
Vehicle | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 342 | 292 |
Vehicle | Passenger and Light Duty | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 312 | 306 |
eMobility | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 83 | $ 72 |
REVENUE RECOGNITION - Changes i
REVENUE RECOGNITION - Changes in Deferred Revenue Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | $ 257 | $ 234 |
Customer deposits and billings | 276 | 245 |
Revenue recognized in the period | (262) | (240) |
Translation and other | (3) | |
Translation | (4) | |
Deferred revenue reclassified to held for sale | (11) | |
Balance at end of period | $ 268 | $ 224 |
CREDIT LOSSES FOR RECEIVABLES -
CREDIT LOSSES FOR RECEIVABLES - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Credit Loss [Abstract] | ||
Allowance for credit losses | $ 52 | $ 48 |
INVENTORY - Summary (Details)
INVENTORY - Summary (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 824 | $ 803 |
Work-in-process | 530 | 498 |
Finished goods | 1,045 | 808 |
Total inventory | $ 2,399 | $ 2,109 |
GOODWILL - Summary (Details)
GOODWILL - Summary (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 12,903 |
Additions | 989 |
Translation | (135) |
Balance at end of period | 13,757 |
Electrical Americas | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 6,456 |
Additions | 928 |
Translation | (3) |
Balance at end of period | 7,381 |
Electrical Global | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 4,295 |
Additions | 61 |
Translation | (101) |
Balance at end of period | 4,255 |
Aerospace | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 1,777 |
Additions | 0 |
Translation | (28) |
Balance at end of period | 1,749 |
Vehicle | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 293 |
Additions | 0 |
Translation | (2) |
Balance at end of period | 291 |
eMobility | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 82 |
Additions | 0 |
Translation | (1) |
Balance at end of period | $ 81 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - Notes - 2021 Euro Notes € in Millions, $ in Millions | Mar. 08, 2021EUR (€)tranche | Mar. 08, 2021USD ($) | Mar. 31, 2021 | Mar. 08, 2021USD ($)tranche |
Debt Instrument [Line Items] | ||||
Face value of debt instrument | € 1,500 | $ 1,798 | ||
Number of tranches | tranche | 2 | 2 | ||
Proceeds from issuance of notes | € 1,494 | $ 1,790 | ||
Redemption price (as a percent) | 101.00% | 101.00% | ||
Tranche One | ||||
Debt Instrument [Line Items] | ||||
Face value of debt instrument | € 900 | |||
Debt instrument, stated interest rate (as a percent) | 0.128% | |||
Tranche Two | ||||
Debt Instrument [Line Items] | ||||
Face value of debt instrument | € 600 | |||
Debt instrument, stated interest rate (as a percent) | 0.577% |
RETIREMENT BENEFIT PLANS (Detai
RETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Pension plan | United States pension benefit expense (income) | ||
Retirement benefits plans expense (income) | ||
Service cost | $ 10 | $ 24 |
Interest cost | 17 | 26 |
Expected return on plan assets | (56) | (57) |
Amortization | 10 | 25 |
Total | (19) | 18 |
Settlements, curtailments and special termination benefits | 14 | 17 |
Total expense (income) | (5) | 35 |
Pension plan | Non-United States pension benefit expense (income) | ||
Retirement benefits plans expense (income) | ||
Service cost | 19 | 18 |
Interest cost | 10 | 11 |
Expected return on plan assets | (30) | (27) |
Amortization | 19 | 15 |
Total | 18 | 17 |
Settlements, curtailments and special termination benefits | 0 | 3 |
Total expense (income) | 18 | 20 |
Postretirement plan | ||
Retirement benefits plans expense (income) | ||
Service cost | 0 | 0 |
Interest cost | 2 | 2 |
Expected return on plan assets | 0 | 0 |
Amortization | (1) | (3) |
Total | 1 | (1) |
Settlements, curtailments and special termination benefits | 0 | 0 |
Total expense (income) | $ 1 | $ (1) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 14.70% | 29.50% |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Feb. 27, 2019 | |
Class of Stock [Line Items] | |||
Antidilutive shares excluded from net income per share (shares) | 0.1 | 0.3 | |
2019 Program | |||
Class of Stock [Line Items] | |||
Share repurchase program, authorized amount | $ 5,000 | ||
Ordinary shares purchased (shares) | 0.5 | 14.2 | |
Stock repurchased (shares) | $ 59 | $ 1,300 |
EQUITY - Changes in Shareholder
EQUITY - Changes in Shareholders' Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 14,973 | $ 16,133 |
Net income | 459 | 438 |
Other comprehensive loss, net of tax | (30) | (676) |
Cash dividends paid and accrued | (309) | (305) |
Issuance of shares under equity-based compensation plans | 5 | 1 |
Changes in noncontrolling interest of consolidated subsidiaries - net | (2) | (3) |
Repurchase of shares | (59) | (1,300) |
Balance at end of period | 15,037 | 14,288 |
Total Eaton shareholders' equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 14,930 | 16,082 |
Net income | 458 | 438 |
Other comprehensive loss, net of tax | (30) | (676) |
Cash dividends paid and accrued | (309) | (300) |
Issuance of shares under equity-based compensation plans | 5 | 1 |
Repurchase of shares | (59) | (1,300) |
Balance at end of period | $ 14,995 | $ 14,245 |
Ordinary shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (shares) | 398.1 | 413.3 |
Balance at beginning of period | $ 4 | $ 4 |
Issuance of shares under equity-based compensation plans (shares) | 0.9 | 0.9 |
Repurchase of shares (shares) | (0.5) | (14.2) |
Balance at end of period (shares) | 398.5 | 400 |
Balance at end of period | $ 4 | $ 4 |
Capital in excess of par value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 12,329 | 12,200 |
Issuance of shares under equity-based compensation plans | 6 | 3 |
Balance at end of period | 12,335 | 12,203 |
Retained earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 6,794 | 8,170 |
Net income | 458 | 438 |
Cash dividends paid and accrued | (309) | (300) |
Issuance of shares under equity-based compensation plans | (1) | (1) |
Repurchase of shares | (59) | (1,300) |
Balance at end of period | 6,883 | 7,007 |
Accumulated other comprehensive loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (4,195) | (4,290) |
Other comprehensive loss, net of tax | (30) | (676) |
Balance at end of period | (4,225) | (4,966) |
Shares held in trust | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (2) | (2) |
Issuance of shares under equity-based compensation plans | (1) | |
Balance at end of period | (2) | (3) |
Noncontrolling interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 43 | 51 |
Net income | 1 | |
Cash dividends paid and accrued | (5) | |
Changes in noncontrolling interest of consolidated subsidiaries - net | (2) | (3) |
Balance at end of period | $ 42 | $ 43 |
EQUITY - Changes in Accumulated
EQUITY - Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 14,973 | $ 16,133 |
Other comprehensive (loss) income before reclassifications | (66) | |
Amounts reclassified from Accumulated other comprehensive loss (income) | 36 | |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (30) | (676) |
Balance at end of period | 15,037 | 14,288 |
Accumulated other comprehensive loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (4,195) | (4,290) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (30) | (676) |
Balance at end of period | (4,225) | $ (4,966) |
Currency translation and related hedging instruments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (2,647) | |
Other comprehensive (loss) income before reclassifications | (173) | |
Amounts reclassified from Accumulated other comprehensive loss (income) | 1 | |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (172) | |
Balance at end of period | (2,819) | |
Pensions and other postretirement benefits | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (1,481) | |
Other comprehensive (loss) income before reclassifications | 13 | |
Amounts reclassified from Accumulated other comprehensive loss (income) | 34 | |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 47 | |
Balance at end of period | (1,434) | |
Cash flow hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (67) | |
Other comprehensive (loss) income before reclassifications | 94 | |
Amounts reclassified from Accumulated other comprehensive loss (income) | 1 | |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 95 | |
Balance at end of period | $ 28 |
EQUITY - Reclassifications Out
EQUITY - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Sale of shares in associate company | $ 0 | $ 221 |
Income before income taxes | 538 | 621 |
Income tax benefit | (79) | (183) |
Net income attributable to Eaton ordinary shareholders | 458 | $ 438 |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income attributable to Eaton ordinary shareholders | (36) | |
Currency translation and related hedging instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Sale of shares in associate company | (1) | |
Income tax benefit | 0 | |
Net income attributable to Eaton ordinary shareholders | (1) | |
Pensions and other postretirement benefits | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes | (42) | |
Income tax benefit | 8 | |
Net income attributable to Eaton ordinary shareholders | (34) | |
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income tax benefit | 1 | |
Net income attributable to Eaton ordinary shareholders | (1) | |
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Currency exchange contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes | (4) | |
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Commodity contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes | $ 2 |
EQUITY - Calculation of Net Inc
EQUITY - Calculation of Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Calculation of net income per ordinary share attributable to ordinary shareholders | ||
Net Income Attributable to Eaton ordinary shareholders | $ 458 | $ 438 |
Weighted-average number of ordinary shares outstanding - diluted (shares) | 400.9 | 411.1 |
Less dilutive effect of equity-based compensation (shares) | 2.6 | 1.8 |
Weighted-average number of ordinary shares outstanding - basic (shares) | 398.3 | 409.3 |
Net income per share attributable to Eaton ordinary shareholders | ||
Diluted (USD per share) | $ 1.14 | $ 1.07 |
Basic (USD per share) | $ 1.15 | $ 1.07 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Cash | $ 354 | $ 438 |
Short-term investments | 945 | 664 |
Net derivative contracts | 105 | 31 |
Contingent consideration from acquisition of Green Motion (Note 2) | (56) | |
Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Cash | 354 | 438 |
Short-term investments | 945 | 664 |
Net derivative contracts | 0 | 0 |
Contingent consideration from acquisition of Green Motion (Note 2) | 0 | |
Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 105 | 31 |
Contingent consideration from acquisition of Green Motion (Note 2) | 0 | |
Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 0 | $ 0 |
Contingent consideration from acquisition of Green Motion (Note 2) | $ (56) |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Long-term debt and current portion of long term debt, carrying value | $ 9,694 | $ 8,057 |
Long-term debt and current portion of long-term debt, fair value | $ 10,337 | $ 9,075 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative [Line Items] | ||
Proportion of intercompany balance sheet exposure (as a percent) | 100.00% | |
Cash flow hedge loss to be reclassified within the next twelve months | $ 5 | |
Non-derivative net investment hedge | ||
Derivative [Line Items] | ||
Foreign currency note payable, noncurrent, after-tax | $ 2,973 | $ 2,020 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Financial Instrument Recognized in the Consolidated Balance Sheet (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivatives designated as hedges | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | $ 21 | $ 26 |
Derivatives designated as hedges | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 155 | 123 |
Derivatives designated as hedges | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 25 | 20 |
Derivatives designated as hedges | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 30 | 109 |
Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 2,075 | 2,075 |
Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 1 | 2 |
Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 82 | 100 |
Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 900 | 900 |
Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 67 | 17 |
Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 29 | 108 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 1,295 | 946 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 15 | 20 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 6 | 6 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 25 | 20 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 1 | 1 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 23 | 24 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 5 | 4 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Derivatives not designated as hedges | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset not designated as hedging instrument | 31 | 45 |
Derivatives not designated as hedges | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability not designated as hedging instrument | 47 | 34 |
Derivatives not designated as hedges | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 5,667 | 5,227 |
Derivatives not designated as hedges | Currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset not designated as hedging instrument | 29 | 43 |
Derivatives not designated as hedges | Currency exchange contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability not designated as hedging instrument | 47 | 34 |
Derivatives not designated as hedges | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 37 | 18 |
Derivatives not designated as hedges | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset not designated as hedging instrument | 2 | 2 |
Derivatives not designated as hedges | Commodity contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability not designated as hedging instrument | $ 0 | $ 0 |
Derivative, remaining maturity | 1 month | 1 month |
Minimum | Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 3 months | 6 months |
Minimum | Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 11 years | 12 years |
Minimum | Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 1 month | 1 month |
Minimum | Derivatives designated as hedges | Cash flow hedging | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 1 month | 1 month |
Minimum | Derivatives not designated as hedges | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 1 month | 1 month |
Maximum | Derivatives designated as hedges | Fair value hedging | Fixed-to-floating interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 13 years | 14 years |
Maximum | Derivatives designated as hedges | Cash flow hedging | Floating-to-fixed interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 31 years | 32 years |
Maximum | Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 36 months | 36 months |
Maximum | Derivatives designated as hedges | Cash flow hedging | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 11 months | 12 months |
Maximum | Derivatives not designated as hedges | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 12 months | 12 months |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Volume of Outstanding Commodity Contracts (Details) - Commodity contracts lb in Millions | 3 Months Ended |
Mar. 31, 2021oztlb | |
Copper | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | lb | 6 |
Copper | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Copper | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 11 months |
Gold | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | ozt | 1,346 |
Gold | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Gold | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 11 months |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Balance Sheet Related to Fixed-to-Floating Interest Rate Swaps (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Carrying amount of the hedged assets (liabilities) | $ (2,688) | $ (2,688) |
Long-term debt | ||
Derivative [Line Items] | ||
Discontinued hedge, cumulative adjustment | 36 | 37 |
Long-term debt | Interest rate swaps | ||
Derivative [Line Items] | ||
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) | $ (119) | $ (139) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivatives on Consolidated Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative [Line Items] | ||
Net sales | $ 4,692 | $ 4,789 |
Cost of products sold | 3,184 | 3,302 |
Interest expense - net | 38 | 34 |
Cash flow hedging | Net sales | Currency exchange contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 3 | 0 |
Gain (loss) on hedging instrument | (3) | 0 |
Cash flow hedging | Net sales | Commodity contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 |
Cash flow hedging | Cost of products sold | Currency exchange contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 1 | (3) |
Gain (loss) on hedging instrument | (1) | 3 |
Cash flow hedging | Cost of products sold | Commodity contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | (2) | 0 |
Gain (loss) on hedging instrument | 2 | 0 |
Cash flow hedging | Interest expense - net | Currency exchange contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 |
Cash flow hedging | Interest expense - net | Commodity contracts | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 |
Fair value hedging | Net sales | Interest rate swaps | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 |
Fair value hedging | Cost of products sold | Interest rate swaps | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 |
Fair value hedging | Interest expense - net | Interest rate swaps | ||
Derivative [Line Items] | ||
Gain (loss) on hedged item | 19 | (68) |
Gain (loss) on hedging instrument | $ (19) | $ 68 |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivatives Not Designated as Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | $ (61) | $ (149) |
Currency exchange contracts | Interest expense - net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | (63) | (149) |
Commodity contracts | Cost of products sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | $ 2 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest expense - net | Non-derivative designated as net investment hedges | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | $ 144 | $ 43 |
Gain (loss) reclassified in accumulated other comprehensive (loss) income | 0 | 0 |
Total | ||
Amounts recognized in accumulated other comprehensive income | ||
Total, gain (loss) on derivative and net investment hedge recognized in other comprehensive (loss) income | 263 | (148) |
Total, gain (loss) on derivative and net investment hedge recognized in accumulated other comprehensive (loss) income | (2) | 3 |
Forward Starting Floating-to-Fixed Interest Rate Swap | Interest expense - net | Derivatives designated as cash flow hedges | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | 129 | (147) |
Gain (loss) reclassified from Accumulated other comprehensive loss | 0 | 0 |
Currency exchange contracts | Net sales and Cost of products sold | Derivatives designated as cash flow hedges | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | (13) | (42) |
Gain (loss) reclassified from Accumulated other comprehensive loss | (4) | 3 |
Commodity contracts | Cost of products sold | Derivatives designated as cash flow hedges | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in other comprehensive (loss) income | 3 | (2) |
Gain (loss) reclassified from Accumulated other comprehensive loss | $ 2 | $ 0 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 16 | $ 0 | $ 214 | ||
Estimated charges | $ 280 | ||||
Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 45 | $ 5 |
RESTRUCTURING CHARGES - Restruc
RESTRUCTURING CHARGES - Restructuring Program Charges (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ 16 | $ 0 | $ 214 |
Income tax benefit | 4 | ||
Total after income taxes | $ 12 | ||
Per ordinary share - diluted (USD per share) | $ 0.03 | ||
Workforce reductions | |||
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ 2 | 172 | |
Plant closing and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Total before income taxes | $ 14 | $ 42 |
RESTRUCTURING CHARGES - Restr_2
RESTRUCTURING CHARGES - Restructuring Program Charges Related to Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 16 | $ 0 | $ 214 |
Operating segments | Electrical Americas | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 5 | ||
Operating segments | Electrical Global | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 2 | ||
Operating segments | Aerospace | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1 | ||
Operating segments | Vehicle | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 6 | ||
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 2 |
RESTRUCTURING CHARGES - Liabili
RESTRUCTURING CHARGES - Liabilities Related to Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | $ 142 | $ 0 | $ 0 |
Liability recognized | 16 | 0 | 214 |
Payments, utilization and translation | (31) | (72) | |
Balance at end of period | 127 | 142 | |
Workforce reductions | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 139 | 0 | 0 |
Liability recognized | 2 | 172 | |
Payments, utilization and translation | (25) | (33) | |
Balance at end of period | 116 | 139 | |
Plant closing and other | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 3 | $ 0 | 0 |
Liability recognized | 14 | 42 | |
Payments, utilization and translation | (6) | (39) | |
Balance at end of period | $ 11 | $ 3 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | $ 4,692 | $ 4,789 | |
Interest expense - net | (38) | (34) | |
Pension and other postretirement benefits income (expense) | (14) | (54) | |
Restructuring program charges | (16) | 0 | $ (214) |
Other expense - net | 11 | (35) | |
Income before income taxes | 538 | 621 | |
Income tax expense | 79 | 183 | |
Net income | 459 | 438 | |
Less net income for noncontrolling interests | (1) | 0 | |
Net income attributable to Eaton ordinary shareholders | 458 | 438 | |
Electrical Americas | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 1,622 | 1,788 | |
Electrical Global | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 1,253 | 1,144 | |
Hydraulics | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 561 | 507 | |
Aerospace | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 519 | 680 | |
Vehicle | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 654 | 598 | |
eMobility | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 83 | 72 | |
Operating segments | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 4,692 | 4,789 | |
Segment operating profit (loss) | 831 | 758 | |
Operating segments | Electrical Americas | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 1,622 | 1,788 | |
Segment operating profit (loss) | 332 | 308 | |
Restructuring program charges | (5) | ||
Operating segments | Electrical Global | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 1,253 | 1,144 | |
Segment operating profit (loss) | 213 | 166 | |
Restructuring program charges | (2) | ||
Operating segments | Hydraulics | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 561 | 507 | |
Segment operating profit (loss) | 84 | 55 | |
Operating segments | Aerospace | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 519 | 680 | |
Segment operating profit (loss) | 96 | 147 | |
Restructuring program charges | (1) | ||
Operating segments | Vehicle | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 654 | 598 | |
Segment operating profit (loss) | 113 | 81 | |
Restructuring program charges | (6) | ||
Operating segments | eMobility | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Net sales | 83 | 72 | |
Segment operating profit (loss) | (7) | 1 | |
Corporate | |||
Segment Reporting Information, Profit (Loss) [Abstract] | |||
Intangible asset amortization expense | (92) | (87) | |
Interest expense - net | (38) | (34) | |
Pension and other postretirement benefits income (expense) | 14 | (8) | |
Restructuring program charges | (2) | ||
Other expense - net | $ (161) | $ (8) |