Cover Page
Cover Page - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 31, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2023 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 80.2 | ||
Entity Common Stock, Shares Outstanding | 399.5 | ||
Documents Incorporated by Reference | Portions of the Proxy Statement for the 2024 annual shareholders meeting are incorporated by reference into Part III. | ||
Entity Central Index Key | 0001551182 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Annual Report | true | ||
Document Transition Report | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Cleveland, Ohio |
Auditor Firm ID | 42 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net sales | $ 23,196 | $ 20,752 | $ 19,628 |
Cost of products sold | 14,762 | 13,865 | 13,293 |
Selling and administrative expense | 3,795 | 3,227 | 3,256 |
Research and development expense | 754 | 665 | 616 |
Interest expense - net | 151 | 144 | 144 |
Gain on sale of business | 0 | 24 | 617 |
Other expense (income) - net | (93) | (36) | 40 |
Income before income taxes | 3,827 | 2,911 | 2,896 |
Income tax expense | 604 | 445 | 750 |
Net income | 3,223 | 2,465 | 2,146 |
Less net income for noncontrolling interests | (5) | (4) | (2) |
Net income attributable to Eaton ordinary shareholders | $ 3,218 | $ 2,462 | $ 2,144 |
Net income per share attributable to Eaton ordinary shareholders | |||
Diluted (USD per share) | $ 8.02 | $ 6.14 | $ 5.34 |
Basic (USD per share) | $ 8.06 | $ 6.17 | $ 5.38 |
Weighted-average number of ordinary shares outstanding | |||
Diluted (in shares) | 401.1 | 400.8 | 401.6 |
Basic (in shares) | 399.1 | 398.7 | 398.7 |
Cash dividends declared per ordinary share (USD per share) | $ 3.44 | $ 3.24 | $ 3.04 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 3,223 | $ 2,465 | $ 2,146 |
Less net income for noncontrolling interests | (5) | (4) | (2) |
Net income attributable to Eaton ordinary shareholders | 3,218 | 2,462 | 2,144 |
Other comprehensive income (loss), net of tax | |||
Currency translation and related hedging instruments | 235 | (647) | 30 |
Pensions and other postretirement benefits | (185) | 175 | 495 |
Cash flow hedges | (11) | 159 | 37 |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 39 | (313) | 562 |
Total comprehensive income attributable to Eaton ordinary shareholders | $ 3,257 | $ 2,149 | $ 2,706 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 488 | $ 294 |
Short-term investments | 2,121 | 261 |
Accounts receivable - net | 4,475 | 4,076 |
Inventory | 3,739 | 3,430 |
Prepaid expenses and other current assets | 851 | 685 |
Total current assets | 11,675 | 8,746 |
Property, plant and equipment | ||
Land and buildings | 2,241 | 2,129 |
Machinery and equipment | 6,497 | 5,885 |
Gross property, plant and equipment | 8,738 | 8,013 |
Accumulated depreciation | (5,208) | (4,867) |
Net property, plant and equipment | 3,530 | 3,146 |
Other noncurrent assets | ||
Goodwill | 14,977 | 14,796 |
Other intangible assets | 5,091 | 5,485 |
Operating lease assets | 648 | 570 |
Deferred income taxes | 458 | 330 |
Other assets | 2,052 | 1,940 |
Total assets | 38,432 | 35,014 |
Current liabilities | ||
Short-term debt | 8 | 324 |
Current portion of long-term debt | 1,017 | 10 |
Accounts payable | 3,365 | 3,072 |
Accrued compensation | 676 | 467 |
Other current liabilities | 2,680 | 2,488 |
Total current liabilities | 7,747 | 6,360 |
Noncurrent liabilities | ||
Long-term debt | 8,244 | 8,321 |
Pension liabilities | 768 | 649 |
Other postretirement benefits liabilities | 180 | 177 |
Operating lease liabilities | 533 | 459 |
Deferred income taxes | 402 | 530 |
Other noncurrent liabilities | 1,489 | 1,444 |
Total noncurrent liabilities | 11,616 | 11,580 |
Shareholders’ equity | ||
Ordinary shares (399.4 million outstanding in 2023 and 397.8 million in 2022) | 4 | 4 |
Capital in excess of par value | 12,634 | 12,512 |
Retained earnings | 10,305 | 8,468 |
Accumulated other comprehensive loss | (3,906) | (3,946) |
Shares held in trust | (1) | (1) |
Total Eaton shareholders’ equity | 19,036 | 17,038 |
Noncontrolling interests | 33 | 38 |
Total equity | 19,069 | 17,075 |
Total liabilities and equity | $ 38,432 | $ 35,014 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Ordinary shares outstanding (in shares) | 399.4 | 397.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net income | $ 3,223 | $ 2,465 | $ 2,146 |
Adjustments to reconcile to net cash provided by operating activities | |||
Depreciation and amortization | 926 | 954 | 922 |
Deferred income taxes | (182) | (128) | (111) |
Pension and other postretirement benefits expense | 15 | 54 | 53 |
Contributions to pension plans | (113) | (116) | (343) |
Contributions to other postretirement benefits plans | (20) | (24) | (20) |
Gain on sale of business | 0 | (24) | (197) |
Changes in working capital | |||
Accounts receivable - net | (341) | (743) | (271) |
Inventory | (282) | (490) | (629) |
Accounts payable | 256 | 334 | 832 |
Accrued compensation | 197 | (16) | 154 |
Accrued income and other taxes | 61 | 170 | (317) |
Other current assets | (112) | (179) | (116) |
Other current liabilities | 72 | 236 | 38 |
Other - net | (76) | 40 | 22 |
Net cash provided by operating activities | 3,624 | 2,533 | 2,163 |
Investing activities | |||
Capital expenditures for property, plant and equipment | (757) | (598) | (575) |
Cash paid for acquisitions of businesses, net of cash acquired | 0 | (610) | (4,500) |
Proceeds from (payments for) sales of businesses, net of cash sold | (2) | 31 | 3,129 |
Proceeds from sales of property, plant and equipment | 76 | 163 | 44 |
Investments in associate companies | (68) | (42) | (124) |
Sales (purchases) of short-term investments - net | (1,861) | (19) | 379 |
Proceeds from (payments for) settlement of currency exchange contracts not designated as hedges - net | 92 | (47) | (27) |
Other - net | (54) | (79) | (90) |
Net cash used in investing activities | (2,575) | (1,200) | (1,764) |
Financing activities | |||
Proceeds from borrowings | 818 | 1,995 | 1,798 |
Payments on borrowings | (19) | (2,012) | (1,013) |
Short-term debt, net | (311) | 317 | 20 |
Cash dividends paid | (1,379) | (1,299) | (1,219) |
Exercise of employee stock options | 78 | 28 | 63 |
Repurchase of shares | 0 | (286) | (122) |
Employee taxes paid from shares withheld | (49) | (60) | (47) |
Other - net | (9) | (23) | (15) |
Net cash used in financing activities | (871) | (1,340) | (535) |
Effect of currency on cash | 16 | 4 | (5) |
Total increase (decrease) in cash | 194 | (3) | (141) |
Cash at the beginning of the period | 294 | 297 | 438 |
Cash at the end of the period | $ 488 | $ 294 | $ 297 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Total Eaton shareholders' equity | Ordinary shares | Capital in excess of par value | Retained earnings | Accumulated other comprehensive loss | Shares held in trust | Noncontrolling interests |
Balance at beginning of period (shares) at Dec. 31, 2020 | 398.1 | |||||||
Balance at beginning of period at Dec. 31, 2020 | $ 14,973 | $ 14,930 | $ 4 | $ 12,329 | $ 6,794 | $ (4,195) | $ (2) | $ 43 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 2,146 | 2,144 | 2,144 | 2 | ||||
Other comprehensive income (loss), net of tax | 562 | 562 | 562 | |||||
Cash dividends paid | (1,220) | (1,219) | (1,219) | (1) | ||||
Issuance of shares under equity-based compensation plans (shares) | 1.6 | |||||||
Issuance of shares under equity-based compensation plans | 118 | 118 | 120 | (3) | 1 | |||
Changes in noncontrolling interest of consolidated subsidiaries - net | (6) | (6) | ||||||
Repurchase of shares (shares) | (0.9) | |||||||
Repurchase of shares | (122) | (122) | (122) | |||||
Balance at end of period (shares) at Dec. 31, 2021 | 398.8 | |||||||
Balance at end of period at Dec. 31, 2021 | 16,451 | 16,413 | $ 4 | 12,449 | 7,594 | (3,633) | (1) | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 2,465 | 2,462 | 2,462 | 4 | ||||
Other comprehensive income (loss), net of tax | (313) | (313) | (313) | |||||
Cash dividends paid | (1,301) | (1,299) | (1,299) | (2) | ||||
Issuance of shares under equity-based compensation plans (shares) | 1.1 | |||||||
Issuance of shares under equity-based compensation plans | 63 | 63 | 65 | (2) | ||||
Changes in noncontrolling interest of consolidated subsidiaries - net | (3) | (1) | (1) | (2) | ||||
Repurchase of shares (shares) | (2) | |||||||
Repurchase of shares | (286) | (286) | (286) | |||||
Balance at end of period (shares) at Dec. 31, 2022 | 397.8 | |||||||
Balance at end of period at Dec. 31, 2022 | 17,075 | 17,038 | $ 4 | 12,512 | 8,468 | (3,946) | (1) | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 3,223 | 3,218 | 3,218 | 5 | ||||
Other comprehensive income (loss), net of tax | 39 | 39 | 39 | |||||
Cash dividends paid | (1,388) | (1,379) | (1,379) | (9) | ||||
Issuance of shares under equity-based compensation plans (shares) | 1.5 | |||||||
Issuance of shares under equity-based compensation plans | 120 | 120 | 122 | (2) | ||||
Changes in noncontrolling interest of consolidated subsidiaries - net | (1) | (1) | ||||||
Balance at end of period (shares) at Dec. 31, 2023 | 399.4 | |||||||
Balance at end of period at Dec. 31, 2023 | $ 19,069 | $ 19,036 | $ 4 | $ 12,634 | $ 10,305 | $ (3,906) | $ (1) | $ 33 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Information and Basis of Presentation Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to protecting the environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. We are guided by our commitment to operate sustainably and with the highest ethical standards. Our work is accelerating the planet’s transition to renewable energy sources, helping to solve the world’s most urgent power management challenges, and building a more sustainable society for people today and for future generations. Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century. We reported revenues of $23.2 billion in 2023 and serve customers in more than 160 countries. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. Investments in associate companies included in Other assets were $860 million and $788 million as of December 31, 2023 and December 31, 2022, respectively, and income from these investments is reported in Other expense (income) - net. Eaton does not have off-balance sheet arrangements with unconsolidated entities. Eaton's reporting currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at exchange rates in effect at the balance sheet date as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. For subsidiaries operating in highly inflationary economies, non-monetary assets and liabilities such as inventory and property, plant and equipment and their related expenses are remeasured at historical exchange rates, while monetary assets and liabilities are remeasured at exchange rates in effect at the balance sheet date. Remeasurement adjustments for these subsidiaries are recognized in income. Adoption of New Accounting Standard Eaton adopted Accounting Standards Update 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, in the first quarter of 2023. The standard requires disclosure of certain information about the Company's supply chain finance program, including key terms and a rollforward of confirmed amounts payable. The adoption of the standard did not have a material impact on the consolidated financial statements. Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. The annual goodwill impairment test was performed using a qualitative analysis in 2023 and 2022, except for the Vehicle and eMobility reporting units which used a quantitative analysis in 2023 and 2022, respectively. A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. The results of the qualitative analyses did not indicate a need to perform quantitative analysis. Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Based on these analyses performed in 2023 and 2022, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts and thus, no impairment exists. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2023 and 2022 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows, and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2023 and 2022, the fair value of indefinite lived intangible assets exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 6. Leases The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, Eaton uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. The Company uses the following depreciation and amortization periods: Category Estimated useful life or amortization period Buildings Generally 40 years Machinery and equipment 3 - 10 years Software 5 - 15 years Customer relationships, certain trademarks, and patents and technology Weighted-average of 18 years Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment. Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico, and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10%, depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. The amortization periods on a weighted average basis for United States and Non-United States pension plans are approximately 22 years and 10 years, respectively. The amortization period for other postretirement benefits plans is 8 years. Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value. Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Eaton's policy is to recognize income tax effects from accumulated other comprehensive income when individual units of account are sold, terminated, or extinguished. For additional information about income taxes, see Note 12. Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 16 for additional information about hedges and derivative financial instruments. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). This accounting standard requires additional segment disclosures on an annual and interim basis, including significant segment expenses that are regularly provided to the chief operating decision maker. The standard does not change how operating segments and reportable segments are determined. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The standard is required to be applied retrospectively to all periods presented in the consolidated financial statements. Eaton plans to adopt the standard for the year ended December 31, 2024. The Company is evaluating the impact of ASU 2023-07 and expects the standard will only impact its segment disclosures with no material impact to the consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). This accounting standard requires disaggregated income tax disclosures on an annual basis, including information on the Company’s effective income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. The Company is evaluating the impact of ASU 2023-09 and expects the standard will only impact its income taxes disclosures with no material impact to the consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES O
ACQUISITIONS AND DIVESTITURES OF BUSINESSES | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES OF BUSINESSES | ACQUISITIONS AND DIVESTITURE OF BUSINESSES Acquisition of Tripp Lite On March 17, 2021, Eaton acquired Tripp Lite for $1.65 billion, net of cash received. Tripp Lite is a leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. Tripp Lite is reported within the Electrical Americas business segment. The acquisition of Tripp Lite has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final allocation as of the date of acquisition follows: (In millions) Final Allocation Short-term investments $ 5 Accounts receivable 93 Inventory 179 Prepaid expenses and other current assets 5 Property, plant and equipment 1 Other intangible assets 604 Other assets 2 Accounts payable (13) Other current liabilities (34) Other noncurrent liabilities (167) Total identifiable net assets 675 Goodwill 976 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. The estimated fair values of the customer relationships, trademarks and technology intangible assets of $539 million, $33 million, and $32 million, respectively, were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, trademarks and technology intangible assets were 20 years, 15 years, and 5 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2021 consolidated financial statements include Tripp Lite’s results of operations, including segment operating profit of $139 million on sales of $419 million, from the date of acquisition through December 31, 2021. Acquisition of Green Motion SA On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of cash paid at closing and an initial estimate of $57 million for the fair value of contingent future consideration based on 2023 and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a maximum possible undiscounted value of $122 million. As of December 31, 2023, the fair value of the contingent future payments has been reduced to $18 million based primarily on lower revenue in 2023 and anticipated reductions in projected 2024 revenue compared to the initial estimates at closing. This reduction is presented in Other expense (income) - net on the Consolidated Statements of Income. Acquisition of a 50% stake in HuanYu High Tech On March 29, 2021, Eaton acquired a 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. HuanYu High Tech has production operations in Wenzhou, China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment. Acquisition of Mission Systems On June 1, 2021, Eaton acquired Mission Systems for $2.8 billion, net of cash received. Mission Systems is a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission Systems is reported within the Aerospace business segment. The acquisition of Mission Systems has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final allocation as of the date of acquisition follows: (In millions) Final Allocation Accounts receivable $ 84 Inventory 178 Prepaid expenses and other current assets 50 Property, plant and equipment 97 Other intangible assets 1,462 Other assets 15 Accounts payable (40) Other current liabilities (202) Other noncurrent liabilities (108) Total identifiable net assets 1,536 Goodwill 1,264 Total consideration, net of cash received $ 2,800 Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Mission Systems. As a result of the acquisition, goodwill of $572 million recognized in the United States is deductible for tax purposes. The estimated fair values of the customer relationships, technology, and backlog intangible assets of $764 million, $612 million, and $86 million, respectively, were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The estimated fair value of technology intangibles is also based on the selection of royalty rates used in the valuation model. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, technology, and backlog intangible assets were 22 years, 21 years, and 2 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2021 consolidated financial statements include Mission Systems’ results of operations, including segment operating profit of $128 million on sales of $450 million, from the date of acquisition through December 31, 2021. Acquisition of a 50% stake in Jiangsu YiNeng Electric's busway business On June 25, 2021, Eaton acquired a 50 percent stake in Jiangsu YiNeng Electric's busway business, which manufactures and markets busway products in China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment. Sale of Hydraulics business On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. The Company finalized negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022 and recognized an additional pre-tax gain of $24 million and received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments. The business had sales of $1.3 billion in 2021 through the date of the sale. Acquisition of Royal Power Solutions On January 5, 2022, Eaton acquired Royal Power Solutions for $610 million, net of cash received. Royal Power Solutions is a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment. The acquisition of Royal Power Solutions has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The final allocation as of the date of acquisition follows: (In millions) Final Allocation Accounts receivable $ 35 Inventory 46 Prepaid expenses and other current assets 1 Property, plant and equipment 31 Other intangible assets 341 Other assets 8 Accounts payable (25) Other current liabilities (14) Other noncurrent liabilities (68) Total identifiable net assets 355 Goodwill 255 Total consideration, net of cash received $ 610 Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Royal Power Solutions. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. The estimated fair values of the customer relationships, technology, trademarks, and other intangible assets of $230 million, $90 million, $16 million, and $5 million, respectively, were determined using either the relief-from-royalty model, the multi-period excess earnings model, or the lost income model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The estimated fair value of technology and trademark intangibles are also based on the selection of royalty rates used in the valuation model. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, technology, trademarks, and other intangible assets were 17 years, 16 years, 15 years, and 2 years, respectively. See Note 6 for additional information about goodwill and other intangible assets. Eaton's 2022 consolidated financial statements include Royal Power Solutions' results of operations, including segment operating profit of $21 million on sales of $158 million, from the date of acquisition through December 31, 2022. Russia During the second quarter of 2022, in light of the ongoing war with Ukraine, the Company decided to exit its business operations in Russia and recorded charges of $29 million presented in Other expense (income) - net on the Consolidated Statements of Income. The charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance. Acquisition of a 50% stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business On July 1, 2022, Eaton acquired a 50 percent stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business, which manufactures and markets low-voltage circuit breakers in China. Eaton accounts for this investment on the equity method of accounting and is reported within the Electrical Global business segment. Acquisition of a 49% stake in Jiangsu Ryan Electrical Co. Ltd. On April 23, 2023, Eaton acquired a 49 percent stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power distribution and sub-transmission transformers in 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 | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when title and risk and rewards of ownership have transferred to the customer. Sales recognized over time are less than 5% of Eaton’s consolidated Net sales. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. Sales for service contracts generally are recognized as the services are provided. For agreements with multiple performance obligations, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, we generally allocate sales price to each distinct obligation based on the price of each item sold in separate transactions. Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a cumulative catch-up basis. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. Eaton does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. Sales, value added, and other taxes collected concurrent with revenue are excluded from Net sales. Shipping and handling costs are treated as fulfillment costs and are included in Cost of products sold. Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. Accrued rebates of $402 million and $400 million as of December 31, 2023 and December 31, 2022, respectively, are generally paid annually and are included in Other current liabilities. Returns are estimated at the time of the sale primarily based on historical experience and are recorded gross on the Consolidated Balance Sheet. Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they are typically earned at the completion of the contract when the customer is invoiced or when the customer pays Eaton. Sales of products and services varies by segment and are discussed in Note 18. In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer. Many of the products and services in power distribution and power quality services in the Electrical Americas and Electrical Global business segments and contracts to develop new products that are fully funded by customers in the Aerospace business segment meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. In the Hydraulics segment, sales contracts were primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts were primarily based on a customer’s purchase order. In this segment, performance obligations were generally satisfied at a point in time when we ship the product from our facility. In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In the eMobility segment, sales contracts are primarily for mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period. The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments: (In millions) 2023 2022 2021 Electrical Americas Products $ 2,949 $ 2,732 $ 2,255 Systems 7,149 5,765 4,987 Total $ 10,098 $ 8,497 $ 7,242 Electrical Global Products $ 3,462 $ 3,424 $ 3,283 Systems 2,622 2,424 2,233 Total $ 6,084 $ 5,848 $ 5,516 Hydraulics United States $ — $ — $ 534 Rest of World — — 766 Total $ — $ — $ 1,300 Aerospace Original Equipment Manufacturers $ 1,350 $ 1,209 $ 1,018 Aftermarket 1,183 977 823 Industrial and Other 878 854 807 Total $ 3,413 $ 3,039 $ 2,648 Vehicle Commercial $ 1,784 $ 1,736 $ 1,438 Passenger and Light Duty 1,180 1,094 1,141 Total $ 2,965 $ 2,830 $ 2,579 eMobility $ 636 $ 538 $ 343 Total net sales $ 23,196 $ 20,752 $ 19,628 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 receivable from customers were $3,966 million and $3,581 million at December 31, 2023 and December 31, 2022, 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 $289 million and $233 million at December 31, 2023 and December 31, 2022, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased business activity in 2023. Changes in the deferred revenue liabilities are as follows: (In millions) Deferred Revenue Balance at January 1, 2022 $ 422 Customer deposits and billings 1,656 Revenue recognized in the period (1,541) Translation and other (29) Balance at December 31, 2022 $ 508 Customer deposits and billings 2,368 Revenue recognized in the period (2,256) Translation 6 Balance at December 31, 2023 $ 626 Deferred revenue liabilities of $610 million and $489 million as of December 31, 2023 and 2022, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities. A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at December 31, 2023 was approximately $13 billion. At December 31, 2023, approximately 76% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter. |
CREDIT LOSSES FOR RECEIVABLES
CREDIT LOSSES FOR RECEIVABLES | 12 Months Ended |
Dec. 31, 2023 | |
Credit Loss [Abstract] | |
CREDIT LOSSES FOR RECEIVABLES | CREDIT LOSSES FOR RECEIVABLES Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 days. Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-off based on historic experience adjusted for market conditions. The Company's segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made. Accounts receivable are net of an allowance for credit losses of $38 million and $31 million at December 31, 2023 and December 31, 2022, respectively. The change in the allowance for credit losses includes expense and net write-offs, none of which are significant. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory is carried at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Cost components include raw materials, purchased components, direct labor, indirect labor, utilities, depreciation, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, and costs of the distribution network. The components of inventory are as follows: December 31 (In millions) 2023 2022 Raw materials $ 1,515 $ 1,275 Work-in-process 870 781 Finished goods 1,354 1,375 Total inventory $ 3,739 $ 3,430 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by segment are as follows: (In millions) January 1, 2022 Additions Translation December 31, 2022 Translation December 31, 2023 Electrical Americas $ 7,417 $ 5 $ (19) $ 7,402 $ 13 $ 7,415 Electrical Global 4,183 2 (255) 3,929 109 4,038 Aerospace 2,781 184 (122) 2,844 57 2,901 Vehicle 290 — (2) 287 2 289 eMobility 80 255 (1) 334 1 334 Total $ 14,751 $ 445 $ (400) $ 14,796 $ 181 $ 14,977 The 2022 additions to goodwill relate primarily to the anticipated synergies of acquiring Royal Power Solutions and Mission Systems. A summary of other intangible assets is as follows: December 31 2023 2022 (In millions) Historical Accumulated Historical Accumulated Intangible assets not subject to amortization Trademarks $ 1,207 $ 1,201 Intangible assets subject to amortization Customer relationships $ 4,742 $ 2,423 $ 4,677 $ 2,156 Patents and technology 1,990 948 1,987 830 Trademarks 1,123 642 1,113 570 Other 176 133 175 111 Total intangible assets subject to amortization $ 8,031 $ 4,146 $ 7,952 $ 3,667 Amortization expense related to intangible assets subject to amortization in 2023, and estimated amortization expense for each of the next five years, is as follows: (In millions) 2023 $ 432 2024 406 2025 401 2026 385 2027 376 2028 315 |
SUPPLY CHAIN FINANCE PROGRAM
SUPPLY CHAIN FINANCE PROGRAM | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SUPPLY CHAIN FINANCE PROGRAM | SUPPLY CHAIN FINANCE PROGRAM The Company negotiates payment terms directly with its suppliers for the purchase of goods and services. In addition, a third-party financial institution offers a voluntary supply chain finance (SCF) program that enables certain of the Company’s suppliers, at the supplier’s sole discretion, to sell receivables due from the Company to the financial institution on terms directly negotiated with the financial institution. If a supplier elects to participate in the SCF program, the supplier decides which invoices are sold to the financial institution and the Company has no economic interest in a supplier’s decision to sell an invoice. Payments by the Company to participating suppliers are paid to the financial institution on the invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. The amounts due to the financial institution for suppliers that participate in the SCF program are included in Accounts payable The changes in SCF obligations are as follows: (In millions) SCF Obligations Balance at January 1, 2023 $ 219 Invoices confirmed during the period 1,339 Invoices paid during the period (1,185) Translation (4) Balance at December 31, 2023 $ 369 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. The components of lease expense are as follows: (In millions) 2023 2022 2021 Operating lease cost $ 200 $ 179 $ 164 Finance lease cost: Amortization of lease assets 15 11 12 Interest on lease liabilities 1 1 2 Short-term lease cost 18 17 15 Variable lease cost 28 27 16 Sublease income (1) (1) (2) Total lease cost $ 261 $ 234 $ 207 During 2023 and 2022, Eaton entered into sale leaseback transactions primarily for certain non-production facilities and recorded gains of $53 million and $81 million, respectively, in Other expense (income) - net. The terms of the new operating leases ranged from 5 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021. Supplemental cash flow information related to leases is as follows: (In millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows - payments on operating leases $ (180) $ (159) $ (158) Operating cash outflows - interest payments on finance leases (1) (2) (2) Financing cash outflows - payments on finance lease obligations (18) (11) (11) Lease assets obtained in exchange for new lease obligations, including leases acquired: Operating leases $ 183 $ 245 $ 145 Finance leases 38 10 14 Supplemental balance sheet information related to leases is as follows: December 31 (In millions) 2023 2022 Operating Leases Operating lease assets $ 648 $ 570 Other current liabilities 135 127 Operating lease liabilities 533 459 Total operating lease liabilities $ 668 $ 586 Finance Leases Land and buildings $ 13 $ 6 Machinery and equipment 62 40 Accumulated depreciation (36) (20) Net property, plant and equipment $ 39 $ 26 Current portion of long-term debt $ 13 $ 10 Long-term debt 22 18 Total finance lease liabilities $ 35 $ 28 December 31 2023 2022 Weighted-average remaining lease term Operating leases 7.6 years 7.6 years Finance leases 4.4 years 4.9 years Weighted-average discount rate Operating leases 4.0 % 3.3 % Finance leases 3.6 % 3.0 % Maturities of lease liabilities at December 31, 2023 are as follows: (In millions) Operating Leases Finance Leases 2024 $ 156 $ 14 2025 126 8 2026 106 6 2027 85 4 2028 63 2 Thereafter 259 4 Total lease payments 795 38 Less imputed interest 127 3 Total present value of lease liabilities $ 668 $ 35 |
LEASES | LEASES Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. The components of lease expense are as follows: (In millions) 2023 2022 2021 Operating lease cost $ 200 $ 179 $ 164 Finance lease cost: Amortization of lease assets 15 11 12 Interest on lease liabilities 1 1 2 Short-term lease cost 18 17 15 Variable lease cost 28 27 16 Sublease income (1) (1) (2) Total lease cost $ 261 $ 234 $ 207 During 2023 and 2022, Eaton entered into sale leaseback transactions primarily for certain non-production facilities and recorded gains of $53 million and $81 million, respectively, in Other expense (income) - net. The terms of the new operating leases ranged from 5 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021. Supplemental cash flow information related to leases is as follows: (In millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows - payments on operating leases $ (180) $ (159) $ (158) Operating cash outflows - interest payments on finance leases (1) (2) (2) Financing cash outflows - payments on finance lease obligations (18) (11) (11) Lease assets obtained in exchange for new lease obligations, including leases acquired: Operating leases $ 183 $ 245 $ 145 Finance leases 38 10 14 Supplemental balance sheet information related to leases is as follows: December 31 (In millions) 2023 2022 Operating Leases Operating lease assets $ 648 $ 570 Other current liabilities 135 127 Operating lease liabilities 533 459 Total operating lease liabilities $ 668 $ 586 Finance Leases Land and buildings $ 13 $ 6 Machinery and equipment 62 40 Accumulated depreciation (36) (20) Net property, plant and equipment $ 39 $ 26 Current portion of long-term debt $ 13 $ 10 Long-term debt 22 18 Total finance lease liabilities $ 35 $ 28 December 31 2023 2022 Weighted-average remaining lease term Operating leases 7.6 years 7.6 years Finance leases 4.4 years 4.9 years Weighted-average discount rate Operating leases 4.0 % 3.3 % Finance leases 3.6 % 3.0 % Maturities of lease liabilities at December 31, 2023 are as follows: (In millions) Operating Leases Finance Leases 2024 $ 156 $ 14 2025 126 8 2026 106 6 2027 85 4 2028 63 2 Thereafter 259 4 Total lease payments 795 38 Less imputed interest 127 3 Total present value of lease liabilities $ 668 $ 35 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT A summary of long-term debt, including the current portion, is as follows: December 31 (In millions) 2023 2022 0.75% Euro notes due 2024 $ 608 $ 587 Floating rate Euro notes due 2024 332 — 6.50% debentures due 2025 145 145 0.70% Euro notes due 2025 553 534 0.128% Euro notes due 2026 995 960 3.10% senior notes due 2027 700 700 4.35% senior notes due 2028 500 — 7.65% debentures due 2029 200 200 0.577% Euro notes due 2030 663 640 4.00% senior notes due 2032 700 700 4.15% sustainability-linked senior notes due 2033 1,300 1,300 5.45% debentures due 2034 137 137 5.80% notes due 2037 240 240 4.15% senior notes due 2042 1,000 1,000 3.92% senior notes due 2047 300 300 4.70% senior notes due 2052 700 700 5.25% to 7.875% notes (maturities ranging from 2024 to 2035) 165 165 Other 25 23 Total long-term debt 9,261 8,331 Less current portion of long-term debt (1,017) (10) Long-term debt less current portion $ 8,244 $ 8,321 Substantially all these long-term debt instruments are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries (the Senior Notes). Further, as of December 31, 2023, all of these long-term debt instruments, except the floating rate Euro notes due 2024, 0.75% Euro notes due 2024, the 0.70% Euro notes due 2025, the 0.128% Euro notes due 2026, and the 0.577% Euro notes due 2030, are registered by Eaton Corporation under the Securities Act of 1933, as amended (the Registered Senior Notes). On March 3, 2023, a subsidiary of Eaton issued Euro denominated notes (2023 Euro Notes) in a private issuance with a face value of €300 million ($318 million). The floating rate notes are due June 3, 2024 with interest payable quarterly based on the three-month Euro Interbank Offered Rate plus 25 basis points. The 2023 Euro Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton. The 2023 Euro Notes contain a change of control provision which requires the Company to make an offer to purchase all or any part of the 2023 Euro Notes at a purchase price of 100.5% of the principal amount plus accrued and unpaid interest. The 2023 Euro Notes are subject to customary non-financial covenants. On May 18, 2023, Eaton issued senior notes (2023 Notes) with a face amount of $500 million. The 2023 Notes mature in 2028 with interest payable semi-annually at a rate of 4.35% per annum. The issuer received proceeds totaling $497 million from the issuance, net of financing costs. The 2023 Notes are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. The 2023 Notes contain customary optional redemption and par call provisions. The 2023 Notes also contain a provision which upon a change of control requires the Company to make an offer to purchase all or any part of the 2023 Notes at a purchase price of 101% of the principal amount plus accrued and unpaid interest. The 2023 Notes are subject to customary non-financial covenants. On October 2, 2023, the Company replaced its existing $500 million 364-day revolving credit facility with a new $500 million 364-day revolving credit facility that will expire on September 30, 2024. The Company also has a $2,500 million five-year revolving credit facility that will expire on October 1, 2027. The revolving credit facilities totaling $3,000 million are used to support commercial paper borrowings and are fully and unconditionally guaranteed by Eaton and certain of its direct and indirect subsidiaries on an unsubordinated, unsecured basis. There were no borrowings outstanding under Eaton’s revolving credit facilities at December 31, 2023. The Company maintains access to the commercial paper markets through its $3,000 million commercial paper program, of which none was outstanding on December 31, 2023. In addition to the revolving credit facilities, the Company also had available lines of credit of $1,070 million from various banks primarily for the issuance of letters of credit, of which there was $451 million outstanding at December 31, 2023. Borrowings outside the United States are generally denominated in local currencies. Short-term debt of $8 million at December 31, 2023 was entirely comprised of short-term debt outside the United States. Short-term debt of $324 million at December 31, 2022 included $300 million of short-term commercial paper in the United States, which had a weighted average interest rate of 4.67%, and $24 million of short-term debt outside the United States. Eaton is in compliance with each of its debt covenants for all periods presented. Maturities of long-term debt for each of the next five years are as follows: (In millions) 2024 $ 1,017 2025 706 2026 1,073 2027 704 2028 502 Interest paid on debt is as follows: (In millions) 2023 $ 319 2022 250 2021 207 |
RETIREMENT BENEFITS PLANS
RETIREMENT BENEFITS PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS Eaton has defined benefits pension plans and other postretirement benefits plans. Obligations and Funded Status United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Funded status Fair value of plan assets $ 2,604 $ 2,635 $ 1,633 $ 1,486 $ 17 $ 16 Benefit obligations (2,824) (2,807) (2,022) (1,813) (212) (209) Funded status $ (220) $ (172) $ (389) $ (327) $ (195) $ (194) Amounts recognized in the Consolidated Other assets $ — $ — $ 210 $ 199 $ — $ — Other current liabilities (18) (19) (33) (30) (15) (17) Pension liabilities and Other postretirement (202) (153) (566) (496) (180) (177) Total $ (220) $ (172) $ (389) $ (327) $ (195) $ (194) Amounts recognized in Accumulated other Net actuarial loss (gain) $ 867 $ 807 $ 649 $ 491 $ (92) $ (119) Prior service cost (credit) 4 5 12 14 (1) (2) Total $ 871 $ 811 $ 661 $ 505 $ (93) $ (120) Change in Benefit Obligations United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 2,807 $ 3,760 $ 1,813 $ 2,837 $ 209 $ 304 Service cost 19 27 43 59 1 1 Interest cost 142 117 85 47 10 7 Actuarial loss (gain) 104 (713) 104 (817) 11 (73) Gross benefits paid (250) (386) (110) (99) (31) (38) Currency translation — — 85 (218) 1 (3) Plan amendments 1 1 (1) 1 — (2) Other — — 3 3 11 13 Balance at December 31 $ 2,824 $ 2,807 $ 2,022 $ 1,813 $ 212 $ 209 Accumulated benefit obligation $ 2,807 $ 2,784 $ 1,922 $ 1,737 During 2020, the Company announced it was freezing its United States pension plans for its non-union employees. The freeze was effective January 1, 2021 for non-union U.S. employees whose retirement benefit was determined under a cash balance formula and is effective January 1, 2026 for non-union U.S. employees whose retirement benefit is determined under a final average pay formula. Actuarial losses related to changes in the United States and Non-United States benefit obligations in 2023 of $104 million and $104 million, respectively, were primarily due to decreases in the discount rates used to measure the obligations. Actuarial gains related to changes in the United States and Non-United States benefit obligations in 2022 of $713 million and $817 million, respectively, were primarily due to increases in the discount rates used to measure the obligations. Change in Plan Assets United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 2,635 $ 3,672 $ 1,486 $ 2,247 $ 16 $ 19 Actual return on plan assets 203 (682) 86 (554) 1 (2) Employer contributions 16 30 97 85 20 24 Gross benefits paid (250) (386) (110) (99) (31) (38) Currency translation — — 71 (197) — — Other — — 3 3 11 13 Balance at December 31 $ 2,604 $ 2,635 $ 1,633 $ 1,486 $ 17 $ 16 The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as follows: United States Non-United States (In millions) 2023 2022 2023 2022 Accumulated benefit obligation $ 2,807 $ 2,784 $ 742 $ 654 Fair value of plan assets 2,604 2,635 203 173 The components of pension plans with a projected benefit obligation in excess of plan assets at December 31 are as follows: United States Non-United States (In millions) 2023 2022 2023 2022 Projected benefit obligation $ 2,824 $ 2,807 $ 827 $ 722 Fair value of plan assets 2,604 2,635 228 195 Other postretirement benefit plans with accumulated postretirement benefit obligations in excess of plan assets have been disclosed in the Obligations and Funded Status table. Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss are as follows: United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 811 $ 713 $ 505 $ 763 $ (120) $ (55) Prior service cost arising during the year 1 1 (1) 1 — (2) Net loss (gain) arising during the year 97 173 139 (149) 10 (69) Currency translation — — 29 (64) — (1) Less amounts included in expense during the year (38) (76) (11) (47) 17 7 Net change for the year 60 98 156 (259) 27 (65) Balance at December 31 $ 871 $ 811 $ 661 $ 505 $ (93) $ (120) Benefits Expense The components of retirement benefits expense (income) are as follows: United States pension benefit expense (income) Non-United States pension benefit expense (income) Other postretirement (In millions) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Service cost $ 19 $ 27 $ 37 $ 43 $ 59 $ 72 $ 1 $ 1 $ 1 Interest cost 142 117 70 85 47 40 10 7 6 Expected return on plan assets (195) (204) (223) (121) (115) (120) (1) (1) — Amortization 4 15 36 7 45 71 (17) (7) (5) (30) (46) (80) 14 37 63 (7) — 2 Settlements, curtailments, and special termination benefits 34 61 65 4 2 17 — — (1) Total expense (income) $ 4 $ 15 $ (15) $ 18 $ 39 $ 80 $ (7) $ — $ 1 Total retirement benefits expense for 2021 of $66 million included $13 million of settlement and curtailment expense related to the sale of the Hydraulics business discussed in Note 2. Retirement Benefits Plans Assumptions In 2023 and 2022, for purposes of determining liabilities related to the majority of its plans in the United States, the Company used the Pri-2012 mortality tables as well as mortality tables that are based on the Company's own experience and generational improvement scales that are based on MP-2021. In 2021, the Company used mortality tables that are based on the Company's own experience and generational improvement scales that are based on MP-2021. To estimate the service and interest cost components of net periodic benefit cost for the vast majority of its defined benefits pension and other postretirement benefits plans, the Company used a spot rate approach by applying the specific spot rates along the yield curve used to measure the benefit obligation at the beginning of the period to the relevant projected cash flows. Pension Plans United States Non-United States 2023 2022 2021 2023 2022 2021 Assumptions used to determine benefit obligation at year-end Discount rate 5.14 % 5.47 % 2.81 % 4.52 % 4.83 % 2.01 % Rate of compensation increase 3.40 % 3.33 % 3.12 % 3.17 % 3.12 % 3.01 % Interest rate used to credit cash balance plans 4.01 % 3.67 % 1.99 % 1.59 % 2.32 % 0.56 % Assumptions used to determine expense Discount rate used to determine benefit obligation 5.47 % 4.30 % 2.61 % 4.83 % 2.01 % 1.63 % Discount rate used to determine service cost 5.54 % 4.41 % 2.92 % 5.90 % 2.98 % 2.52 % Discount rate used to determine interest cost 5.33 % 3.94 % 1.83 % 4.80 % 1.84 % 1.36 % Expected long-term return on plan assets 6.50 % 6.50 % 6.75 % 6.32 % 5.70 % 5.62 % Rate of compensation increase 3.33 % 3.12 % 3.12 % 3.12 % 3.01 % 3.02 % Interest rate used to credit cash balance plans 3.67 % 2.62 % 2.14 % 2.32 % 0.56 % 0.52 % The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical data taking into account each plan's target asset allocation. The expected long-term rates of return on pension assets for United States pension plans and Non-United States pension plans for 2024 are 6.50% and 6.79%, respectively. The discount rates were determined using appropriate bond data for each country. Other Postretirement Benefits Plans Substantially all of the obligation for other postretirement benefits plans relates to United States plans. Assumptions used to determine other postretirement benefits obligations and expense are as follows: Other postretirement 2023 2022 2021 Assumptions used to determine benefit obligation at year-end Discount rate 5.11 % 5.46 % 2.79 % Health care cost trend rate assumed for next year 7.70 % 7.10 % 7.45 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.75 % Year ultimate health care cost trend rate is achieved 2033 2031 2031 Assumptions used to determine expense Discount rate used to determine benefit obligation 5.46 % 2.79 % 2.44 % Discount rate used to determine service cost 5.53 % 3.03 % 2.76 % Discount rate used to determine interest cost 5.32 % 2.24 % 1.70 % Initial health care cost trend rate 7.10 % 7.45 % 7.38 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.75 % Year ultimate health care cost trend rate is achieved 2031 2031 2030 Employer Contributions to Retirement Benefits Plans Contributions to pension plans that Eaton expects to make in 2024, and made in 2023, 2022 and 2021, are as follows: (In millions) Expected in 2024 2023 2022 2021 United States plans $ 19 $ 16 $ 30 $ 237 Non-United States plans 96 97 85 106 Total contributions $ 115 $ 113 $ 116 $ 343 The following table provides the estimated pension and other postretirement benefit payments for each of the next five years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below. Estimated Estimated Estimated other postretirement (In millions) Gross Medicare prescription 2024 $ 286 $ 111 $ 18 $ — 2025 267 113 17 — 2026 257 116 16 — 2027 246 121 19 — 2028 236 123 18 — 2029 - 2033 1,061 669 82 (1) Pension Plan Assets Investment policies and strategies are developed on a country and plan specific basis. The United States plan, representing 61% of worldwide pension assets, and the United Kingdom plans representing 26% of worldwide pension assets, are invested primarily in debt securities largely for liability hedging, as the majority of the assets are in plans that are well-funded. In general, the plans are primarily allocated to diversified high-quality publicly traded debt, primarily through separately managed accounts and commingled funds in the form of common collective and other trusts. The United States plan's target allocation is 15% United States equities, 7% non-United States equities, 3% public real estate (primarily equity of real estate investment trusts), 64% debt securities and 11% other, including private equity, private debt and cash equivalents. The United Kingdom plans' target asset allocations are 31% equities and the remainder in debt securities, cash equivalents and real estate investments. The equity risk for the plans is managed through broad diversification across industries, geographies, and levels of market capitalization. The majority of debt allocations for these plans are longer duration government and corporate debt. The United States, United Kingdom and Canada pension plans are authorized to use derivatives, including the use of futures, swaps and options, to achieve more economically desired market exposures. Fair Value Measurements Financial instruments included in pension and other postretirement benefits plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology are as follows: Level 1 - Quoted prices (unadjusted) for identical assets in active markets. Level 2 - Quoted prices for similar assets in active markets, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - Unobservable prices or inputs. Certain investments that are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables to permit a reconciliation to total plan assets. Pension Plans A summary of the fair value of pension plan assets at December 31, 2023 and 2022, is as follows: (In millions) Total Quoted prices Other Unobservable inputs (Level 3) 1 2023 Common collective trusts Non-United States equity and global equities $ 154 $ — $ 154 $ — United States equity 76 — 76 — Fixed income 115 — 115 — Fixed income securities 1,607 — 1,607 — United States treasuries 566 566 — — Real estate 291 65 27 199 Cash equivalents 36 14 22 — Exchange traded funds 84 84 — — Other 405 — 35 370 Common collective and other trusts measured at net asset value 968 Money market funds measured at net asset value 2 Pending purchases and sales of plan assets, and interest (67) Total pension plan assets $ 4,237 $ 729 $ 2,036 $ 569 1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $154 million at December 31, 2023, which will be satisfied by a reallocation of pension plan assets. (In millions) Total Quoted prices Other Unobservable inputs (Level 3) 1 2022 Common collective trusts Non-United States equity and global equities $ 173 $ — $ 173 $ — United States equity 54 — 54 — Fixed income 620 — 620 — Fixed income securities 744 — 744 — United States treasuries 660 660 — — Real estate 295 76 20 199 Cash equivalents 77 21 56 — Exchange traded funds 77 77 — — Other 387 — 27 360 Common collective and other trusts measured at net asset value 1,100 Money market funds measured at net asset value 3 Pending purchases and sales of plan assets, and interest (69) Total pension plan assets $ 4,121 $ 834 $ 1,694 $ 559 1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer, and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $180 million at December 31, 2022 , which will be satisfied by a reallocation of pension plan assets. The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2023 and 2022 due to the following: (In millions) Real estate Other Total Balance at January 1, 2022 $ 216 $ 319 $ 535 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 1 (3) (2) Purchases, sales, settlements - net (18) 44 26 Transfers into or out of Level 3 — — — Balance at December 31, 2022 199 360 559 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 7 19 26 Purchases, sales, settlements - net (7) — (7) Transfers into or out of Level 3 — (9) (9) Balance at December 31, 2023 $ 199 $ 370 $ 569 Other Postretirement Benefits Plans A summary of the fair value of other postretirement benefits plan assets at December 31, 2023 and 2022, is as follows: (In millions) Total Quoted prices Other Unobservable 2023 Cash equivalents $ 2 $ 2 $ — $ — Common collective and other trusts measured at net asset value 15 Total other postretirement benefits plan assets $ 17 $ 2 $ — $ — (In millions) Total Quoted prices Other Unobservable 2022 Cash equivalents $ 3 $ 3 $ — $ — Common collective and other trusts measured at net asset value 13 Total other postretirement benefits plan assets $ 16 $ 3 $ — $ — Valuation Methodologies Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2023 and 2022. Common collective and other trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. The investments in other trusts are predominantly in exchange traded funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective and other trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Fixed income securities - These securities consist of publicly traded United States and non-United States fixed interest obligations (principally corporate and government bonds and debentures). The fair value of corporate and government debt securities is determined through third-party pricing models that consider various assumptions, including time value, yield curves, credit ratings, and current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. United States treasuries - Valued at the closing price of each security. Real estate - Consists of direct investments in the stock of publicly traded companies and investments in pooled funds that invest directly in real estate. The publicly traded companies are valued based on the closing price reported in an active market on which the individual securities are traded and as such are classified as Level 1. The pooled funds rely on appraisal-based valuations and as such are classified as Level 3. Cash equivalents - Primarily certificates of deposit, commercial paper, and repurchase agreements. Exchange traded funds - Valued at the closing price of the exchange traded fund's shares. Money market funds - Money market funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets. Other - These assets consist of private equity, private debt, insurance contracts primarily for international plans, futures contracts, and over-the-counter options. Investments in private equity and private debt are valued at net asset value or estimated fair value based on quarterly financial information received from the investment advisor, third party appraisal or general partner. These estimates incorporate factors such as contributions and distributions, market transactions, market comparables and performance multiples. Futures contracts and options are valued based on the closing prices of contracts or indices as available using third-party sources. For additional information regarding fair value measurements, see Note 15. Defined Contribution Plans The Company has various defined contribution benefit plans, primarily consisting of the plans in the United States. The total contributions related to these plans are charged to expense and are as follows: (In millions) 2023 $ 201 2022 182 2021 171 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Contingencies Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations and indemnity claims, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to legal claims from historic products which may have contained asbestos. Insurance may cover some of the costs associated with these claims and proceedings. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes they will not have a material adverse effect on the consolidated financial statements. Environmental Contingencies Eaton has established policies to ensure that its operations are conducted in keeping with good corporate citizenship and with a positive commitment to the protection of the natural and workplace environments. The Company requires that its businesses be certified to ISO 14001, an international standard for environmental management systems. The Company routinely reviews EHS performance at each of its manufacturing facilities and continuously strives to improve its environmental footprint, including carbon, waste, water and related operational profiles consistent with our sustainability goals. Eaton is involved in remedial response and voluntary environmental remediation at a number of sites, including certain of its currently-owned or formerly-owned plants. The Company has also been named a potentially responsible party under the United States federal Superfund law, or the state equivalents thereof, at a number of disposal sites. The Company became involved in these sites as a result of government action or in connection with business acquisitions. At the end of 2023, the Company was involved with a total of 110 sites worldwide, including the Superfund sites mentioned above, with none of these sites being individually significant to the Company. Remediation activities, generally involving soil and/or groundwater contamination, include pre-cleanup activities such as fact finding and investigation, risk assessment, feasibility study, design and action planning, performance (where actions may range from monitoring, to removal of contaminants, to installation of longer-term remediation systems), and operation and maintenance of a remediation system. The extent of expected remediation activities and costs varies by site. A number of factors affect the cost of environmental remediation, including the number of parties involved at a particular site, the determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental regulations, and the continuing advancement of remediation technology. Taking these factors into account, Eaton has estimated the costs of remediation, which will be paid over a period of years. The Company accrues an amount on an undiscounted basis, consistent with the estimates of these costs, when it is probable that a liability has been incurred. Actual results may differ from these estimates. At December 31, 2023 and 2022, the Company had an accrual totaling $71 million and $73 million, respectively, for these costs. Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability by an amount that would have a material effect on its financial position, results of operations or cash flows. Warranty Accruals Product warranty accruals are established at the time the related sale is recognized through a charge to Cost of products sold. Warranty accrual estimates are based primarily on historical warranty claim experience and specific customer contracts. Provisions for warranty accruals are comprised of basic warranties for products sold, as well as accruals for product recalls and other events when they are known and estimable. A summary of the current and long-term warranty accruals is as follows: (In millions) 2023 2022 2021 Balance at January 1 $ 125 $ 125 $ 151 Provision 100 83 65 Settled (91) (81) (112) Warranty accruals from business acquisitions and other 2 (2) 21 Balance at December 31 $ 136 $ 125 $ 125 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax expense (benefit) are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable. Income (loss) before income taxes (In millions) 2023 2022 2021 Ireland $ (3) $ 198 $ 153 Foreign 3,830 2,713 2,743 Total income before income taxes $ 3,827 $ 2,911 $ 2,896 Income tax expense (benefit) (In millions) 2023 2022 2021 Current Ireland $ 42 $ 3 $ 50 Foreign 744 570 730 Total current income tax expense 786 573 780 Deferred Ireland 1 13 (2) Foreign (183) (141) (28) Total deferred income tax expense (benefit) (182) (128) (30) Total income tax expense $ 604 $ 445 $ 750 Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate are as follows: 2023 2022 2021 Income taxes at the applicable statutory rate 25.0 % 25.0 % 25.0 % Ireland operations Ireland tax on trading income (1.3) % (1.3) % (0.7) % Nondeductible interest expense 2.6 % 1.0 % 0.6 % Ireland Other - net (0.2) % (0.5) % (0.2) % Foreign operations Tax impact on sale of businesses — % — % 9.1 % Earnings taxed at other than the applicable statutory tax rate (9.9) % (10.2) % (8.0) % Other items 2.2 % 1.6 % (0.1) % Worldwide operations Adjustments to tax liabilities (0.2) % (0.4) % 0.2 % Adjustments to valuation allowances (2.4) % 0.1 % — % Effective income tax expense rate 15.8 % 15.3 % 25.9 % During 2023, income tax expense of $604 million was recognized (an effective tax rate of 15.8%) compared to income tax expense of $445 million in 2022 (an effective tax rate of 15.3%) and income tax expense of $750 million in 2021 (an effective tax rate of 25.9%). The increase in the effective tax rate from 15.3% in 2022 to 15.8% in 2023 was primarily due to greater levels of income earned in higher tax jurisdictions, partially offset by the reduction of valuation allowances on foreign tax attributes. The decrease in the effective tax rate from 25.9% in 2021 to 15.3% in 2022, was primarily due to the one-time tax expense on the gain from the sale of the Hydraulics business in 2021 discussed in Note 2. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries of approximately $29.9 billion at December 31, 2023, since it is the Company's intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. The Company expects to deploy capital to those markets which offer particularly attractive growth opportunities. The cash that is permanently reinvested is typically used to expand operations either organically or through acquisitions. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings. Worldwide income tax payments, net of tax refunds, are as follows: (In millions) 2023 $ 727 2022 393 2021 753 Deferred Income Tax Assets and Liabilities Components of noncurrent deferred income taxes are as follows: December 31 2023 2022 (In millions) Noncurrent assets and liabilities Accruals and other adjustments Employee benefits $ 328 $ 266 Depreciation and amortization (929) (1,067) Other accruals and adjustments 408 397 Ireland income tax loss carryforwards 2 1 Foreign income tax loss carryforwards 3,878 4,151 Foreign income tax credit carryforwards 247 280 Valuation allowance for income tax loss and income tax credit carryforwards (3,828) (4,184) Other valuation allowances (50) (44) Total deferred income taxes $ 56 $ (200) In 2023, the Company recorded corresponding decreases in its deferred tax assets and valuation allowances for foreign income tax loss carryforwards related to currency revaluation resulting in no change to the net balance of deferred taxes. The Company also recorded a decrease of $90 million in its valuation allowance for income tax loss carryforwards in Hungary and Switzerland. At December 31, 2023, Eaton Corporation plc and its foreign subsidiaries had income tax loss carryforwards and income tax credit carryforwards that are available to reduce future taxable income or tax liabilities. These carryforwards and their respective expiration dates are summarized below: (In millions) 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2048 Not Ireland income tax loss carryforwards $ — $ — $ — $ — $ 10 $ — Ireland deferred income tax assets for income tax loss — — — — 2 (1) Foreign income tax loss carryforwards 42 6 11,605 111 6,619 — Foreign deferred income tax assets for income tax loss carryforwards 14 3 2,898 30 942 (3,683) Foreign deferred income tax assets for income tax loss carryforwards after ASU 2013-11 9 2 2,897 30 940 (3,683) Foreign income tax credit carryforwards 208 26 45 — 35 (145) Foreign income tax credit carryforwards after ASU 2013-11 153 16 43 — 35 (145) Recoverability of Deferred Income Tax Assets Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine its income tax provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and income tax loss carryforwards and income tax credit carryforwards. Management evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If the Company experiences cumulative pre-tax income in a particular jurisdiction in the three-year period including the current and prior two years, management normally concludes that the deferred income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments, or changes in tax laws, would lead management to conclude otherwise. However, if the Company experiences cumulative pre-tax losses in a particular jurisdiction in the three-year period including the current and prior two years, management then considers a series of factors in the determination of whether the deferred income tax assets can be realized. These factors include historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the utilization of certain deferred income tax liabilities, carryback capability under the tax law in the particular country, prudent and feasible tax planning strategies, changes in tax laws, and estimates of future earnings and taxable income using the same assumptions as those used for the Company's goodwill and other impairment testing. After evaluation of these factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific country, management would conclude that no valuation allowance would be required. To the extent that the deferred income tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, management would establish a valuation allowance. Applying the above methodology, valuation allowances have been established for certain deferred income tax assets to the extent they are not expected to be realized within the particular tax carryforward period. Unrecognized Income Tax Benefits A summary of gross unrecognized income tax benefits is as follows: (In millions) 2023 2022 2021 Balance at January 1 $ 1,235 $ 1,120 $ 1,036 Increases and decreases as a result of positions taken during prior years Transfers from valuation allowances — — 6 Other increases, including currency translation 42 36 22 Other decreases, including currency translation (5) (16) (10) Increases related to acquired businesses — 10 12 Increases as a result of positions taken during the current year 86 97 75 Decreases relating to settlements with tax authorities (6) — (11) Decreases as a result of a lapse of the applicable statute of limitations (52) (12) (10) Balance at December 31 $ 1,300 $ 1,235 $ 1,120 Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the benefit would be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company evaluates and adjusts the amount of unrecognized income tax benefits based on changes in facts and circumstances. The Company does not enter into any of the United States Internal Revenue Service (IRS) Listed Transactions as set forth in Treasury Regulation 1.6011-4. If all unrecognized income tax benefits were recognized, the net impact on the provision for income tax expense would be $889 million. As of December 31, 2023 and 2022, Eaton had accrued approximately $188 million and $137 million, respectively, for the payment of worldwide interest and penalties, which are not included in the table of unrecognized income tax benefits above. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. The resolution of the majority of Eaton's unrecognized income tax benefits is dependent upon uncontrollable factors such as the timing of finalizing resolutions of audit disputes through reaching settlement agreements or concluding litigation, or changes in law. Therefore, for the majority of Eaton’s unrecognized income tax benefits, it is not reasonably possible to estimate the increase or decrease in the next 12 months. For each of the unrecognized income tax benefits where it is possible to estimate the increase or decrease in the balance within the next 12 months, the Company does not anticipate any significant change. The Company believes that the final resolution of all the assessments discussed below will not have a material impact on its consolidated financial statements. The ultimate outcome of these matters cannot be predicted with certainty given the complex nature of tax controversies. Should the ultimate outcome of any one of these matters deviate from our reasonable expectations, final resolution may have a material adverse impact on the Company’s consolidated financial statements. However, Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct, and that its accrual of unrecognized income tax benefits is appropriate with respect to these matters. Eaton or its subsidiaries file income tax returns in Ireland and many countries around the world. With only a few exceptions, Eaton and its subsidiaries are no longer subject to examinations for years before 2014. Brazil Tax Years 2005-2012 The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $29 million plus $122 million of interest and penalties (translated at the December 31, 2023 exchange rate). The Company is challenging this assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 27, 2022, the Company filed a motion for clarification relating to that decision. On May 20, 2022, the court largely upheld its prior decision without further clarification. On June 9, 2022, the Company filed its notice of appeal to the second level court. The Company intends to continue its challenge of this assessment in the judicial system. As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $34 million plus $121 million of interest and penalties (translated at the December 31, 2023 exchange rate), which the Company is challenging in the judicial system. This case is still pending resolution at the first judicial level. Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of certain assets as security for the alleged deficiencies. As of December 31, 2023, the Company pledged Brazilian real estate assets with net book value of $20 million and provided additional security in the form of bank secured bonds and insurance bonds totaling $138 million and a cash deposit of $26 million (translated at the December 31, 2023 exchange rate). United States Tax Disputes The IRS typically audits large corporate taxpayers on a continuous basis, generally resulting in many open tax years if there are disputed tax positions upon completion of the audits. The IRS has completed its examination of the consolidated income tax returns of the Company’s United States subsidiaries (Eaton US) for 2005 through 2016 and the statuses of the various tax years are discussed below. The IRS has challenged certain tax positions of Eaton US, and the Company is attempting to resolve those issues in litigation and the IRS administrative process, as described in more detail below. The IRS is currently examining tax years 2017 through 2019, and the statute of limitations for those years is open until June 30, 2026. Tax years 2020 and later are subject to future examination by the IRS. Income tax returns of states and localities within the United States will be reopened to the extent of United States federal income tax adjustments. For some states and localities, the statute of limitations is open as early as the 2005 tax year. The Eaton US tax positions challenged by the IRS are items that recur beyond the tax years for which the IRS has proposed adjustments. Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct. However, if there is a final unfavorable resolution of any of the issues discussed below, it may have a material adverse impact on the Company’s consolidated financial statements. U.S. Tax Years 2005-2006 In 2011, the United States Internal Revenue Service (IRS) issued a Statutory Notice of Deficiency for the Company’s United States subsidiaries (Eaton US) for the 2005 and 2006 tax years (the 2005-06 Notice), which Eaton US contested in United States Tax Court. The 2005-06 Notice proposed assessments of $75 million in additional taxes plus $52 million in penalties related primarily to transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the United States. Eaton US has set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. Immediately prior to the 2005-06 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs. The case in Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. The Tax Court’s ruling on the APAs did not have a material impact on Eaton’s consolidated financial statements. On May 24, 2021, the IRS filed a notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals. In July 2022, the Sixth Circuit panel heard oral arguments, and on August 25, 2022, issued a ruling in favor of Eaton US, confirming that the IRS must abide by the terms of the APAs. On February 3, 2023, the Tax Court issued a final stipulated decision for the tax years 2005-2006, based on the Sixth Circuit's decision. This action formally ended the litigation between the parties for the 2005-2006 tax years and did not have a material impact on the Company's consolidated financial statements. U.S. Tax Years 2007-2010 In 2014, the IRS issued a Statutory Notice of Deficiency for Eaton US for the 2007 through 2010 tax years (the 2007-10 Notice), which Eaton US contested in Tax Court. The 2007-10 Notice proposed assessments of $190 million in additional taxes plus $72 million in penalties, net of agreed credits and deductions. The proposed assessments pertain to: (i) the same transfer pricing issues and APA for which the Tax Court and Sixth Circuit have issued favorable rulings to Eaton as noted above; and (ii) the separate proposed assessment noted below. The Company believes that the Sixth Circuit Court of Appeals ruling discussed above for tax years 2005-2006 should also resolve the APA cancellation issue for the 2007-2010 years. Eaton and the IRS have recognized that the ruling on the enforceability of the APA did not address a secondary issue regarding the transfer pricing for a certain royalty paid from 2006-2010. Eaton US reported a consistent royalty rate for 2006-2010. The IRS previously agreed to the royalty rate as reported by Eaton US for the 2006 tax year. On November 15, 2023, the IRS also agreed to use the royalty rate reported by Eaton for the 2007-2010 tax years. The 2007-10 Notice also includes a separate proposed assessment involving the recognition of income for several of Eaton US’s controlled foreign corporations. The Company believes that the proposed assessment is without merit and contested the matter in Tax Court. In October 2017, Eaton and the IRS both moved for partial summary judgment on this issue. On February 25, 2019, the Tax Court granted the IRS’s motion for partial summary judgment and denied Eaton’s. The Company intends to appeal the Tax Court’s partial summary judgment decision to the United States Sixth Circuit Court of Appeals. The total potential impact of the Tax Court's partial summary judgment decision on the controlled foreign corporation income recognition issue is not estimable until all matters in the open tax years have been resolved. U.S. Tax Years 2011-2013 In 2018, the IRS completed its examination of Eaton US for tax years 2011 through 2013 and proposed adjustments. Those adjustments were the subject of administrative appeals, which concluded without resolution. As a result, on December 21, 2022, the IRS issued Statutory Notices of Deficiency for Eaton US for these tax years (the 2011-2013 Notice) proposing assessments of $749 million in additional taxes plus $110 million in penalties, net of agreed credits and deductions. The proposed assessments pertain to: (i) transfer pricing adjustments similar to those proposed in the 2005-06 and 2007-10 Notices for products manufactured in the Company’s facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the U.S.; (ii) adjustments involving the recognition of income for several of Eaton US’s controlled foreign corporations; (iii) transfer pricing adjustments for products manufactured in one of the Company’s facilities in Mexico and sold to affiliated companies located in the U.S.; and (iv) adjustments challenging the appropriate interest rate on intercompany debt and amount of intercompany fees charged for financial guarantees on external debt. On March 3, 2023, the Company filed its petition to the U.S. Tax Court. The Company will vigorously defend its positions through litigation, which will take several years for final resolution. U.S. Tax Years 2014-2016 In 2021, the IRS completed its examination of Eaton US for tax years 2014 through 2016 and has proposed adjustments, including: (i) transfer pricing adjustments similar to those proposed in the 2005-06, 2007-10, and 2011-2013 Notices for products manufactured in the Company’s facilities in Puerto Rico, and the Dominican Republic and sold to affiliated companies located in the U.S.; (ii) transfer pricing adjustments similar to those proposed in the 2011-2013 Notice for products manufactured in one of the Company’s facilities in Mexico and sold to affiliated companies located in the U.S.; and (iii) adjustments similar to those proposed in the 2011-2013 Notice challenging the appropriate interest rate on intercompany debt and amount of intercompany fees charged for financial guarantees on external debt. On November 29, 2021, the case was formally assigned to administrative appeals, and the Company will attempt to resolve certain of the issues in this administrative forum. However, if acceptable resolutions are not achieved, the Company will vigorously defend its positions through litigation, which if undertaken will likely take several years for final resolution. The statute of limitations on these tax years currently remains open until December 31, 2024. |
EATON SHAREHOLDERS' EQUITY
EATON SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
EATON SHAREHOLDERS' EQUITY | EATON SHAREHOLDERS' EQUITY There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 399.4 million and 397.8 million of which were issued and outstanding at December 31, 2023 and 2022, respectively. Eaton's Memorandum and Articles of Association authorized 40 thousand deferred ordinary shares (€1.00 par value per share) and 10 thousand preferred A shares ($1.00 par value per share), all of which were issued and outstanding at December 31, 2023 and 2022, and 10 million serial preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2023 and 2022. At December 31, 2023, there were 9,579 holders of record of Eaton ordinary shares. Additionally, 13,994 current and former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, or the Eaton Puerto Rico Retirement Savings Plan. On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During 2023, no ordinary shares were repurchased. During 2022, 2.0 million ordinary shares were repurchased under the 2022 program in the open market at a total cost of $286 million. Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $3 million of ordinary shares and marketable securities at December 31, 2023 and 2022 to fund a portion of these liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' equity at historical cost. On February 29, 2024, Eaton's Board of Directors declared a quarterly dividend of $0.94 per ordinary share, a 9% increase over the dividend paid in the fourth quarter of 2023. The dividend is payable on March 29, 2024 to shareholders of record on March 11, 2024. Comprehensive Income (Loss) Comprehensive income (loss) consists primarily of net income, currency translation and related hedging instruments, changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open derivative contracts designated as cash flow hedges. The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss): 2023 2022 2021 (In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Currency translation and related hedging instruments Gain (loss) from currency translation and related hedging $ 252 $ 247 $ (632) $ (647) $ (335) $ (339) Translation reclassified to earnings — — — — 369 369 Amortization of gains on net investment hedges (amount (12) (12) — — — — 241 235 (632) (647) 34 30 Pensions and other postretirement benefits Prior service credit (cost) arising during the year — — — — (1) (1) Net gain (loss) arising during the year (246) (189) 45 31 448 337 Currency translation (29) (21) 65 56 24 19 Amortization of actuarial loss and prior service cost 32 24 116 89 183 140 (243) (185) 226 175 654 495 Cash flow hedges Gain on derivatives designated as cash flow hedges 63 50 210 166 50 39 Changes in cash flow hedges reclassified to earnings (78) (61) (9) (7) (3) (2) (14) (11) 201 159 47 37 Other comprehensive income (loss) attributable to Eaton ordinary shareholders $ (17) $ 39 $ (205) $ (313) $ 735 $ 562 The changes in Accumulated other comprehensive loss are as follows: (In millions) Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow Total Balance at January 1, 2023 $ (3,264) $ (810) $ 129 $ (3,946) Other comprehensive income (loss) before 247 (209) 50 88 Amounts reclassified from Accumulated other (12) 24 (61) (49) Net current-period Other comprehensive 235 (185) (11) 39 Balance at December 31, 2023 $ (3,029) $ (995) $ 118 $ (3,906) The reclassifications out of Accumulated other comprehensive loss are as follows: (In millions) December 31, 2023 Consolidated Statements Gains and (losses) on net investment hedges (amount excluded Currency exchange contracts $ 12 Interest expense - net Tax expense — Total, net of tax 12 Amortization of defined benefits pensions and other Actuarial loss and prior service cost (32) 1 Tax benefit 8 Total, net of tax (24) Gains and (losses) on cash flow hedges Floating-to-fixed interest rate swaps 13 Interest expense - net Currency exchange contracts 64 Net sales and Cost of products sold Commodity contracts 1 Cost of products sold Tax expense (16) Total, net of tax 61 Total reclassifications for the period $ 49 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 10 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 is as follows: (In millions except for per share data) 2023 2022 2021 Net income attributable to Eaton ordinary shareholders $ 3,218 $ 2,462 $ 2,144 Weighted-average number of ordinary shares outstanding - diluted 401.1 400.8 401.6 Less dilutive effect of equity-based compensation 2.0 2.1 2.9 Weighted-average number of ordinary shares outstanding - basic 399.1 398.7 398.7 Net income per share attributable to Eaton ordinary shareholders Diluted $ 8.02 $ 6.14 $ 5.34 Basic 8.06 6.17 5.38 In 2023 and 2021, all stock options were included in the calculation of diluted net income per share attributable to Eaton ordinary shareholders because they were all dilutive. In 2022, 0.1 million of stock options were excluded from the calculation of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service conditions or both service and market conditions are expensed over the period during which an employee is required to provide service in exchange for the award. Awards with both service and performance conditions are expensed over the period an employee is required to provide service based on the number of units for which achievement of the performance objective is probable. The Company estimates forfeitures as part of recording equity-based compensation expense. Restricted Stock Units and Awards Restricted stock units (RSUs) and restricted stock awards (RSAs) have been issued to certain employees and directors. The fair value of RSUs and RSAs are determined based on the closing market price of the Company’s ordinary shares at the date of grant. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three years. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over ten years. A summary of the RSU and RSA activity for 2023 is as follows: (Restricted stock units and awards in millions) Number of restricted Weighted-average fair Non-vested at January 1 1.0 $ 127.33 Granted 0.4 173.72 Vested (0.5) 123.84 Forfeited — 157.61 Non-vested at December 31 0.9 $ 150.55 Information related to RSUs and RSAs is as follows: (In millions) 2023 2022 2021 Pre-tax expense for RSUs and RSAs $ 65 $ 65 $ 61 After-tax expense for RSUs and RSAs 51 51 48 Fair value of vested RSUs and RSAs 84 98 92 As of December 31, 2023, total compensation expense not yet recognized related to non-vested RSUs and RSAs was $84 million, and the weighted-average period in which the expense is expected to be recognized is 2.6 years. Excess tax benefit for RSUs and RSAs totaled $4 million, $5 million and $5 million for 2023, 2022, and 2021, respectively. Performance Share Units Performance share units (PSUs) have been issued to certain employees that vest based on the satisfaction of a three-year service period and total shareholder return relative to that of a group of peers. Awards earned at the end of the three-year vesting period range from 0% to 200% of the targeted number of PSUs granted based on the ranking of total shareholder return of the Company, assuming reinvestment of all dividends, relative to a defined peer group of companies. Equity-based compensation expense for these PSUs is recognized over the period during which an employee is required to provide service in exchange for the award. Upon vesting, dividends that have accumulated during the vesting period are paid on earned awards. The Company uses a Monte Carlo simulation to estimate the fair value of PSUs with market conditions. The principal assumptions utilized in valuing these PSUs include the expected stock price volatility (based on the most recent 3-year period as of the grant date) and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon bonds with a three-year maturity as of the grant date). A summary of the assumptions used in determining fair value of these PSUs is as follows: 2023 2022 2021 Expected volatility 27 % 35 % 35 % Risk-free interest rate 4.35 % 1.71 % 0.20 % Weighted-average fair value of PSUs granted $ 203.18 $ 171.63 $ 159.74 A summary of these PSUs that vested is as follows: (Performance share units in millions) 2023 2022 2021 Percent payout 187 % 178 % 189 % Shares vested 0.3 0.4 0.5 A summary of the 2023 activity for these PSUs is as follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 0.3 $ 141.88 Granted 1 0.2 203.18 Adjusted for performance results achieved 2 0.1 159.74 Vested (0.3) 159.74 Non-vested at December 31 0.3 $ 162.67 1 Performance shares granted assuming the Company will perform at target relative to peers. 2 Adjustments for the number of shares vested under the 2021 awards at the end of the three-year performance period ended December 31, 2023, being higher than the target number of shares. Information related to PSUs is as follows: (In millions) 2023 2022 2021 Pre-tax expense for PSUs $ 22 $ 21 $ 26 After-tax expense for PSUs 17 17 21 As of December 31, 2023, total compensation expense not yet recognized related to non-vested PSUs was $28 million and the weighted-average period in which the expense is to be recognized is 1.7 years. Excess tax benefit for PSUs totaled $7 million, $10 million and $6 million for 2023, 2022, and 2021, respectively. Stock Options Under various plans, stock options have been granted to certain employees and directors to purchase ordinary shares at prices equal to fair market value on the date of grant. Substantially all of these options vest ratably during the three-year period following the date of grant and expire 10 years from the date of grant. Compensation expense is recognized for stock options based on the fair value of the options at the date of grant and amortized on a straight-line basis over the period the employee or director is required to provide service. The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The principal assumptions utilized in valuing stock options include the expected stock price volatility (based on the most recent historical period equal to the expected life of the option); the expected option life (an estimate based on historical experience); the expected dividend yield; and the risk-free interest rate (an estimate based on the yield of United States Treasury zero coupon with a maturity equal to the expected life of the option). A summary of the assumptions used in determining the fair value of stock options is as follows: 2023 2022 2021 Expected volatility 27 % 27 % 28 % Expected option life in years 6.3 6.6 6.5 Expected dividend yield 2.0 % 2.0 % 3.0 % Risk-free interest rate 4.1 to 4.3% 0.3 to 3.0% 0.0 to 1.5% Weighted-average fair value of stock options granted $ 48.79 $ 36.56 $ 26.11 A summary of stock option activity is as follows: (Options in millions) Weighted-average Options Weighted-average Aggregate Outstanding at January 1, 2023 $ 91.15 3.0 Granted 173.26 0.2 Exercised 80.23 (1.0) Outstanding at December 31, 2023 $ 103.76 2.2 5.6 $ 303.6 Exercisable at December 31, 2023 $ 88.53 1.7 4.7 $ 260.6 Reserved for future grants at December 31, 2023 19.3 The aggregate intrinsic value in the table above represents the total excess of the $240.82 closing price of Eaton ordinary shares on the last trading day of 2023 over the exercise price of the stock option, multiplied by the related number of options outstanding and exercisable. The aggregate intrinsic value is not recognized for financial accounting purposes and the value changes based on the daily changes in the fair market value of the Company's ordinary shares. Information related to stock options is as follows: (In millions) 2023 2022 2021 Pre-tax expense for stock options $ 10 $ 11 $ 14 After-tax expense for stock options 8 9 11 Proceeds from stock options exercised 78 28 63 Income tax benefit related to stock options exercised Tax benefit classified in operating activities in the Consolidated 22 6 13 Intrinsic value of stock options exercised 116 29 69 Total fair value of stock options vested $ 10 $ 11 $ 14 Stock options exercised 1.0 0.4 0.9 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows: (In millions) Total Quoted prices in active markets for identical assets Other observable inputs Unobservable inputs December 31, 2023 Cash $ 488 $ 488 $ — $ — Short-term investments 2,121 2,121 — — Net derivative contracts 11 — 11 — Contingent future payments from acquisition of Green Motion (Note 2) (18) — — (18) December 31, 2022 Cash $ 294 $ 294 $ — $ — Short-term investments 261 261 — — Net derivative contracts 29 — 29 — Contingent future payments from acquisition of Green Motion (Note 2) (44) — — (44) 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 $9,261 million and fair value of $8,924 million at December 31, 2023 compared to $8,331 million and $7,625 million, respectively, at December 31, 2022. The fair value of Eaton's debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement. Short-Term Investments Eaton invests excess cash generated from operations in short-term marketable investments. Short-term investments are recorded at carrying value, which approximates the fair value due to the short-term maturities of these investments. A summary of short-term investments is as follows: December 31 (In millions) 2023 2022 Time deposits and certificates of deposit with banks $ 299 $ 248 Money market investments 1,822 13 Total short-term investments $ 2,121 $ 261 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and commodity contracts to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes. Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated as part of a hedging relationship, is effective and the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as: • Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in income during the period of change in fair value. • Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such an asset or liability (a cash flow hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss on the hedged item is included in income. • Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss related to the net investment in the foreign operation is included in income. The gain or loss from a derivative financial instrument designated as a hedge is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these financial instruments are classified in operating activities on the Consolidated Statements of Cash Flows. For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain commodity contracts that arise in the normal course of business. Eaton uses currency exchange contracts and 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). The Company uses the spot rate method to assess hedge effectiveness when currency exchange contracts are used in net investment hedges. Under this method, changes in the spot exchange rate are recognized in Accumulated other comprehensive loss. Changes related to the forward rate are excluded from the hedging relationship and the forward points are amortized to Interest expense - net on a straight-line basis over the term of the contract. The cash flows resulting from these currency exchange contracts are classified in investing activities on the Consolidated Statements of Cash Flows. Interest Rate Risk Eaton enters into fixed-to-floating interest rate swaps to manage interest rate risk of certain long-term debt. These interest rate swaps are accounted for as fair value hedges of certain long-term debt. Eaton also enters into forward starting floating-to-fixed interest rate swaps to manage interest rate risk on future anticipated debt issuances. A summary of interest rate swaps outstanding at December 31, 2023, is as follows: Forward Starting Floating-to-Fixed Interest Rate Swaps (Notional amount in millions) Notional amount Floating interest Fixed interest Basis for contracted floating interest rate received $ 55 —% 3.01% 6 month Euribor 55 —% 2.54% 6 month Euribor 55 —% 2.32% 6 month Euribor Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows: (In millions) Notional Other Other Other Other Type of Term December 31, 2023 Derivatives designated as hedges Forward starting floating-to-fixed interest rate swaps $ 165 $ — $ — $ — $ 3 Cash flow 8 years Currency exchange contracts 505 17 3 7 1 Cash flow 1 to 25 months Commodity contracts 54 1 — 1 — Cash flow 1 to 12 months Currency exchange contracts 564 — — 1 — Net investment 3 months Total $ 17 $ 3 $ 9 $ 4 Derivatives not designated as hedges Currency exchange contracts $ 4,797 $ 12 $ 8 1 to 7 months December 31, 2022 Derivatives designated as hedges Currency exchange contracts $ 1,240 $ 35 $ 2 $ 17 $ 9 Cash flow 1 to 36 months Commodity contracts 64 4 — 2 — Cash flow 1 to 12 months Total $ 39 $ 2 $ 19 $ 9 Derivatives not designated as hedges Currency exchange contracts $ 4,683 $ 30 $ 14 1 to 12 months The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its operations. This activity represents the great majority of these currency exchange contracts. The cash flows resulting from the settlement of these derivatives have been classified in investing activities in the Consolidated Statements of Cash Flows. Foreign currency denominated debt designated as non-derivative net investment hedging instruments had a carrying value on an after-tax basis of $3,140 million at December 31, 2023 and $2,711 million at December 31, 2022. As of December 31, 2023, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions: Commodity December 31, 2023 Term Aluminum 4 Millions of pounds 1 to 11 months Copper 11 Millions of pounds 1 to 12 months Gold 1,611 Troy ounces 1 to 12 months Silver 67,285 Troy ounces 1 to 10 months The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps: (In millions) Carrying amount of the hedged Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) 1 Location on Consolidated Balance Sheets December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Long-term debt $ (713) $ (713) $ (42) $ (48) 1 At December 31, 2023 and December 31, 2022, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $42 million and $48 million, respectively. The impact of cash flow and fair value hedging activities to the Consolidated Statements of Income is as follows: 2023 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 23,196 $ 14,762 $ 151 Gain (loss) on derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Hedged item $ — $ — $ (13) Derivative designated as hedging instrument — — 13 Currency exchange contracts Hedged item $ (2) $ (58) $ — Derivative designated as hedging instrument 2 58 — Commodity contracts Hedged item $ — $ (1) $ — Derivative designated as hedging instrument — 1 — 2022 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 20,752 $ 13,865 $ 144 Gain (loss) on derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Hedged item $ — $ — $ (4) Derivative designated as hedging instrument — — 4 Currency exchange contracts Hedged item $ 17 $ (26) $ — Derivative designated as hedging instrument (17) 26 — Commodity contracts Hedged item $ — $ 4 $ — Derivative designated as hedging instrument — (4) — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 8 Derivative designated as hedging instrument — — (8) 2021 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 19,628 $ 13,293 $ 144 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ 6 $ — $ — Derivative designated as hedging instrument (6) — — Commodity contracts Hedged item $ — $ (9) $ — Derivative designated as hedging instrument — 9 — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 51 Derivative designated as hedging instrument — — (51) The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows: Gain (loss) recognized in Consolidated Statements of Income Consolidated Statements of Income classification (In millions) 2023 2022 2021 Gain (loss) on derivatives not designated as hedges Currency exchange contracts $ 57 $ (56) $ — Interest expense - net Commodity contracts — (15) 11 Other expense (income) - net and Cost of products sold 1 Total $ 57 $ (71) $ 11 1 In 2022, Eaton changed the presentation of gains and losses associated with derivative contracts for commodities that are not designated as hedges from Cost of product sold to Other expense (income) - net on the Consolidated Statements of Income. Prior period amounts have not been reclassified as they are not material. The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows: Gain (loss) recognized in other (In millions) 2023 2022 2021 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ (2) $ 202 $ 50 Currency exchange contracts 66 13 (6) Commodity contracts — (5) 6 Derivatives designated as net investment hedges Currency exchange contracts Effective portion 8 — — Amount excluded from effectiveness testing 15 — — Non-derivative designated as net investment hedges Foreign currency denominated debt (110) 171 240 Total $ (24) $ 381 $ 290 Location of gain (loss) Gain (loss) reclassified (In millions) 2023 2022 2021 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Interest expense - net $ 13 $ 4 $ — Currency exchange contracts Net sales and Cost of products sold 64 9 (6) Commodity contracts Cost of products sold 1 (4) 9 Derivatives designated as net investment hedges Currency exchange contracts Effective portion Gain (loss) on sale of business — — — Amount excluded from effectiveness testing Interest expense - net 12 — — Non-derivative designated as net investment hedges Foreign currency denominated debt Gain (loss) on sale of business — — — Total $ 89 $ 9 $ 3 The pre-tax portion of the fair value of currency exchange contracts designated as net investment hedges included in Accumulated other comprehensive loss were net gains of $8 million at December 31, 2023. The pre-tax portion of the fair value of the forward points included in Accumulated other comprehensive loss were net gains of $15 million at December 31, 2023. At December 31, 2023, a gain of $9 million of estimated unrealized net gains or losses associated with our cash flow hedges were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next twelve months. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In the second quarter of 2020, Eaton initiated a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to initially respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company incurred charges of $382 million. The multi-year program was substantially complete at the end of 2023. A summary of restructuring program charges (income) is as follows: (In millions except for per share data) 2023 2022 2021 Workforce reductions $ 19 $ (13) $ 21 Plant closing and other 38 47 57 Total before income taxes 57 33 78 Income tax benefit 11 4 18 Total after income taxes $ 46 $ 29 $ 60 Per ordinary share - diluted $ 0.11 $ 0.07 $ 0.15 Restructuring program charges (income) related to the following segments: (In millions) 2023 2022 2021 2020 Electrical Americas $ 5 $ 17 $ 14 $ 18 Electrical Global 26 14 18 55 Aerospace 5 8 8 34 Vehicle 6 (15) 21 102 eMobility 7 1 1 1 Corporate 8 8 16 4 Total $ 57 $ 33 $ 78 $ 214 A summary of liabilities related to workforce reductions, plant closing, and other associated costs is as follows: (In millions) 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 21 57 78 Payments, utilization and translation (64) (52) (116) Balance at December 31, 2021 $ 96 $ 8 $ 104 Liability recognized, net 1 (13) 47 33 Payments, utilization and translation (45) (51) (96) Balance at December 31, 2022 $ 38 $ 4 $ 41 Liability recognized, net 19 38 57 Payments, utilization and translation (21) (36) (57) Balance at December 31, 2023 $ 35 $ 6 $ 41 1 The restructuring program liability was adjusted by $30 million in 2022 related to true-ups for completed workforce reductions and the decision not to close a facility in the Vehicle segment that was previously included in the program. These restructuring program charges (income) were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) – net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 18 for additional information about business segments. On February 1, 2024, the Company announced a new multi-year restructuring program to accelerate opportunities to optimize its operations and global support structure. These actions will better align the Company's functions to support anticipated growth and drive greater effectiveness throughout the Company. This restructuring program is expected to be completed in 2026, with anticipated workforce reductions of $275 million and plant closing and other costs of $100 million, resulting in total estimated charges of $375 million for the entire program. |
BUSINESS SEGMENT AND GEOGRAPHIC
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION | BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Eaton’s segments are as follows: Electrical Americas and Electrical Global The Electrical Americas segment consists of electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The Electrical Global segment consists of electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America; as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The principal markets for these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share certain common global customers, but a large number of customers are located regionally. Sales are made through distributors, resellers, and manufacturers’ representatives, as well as directly to original equipment manufacturers, utilities, and certain other end users. Hydraulics On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. The Hydraulics business sold hydraulics components, systems and services for industrial and mobile equipment. The Hydraulics business offered a wide range of power products including pumps, motors and hydraulic power units; a broad range of controls and sensing products including valves, cylinders and electronic controls; a full range of fluid conveyance products including industrial and hydraulic hose, fittings, and assemblies, thermoplastic hose and tubing, couplings, connectors, and assembly equipment; industrial drum and disc brakes. Historically, the principal markets for the Hydraulics business included renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, and power generation. Key manufacturing customers in these markets and other customers were located globally. Products were sold and serviced through a variety of channels. Aerospace The Aerospace segment is a leading global supplier of aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. Products include hydraulic power generation systems for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, couplings, sealing and ducting; fuel systems including air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, valves, adapters and regulators; mission systems including oxygen generation system, payload carriages, and thermal management products; high performance interconnect products including wiring connectors and cables. The Aerospace segment also includes filtration systems including hydraulic filters, bag filters, strainers and cartridges; and golf grips. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers, as well as industrial applications. These manufacturers and other customers operate globally. Products are sold and serviced through a variety of channels. Vehicle The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. Products include transmissions and transmission components, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars, construction, and agricultural equipment. eMobility The eMobility segment designs, manufactures, markets, and supplies mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. Products include high voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution, fuel tank isolation valves, and commercial vehicle hybrid systems. The principal markets for the eMobility segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars, construction, agriculture, material handling and mining equipment. Other Information No single customer represented greater than 10% of net sales in 2023, 2022 or 2021, respectively. The accounting policies of the business segments are generally the same as the policies described in Note 1, except that, as described further in the following paragraph, certain items are not allocated to the businesses. Intersegment sales and transfers are accounted for at the same prices as if the sales and transfers were made to third parties. These intersegment sales are eliminated in consolidation. Operating profit (loss) includes the operating profit from intersegment sales. Corporate includes all the Company's amortization of intangible assets, interest expense - net and restructuring program charges (Note 17) and the non-service cost portion of pension and other postretirement benefits income. Other expense - net includes all the Company's costs associated with acquisitions, divestitures, and gains and losses on the sale of certain businesses and other items that are of a corporate or functional governance nature. For purposes of business segment performance measurement, a portion of corporate costs, excluding amortization of intangibles assets, acquisition integration and divestiture costs, and restructuring program charges, are allocated to the businesses. These allocations are periodically adjusted to pass on year-over-year cost savings or increases to the businesses in a manner that is consistent with how the chief operating decision maker assesses performance. Identifiable assets of the business segments exclude goodwill, other intangible assets, and general corporate assets, which principally consist of certain cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets. Business Segment Information (In millions) 2023 2022 2021 Net sales Electrical Americas $ 10,098 $ 8,497 $ 7,242 Electrical Global 6,084 5,848 5,516 Hydraulics — — 1,300 Aerospace 3,413 3,039 2,648 Vehicle 2,965 2,830 2,579 eMobility 636 538 343 Total net sales $ 23,196 $ 20,752 $ 19,628 Segment operating profit (loss) Electrical Americas $ 2,675 $ 1,913 $ 1,495 Electrical Global 1,176 1,134 1,034 Hydraulics — — 177 Aerospace 780 705 580 Vehicle 482 453 449 eMobility (21) (9) (29) Total segment operating profit 5,093 4,196 3,706 Corporate Intangible asset amortization expense (450) (499) (444) Interest expense - net (151) (144) (144) Pension and other postretirement benefits income 46 43 65 Restructuring program charges (57) (33) (78) Other expense - net (654) (653) (209) Income before income taxes 3,827 2,911 2,896 Income tax expense 604 445 750 Net income 3,223 2,465 2,146 Less net income for noncontrolling interests (5) (4) (2) Net income attributable to Eaton ordinary shareholders $ 3,218 $ 2,462 $ 2,144 (In millions) 2023 2022 2021 Identifiable assets Electrical Americas $ 4,163 $ 3,655 $ 3,002 Electrical Global 2,868 2,658 2,579 Aerospace 2,276 1,859 1,729 Vehicle 2,251 2,230 1,985 eMobility 563 402 220 Total identifiable assets 12,121 10,804 9,515 Goodwill 14,977 14,796 14,751 Other intangible assets 5,091 5,485 5,855 Corporate 6,243 3,929 3,906 Total assets $ 38,432 $ 35,014 $ 34,027 Capital expenditures for property, plant and equipment Electrical Americas $ 309 $ 181 $ 180 Electrical Global 142 151 120 Hydraulics — — 34 Aerospace 97 92 78 Vehicle 96 95 112 eMobility 76 52 27 Total 721 571 551 Corporate 36 28 24 Total expenditures for property, plant and equipment $ 757 $ 598 $ 575 Depreciation of property, plant and equipment Electrical Americas $ 108 $ 101 $ 105 Electrical Global 96 94 97 Aerospace 69 64 69 Vehicle 92 89 95 eMobility 21 16 8 Total 386 364 374 Corporate 43 44 52 Total depreciation of property, plant and equipment $ 429 $ 408 $ 426 Geographic Region Information Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net. (In millions) 2023 2022 2021 Net sales United States $ 14,071 $ 12,353 $ 10,868 Canada 949 754 797 Latin America 1,549 1,504 1,160 Europe 4,339 3,957 4,276 Asia Pacific 2,288 2,185 2,527 Total $ 23,196 $ 20,752 $ 19,628 Long-lived assets United States $ 1,773 $ 1,567 $ 1,593 Canada 31 25 25 Latin America 476 383 277 Europe 797 711 701 Asia Pacific 453 460 468 Total $ 3,530 $ 3,146 $ 3,064 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes. Actual results could differ from these estimates. Management has evaluated subsequent events through the date the consolidated financial statements were filed with the Securities Exchange Commission. |
Consolidation Policy | The consolidated financial statements include the accounts of Eaton and all subsidiaries and other entities it controls. Intercompany transactions and balances have been eliminated. The equity method of accounting is used for investments in associate companies where the Company has significant influence and generally a 20% to 50% ownership interest. Equity investments are evaluated for impairment whenever events or circumstances indicate the book value of the investment exceeds fair value. An impairment would exist if there is an other-than-temporary decline in value. Investments in associate companies included in Other assets were $860 million and $788 million as of December 31, 2023 and December 31, 2022, respectively, and income from these investments is reported in Other expense (income) - net. Eaton does not have off-balance sheet arrangements with unconsolidated entities. |
Foreign Currency Translation | Eaton's reporting currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at exchange rates in effect at the balance sheet date as to assets and liabilities and weighted-average exchange rates as to revenues and expenses. The resulting translation adjustments are recognized in Accumulated other comprehensive loss. For subsidiaries operating in highly inflationary economies, non-monetary assets and liabilities such as inventory and property, plant and equipment and their related expenses are remeasured at historical exchange rates, while monetary assets and liabilities are remeasured at exchange rates in effect at the balance sheet date. Remeasurement adjustments for these subsidiaries are recognized in income. |
Adoption of New Accounting Standard and Recently Issued Accounting Pronouncements | Adoption of New Accounting Standard Eaton adopted Accounting Standards Update 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, in the first quarter of 2023. The standard requires disclosure of certain information about the Company's supply chain finance program, including key terms and a rollforward of confirmed amounts payable. The adoption of the standard did not have a material impact on the consolidated financial statements. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). This accounting standard requires additional segment disclosures on an annual and interim basis, including significant segment expenses that are regularly provided to the chief operating decision maker. The standard does not change how operating segments and reportable segments are determined. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The standard is required to be applied retrospectively to all periods presented in the consolidated financial statements. Eaton plans to adopt the standard for the year ended December 31, 2024. The Company is evaluating the impact of ASU 2023-07 and expects the standard will only impact its segment disclosures with no material impact to the consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). This accounting standard requires disaggregated income tax disclosures on an annual basis, including information on the Company’s effective income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. The Company is evaluating the impact of ASU 2023-09 and expects the standard will only impact its income taxes disclosures with no material impact to the consolidated financial statements. |
Goodwill and Indefinite Life Intangible Assets | Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Additionally, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis. The annual goodwill impairment test was performed using a qualitative analysis in 2023 and 2022, except for the Vehicle and eMobility reporting units which used a quantitative analysis in 2023 and 2022, respectively. A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit. The results of the qualitative analyses did not indicate a need to perform quantitative analysis. Quantitative analyses were performed by estimating the fair value of the reporting unit using a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The future cash flows were based on the Company's long-term operating plan and a terminal value was used to estimate the reporting unit's cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions. Sensitivity analyses were performed around certain of these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Based on these analyses performed in 2023 and 2022, the fair value of Eaton's reporting units continue to substantially exceed their respective carrying amounts and thus, no impairment exists. Indefinite life intangible assets consist of certain trademarks. They are evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis to determine whether their fair values exceed their respective carrying amounts. Indefinite life intangible asset impairment testing for 2023 and 2022 was performed using a quantitative analysis. The Company determines the fair value of these assets using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows, and profitability. Additionally, indefinite life intangible assets are evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the asset is impaired. For 2023 and 2022, the fair value of indefinite lived intangible assets exceeded the respective carrying value. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, Eaton uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. |
Other Long-Lived Assets | Other Long-Lived Assets Depreciation and amortization for property, plant and equipment, and intangible assets subject to amortization, are generally computed by the straight-line method and included in Cost of products sold, Selling and administrative expense, and Research and development expense, as appropriate. The Company uses the following depreciation and amortization periods: Category Estimated useful life or amortization period Buildings Generally 40 years Machinery and equipment 3 - 10 years Software 5 - 15 years Customer relationships, certain trademarks, and patents and technology Weighted-average of 18 years Other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The asset group would be considered impaired when the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value. Determining asset groups and underlying cash flows requires the use of significant judgment. |
Retirement Benefits Plans | Retirement Benefits Plans For the principal pension plans in the United States, Canada, Puerto Rico, and the United Kingdom, the Company uses a market-related value of plan assets to calculate the expected return on assets used to determine net periodic benefit costs. The market-related value of plan assets is a calculated value that recognizes changes in the fair value of plan assets over a five year period. All other plans use fair value of plan assets. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The Company’s corridors are set at either 8% or 10%, depending on the plan, of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. The amortization periods on a weighted average basis for United States and Non-United States pension plans are approximately 22 years and 10 years, respectively. The amortization period for other postretirement benefits plans is 8 years. |
Asset Retirement Obligations | Asset Retirement Obligations A conditional asset retirement obligation is recognized at fair value when incurred if the fair value of the liability can be reasonably estimated. Uncertainty about the timing or method of settlement of a conditional asset retirement obligation would be considered in the measurement of the liability when sufficient information exists. Eaton believes that for substantially all of its asset retirement obligations, there is an indeterminate settlement date because the range of time over which the Company may settle the obligation is unknown or cannot be estimated. A liability for these obligations will be recognized when sufficient information is available to estimate fair value. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax basis of the respective assets and liabilities, using enacted tax rates in effect for the year when the differences are expected to reverse. Deferred income tax assets are recognized for income tax loss carryforwards and income tax credit carryforwards. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. Eaton recognizes an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Eaton evaluates and adjusts these accruals based on changing facts and circumstances. Eaton recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. Eaton's policy is to recognize income tax effects from accumulated other comprehensive income when individual units of account are sold, terminated, or extinguished. For additional information about income taxes, see Note 12. |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Eaton uses derivative financial instruments to manage the exposure to the volatility in raw material costs, currency, and interest rates on certain debt. These instruments are marked to fair value in the accompanying Consolidated Balance Sheets. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether an instrument has been designated as a hedge. For those instruments that qualify for hedge accounting, Eaton designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. Changes in fair value of these instruments that do not qualify for hedge accounting are recognized immediately in net income. See Note 16 for additional information about hedges and derivative financial instruments. |
Revenue Recognition | Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when title and risk and rewards of ownership have transferred to the customer. Sales recognized over time are less than 5% of Eaton’s consolidated Net sales. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. Sales for service contracts generally are recognized as the services are provided. For agreements with multiple performance obligations, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, we generally allocate sales price to each distinct obligation based on the price of each item sold in separate transactions. Due to the nature of the work required to be performed for obligations recognized over time, Eaton estimates total costs by contract. The estimate of total costs are subject to judgment. Estimated amounts are included in the recognized sales price to the extent it is not probable that a significant reversal of cumulative sales will occur. Additionally, contracts can be modified to account for changes in contract specifications, requirements or sale price. The effect of a contract modification on the sales price or adjustments to the measure of completion under the input method are recognized as adjustments to revenue on a cumulative catch-up basis. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. Eaton does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. Sales, value added, and other taxes collected concurrent with revenue are excluded from Net sales. Shipping and handling costs are treated as fulfillment costs and are included in Cost of products sold. Eaton records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. The rebate programs offered vary across businesses due to the numerous markets Eaton serves, but the most common incentives relate to amounts paid or credited to customers for achieving defined volume levels. Accrued rebates of $402 million and $400 million as of December 31, 2023 and December 31, 2022, respectively, are generally paid annually and are included in Other current liabilities. Returns are estimated at the time of the sale primarily based on historical experience and are recorded gross on the Consolidated Balance Sheet. Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they are typically earned at the completion of the contract when the customer is invoiced or when the customer pays Eaton. Sales of products and services varies by segment and are discussed in Note 18. In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single phase power quality and connectivity, three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time. In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer. Many of the products and services in power distribution and power quality services in the Electrical Americas and Electrical Global business segments and contracts to develop new products that are fully funded by customers in the Aerospace business segment meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. In the Hydraulics segment, sales contracts were primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts were primarily based on a customer’s purchase order. In this segment, performance obligations were generally satisfied at a point in time when we ship the product from our facility. In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks, and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In the eMobility segment, sales contracts are primarily for mechanical, electrical, and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Depreciation and Amortization Periods | The Company uses the following depreciation and amortization periods: Category Estimated useful life or amortization period Buildings Generally 40 years Machinery and equipment 3 - 10 years Software 5 - 15 years Customer relationships, certain trademarks, and patents and technology Weighted-average of 18 years |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES OF BUSINESSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The final allocation as of the date of acquisition follows: (In millions) Final Allocation Short-term investments $ 5 Accounts receivable 93 Inventory 179 Prepaid expenses and other current assets 5 Property, plant and equipment 1 Other intangible assets 604 Other assets 2 Accounts payable (13) Other current liabilities (34) Other noncurrent liabilities (167) Total identifiable net assets 675 Goodwill 976 Total consideration, net of cash received $ 1,651 (In millions) Final Allocation Accounts receivable $ 84 Inventory 178 Prepaid expenses and other current assets 50 Property, plant and equipment 97 Other intangible assets 1,462 Other assets 15 Accounts payable (40) Other current liabilities (202) Other noncurrent liabilities (108) Total identifiable net assets 1,536 Goodwill 1,264 Total consideration, net of cash received $ 2,800 (In millions) Final Allocation Accounts receivable $ 35 Inventory 46 Prepaid expenses and other current assets 1 Property, plant and equipment 31 Other intangible assets 341 Other assets 8 Accounts payable (25) Other current liabilities (14) Other noncurrent liabilities (68) Total identifiable net assets 355 Goodwill 255 Total consideration, net of cash received $ 610 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Sales | The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments: (In millions) 2023 2022 2021 Electrical Americas Products $ 2,949 $ 2,732 $ 2,255 Systems 7,149 5,765 4,987 Total $ 10,098 $ 8,497 $ 7,242 Electrical Global Products $ 3,462 $ 3,424 $ 3,283 Systems 2,622 2,424 2,233 Total $ 6,084 $ 5,848 $ 5,516 Hydraulics United States $ — $ — $ 534 Rest of World — — 766 Total $ — $ — $ 1,300 Aerospace Original Equipment Manufacturers $ 1,350 $ 1,209 $ 1,018 Aftermarket 1,183 977 823 Industrial and Other 878 854 807 Total $ 3,413 $ 3,039 $ 2,648 Vehicle Commercial $ 1,784 $ 1,736 $ 1,438 Passenger and Light Duty 1,180 1,094 1,141 Total $ 2,965 $ 2,830 $ 2,579 eMobility $ 636 $ 538 $ 343 Total net sales $ 23,196 $ 20,752 $ 19,628 |
Schedule of Changes in Deferred Revenue Liabilities | Changes in the deferred revenue liabilities are as follows: (In millions) Deferred Revenue Balance at January 1, 2022 $ 422 Customer deposits and billings 1,656 Revenue recognized in the period (1,541) Translation and other (29) Balance at December 31, 2022 $ 508 Customer deposits and billings 2,368 Revenue recognized in the period (2,256) Translation 6 Balance at December 31, 2023 $ 626 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory are as follows: December 31 (In millions) 2023 2022 Raw materials $ 1,515 $ 1,275 Work-in-process 870 781 Finished goods 1,354 1,375 Total inventory $ 3,739 $ 3,430 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill by segment are as follows: (In millions) January 1, 2022 Additions Translation December 31, 2022 Translation December 31, 2023 Electrical Americas $ 7,417 $ 5 $ (19) $ 7,402 $ 13 $ 7,415 Electrical Global 4,183 2 (255) 3,929 109 4,038 Aerospace 2,781 184 (122) 2,844 57 2,901 Vehicle 290 — (2) 287 2 289 eMobility 80 255 (1) 334 1 334 Total $ 14,751 $ 445 $ (400) $ 14,796 $ 181 $ 14,977 |
Schedule of Other Intangible Assets | A summary of other intangible assets is as follows: December 31 2023 2022 (In millions) Historical Accumulated Historical Accumulated Intangible assets not subject to amortization Trademarks $ 1,207 $ 1,201 Intangible assets subject to amortization Customer relationships $ 4,742 $ 2,423 $ 4,677 $ 2,156 Patents and technology 1,990 948 1,987 830 Trademarks 1,123 642 1,113 570 Other 176 133 175 111 Total intangible assets subject to amortization $ 8,031 $ 4,146 $ 7,952 $ 3,667 |
Schedule of Amortization Expense of Intangible Assets | Amortization expense related to intangible assets subject to amortization in 2023, and estimated amortization expense for each of the next five years, is as follows: (In millions) 2023 $ 432 2024 406 2025 401 2026 385 2027 376 2028 315 |
SUPPLY CHAIN FINANCE PROGRAM (T
SUPPLY CHAIN FINANCE PROGRAM (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of changes in SCF obligations | The changes in SCF obligations are as follows: (In millions) SCF Obligations Balance at January 1, 2023 $ 219 Invoices confirmed during the period 1,339 Invoices paid during the period (1,185) Translation (4) Balance at December 31, 2023 $ 369 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense are as follows: (In millions) 2023 2022 2021 Operating lease cost $ 200 $ 179 $ 164 Finance lease cost: Amortization of lease assets 15 11 12 Interest on lease liabilities 1 1 2 Short-term lease cost 18 17 15 Variable lease cost 28 27 16 Sublease income (1) (1) (2) Total lease cost $ 261 $ 234 $ 207 Supplemental cash flow information related to leases is as follows: (In millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows - payments on operating leases $ (180) $ (159) $ (158) Operating cash outflows - interest payments on finance leases (1) (2) (2) Financing cash outflows - payments on finance lease obligations (18) (11) (11) Lease assets obtained in exchange for new lease obligations, including leases acquired: Operating leases $ 183 $ 245 $ 145 Finance leases 38 10 14 |
Schedule of Supplemental Balance Sheet Information related to Leases | Supplemental balance sheet information related to leases is as follows: December 31 (In millions) 2023 2022 Operating Leases Operating lease assets $ 648 $ 570 Other current liabilities 135 127 Operating lease liabilities 533 459 Total operating lease liabilities $ 668 $ 586 Finance Leases Land and buildings $ 13 $ 6 Machinery and equipment 62 40 Accumulated depreciation (36) (20) Net property, plant and equipment $ 39 $ 26 Current portion of long-term debt $ 13 $ 10 Long-term debt 22 18 Total finance lease liabilities $ 35 $ 28 December 31 2023 2022 Weighted-average remaining lease term Operating leases 7.6 years 7.6 years Finance leases 4.4 years 4.9 years Weighted-average discount rate Operating leases 4.0 % 3.3 % Finance leases 3.6 % 3.0 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities at December 31, 2023 are as follows: (In millions) Operating Leases Finance Leases 2024 $ 156 $ 14 2025 126 8 2026 106 6 2027 85 4 2028 63 2 Thereafter 259 4 Total lease payments 795 38 Less imputed interest 127 3 Total present value of lease liabilities $ 668 $ 35 |
Schedule of Maturities of Finance Lease Liabilities | Maturities of lease liabilities at December 31, 2023 are as follows: (In millions) Operating Leases Finance Leases 2024 $ 156 $ 14 2025 126 8 2026 106 6 2027 85 4 2028 63 2 Thereafter 259 4 Total lease payments 795 38 Less imputed interest 127 3 Total present value of lease liabilities $ 668 $ 35 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt, including Current Portion | A summary of long-term debt, including the current portion, is as follows: December 31 (In millions) 2023 2022 0.75% Euro notes due 2024 $ 608 $ 587 Floating rate Euro notes due 2024 332 — 6.50% debentures due 2025 145 145 0.70% Euro notes due 2025 553 534 0.128% Euro notes due 2026 995 960 3.10% senior notes due 2027 700 700 4.35% senior notes due 2028 500 — 7.65% debentures due 2029 200 200 0.577% Euro notes due 2030 663 640 4.00% senior notes due 2032 700 700 4.15% sustainability-linked senior notes due 2033 1,300 1,300 5.45% debentures due 2034 137 137 5.80% notes due 2037 240 240 4.15% senior notes due 2042 1,000 1,000 3.92% senior notes due 2047 300 300 4.70% senior notes due 2052 700 700 5.25% to 7.875% notes (maturities ranging from 2024 to 2035) 165 165 Other 25 23 Total long-term debt 9,261 8,331 Less current portion of long-term debt (1,017) (10) Long-term debt less current portion $ 8,244 $ 8,321 |
Schedule of Maturities of Long-Term Debt | Maturities of long-term debt for each of the next five years are as follows: (In millions) 2024 $ 1,017 2025 706 2026 1,073 2027 704 2028 502 |
Schedule of Interest Paid on Debt | Interest paid on debt is as follows: (In millions) 2023 $ 319 2022 250 2021 207 |
RETIREMENT BENEFITS PLANS (Tabl
RETIREMENT BENEFITS PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Obligations and Funded Status | Obligations and Funded Status United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Funded status Fair value of plan assets $ 2,604 $ 2,635 $ 1,633 $ 1,486 $ 17 $ 16 Benefit obligations (2,824) (2,807) (2,022) (1,813) (212) (209) Funded status $ (220) $ (172) $ (389) $ (327) $ (195) $ (194) Amounts recognized in the Consolidated Other assets $ — $ — $ 210 $ 199 $ — $ — Other current liabilities (18) (19) (33) (30) (15) (17) Pension liabilities and Other postretirement (202) (153) (566) (496) (180) (177) Total $ (220) $ (172) $ (389) $ (327) $ (195) $ (194) Amounts recognized in Accumulated other Net actuarial loss (gain) $ 867 $ 807 $ 649 $ 491 $ (92) $ (119) Prior service cost (credit) 4 5 12 14 (1) (2) Total $ 871 $ 811 $ 661 $ 505 $ (93) $ (120) |
Schedule of Change in Benefit Obligations | Change in Benefit Obligations United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 2,807 $ 3,760 $ 1,813 $ 2,837 $ 209 $ 304 Service cost 19 27 43 59 1 1 Interest cost 142 117 85 47 10 7 Actuarial loss (gain) 104 (713) 104 (817) 11 (73) Gross benefits paid (250) (386) (110) (99) (31) (38) Currency translation — — 85 (218) 1 (3) Plan amendments 1 1 (1) 1 — (2) Other — — 3 3 11 13 Balance at December 31 $ 2,824 $ 2,807 $ 2,022 $ 1,813 $ 212 $ 209 Accumulated benefit obligation $ 2,807 $ 2,784 $ 1,922 $ 1,737 |
Schedule of Change in Plan Assets | Change in Plan Assets United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 2,635 $ 3,672 $ 1,486 $ 2,247 $ 16 $ 19 Actual return on plan assets 203 (682) 86 (554) 1 (2) Employer contributions 16 30 97 85 20 24 Gross benefits paid (250) (386) (110) (99) (31) (38) Currency translation — — 71 (197) — — Other — — 3 3 11 13 Balance at December 31 $ 2,604 $ 2,635 $ 1,633 $ 1,486 $ 17 $ 16 |
Schedule of Components of Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as follows: United States Non-United States (In millions) 2023 2022 2023 2022 Accumulated benefit obligation $ 2,807 $ 2,784 $ 742 $ 654 Fair value of plan assets 2,604 2,635 203 173 |
Schedule of Components of Pension Plans with Projected Benefit Obligations in Excess of Plan Assets | The components of pension plans with a projected benefit obligation in excess of plan assets at December 31 are as follows: United States Non-United States (In millions) 2023 2022 2023 2022 Projected benefit obligation $ 2,824 $ 2,807 $ 827 $ 722 Fair value of plan assets 2,604 2,635 228 195 |
Schedule of Changes in Pension and Other Postretirement Benefits Liabilities recognized in Accumulated Other Comprehensive Income (Loss) | Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss are as follows: United States Non-United States Other postretirement (In millions) 2023 2022 2023 2022 2023 2022 Balance at January 1 $ 811 $ 713 $ 505 $ 763 $ (120) $ (55) Prior service cost arising during the year 1 1 (1) 1 — (2) Net loss (gain) arising during the year 97 173 139 (149) 10 (69) Currency translation — — 29 (64) — (1) Less amounts included in expense during the year (38) (76) (11) (47) 17 7 Net change for the year 60 98 156 (259) 27 (65) Balance at December 31 $ 871 $ 811 $ 661 $ 505 $ (93) $ (120) |
Schedule of Benefits Expense (Income) | The components of retirement benefits expense (income) are as follows: United States pension benefit expense (income) Non-United States pension benefit expense (income) Other postretirement (In millions) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Service cost $ 19 $ 27 $ 37 $ 43 $ 59 $ 72 $ 1 $ 1 $ 1 Interest cost 142 117 70 85 47 40 10 7 6 Expected return on plan assets (195) (204) (223) (121) (115) (120) (1) (1) — Amortization 4 15 36 7 45 71 (17) (7) (5) (30) (46) (80) 14 37 63 (7) — 2 Settlements, curtailments, and special termination benefits 34 61 65 4 2 17 — — (1) Total expense (income) $ 4 $ 15 $ (15) $ 18 $ 39 $ 80 $ (7) $ — $ 1 |
Schedule of Assumptions Used to Determine Pension Plans Expense | Pension Plans United States Non-United States 2023 2022 2021 2023 2022 2021 Assumptions used to determine benefit obligation at year-end Discount rate 5.14 % 5.47 % 2.81 % 4.52 % 4.83 % 2.01 % Rate of compensation increase 3.40 % 3.33 % 3.12 % 3.17 % 3.12 % 3.01 % Interest rate used to credit cash balance plans 4.01 % 3.67 % 1.99 % 1.59 % 2.32 % 0.56 % Assumptions used to determine expense Discount rate used to determine benefit obligation 5.47 % 4.30 % 2.61 % 4.83 % 2.01 % 1.63 % Discount rate used to determine service cost 5.54 % 4.41 % 2.92 % 5.90 % 2.98 % 2.52 % Discount rate used to determine interest cost 5.33 % 3.94 % 1.83 % 4.80 % 1.84 % 1.36 % Expected long-term return on plan assets 6.50 % 6.50 % 6.75 % 6.32 % 5.70 % 5.62 % Rate of compensation increase 3.33 % 3.12 % 3.12 % 3.12 % 3.01 % 3.02 % Interest rate used to credit cash balance plans 3.67 % 2.62 % 2.14 % 2.32 % 0.56 % 0.52 % |
Schedule of Assumptions Used to Determine Other Postretirement Benefits Obligations and Expense | Assumptions used to determine other postretirement benefits obligations and expense are as follows: Other postretirement 2023 2022 2021 Assumptions used to determine benefit obligation at year-end Discount rate 5.11 % 5.46 % 2.79 % Health care cost trend rate assumed for next year 7.70 % 7.10 % 7.45 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.75 % Year ultimate health care cost trend rate is achieved 2033 2031 2031 Assumptions used to determine expense Discount rate used to determine benefit obligation 5.46 % 2.79 % 2.44 % Discount rate used to determine service cost 5.53 % 3.03 % 2.76 % Discount rate used to determine interest cost 5.32 % 2.24 % 1.70 % Initial health care cost trend rate 7.10 % 7.45 % 7.38 % Ultimate health care cost trend rate 4.75 % 4.75 % 4.75 % Year ultimate health care cost trend rate is achieved 2031 2031 2030 |
Schedule of Employer Contributions to Pension Plans | Contributions to pension plans that Eaton expects to make in 2024, and made in 2023, 2022 and 2021, are as follows: (In millions) Expected in 2024 2023 2022 2021 United States plans $ 19 $ 16 $ 30 $ 237 Non-United States plans 96 97 85 106 Total contributions $ 115 $ 113 $ 116 $ 343 |
Schedule of Expected Pension and Other Postretirement Benefit Payments and Expected Subsidy | For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below. Estimated Estimated Estimated other postretirement (In millions) Gross Medicare prescription 2024 $ 286 $ 111 $ 18 $ — 2025 267 113 17 — 2026 257 116 16 — 2027 246 121 19 — 2028 236 123 18 — 2029 - 2033 1,061 669 82 (1) |
Schedule of Fair Value of Pension Plan Assets | A summary of the fair value of pension plan assets at December 31, 2023 and 2022, is as follows: (In millions) Total Quoted prices Other Unobservable inputs (Level 3) 1 2023 Common collective trusts Non-United States equity and global equities $ 154 $ — $ 154 $ — United States equity 76 — 76 — Fixed income 115 — 115 — Fixed income securities 1,607 — 1,607 — United States treasuries 566 566 — — Real estate 291 65 27 199 Cash equivalents 36 14 22 — Exchange traded funds 84 84 — — Other 405 — 35 370 Common collective and other trusts measured at net asset value 968 Money market funds measured at net asset value 2 Pending purchases and sales of plan assets, and interest (67) Total pension plan assets $ 4,237 $ 729 $ 2,036 $ 569 1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $154 million at December 31, 2023, which will be satisfied by a reallocation of pension plan assets. (In millions) Total Quoted prices Other Unobservable inputs (Level 3) 1 2022 Common collective trusts Non-United States equity and global equities $ 173 $ — $ 173 $ — United States equity 54 — 54 — Fixed income 620 — 620 — Fixed income securities 744 — 744 — United States treasuries 660 660 — — Real estate 295 76 20 199 Cash equivalents 77 21 56 — Exchange traded funds 77 77 — — Other 387 — 27 360 Common collective and other trusts measured at net asset value 1,100 Money market funds measured at net asset value 3 Pending purchases and sales of plan assets, and interest (69) Total pension plan assets $ 4,121 $ 834 $ 1,694 $ 559 1 These pension plan assets include private equity, private credit and private real estate funds that generally have redemption notice periods of six months or longer, and are often not eligible for redemption until the underlying assets are liquidated or distributed. The Company has unfunded commitments to these funds of approximately $180 million at December 31, 2022 , which will be satisfied by a reallocation of pension plan assets. |
Schedule of Fair Value Measurement of Plan Assets using Significant Unobservable Inputs | The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2023 and 2022 due to the following: (In millions) Real estate Other Total Balance at January 1, 2022 $ 216 $ 319 $ 535 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 1 (3) (2) Purchases, sales, settlements - net (18) 44 26 Transfers into or out of Level 3 — — — Balance at December 31, 2022 199 360 559 Actual return on plan assets: Gains (losses) relating to assets still held at year-end 7 19 26 Purchases, sales, settlements - net (7) — (7) Transfers into or out of Level 3 — (9) (9) Balance at December 31, 2023 $ 199 $ 370 $ 569 |
Schedule of Fair Value of Other Postretirement Benefits Plan Assets | A summary of the fair value of other postretirement benefits plan assets at December 31, 2023 and 2022, is as follows: (In millions) Total Quoted prices Other Unobservable 2023 Cash equivalents $ 2 $ 2 $ — $ — Common collective and other trusts measured at net asset value 15 Total other postretirement benefits plan assets $ 17 $ 2 $ — $ — (In millions) Total Quoted prices Other Unobservable 2022 Cash equivalents $ 3 $ 3 $ — $ — Common collective and other trusts measured at net asset value 13 Total other postretirement benefits plan assets $ 16 $ 3 $ — $ — |
Schedule of Employer Contributions to Defined Contribution Benefit Plans, Charged to Expense | The total contributions related to these plans are charged to expense and are as follows: (In millions) 2023 $ 201 2022 182 2021 171 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Current and Long-Term Warranty Accruals | A summary of the current and long-term warranty accruals is as follows: (In millions) 2023 2022 2021 Balance at January 1 $ 125 $ 125 $ 151 Provision 100 83 65 Settled (91) (81) (112) Warranty accruals from business acquisitions and other 2 (2) 21 Balance at December 31 $ 136 $ 125 $ 125 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) before Income Taxes | Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax expense (benefit) are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable. Income (loss) before income taxes (In millions) 2023 2022 2021 Ireland $ (3) $ 198 $ 153 Foreign 3,830 2,713 2,743 Total income before income taxes $ 3,827 $ 2,911 $ 2,896 |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) (In millions) 2023 2022 2021 Current Ireland $ 42 $ 3 $ 50 Foreign 744 570 730 Total current income tax expense 786 573 780 Deferred Ireland 1 13 (2) Foreign (183) (141) (28) Total deferred income tax expense (benefit) (182) (128) (30) Total income tax expense $ 604 $ 445 $ 750 |
Schedule of Reconciliation of Effective Income Tax Rate | Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate are as follows: 2023 2022 2021 Income taxes at the applicable statutory rate 25.0 % 25.0 % 25.0 % Ireland operations Ireland tax on trading income (1.3) % (1.3) % (0.7) % Nondeductible interest expense 2.6 % 1.0 % 0.6 % Ireland Other - net (0.2) % (0.5) % (0.2) % Foreign operations Tax impact on sale of businesses — % — % 9.1 % Earnings taxed at other than the applicable statutory tax rate (9.9) % (10.2) % (8.0) % Other items 2.2 % 1.6 % (0.1) % Worldwide operations Adjustments to tax liabilities (0.2) % (0.4) % 0.2 % Adjustments to valuation allowances (2.4) % 0.1 % — % Effective income tax expense rate 15.8 % 15.3 % 25.9 % |
Schedule of Worldwide Income Tax Payments | Worldwide income tax payments, net of tax refunds, are as follows: (In millions) 2023 $ 727 2022 393 2021 753 |
Schedule of Components of Deferred Income Taxes | Components of noncurrent deferred income taxes are as follows: December 31 2023 2022 (In millions) Noncurrent assets and liabilities Accruals and other adjustments Employee benefits $ 328 $ 266 Depreciation and amortization (929) (1,067) Other accruals and adjustments 408 397 Ireland income tax loss carryforwards 2 1 Foreign income tax loss carryforwards 3,878 4,151 Foreign income tax credit carryforwards 247 280 Valuation allowance for income tax loss and income tax credit carryforwards (3,828) (4,184) Other valuation allowances (50) (44) Total deferred income taxes $ 56 $ (200) |
Schedule of Foreign Tax Loss Carryforwards and Income Tax Credit Carryforwards | These carryforwards and their respective expiration dates are summarized below: (In millions) 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2048 Not Ireland income tax loss carryforwards $ — $ — $ — $ — $ 10 $ — Ireland deferred income tax assets for income tax loss — — — — 2 (1) Foreign income tax loss carryforwards 42 6 11,605 111 6,619 — Foreign deferred income tax assets for income tax loss carryforwards 14 3 2,898 30 942 (3,683) Foreign deferred income tax assets for income tax loss carryforwards after ASU 2013-11 9 2 2,897 30 940 (3,683) Foreign income tax credit carryforwards 208 26 45 — 35 (145) Foreign income tax credit carryforwards after ASU 2013-11 153 16 43 — 35 (145) |
Schedule of Gross Unrecognized Income Tax Benefits | A summary of gross unrecognized income tax benefits is as follows: (In millions) 2023 2022 2021 Balance at January 1 $ 1,235 $ 1,120 $ 1,036 Increases and decreases as a result of positions taken during prior years Transfers from valuation allowances — — 6 Other increases, including currency translation 42 36 22 Other decreases, including currency translation (5) (16) (10) Increases related to acquired businesses — 10 12 Increases as a result of positions taken during the current year 86 97 75 Decreases relating to settlements with tax authorities (6) — (11) Decreases as a result of a lapse of the applicable statute of limitations (52) (12) (10) Balance at December 31 $ 1,300 $ 1,235 $ 1,120 |
EATON SHAREHOLDERS' EQUITY (Tab
EATON SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Pre-Tax and After-Tax Amounts Recognized in Comprehensive Income (Loss) | The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss): 2023 2022 2021 (In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Currency translation and related hedging instruments Gain (loss) from currency translation and related hedging $ 252 $ 247 $ (632) $ (647) $ (335) $ (339) Translation reclassified to earnings — — — — 369 369 Amortization of gains on net investment hedges (amount (12) (12) — — — — 241 235 (632) (647) 34 30 Pensions and other postretirement benefits Prior service credit (cost) arising during the year — — — — (1) (1) Net gain (loss) arising during the year (246) (189) 45 31 448 337 Currency translation (29) (21) 65 56 24 19 Amortization of actuarial loss and prior service cost 32 24 116 89 183 140 (243) (185) 226 175 654 495 Cash flow hedges Gain on derivatives designated as cash flow hedges 63 50 210 166 50 39 Changes in cash flow hedges reclassified to earnings (78) (61) (9) (7) (3) (2) (14) (11) 201 159 47 37 Other comprehensive income (loss) attributable to Eaton ordinary shareholders $ (17) $ 39 $ (205) $ (313) $ 735 $ 562 |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in Accumulated other comprehensive loss are as follows: (In millions) Currency translation and related hedging instruments Pensions and other postretirement benefits Cash flow Total Balance at January 1, 2023 $ (3,264) $ (810) $ 129 $ (3,946) Other comprehensive income (loss) before 247 (209) 50 88 Amounts reclassified from Accumulated other (12) 24 (61) (49) Net current-period Other comprehensive 235 (185) (11) 39 Balance at December 31, 2023 $ (3,029) $ (995) $ 118 $ (3,906) |
Schedule of Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The reclassifications out of Accumulated other comprehensive loss are as follows: (In millions) December 31, 2023 Consolidated Statements Gains and (losses) on net investment hedges (amount excluded Currency exchange contracts $ 12 Interest expense - net Tax expense — Total, net of tax 12 Amortization of defined benefits pensions and other Actuarial loss and prior service cost (32) 1 Tax benefit 8 Total, net of tax (24) Gains and (losses) on cash flow hedges Floating-to-fixed interest rate swaps 13 Interest expense - net Currency exchange contracts 64 Net sales and Cost of products sold Commodity contracts 1 Cost of products sold Tax expense (16) Total, net of tax 61 Total reclassifications for the period $ 49 1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 10 for additional information about pension and other postretirement benefits items. |
Schedule of Net Income per Share | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders is as follows: (In millions except for per share data) 2023 2022 2021 Net income attributable to Eaton ordinary shareholders $ 3,218 $ 2,462 $ 2,144 Weighted-average number of ordinary shares outstanding - diluted 401.1 400.8 401.6 Less dilutive effect of equity-based compensation 2.0 2.1 2.9 Weighted-average number of ordinary shares outstanding - basic 399.1 398.7 398.7 Net income per share attributable to Eaton ordinary shareholders Diluted $ 8.02 $ 6.14 $ 5.34 Basic 8.06 6.17 5.38 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSU and RSA activity | A summary of the RSU and RSA activity for 2023 is as follows: (Restricted stock units and awards in millions) Number of restricted Weighted-average fair Non-vested at January 1 1.0 $ 127.33 Granted 0.4 173.72 Vested (0.5) 123.84 Forfeited — 157.61 Non-vested at December 31 0.9 $ 150.55 |
Schedule of Information Related to RSUs and RSAs | Information related to RSUs and RSAs is as follows: (In millions) 2023 2022 2021 Pre-tax expense for RSUs and RSAs $ 65 $ 65 $ 61 After-tax expense for RSUs and RSAs 51 51 48 Fair value of vested RSUs and RSAs 84 98 92 |
Schedule of Assumptions Used in Determining Fair Value of PSUs | A summary of the assumptions used in determining fair value of these PSUs is as follows: 2023 2022 2021 Expected volatility 27 % 35 % 35 % Risk-free interest rate 4.35 % 1.71 % 0.20 % Weighted-average fair value of PSUs granted $ 203.18 $ 171.63 $ 159.74 |
Schedule of PSU Activity | A summary of these PSUs that vested is as follows: (Performance share units in millions) 2023 2022 2021 Percent payout 187 % 178 % 189 % Shares vested 0.3 0.4 0.5 A summary of the 2023 activity for these PSUs is as follows: (Performance share units in millions) Number of performance Weighted-average fair Non-vested at January 1 0.3 $ 141.88 Granted 1 0.2 203.18 Adjusted for performance results achieved 2 0.1 159.74 Vested (0.3) 159.74 Non-vested at December 31 0.3 $ 162.67 1 Performance shares granted assuming the Company will perform at target relative to peers. 2 Adjustments for the number of shares vested under the 2021 awards at the end of the three-year performance period ended December 31, 2023, being higher than the target number of shares. |
Schedule of Information Related to PSUs | Information related to PSUs is as follows: (In millions) 2023 2022 2021 Pre-tax expense for PSUs $ 22 $ 21 $ 26 After-tax expense for PSUs 17 17 21 |
Schedule of Assumptions Used in Determining Fair Value of Stock Options | A summary of the assumptions used in determining the fair value of stock options is as follows: 2023 2022 2021 Expected volatility 27 % 27 % 28 % Expected option life in years 6.3 6.6 6.5 Expected dividend yield 2.0 % 2.0 % 3.0 % Risk-free interest rate 4.1 to 4.3% 0.3 to 3.0% 0.0 to 1.5% Weighted-average fair value of stock options granted $ 48.79 $ 36.56 $ 26.11 |
Schedule of Stock Option Activity | A summary of stock option activity is as follows: (Options in millions) Weighted-average Options Weighted-average Aggregate Outstanding at January 1, 2023 $ 91.15 3.0 Granted 173.26 0.2 Exercised 80.23 (1.0) Outstanding at December 31, 2023 $ 103.76 2.2 5.6 $ 303.6 Exercisable at December 31, 2023 $ 88.53 1.7 4.7 $ 260.6 Reserved for future grants at December 31, 2023 19.3 |
Schedule of Information Related to Stock Options | Information related to stock options is as follows: (In millions) 2023 2022 2021 Pre-tax expense for stock options $ 10 $ 11 $ 14 After-tax expense for stock options 8 9 11 Proceeds from stock options exercised 78 28 63 Income tax benefit related to stock options exercised Tax benefit classified in operating activities in the Consolidated 22 6 13 Intrinsic value of stock options exercised 116 29 69 Total fair value of stock options vested $ 10 $ 11 $ 14 Stock options exercised 1.0 0.4 0.9 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Recognized at Fair Value | A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows: (In millions) Total Quoted prices in active markets for identical assets Other observable inputs Unobservable inputs December 31, 2023 Cash $ 488 $ 488 $ — $ — Short-term investments 2,121 2,121 — — Net derivative contracts 11 — 11 — Contingent future payments from acquisition of Green Motion (Note 2) (18) — — (18) December 31, 2022 Cash $ 294 $ 294 $ — $ — Short-term investments 261 261 — — Net derivative contracts 29 — 29 — Contingent future payments from acquisition of Green Motion (Note 2) (44) — — (44) |
Schedule of Carrying Value of Short-Term Investments | A summary of short-term investments is as follows: December 31 (In millions) 2023 2022 Time deposits and certificates of deposit with banks $ 299 $ 248 Money market investments 1,822 13 Total short-term investments $ 2,121 $ 261 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instruments | A summary of interest rate swaps outstanding at December 31, 2023, is as follows: Forward Starting Floating-to-Fixed Interest Rate Swaps (Notional amount in millions) Notional amount Floating interest Fixed interest Basis for contracted floating interest rate received $ 55 —% 3.01% 6 month Euribor 55 —% 2.54% 6 month Euribor 55 —% 2.32% 6 month Euribor The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows: (In millions) Notional Other Other Other Other Type of Term December 31, 2023 Derivatives designated as hedges Forward starting floating-to-fixed interest rate swaps $ 165 $ — $ — $ — $ 3 Cash flow 8 years Currency exchange contracts 505 17 3 7 1 Cash flow 1 to 25 months Commodity contracts 54 1 — 1 — Cash flow 1 to 12 months Currency exchange contracts 564 — — 1 — Net investment 3 months Total $ 17 $ 3 $ 9 $ 4 Derivatives not designated as hedges Currency exchange contracts $ 4,797 $ 12 $ 8 1 to 7 months December 31, 2022 Derivatives designated as hedges Currency exchange contracts $ 1,240 $ 35 $ 2 $ 17 $ 9 Cash flow 1 to 36 months Commodity contracts 64 4 — 2 — Cash flow 1 to 12 months Total $ 39 $ 2 $ 19 $ 9 Derivatives not designated as hedges Currency exchange contracts $ 4,683 $ 30 $ 14 1 to 12 months |
Schedule of Notional Amounts of Outstanding Derivative Positions and Commodity Contracts | As of December 31, 2023, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions: Commodity December 31, 2023 Term Aluminum 4 Millions of pounds 1 to 11 months Copper 11 Millions of pounds 1 to 12 months Gold 1,611 Troy ounces 1 to 12 months Silver 67,285 Troy ounces 1 to 10 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: (In millions) Carrying amount of the hedged Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) 1 Location on Consolidated Balance Sheets December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Long-term debt $ (713) $ (713) $ (42) $ (48) 1 At December 31, 2023 and December 31, 2022, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $42 million and $48 million, respectively. |
Schedule of Impact of Hedging Activities to Consolidated Statement of Income | The impact of cash flow and fair value hedging activities to the Consolidated Statements of Income is as follows: 2023 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 23,196 $ 14,762 $ 151 Gain (loss) on derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Hedged item $ — $ — $ (13) Derivative designated as hedging instrument — — 13 Currency exchange contracts Hedged item $ (2) $ (58) $ — Derivative designated as hedging instrument 2 58 — Commodity contracts Hedged item $ — $ (1) $ — Derivative designated as hedging instrument — 1 — 2022 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 20,752 $ 13,865 $ 144 Gain (loss) on derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Hedged item $ — $ — $ (4) Derivative designated as hedging instrument — — 4 Currency exchange contracts Hedged item $ 17 $ (26) $ — Derivative designated as hedging instrument (17) 26 — Commodity contracts Hedged item $ — $ 4 $ — Derivative designated as hedging instrument — (4) — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 8 Derivative designated as hedging instrument — — (8) 2021 (In millions) Net sales Cost of products sold Interest expense - net Amounts from Consolidated Statements of Income $ 19,628 $ 13,293 $ 144 Gain (loss) on derivatives designated as cash flow hedges Currency exchange contracts Hedged item $ 6 $ — $ — Derivative designated as hedging instrument (6) — — Commodity contracts Hedged item $ — $ (9) $ — Derivative designated as hedging instrument — 9 — Gain (loss) on derivatives designated as fair value hedges Fixed-to-floating interest rate swaps Hedged item $ — $ — $ 51 Derivative designated as hedging instrument — — (51) |
Schedule of Amounts Recognized in Net Income | The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows: Gain (loss) recognized in Consolidated Statements of Income Consolidated Statements of Income classification (In millions) 2023 2022 2021 Gain (loss) on derivatives not designated as hedges Currency exchange contracts $ 57 $ (56) $ — Interest expense - net Commodity contracts — (15) 11 Other expense (income) - net and Cost of products sold 1 Total $ 57 $ (71) $ 11 1 |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss) | The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows: Gain (loss) recognized in other (In millions) 2023 2022 2021 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps $ (2) $ 202 $ 50 Currency exchange contracts 66 13 (6) Commodity contracts — (5) 6 Derivatives designated as net investment hedges Currency exchange contracts Effective portion 8 — — Amount excluded from effectiveness testing 15 — — Non-derivative designated as net investment hedges Foreign currency denominated debt (110) 171 240 Total $ (24) $ 381 $ 290 Location of gain (loss) Gain (loss) reclassified (In millions) 2023 2022 2021 Derivatives designated as cash flow hedges Forward starting floating-to-fixed interest rate swaps Interest expense - net $ 13 $ 4 $ — Currency exchange contracts Net sales and Cost of products sold 64 9 (6) Commodity contracts Cost of products sold 1 (4) 9 Derivatives designated as net investment hedges Currency exchange contracts Effective portion Gain (loss) on sale of business — — — Amount excluded from effectiveness testing Interest expense - net 12 — — Non-derivative designated as net investment hedges Foreign currency denominated debt Gain (loss) on sale of business — — — Total $ 89 $ 9 $ 3 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Program Charges | A summary of restructuring program charges (income) is as follows: (In millions except for per share data) 2023 2022 2021 Workforce reductions $ 19 $ (13) $ 21 Plant closing and other 38 47 57 Total before income taxes 57 33 78 Income tax benefit 11 4 18 Total after income taxes $ 46 $ 29 $ 60 Per ordinary share - diluted $ 0.11 $ 0.07 $ 0.15 Restructuring program charges (income) related to the following segments: (In millions) 2023 2022 2021 2020 Electrical Americas $ 5 $ 17 $ 14 $ 18 Electrical Global 26 14 18 55 Aerospace 5 8 8 34 Vehicle 6 (15) 21 102 eMobility 7 1 1 1 Corporate 8 8 16 4 Total $ 57 $ 33 $ 78 $ 214 |
Schedule of Liabilities Related to Restructuring | A summary of liabilities related to workforce reductions, plant closing, and other associated costs is as follows: (In millions) 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 21 57 78 Payments, utilization and translation (64) (52) (116) Balance at December 31, 2021 $ 96 $ 8 $ 104 Liability recognized, net 1 (13) 47 33 Payments, utilization and translation (45) (51) (96) Balance at December 31, 2022 $ 38 $ 4 $ 41 Liability recognized, net 19 38 57 Payments, utilization and translation (21) (36) (57) Balance at December 31, 2023 $ 35 $ 6 $ 41 1 The restructuring program liability was adjusted by $30 million in 2022 related to true-ups for completed workforce reductions and the decision not to close a facility in the Vehicle segment that was previously included in the program. |
BUSINESS SEGMENT AND GEOGRAPH_2
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Business Segment Information | Business Segment Information (In millions) 2023 2022 2021 Net sales Electrical Americas $ 10,098 $ 8,497 $ 7,242 Electrical Global 6,084 5,848 5,516 Hydraulics — — 1,300 Aerospace 3,413 3,039 2,648 Vehicle 2,965 2,830 2,579 eMobility 636 538 343 Total net sales $ 23,196 $ 20,752 $ 19,628 Segment operating profit (loss) Electrical Americas $ 2,675 $ 1,913 $ 1,495 Electrical Global 1,176 1,134 1,034 Hydraulics — — 177 Aerospace 780 705 580 Vehicle 482 453 449 eMobility (21) (9) (29) Total segment operating profit 5,093 4,196 3,706 Corporate Intangible asset amortization expense (450) (499) (444) Interest expense - net (151) (144) (144) Pension and other postretirement benefits income 46 43 65 Restructuring program charges (57) (33) (78) Other expense - net (654) (653) (209) Income before income taxes 3,827 2,911 2,896 Income tax expense 604 445 750 Net income 3,223 2,465 2,146 Less net income for noncontrolling interests (5) (4) (2) Net income attributable to Eaton ordinary shareholders $ 3,218 $ 2,462 $ 2,144 |
Schedule of Identifiable Assets, Capital Expenditures, and Depreciation by Segment | (In millions) 2023 2022 2021 Identifiable assets Electrical Americas $ 4,163 $ 3,655 $ 3,002 Electrical Global 2,868 2,658 2,579 Aerospace 2,276 1,859 1,729 Vehicle 2,251 2,230 1,985 eMobility 563 402 220 Total identifiable assets 12,121 10,804 9,515 Goodwill 14,977 14,796 14,751 Other intangible assets 5,091 5,485 5,855 Corporate 6,243 3,929 3,906 Total assets $ 38,432 $ 35,014 $ 34,027 Capital expenditures for property, plant and equipment Electrical Americas $ 309 $ 181 $ 180 Electrical Global 142 151 120 Hydraulics — — 34 Aerospace 97 92 78 Vehicle 96 95 112 eMobility 76 52 27 Total 721 571 551 Corporate 36 28 24 Total expenditures for property, plant and equipment $ 757 $ 598 $ 575 Depreciation of property, plant and equipment Electrical Americas $ 108 $ 101 $ 105 Electrical Global 96 94 97 Aerospace 69 64 69 Vehicle 92 89 95 eMobility 21 16 8 Total 386 364 374 Corporate 43 44 52 Total depreciation of property, plant and equipment $ 429 $ 408 $ 426 |
Schedule of Geographic Region Information | Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net. (In millions) 2023 2022 2021 Net sales United States $ 14,071 $ 12,353 $ 10,868 Canada 949 754 797 Latin America 1,549 1,504 1,160 Europe 4,339 3,957 4,276 Asia Pacific 2,288 2,185 2,527 Total $ 23,196 $ 20,752 $ 19,628 Long-lived assets United States $ 1,773 $ 1,567 $ 1,593 Canada 31 25 25 Latin America 476 383 277 Europe 797 711 701 Asia Pacific 453 460 468 Total $ 3,530 $ 3,146 $ 3,064 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) country reporting_unit | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Long-Lived Assets [Line Items] | |||
Net sales | $ 23,196 | $ 20,752 | $ 19,628 |
Countries where products are sold (more than) | country | 160 | ||
Investments in associate companies | $ 860 | 788 | |
Other postretirement benefits plans | |||
Long-Lived Assets [Line Items] | |||
Defined benefit plan, amortization period of gain (loss) | 8 years | ||
Aerospace Segment | |||
Long-Lived Assets [Line Items] | |||
Net sales | $ 3,413 | $ 3,039 | $ 2,648 |
Number of reporting units | reporting_unit | 2 | ||
United States | Pension plans | |||
Long-Lived Assets [Line Items] | |||
Defined benefit plan, amortization period of gain (loss) | 22 years | ||
Non-United States plans | Pension plans | |||
Long-Lived Assets [Line Items] | |||
Defined benefit plan, amortization period of gain (loss) | 10 years | ||
Minimum | |||
Long-Lived Assets [Line Items] | |||
Defined benefit plan, accounting corridor for amortization of net actuarial gains (losses) (as a percent) | 8% | ||
Maximum | |||
Long-Lived Assets [Line Items] | |||
Defined benefit plan, accounting corridor for amortization of net actuarial gains (losses) (as a percent) | 10% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Depreciation and Amortization Periods (Details) | Dec. 31, 2023 |
Customer relationships | |
Long-Lived Assets [Line Items] | |
Weighted-average amortization period of finite-lived intangible assets | 18 years |
Patents and technology | |
Long-Lived Assets [Line Items] | |
Weighted-average amortization period of finite-lived intangible assets | 18 years |
Certain trademarks | |
Long-Lived Assets [Line Items] | |
Weighted-average amortization period of finite-lived intangible assets | 18 years |
Buildings | |
Long-Lived Assets [Line Items] | |
Useful life | 40 years |
Machinery and equipment | Maximum | |
Long-Lived Assets [Line Items] | |
Useful life | 10 years |
Machinery and equipment | Minimum | |
Long-Lived Assets [Line Items] | |
Useful life | 3 years |
Software | Maximum | |
Long-Lived Assets [Line Items] | |
Useful life | 15 years |
Software | Minimum | |
Long-Lived Assets [Line Items] | |
Useful life | 5 years |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES OF BUSINESSES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Jan. 05, 2022 | Aug. 02, 2021 | Jun. 01, 2021 | Mar. 22, 2021 | Mar. 17, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 23, 2023 | Jul. 01, 2022 | Jun. 25, 2021 | Mar. 29, 2021 | |
Business Acquisition [Line Items] | |||||||||||||||||
Cash purchase price, net of cash received | $ 0 | $ 610 | $ 4,500 | ||||||||||||||
Contingent consideration | 18 | 44 | |||||||||||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) On Disposal, Statement Of Income Or Comprehensive Income, Not Disclosed Flag | Sale of Hydraulics business | ||||||||||||||||
Other nonoperating income (expense) | 93 | 36 | $ (40) | ||||||||||||||
War With Russia And Ukraine | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other nonoperating income (expense) | $ (29) | ||||||||||||||||
Hydraulics Business | Held-for-sale | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Consideration received, net of cash sold | $ 3,100 | $ 22 | $ 3,100 | ||||||||||||||
Hydraulics Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Pre-tax gain (loss) on disposal | $ 617 | $ 24 | |||||||||||||||
Sales of business sold | $ 1,300 | ||||||||||||||||
Tripp Lite | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash purchase price, net of cash received | $ 1,650 | ||||||||||||||||
Other intangible assets | 604 | ||||||||||||||||
Operating profit of acquiree since acquisition date | $ 139 | ||||||||||||||||
Revenue of acquiree since acquisition date | $ 419 | ||||||||||||||||
Tripp Lite | Customer relationships | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 539 | ||||||||||||||||
Useful life of intangible assets acquired | 20 years | ||||||||||||||||
Tripp Lite | Technology intangible assets | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 32 | ||||||||||||||||
Useful life of intangible assets acquired | 5 years | ||||||||||||||||
Tripp Lite | Trademarks | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 33 | ||||||||||||||||
Useful life of intangible assets acquired | 15 years | ||||||||||||||||
Green Motion, SA | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Total consideration to be transferred for acquisition | $ 106 | ||||||||||||||||
Cash paid at closing | 49 | ||||||||||||||||
Contingent consideration | 57 | $ 18 | |||||||||||||||
Fair value of contingent future payments | $ 122 | ||||||||||||||||
HuanYu High Tech | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Ownership interest acquired (as a percent) | 50% | ||||||||||||||||
Mission Systems | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 1,462 | ||||||||||||||||
Operating profit of acquiree since acquisition date | $ 128 | ||||||||||||||||
Revenue of acquiree since acquisition date | $ 450 | ||||||||||||||||
Total consideration to be transferred for acquisition | 2,800 | ||||||||||||||||
Goodwill, tax deductible amount | 572 | ||||||||||||||||
Mission Systems | Customer relationships | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 764 | ||||||||||||||||
Useful life of intangible assets acquired | 22 years | ||||||||||||||||
Mission Systems | Technology intangible assets | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 612 | ||||||||||||||||
Useful life of intangible assets acquired | 21 years | ||||||||||||||||
Mission Systems | Order or Production Backlog | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 86 | ||||||||||||||||
Useful life of intangible assets acquired | 2 years | ||||||||||||||||
Jiangsu YiNeng Electric's busway business | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Ownership interest acquired (as a percent) | 50% | ||||||||||||||||
Royal Power Solutions | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 341 | ||||||||||||||||
Operating profit of acquiree since acquisition date | 21 | ||||||||||||||||
Revenue of acquiree since acquisition date | $ 158 | ||||||||||||||||
Total consideration to be transferred for acquisition | 610 | ||||||||||||||||
Royal Power Solutions | Customer relationships | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 230 | ||||||||||||||||
Useful life of intangible assets acquired | 17 years | ||||||||||||||||
Royal Power Solutions | Technology intangible assets | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 90 | ||||||||||||||||
Useful life of intangible assets acquired | 16 years | ||||||||||||||||
Royal Power Solutions | Trademarks | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 16 | ||||||||||||||||
Useful life of intangible assets acquired | 15 years | ||||||||||||||||
Royal Power Solutions | Other | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other intangible assets | $ 5 | ||||||||||||||||
Useful life of intangible assets acquired | 2 years | ||||||||||||||||
Jiangsu Huineng Electric Co. Ltd. | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Ownership interest acquired (as a percent) | 50% | ||||||||||||||||
Jiangsu Ryan Electrical Co. Ltd. | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Ownership interest acquired (as a percent) | 49% |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES OF BUSINESSES - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 05, 2022 | Dec. 31, 2021 | Jun. 01, 2021 | Mar. 17, 2021 |
Allocations | ||||||
Goodwill | $ 14,977 | $ 14,796 | $ 14,751 | |||
Tripp Lite | ||||||
Allocations | ||||||
Short-term investments | $ 5 | |||||
Accounts receivable | 93 | |||||
Inventory | 179 | |||||
Prepaid expenses and other current assets | 5 | |||||
Property, plant and equipment | 1 | |||||
Other intangible assets | 604 | |||||
Other assets | 2 | |||||
Accounts payable | (13) | |||||
Other current liabilities | (34) | |||||
Other noncurrent liabilities | (167) | |||||
Total identifiable net assets | 675 | |||||
Goodwill | 976 | |||||
Total consideration, net of cash received | $ 1,651 | |||||
Mission Systems | ||||||
Allocations | ||||||
Accounts receivable | $ 84 | |||||
Inventory | 178 | |||||
Prepaid expenses and other current assets | 50 | |||||
Property, plant and equipment | 97 | |||||
Other intangible assets | 1,462 | |||||
Other assets | 15 | |||||
Accounts payable | (40) | |||||
Other current liabilities | (202) | |||||
Other noncurrent liabilities | (108) | |||||
Total identifiable net assets | 1,536 | |||||
Goodwill | 1,264 | |||||
Total consideration, net of cash received | $ 2,800 | |||||
Royal Power Solutions | ||||||
Allocations | ||||||
Accounts receivable | $ 35 | |||||
Inventory | 46 | |||||
Prepaid expenses and other current assets | 1 | |||||
Property, plant and equipment | 31 | |||||
Other intangible assets | 341 | |||||
Other assets | 8 | |||||
Accounts payable | (25) | |||||
Other current liabilities | (14) | |||||
Other noncurrent liabilities | (68) | |||||
Total identifiable net assets | 355 | |||||
Goodwill | 255 | |||||
Total consideration, net of cash received | $ 610 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Sales recognized over time, as a percent of Consolidated Net Sales (less than) (as a percent) | 5% | |
Accrued rebates | $ 402 | $ 400 |
Accounts receivables from customers | 3,966 | 3,581 |
Unbilled receivables | 289 | 233 |
Deferred revenue liabilities, included in other current liabilities | 610 | $ 489 |
Backlog of unsatisfied or partially satisfied obligations | $ 13,000 | |
Backlog expected to be recognized in the next twelve months, percent | 76% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 12 months |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 23,196 | $ 20,752 | $ 19,628 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 14,071 | 12,353 | 10,868 |
Electrical Americas | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 10,098 | 8,497 | 7,242 |
Electrical Global | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 6,084 | 5,848 | 5,516 |
Aerospace | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 3,413 | 3,039 | 2,648 |
Aerospace | Original Equipment Manufacturers | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 1,350 | 1,209 | 1,018 |
Aerospace | Aftermarket | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 1,183 | 977 | 823 |
Aerospace | Industrial and Other | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 878 | 854 | 807 |
Vehicle | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 2,965 | 2,830 | 2,579 |
eMobility | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 636 | 538 | 343 |
Hydraulics | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 0 | 0 | 1,300 |
Hydraulics | United States | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 0 | 0 | 534 |
Hydraulics | Rest of World | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 0 | 0 | 766 |
Products | Electrical Americas | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 2,949 | 2,732 | 2,255 |
Products | Electrical Global | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 3,462 | 3,424 | 3,283 |
Systems | Electrical Americas | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 7,149 | 5,765 | 4,987 |
Systems | Electrical Global | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 2,622 | 2,424 | 2,233 |
Commercial | Vehicle | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 1,784 | 1,736 | 1,438 |
Passenger and Light Duty | Vehicle | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 1,180 | $ 1,094 | $ 1,141 |
REVENUE RECOGNITION - Changes i
REVENUE RECOGNITION - Changes in Deferred Revenue Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | $ 508 | $ 422 |
Customer deposits and billings | 2,368 | 1,656 |
Revenue recognized in the period | (2,256) | (1,541) |
Translation and other | 6 | (29) |
Balance at end of period | $ 626 | $ 508 |
CREDIT LOSSES FOR RECEIVABLES -
CREDIT LOSSES FOR RECEIVABLES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Credit Loss [Abstract] | ||
Allowance for credit losses | $ 38 | $ 31 |
INVENTORY - Summary (Details)
INVENTORY - Summary (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,515 | $ 1,275 |
Work-in-process | 870 | 781 |
Finished goods | 1,354 | 1,375 |
Total inventory | $ 3,739 | $ 3,430 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 14,796 | $ 14,751 |
Additions | 445 | |
Translation | 181 | (400) |
Balance at end of period | 14,977 | 14,796 |
Electrical Americas | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 7,402 | 7,417 |
Additions | 5 | |
Translation | 13 | (19) |
Balance at end of period | 7,415 | 7,402 |
Electrical Global | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 3,929 | 4,183 |
Additions | 2 | |
Translation | 109 | (255) |
Balance at end of period | 4,038 | 3,929 |
Aerospace | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 2,844 | 2,781 |
Additions | 184 | |
Translation | 57 | (122) |
Balance at end of period | 2,901 | 2,844 |
Vehicle | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 287 | 290 |
Additions | 0 | |
Translation | 2 | (2) |
Balance at end of period | 289 | 287 |
eMobility | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 334 | 80 |
Additions | 255 | |
Translation | 1 | (1) |
Balance at end of period | $ 334 | $ 334 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets by Major Class (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of other intangible assets | ||
Intangible assets not subject to amortization | $ 1,207 | $ 1,201 |
Intangible assets subject to amortization | ||
Historical cost | 8,031 | 7,952 |
Accumulated amortization | 4,146 | 3,667 |
Customer relationships | ||
Intangible assets subject to amortization | ||
Historical cost | 4,742 | 4,677 |
Accumulated amortization | 2,423 | 2,156 |
Patents and technology | ||
Intangible assets subject to amortization | ||
Historical cost | 1,990 | 1,987 |
Accumulated amortization | 948 | 830 |
Trademarks | ||
Intangible assets subject to amortization | ||
Historical cost | 1,123 | 1,113 |
Accumulated amortization | 642 | 570 |
Other | ||
Intangible assets subject to amortization | ||
Historical cost | 176 | 175 |
Accumulated amortization | $ 133 | $ 111 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense of Intangible Assets (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 432 |
2024 | 406 |
2025 | 401 |
2026 | 385 |
2027 | 376 |
2028 | $ 315 |
SUPPLY CHAIN FINANCE PROGRAM (D
SUPPLY CHAIN FINANCE PROGRAM (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Supplier Finance Program, Obligation [Roll Forward] | |
Balance at beginning period | $ 219 |
Invoices confirmed during the period | 1,339 |
Invoices paid during the period | (1,185) |
Translation | (4) |
Balance at ending period | $ 369 |
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 200 | $ 179 | $ 164 |
Finance lease cost: Amortization of lease assets | 15 | 11 | 12 |
Finance lease cost: Interest on lease liabilities | 1 | 1 | 2 |
Short-term lease cost | 18 | 17 | 15 |
Variable lease cost | 28 | 27 | 16 |
Sublease income | (1) | (1) | (2) |
Total lease cost | $ 261 | $ 234 | $ 207 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Gain on sale leaseback transactions | $ 53 | $ 81 | $ 0 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 5 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 20 years |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflows - payments on operating leases | $ (180) | $ (159) | $ (158) |
Operating cash outflows - interest payments on finance leases | (1) | (2) | (2) |
Financing cash outflows - payments on finance lease obligations | (18) | (11) | (11) |
Lease assets obtained in exchange for new lease obligations, including leases acquired: | |||
Operating leases | 183 | 245 | 145 |
Finance leases | $ 38 | $ 10 | $ 14 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 648 | $ 570 |
Other current liabilities | 135 | 127 |
Operating lease liabilities | 533 | 459 |
Total operating lease liabilities | 668 | 586 |
Accumulated depreciation | (36) | (20) |
Net property, plant and equipment | 39 | 26 |
Current portion of long-term debt | 13 | 10 |
Long-term debt | 22 | 18 |
Total finance lease liabilities | $ 35 | $ 28 |
Weighted-average remaining lease term | ||
Operating leases | 7 years 7 months 6 days | 7 years 7 months 6 days |
Finance leases | 4 years 4 months 24 days | 4 years 10 months 24 days |
Weighted-average discount rate | ||
Operating leases | 4% | 3.30% |
Finance leases | 3.60% | 3% |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt less current portion | Long-term debt less current portion |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-Term Debt and Lease Obligation, Current | Long-Term Debt and Lease Obligation, Current |
Land and buildings | ||
Lessee, Lease, Description [Line Items] | ||
Finance Lease, right-of-use asset | $ 13 | $ 6 |
Machinery and equipment | ||
Lessee, Lease, Description [Line Items] | ||
Finance Lease, right-of-use asset | $ 62 | $ 40 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 156 | |
2025 | 126 | |
2026 | 106 | |
2027 | 85 | |
2028 | 63 | |
Thereafter | 259 | |
Total lease payments | 795 | |
Less imputed interest | 127 | |
Total present value of lease liabilities | 668 | $ 586 |
Finance Leases | ||
2024 | 14 | |
2025 | 8 | |
2026 | 6 | |
2027 | 4 | |
2028 | 2 | |
Thereafter | 4 | |
Total lease payments | 38 | |
Less imputed interest | 3 | |
Total present value of lease liabilities | $ 35 | $ 28 |
DEBT - Long-term Debt, includin
DEBT - Long-term Debt, including Current Portion (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 9,261 | $ 8,331 |
Less current portion of long-term debt | (1,017) | (10) |
Long-term debt less current portion | 8,244 | 8,321 |
Debentures | 6.50% debentures due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 145 | 145 |
Debt instrument, stated interest rate | 6.50% | |
Debentures | 7.65% debentures due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 200 | 200 |
Debt instrument, stated interest rate | 7.65% | |
Debentures | 5.45% debentures due 2034 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 137 | 137 |
Debt instrument, stated interest rate | 5.45% | |
Notes | 0.75% Euro notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 608 | 587 |
Debt instrument, stated interest rate | 0.75% | |
Notes | Floating rate Euro notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 332 | 0 |
Notes | 0.70% Euro notes due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 553 | 534 |
Debt instrument, stated interest rate | 0.70% | |
Notes | 0.128% Euro notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 995 | 960 |
Debt instrument, stated interest rate | 0.128% | |
Notes | 0.577% Euro notes due 2030 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 663 | 640 |
Debt instrument, stated interest rate | 0.577% | |
Notes | 5.80% notes due 2037 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 240 | 240 |
Debt instrument, stated interest rate | 5.80% | |
Notes | 5.25% to 7.875% notes (maturities ranging from 2024 to 2035) | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 165 | 165 |
Notes | 5.25% to 7.875% notes (maturities ranging from 2024 to 2035) | Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 5.25% | |
Notes | 5.25% to 7.875% notes (maturities ranging from 2024 to 2035) | Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 7.875% | |
Senior notes | 3.10% senior notes due 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 700 | 700 |
Debt instrument, stated interest rate | 3.10% | |
Senior notes | 4.35% senior notes due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500 | 0 |
Debt instrument, stated interest rate | 4.35% | |
Senior notes | 4.00% senior notes due 2032 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 700 | 700 |
Debt instrument, stated interest rate | 4% | |
Senior notes | 4.15% sustainability-linked senior notes due 2033 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,300 | 1,300 |
Debt instrument, stated interest rate | 4.15% | |
Senior notes | 4.15% senior notes due 2042 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,000 | 1,000 |
Debt instrument, stated interest rate | 4.15% | |
Senior notes | 3.92% senior notes due 2047 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 300 | 300 |
Debt instrument, stated interest rate | 3.92% | |
Senior notes | 4.70% senior notes due 2052 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 700 | 700 |
Debt instrument, stated interest rate | 4.70% | |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 25 | $ 23 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 12 Months Ended | |||||||
May 18, 2023 USD ($) | Mar. 03, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 02, 2023 USD ($) | Mar. 03, 2023 EUR (€) | Oct. 03, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Proceeds from borrowings | $ 818,000,000 | $ 1,995,000,000 | $ 1,798,000,000 | |||||
Short-term debt | 8,000,000 | 324,000,000 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings outstanding | 0 | |||||||
Revolving Credit Facility | Rest of World | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings outstanding | 24,000,000 | |||||||
Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | 1,070,000,000 | |||||||
Letters of credit outstanding, amount | $ 451,000,000 | |||||||
0.75% Euro notes due 2024 | Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate | 0.75% | |||||||
0.70% Euro notes due 2025 | Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate | 0.70% | |||||||
0.128% Euro Notes Due 2026 | Notes | Tranche One | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate | 0.128% | |||||||
0.577% Euro Notes Due 2030 | Notes | Tranche Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate | 0.577% | |||||||
Commercial Paper | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 3,000,000,000 | |||||||
Borrowings outstanding | $ 0 | |||||||
Commercial Paper | Revolving Credit Facility | United States | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings outstanding | $ 300,000,000 | |||||||
Weighted average interest rate | 4.67% | |||||||
Five Year Credit Facility Expiring On October 1, 2027 | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 2,500,000,000 | |||||||
Long-term debt, term | 5 years | |||||||
364 Day Credit Facility Expiring On October 2, 2023 | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 500,000,000 | |||||||
Long-term debt, term | 364 days | |||||||
2023 Euro Notes | Senior notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value of debt instrument | $ 318,000,000 | € 300,000,000 | ||||||
Redemption price (as a percent) | 100.50% | |||||||
2023 Euro Notes | Senior notes | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.25% | |||||||
2023 Notes | Senior notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate | 4.35% | |||||||
Face value of debt instrument | $ 500,000,000 | |||||||
Redemption price (as a percent) | 101% | |||||||
Proceeds from borrowings | $ 497,000,000 | |||||||
364 Day Credit Facility Expiring On September 30, 2024 | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 500,000,000 | |||||||
Long-term debt, term | 364 days |
DEBT - Maturities of Long-term
DEBT - Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 1,017 |
2025 | 706 |
2026 | 1,073 |
2027 | 704 |
2028 | $ 502 |
DEBT - Interest Paid on Debt (D
DEBT - Interest Paid on Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Interest paid on debt | $ 319 | $ 250 | $ 207 |
RETIREMENT BENEFITS PLANS - Obl
RETIREMENT BENEFITS PLANS - Obligations and Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Funded status | |||
Fair value of plan assets | $ 4,237 | $ 4,121 | |
Pension plans | United States | |||
Funded status | |||
Fair value of plan assets | 2,604 | 2,635 | $ 3,672 |
Benefit obligations | (2,824) | (2,807) | (3,760) |
Funded status | (220) | (172) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Other assets | 0 | 0 | |
Other current liabilities | (18) | (19) | |
Pension liabilities and Other postretirement benefits liabilities | (202) | (153) | |
Total | (220) | (172) | |
Amounts recognized in Accumulated other comprehensive loss (pre-tax) | |||
Net actuarial loss (gain) | 867 | 807 | |
Prior service cost (credit) | 4 | 5 | |
Total | 871 | 811 | 713 |
Pension plans | Non-United States plans | |||
Funded status | |||
Fair value of plan assets | 1,633 | 1,486 | 2,247 |
Benefit obligations | (2,022) | (1,813) | (2,837) |
Funded status | (389) | (327) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Other assets | 210 | 199 | |
Other current liabilities | (33) | (30) | |
Pension liabilities and Other postretirement benefits liabilities | (566) | (496) | |
Total | (389) | (327) | |
Amounts recognized in Accumulated other comprehensive loss (pre-tax) | |||
Net actuarial loss (gain) | 649 | 491 | |
Prior service cost (credit) | 12 | 14 | |
Total | 661 | 505 | 763 |
Other postretirement benefits plans | |||
Funded status | |||
Fair value of plan assets | 17 | 16 | 19 |
Benefit obligations | (212) | (209) | (304) |
Funded status | (195) | (194) | |
Amounts recognized in the Consolidated Balance Sheets | |||
Other assets | 0 | 0 | |
Other current liabilities | (15) | (17) | |
Pension liabilities and Other postretirement benefits liabilities | (180) | (177) | |
Total | (195) | (194) | |
Amounts recognized in Accumulated other comprehensive loss (pre-tax) | |||
Net actuarial loss (gain) | (92) | (119) | |
Prior service cost (credit) | (1) | (2) | |
Total | $ (93) | $ (120) | $ (55) |
RETIREMENT BENEFITS PLANS - Cha
RETIREMENT BENEFITS PLANS - Change in Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension plans | United States | |||
Change in benefit obligations | |||
Balance at January 1 | $ 2,807 | $ 3,760 | |
Service cost | 19 | 27 | $ 37 |
Interest cost | 142 | 117 | 70 |
Actuarial loss (gain) | 104 | (713) | |
Gross benefits paid | (250) | (386) | |
Currency translation | 0 | 0 | |
Plan amendments | 1 | 1 | |
Other | 0 | 0 | |
Balance at December 31 | 2,824 | 2,807 | 3,760 |
Accumulated benefit obligation | 2,807 | 2,784 | |
Pension plans | Non-United States plans | |||
Change in benefit obligations | |||
Balance at January 1 | 1,813 | 2,837 | |
Service cost | 43 | 59 | 72 |
Interest cost | 85 | 47 | 40 |
Actuarial loss (gain) | 104 | (817) | |
Gross benefits paid | (110) | (99) | |
Currency translation | 85 | (218) | |
Plan amendments | (1) | 1 | |
Other | 3 | 3 | |
Balance at December 31 | 2,022 | 1,813 | 2,837 |
Accumulated benefit obligation | 1,922 | 1,737 | |
Other postretirement benefits plans | |||
Change in benefit obligations | |||
Balance at January 1 | 209 | 304 | |
Service cost | 1 | 1 | 1 |
Interest cost | 10 | 7 | 6 |
Actuarial loss (gain) | 11 | (73) | |
Gross benefits paid | (31) | (38) | |
Currency translation | 1 | (3) | |
Plan amendments | 0 | (2) | |
Other | 11 | 13 | |
Balance at December 31 | $ 212 | $ 209 | $ 304 |
RETIREMENT BENEFITS PLANS - C_2
RETIREMENT BENEFITS PLANS - Change in Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in plan assets | |||
Beginning balance | $ 4,121 | ||
Ending balance | 4,237 | $ 4,121 | |
Pension plans | |||
Change in plan assets | |||
Employer contributions | 113 | 116 | $ 343 |
Pension plans | United States | |||
Change in plan assets | |||
Beginning balance | 2,635 | 3,672 | |
Actual return on plan assets | 203 | (682) | |
Employer contributions | 16 | 30 | 237 |
Gross benefits paid | (250) | (386) | |
Currency translation | 0 | 0 | |
Other | 0 | 0 | |
Ending balance | 2,604 | 2,635 | 3,672 |
Pension plans | Non-United States plans | |||
Change in plan assets | |||
Beginning balance | 1,486 | 2,247 | |
Actual return on plan assets | 86 | (554) | |
Employer contributions | 97 | 85 | 106 |
Gross benefits paid | (110) | (99) | |
Currency translation | 71 | (197) | |
Other | 3 | 3 | |
Ending balance | 1,633 | 1,486 | 2,247 |
Other postretirement benefits plans | |||
Change in plan assets | |||
Beginning balance | 16 | 19 | |
Actual return on plan assets | 1 | (2) | |
Employer contributions | 20 | 24 | |
Gross benefits paid | (31) | (38) | |
Currency translation | 0 | 0 | |
Other | 11 | 13 | |
Ending balance | $ 17 | $ 16 | $ 19 |
RETIREMENT BENEFITS PLANS - Com
RETIREMENT BENEFITS PLANS - Components of Pension Plans with Accumulated and Projected Benefit Obligation in Excess of Plan Assets (Details) - Pension plans - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
United States | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Accumulated benefit obligation | $ 2,807 | $ 2,784 |
Fair value of plan assets | 2,604 | 2,635 |
Components of pension plans with a projected benefit obligation in excess of plan assets | ||
Projected benefit obligation | 2,824 | 2,807 |
Fair value of plan assets | 2,604 | 2,635 |
Non-United States plans | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Accumulated benefit obligation | 742 | 654 |
Fair value of plan assets | 203 | 173 |
Components of pension plans with a projected benefit obligation in excess of plan assets | ||
Projected benefit obligation | 827 | 722 |
Fair value of plan assets | $ 228 | $ 195 |
RETIREMENT BENEFITS PLANS - C_3
RETIREMENT BENEFITS PLANS - Changes in Pension and Other Postretirement Liabilities Recognized in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pension plans | United States | ||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | ||
Balance at January 1 | $ 811 | $ 713 |
Prior service cost arising during the year | 1 | 1 |
Net loss (gain) arising during the year | 97 | 173 |
Currency translation | 0 | 0 |
Less amounts included in expense during the year | (38) | (76) |
Net change for the year | 60 | 98 |
Balance at December 31 | 871 | 811 |
Pension plans | Non-United States plans | ||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | ||
Balance at January 1 | 505 | 763 |
Prior service cost arising during the year | (1) | 1 |
Net loss (gain) arising during the year | 139 | (149) |
Currency translation | 29 | (64) |
Less amounts included in expense during the year | (11) | (47) |
Net change for the year | 156 | (259) |
Balance at December 31 | 661 | 505 |
Other postretirement benefits plans | ||
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss | ||
Balance at January 1 | (120) | (55) |
Prior service cost arising during the year | 0 | (2) |
Net loss (gain) arising during the year | 10 | (69) |
Currency translation | 0 | (1) |
Less amounts included in expense during the year | 17 | 7 |
Net change for the year | 27 | (65) |
Balance at December 31 | $ (93) | $ (120) |
RETIREMENT BENEFITS PLANS - Ben
RETIREMENT BENEFITS PLANS - Benefits Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Total expense (income) | $ 66 | ||
Pension plans | United States | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | $ 19 | $ 27 | 37 |
Interest cost | 142 | 117 | 70 |
Expected return on plan assets | (195) | (204) | (223) |
Amortization | 4 | 15 | 36 |
Total | (30) | (46) | (80) |
Settlements, curtailments, and special termination benefits | 34 | 61 | 65 |
Total expense (income) | 4 | 15 | (15) |
Pension plans | Non-United States plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | 43 | 59 | 72 |
Interest cost | 85 | 47 | 40 |
Expected return on plan assets | (121) | (115) | (120) |
Amortization | 7 | 45 | 71 |
Total | 14 | 37 | 63 |
Settlements, curtailments, and special termination benefits | 4 | 2 | 17 |
Total expense (income) | 18 | 39 | 80 |
Other postretirement benefits plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Service cost | 1 | 1 | 1 |
Interest cost | 10 | 7 | 6 |
Expected return on plan assets | (1) | (1) | 0 |
Amortization | (17) | (7) | (5) |
Total | (7) | 0 | 2 |
Settlements, curtailments, and special termination benefits | 0 | 0 | (1) |
Total expense (income) | $ (7) | $ 0 | 1 |
Hydraulics Business | Pension plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Settlements, curtailments, and special termination benefits | $ 13 |
RETIREMENT BENEFITS PLANS - Pen
RETIREMENT BENEFITS PLANS - Pension Plans Assumptions (Details) - Pension plans | 12 Months Ended | |||
Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
United States | ||||
Assumptions used to determine benefit obligation at year-end (as a percent) | ||||
Discount rate | 5.14% | 5.47% | 2.81% | |
Rate of compensation increase | 3.40% | 3.33% | 3.12% | |
Interest rate used to credit cash balance plans | 4.01% | 3.67% | 1.99% | |
Assumptions used to determine expense (as a percent) | ||||
Discount rate used to determine benefit obligation | 5.47% | 4.30% | 2.61% | |
Discount rate used to determine service cost | 5.54% | 4.41% | 2.92% | |
Discount rate used to determine interest cost | 5.33% | 3.94% | 1.83% | |
Expected long-term return on plan assets | 6.50% | 6.50% | 6.75% | |
Rate of compensation increase | 3.33% | 3.12% | 3.12% | |
Interest rate used to credit cash balance plans | 3.67% | 2.62% | 2.14% | |
Non-United States plans | ||||
Assumptions used to determine benefit obligation at year-end (as a percent) | ||||
Discount rate | 4.52% | 4.83% | 2.01% | |
Rate of compensation increase | 3.17% | 3.12% | 3.01% | |
Interest rate used to credit cash balance plans | 1.59% | 2.32% | 0.56% | |
Assumptions used to determine expense (as a percent) | ||||
Discount rate used to determine benefit obligation | 4.83% | 2.01% | 1.63% | |
Discount rate used to determine service cost | 5.90% | 2.98% | 2.52% | |
Discount rate used to determine interest cost | 4.80% | 1.84% | 1.36% | |
Expected long-term return on plan assets | 6.32% | 5.70% | 5.62% | |
Rate of compensation increase | 3.12% | 3.01% | 3.02% | |
Interest rate used to credit cash balance plans | 2.32% | 0.56% | 0.52% | |
Forecast | United States | ||||
Assumptions used to determine expense (as a percent) | ||||
Expected long-term return on plan assets | 6.50% | |||
Forecast | Non-United States plans | ||||
Assumptions used to determine expense (as a percent) | ||||
Expected long-term return on plan assets | 6.79% |
RETIREMENT BENEFITS PLANS - Oth
RETIREMENT BENEFITS PLANS - Other Postretirement Benefits Plan Assumptions (Details) - Other postretirement benefits plans | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Assumptions used to determine benefit obligation at year-end (as a percent) | |||
Discount rate | 5.11% | 5.46% | 2.79% |
Health care cost trend rate assumed for next year | 7.70% | 7.10% | 7.45% |
Ultimate health care cost trend rate | 4.75% | 4.75% | 4.75% |
Year ultimate health care cost trend rate is achieved | 2033 | 2031 | 2031 |
Assumptions used to determine expense (as a percent) | |||
Discount rate used to determine benefit obligation | 5.46% | 2.79% | 2.44% |
Discount rate used to determine service cost | 5.53% | 3.03% | 2.76% |
Discount rate used to determine interest cost | 5.32% | 2.24% | 1.70% |
Initial health care cost trend rate | 7.10% | 7.45% | 7.38% |
Ultimate health care cost trend rate | 4.75% | 4.75% | 4.75% |
Year ultimate health care cost trend rate is achieved | 2031 | 2031 | 2030 |
RETIREMENT BENEFITS PLANS - Emp
RETIREMENT BENEFITS PLANS - Employer Contributions to Retirement Benefits Plans (Details) - Pension plans - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | $ 115 | ||
Employer contributions to pension plans | 113 | $ 116 | $ 343 |
United States | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | 19 | ||
Employer contributions to pension plans | 16 | 30 | 237 |
Non-United States plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Expected future contributions, defined benefit plans | 96 | ||
Employer contributions to pension plans | $ 97 | $ 85 | $ 106 |
RETIREMENT BENEFITS PLANS - Est
RETIREMENT BENEFITS PLANS - Estimated Pension and Other Postretirement Benefit Payments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Pension plans | United States | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2024 | $ 286 |
2025 | 267 |
2026 | 257 |
2027 | 246 |
2028 | 236 |
2029 - 2033 | 1,061 |
Pension plans | Non-United States plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2024 | 111 |
2025 | 113 |
2026 | 116 |
2027 | 121 |
2028 | 123 |
2029 - 2033 | 669 |
Other postretirement benefits plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2024 | 18 |
Medicare prescription drug subsidy 2024 | 0 |
2025 | 17 |
Medicare prescription drug subsidy 2025 | 0 |
2026 | 16 |
Medicare prescription drug subsidy 2026 | 0 |
2027 | 19 |
Medicare prescription drug subsidy 2027 | 0 |
2028 | 18 |
Medicare prescription drug subsidy 2028 | 0 |
2029 - 2033 | 82 |
Medicare prescription drug subsidy 2029 - 2033 | $ (1) |
RETIREMENT BENEFITS PLANS - Fai
RETIREMENT BENEFITS PLANS - Fair Value of Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
United States pension plans percentage of worldwide pension assets | 61% | |
United Kingdom pension plans percentage of worldwide pension assets | 26% | |
United States pension plans' target allocation of United States equities | 15% | |
United States pension plans' target allocation of non-United States equities | 7% | |
United States pension plans' target allocation of real estate | 3% | |
United State pension plans' target allocation of debt securities | 64% | |
United States pension plans' target allocation of other, including private equity, private debt, and cash equivalents | 11% | |
United Kingdom pension plans' target allocation of equities | 31% | |
Total pension plan assets | $ 4,237 | $ 4,121 |
Pending purchases and sales of plan assets, and interest receivable | (67) | (69) |
Unfunded commitments | 154 | 180 |
Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 729 | 834 |
Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 2,036 | 1,694 |
Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 569 | 559 |
Non-United States equity and global equities | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 154 | 173 |
Non-United States equity and global equities | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Non-United States equity and global equities | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 154 | 173 |
Non-United States equity and global equities | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States equity | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 76 | 54 |
United States equity | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States equity | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 76 | 54 |
United States equity | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed income | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 115 | 620 |
Fixed income | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed income | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 115 | 620 |
Fixed income | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed income securities | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 1,607 | 744 |
Fixed income securities | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Fixed income securities | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 1,607 | 744 |
Fixed income securities | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States treasuries | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 566 | 660 |
United States treasuries | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 566 | 660 |
United States treasuries | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
United States treasuries | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Real estate | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 291 | 295 |
Real estate | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 65 | 76 |
Real estate | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 27 | 20 |
Real estate | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 199 | 199 |
Cash equivalents | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 36 | 77 |
Cash equivalents | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 14 | 21 |
Cash equivalents | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 22 | 56 |
Cash equivalents | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Exchange traded funds | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 84 | 77 |
Exchange traded funds | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 84 | 77 |
Exchange traded funds | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Exchange traded funds | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Other | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 405 | 387 |
Other | Quoted prices in active markets for identical assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 0 | 0 |
Other | Other observable inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 35 | 27 |
Other | Unobservable inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 370 | 360 |
Common collective and other trusts measured at net asset value | Fair Value Measured at Net Asset Value Per Share | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | 968 | 1,100 |
Money market funds measured at net asset value | Fair Value Measured at Net Asset Value Per Share | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pension plan assets | $ 2 | $ 3 |
RETIREMENT BENEFITS PLANS - C_4
RETIREMENT BENEFITS PLANS - Change in Plan Level 3 Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | $ 4,121 | |
Ending balance | 4,237 | $ 4,121 |
Unobservable inputs (Level 3) | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 559 | |
Ending balance | 569 | 559 |
Unobservable inputs (Level 3) | Real estate | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 199 | |
Ending balance | 199 | 199 |
Unobservable inputs (Level 3) | Other | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 360 | |
Ending balance | 370 | 360 |
Pension plans | Unobservable inputs (Level 3) | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 559 | 535 |
Gains (losses) relating to assets still held at year-end | 26 | (2) |
Purchases, sales, settlements - net | (7) | 26 |
Transfers into or out of Level 3 | (9) | 0 |
Ending balance | 569 | 559 |
Pension plans | Unobservable inputs (Level 3) | Real estate | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 199 | 216 |
Gains (losses) relating to assets still held at year-end | 7 | 1 |
Purchases, sales, settlements - net | (7) | (18) |
Transfers into or out of Level 3 | 0 | 0 |
Ending balance | 199 | 199 |
Pension plans | Unobservable inputs (Level 3) | Other | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning balance | 360 | 319 |
Gains (losses) relating to assets still held at year-end | 19 | (3) |
Purchases, sales, settlements - net | 0 | 44 |
Transfers into or out of Level 3 | (9) | 0 |
Ending balance | $ 370 | $ 360 |
RETIREMENT BENEFITS PLANS - F_2
RETIREMENT BENEFITS PLANS - Fair Value of Other Postretirement Benefits Plan Assets (Details) - Other postretirement benefits plans - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | $ 2 | $ 3 |
Common collective and other trusts measured at net asset value | 15 | 13 |
Total other postretirement benefits plan assets | 17 | 16 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 2 | 3 |
Total other postretirement benefits plan assets | 2 | 3 |
Other observable inputs (Level 2) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 0 | 0 |
Total other postretirement benefits plan assets | 0 | 0 |
Unobservable inputs (Level 3) | ||
Fair Value of Other Postretirement Benefits Plan Assets [Line Items] | ||
Cash equivalents | 0 | 0 |
Total other postretirement benefits plan assets | $ 0 | $ 0 |
RETIREMENT BENEFITS PLANS - Def
RETIREMENT BENEFITS PLANS - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Employer contributions to defined contribution plans | $ 201 | $ 182 | $ 171 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) site | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of environmental remediation sites world wide | 110 | |
Number of environmental remediation sites world wide with individual significance | 0 | |
Accrual for environmental loss contingencies | $ | $ 71 | $ 73 |
Environmental Loss Contingency, Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag | Company had an accrual totaling | Company had an accrual totaling |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Current and Long-Term Warranty Accruals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current and long-term warranty accruals [Roll Forward] | |||
Balance at January 1 | $ 125 | $ 125 | $ 151 |
Provision | 100 | 83 | 65 |
Settled | (91) | (81) | (112) |
Warranty accruals from business acquisitions and other | 2 | (2) | 21 |
Balance at December 31 | $ 136 | $ 125 | $ 125 |
INCOME TAXES - Income (Loss) be
INCOME TAXES - Income (Loss) before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | $ 3,827 | $ 2,911 | $ 2,896 |
Ireland | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | (3) | 198 | 153 |
Foreign | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Income before income taxes | $ 3,830 | $ 2,713 | $ 2,743 |
INCOME TAXES - Income Tax (Bene
INCOME TAXES - Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current | |||
Ireland | $ 42 | $ 3 | $ 50 |
Foreign | 744 | 570 | 730 |
Total current income tax expense | 786 | 573 | 780 |
Deferred | |||
Ireland | 1 | 13 | (2) |
Foreign | (183) | (141) | (28) |
Total deferred income tax expense (benefit) | (182) | (128) | (30) |
Total income tax expense | $ 604 | $ 445 | $ 750 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Income taxes at the applicable statutory rate | 25% | 25% | 25% |
Effective income tax expense rate | 15.80% | 15.30% | 25.90% |
Ireland operations | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Ireland tax on trading income | (1.30%) | (1.30%) | (0.70%) |
Nondeductible interest expense | 2.60% | 1% | 0.60% |
Ireland Other - net | (0.20%) | (0.50%) | (0.20%) |
Foreign operations | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Ireland Other - net | 2.20% | 1.60% | (0.10%) |
Tax impact on sale of businesses | 0% | 0% | 9.10% |
Earnings taxed at other than the applicable statutory tax rate | (9.90%) | (10.20%) | (8.00%) |
Worldwide operations | |||
Reconciliation of income taxes from appropriate statutory rate to the consolidated effective income tax rate [Line Items] | |||
Adjustments to tax liabilities | (0.20%) | (0.40%) | 0.20% |
Adjustments to valuation allowances | (2.40%) | 0.10% | 0% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 12 Months Ended | |||||
Dec. 31, 2023 USD ($) taxCase advancedPricingAgreement | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 21, 2022 USD ($) | Aug. 31, 2021 USD ($) | Nov. 30, 2019 USD ($) | |
Income Taxes [Abstract] | ||||||
Income tax expense | $ 604,000,000 | $ 445,000,000 | $ 750,000,000 | |||
Effective income tax (benefit) expense rate (as a percent) | 15.80% | 15.30% | 25.90% | |||
Provision for income taxes on undistributed earnings of foreign subsidiaries | $ 0 | |||||
Undistributed earnings of foreign subsidiaries | 29,900,000,000 | |||||
Unrecognized tax benefits that would impact effective tax rate | 889,000,000 | |||||
Income tax examination, penalties and interest accrued | 188,000,000 | $ 137,000,000 | ||||
Secretariat of the Federal Revenue Bureau of Brazil | ||||||
Income Taxes [Abstract] | ||||||
Alleged tax deficiency | $ 34,000,000 | |||||
Income tax examination, penalties and interest accrued | $ 121,000,000 | |||||
Pledged real estate assets | 20,000,000 | |||||
Real estate bond | 138,000,000 | |||||
Real estate cash deposit | 26,000,000 | |||||
Tax Years 2005-2006 | ||||||
Income Taxes [Abstract] | ||||||
IRS Statutory Notice of Deficiency proposed assessment of additional federal taxes | 75,000,000 | |||||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | $ 52,000,000 | |||||
Number of advance pricing agreements | advancedPricingAgreement | 2 | |||||
Tax Years 2005-2012 | Secretariat of the Federal Revenue Bureau of Brazil | ||||||
Income Taxes [Abstract] | ||||||
Number of tax cases | taxCase | 2 | |||||
Alleged tax deficiency | $ 29,000,000 | |||||
Income tax examination, penalties and interest accrued | $ 122,000,000 | |||||
Tax Years 2007-2010 | ||||||
Income Taxes [Abstract] | ||||||
IRS Statutory Notice of Deficiency proposed assessment of additional federal taxes | $ 190,000,000 | |||||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | 72,000,000 | |||||
Tax Years 2011-2013 | ||||||
Income Taxes [Abstract] | ||||||
IRS Statutory Notice of Deficiency proposed assessment of additional federal taxes | $ 749,000,000 | |||||
Penalties associated with IRS Statutory Notice of Deficiency proposed assessment | $ 110,000,000 | |||||
Hungary And Switzerland | ||||||
Income Taxes [Abstract] | ||||||
Decrease in valuation allowance for income tax loss carryforwards | $ 90,000,000 |
INCOME TAXES- Worldwide Income
INCOME TAXES- Worldwide Income Tax Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 727 | $ 393 | $ 753 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Income Taxes (Details) - Noncurrent assets and liabilities - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accruals and other adjustments | ||
Employee benefits | $ 328 | $ 266 |
Depreciation and amortization | (929) | (1,067) |
Other accruals and adjustments | 408 | 397 |
Ireland income tax loss carryforwards | 2 | 1 |
Foreign income tax loss carryforwards | 3,878 | 4,151 |
Foreign income tax credit carryforwards | 247 | 280 |
Valuation allowance for income tax loss and income tax credit carryforwards | (3,828) | (4,184) |
Other valuation allowances | (50) | (44) |
Total deferred income taxes | $ 56 | $ (200) |
INCOME TAXES - Operating Loss a
INCOME TAXES - Operating Loss and Tax Credit Carryforwards by Expiration Dates (Details) $ in Millions | Dec. 31, 2023 USD ($) |
2024 through 2028 | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | $ 0 |
Deferred income tax assets for income tax loss carryforwards | 0 |
2029 through 2033 | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 0 |
Deferred income tax assets for income tax loss carryforwards | 0 |
2034 through 2038 | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 0 |
Deferred income tax assets for income tax loss carryforwards | 0 |
2039 through 2048 | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 0 |
Deferred income tax assets for income tax loss carryforwards | 0 |
Not subject to expiration | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 10 |
Deferred income tax assets for income tax loss carryforwards | 2 |
Valuation allowance | Ireland | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 0 |
Deferred income tax assets for income tax loss carryforwards | 1 |
Foreign Tax Authority | 2024 through 2028 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 42 |
Deferred income tax assets for income tax loss carryforwards | 14 |
Foreign income tax credit carryforwards | 208 |
Foreign Tax Authority | 2024 through 2028 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 153 |
Foreign Tax Authority | 2024 through 2028 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | 9 |
Foreign Tax Authority | 2029 through 2033 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 6 |
Deferred income tax assets for income tax loss carryforwards | 3 |
Foreign income tax credit carryforwards | 26 |
Foreign Tax Authority | 2029 through 2033 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 16 |
Foreign Tax Authority | 2029 through 2033 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | 2 |
Foreign Tax Authority | 2034 through 2038 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 11,605 |
Deferred income tax assets for income tax loss carryforwards | 2,898 |
Foreign income tax credit carryforwards | 45 |
Foreign Tax Authority | 2034 through 2038 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 43 |
Foreign Tax Authority | 2034 through 2038 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | 2,897 |
Foreign Tax Authority | 2039 through 2048 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 111 |
Deferred income tax assets for income tax loss carryforwards | 30 |
Foreign income tax credit carryforwards | 0 |
Foreign Tax Authority | 2039 through 2048 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 0 |
Foreign Tax Authority | 2039 through 2048 | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | 30 |
Foreign Tax Authority | Not subject to expiration | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 6,619 |
Deferred income tax assets for income tax loss carryforwards | 942 |
Foreign income tax credit carryforwards | 35 |
Foreign Tax Authority | Not subject to expiration | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 35 |
Foreign Tax Authority | Not subject to expiration | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | 940 |
Foreign Tax Authority | Valuation allowance | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Operating loss carryforwards | 0 |
Deferred income tax assets for income tax loss carryforwards | 3,683 |
Foreign income tax credit carryforwards | 145 |
Foreign Tax Authority | Valuation allowance | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Foreign income tax credit carryforwards | 145 |
Foreign Tax Authority | Valuation allowance | After ASU 2013-11 | |
Operating Loss and Tax Credit Carry Forward [Line Items] | |
Deferred income tax assets for income tax loss carryforwards | $ 3,683 |
INCOME TAXES - Gross Unrecogniz
INCOME TAXES - Gross Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1 | $ 1,235 | $ 1,120 | $ 1,036 |
Increases and decreases as a result of positions taken during prior years | |||
Transfers from valuation allowances | 0 | 0 | 6 |
Other increases, including currency translation | 42 | 36 | 22 |
Other decreases, including currency translation | (5) | (16) | (10) |
Increases related to acquired businesses | 0 | 10 | 12 |
Increases as a result of positions taken during the current year | 86 | 97 | 75 |
Decreases relating to settlements with tax authorities | (6) | 0 | (11) |
Decreases as a result of a lapse of the applicable statute of limitations | (52) | (12) | (10) |
Balance at December 31 | $ 1,300 | $ 1,235 | $ 1,120 |
EATON SHAREHOLDERS' EQUITY - Na
EATON SHAREHOLDERS' EQUITY - Narrative (Details) | 12 Months Ended | ||||||||
Feb. 29, 2024 $ / shares | Feb. 23, 2022 USD ($) | Dec. 31, 2023 employee € / shares $ / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | Dec. 31, 2023 USD ($) holder $ / shares shares | Dec. 31, 2022 € / shares | Dec. 31, 2022 USD ($) $ / shares shares | Feb. 27, 2019 USD ($) | |
Subsequent Event [Line Items] | |||||||||
Ordinary shares authorized (shares) | 750,000,000 | ||||||||
Ordinary share par value (USD per share) | $ / shares | $ 0.01 | ||||||||
Ordinary shares outstanding (in shares) | 399,400,000 | 397,800,000 | |||||||
Deferred ordinary shares authorized (shares) | 40,000 | 40,000 | |||||||
Deferred ordinary shares, shares issued and outstanding (shares) | 40,000 | 40,000 | |||||||
Deferred ordinary shares par value (EUR per share) | € / shares | € 1 | € 1 | |||||||
Number of holders of record of Eaton ordinary shares | holder | 9,579 | ||||||||
Number of current and former employees who were shareholders through various Eaton plans | employee | 13,994 | ||||||||
Deferred compensation plan trust of shares and marketable securities | $ | $ 3,000,000 | $ 3,000,000 | |||||||
Quarterly dividends declared per share (USD per share) | $ / shares | € 3.44 | $ 3.24 | $ 3.04 | ||||||
Antidilutive securities excluded from computation of net income per ordinary share (shares) | 100,000 | ||||||||
Ordinary shares issued (shares) | 399,400,000 | 397,800,000 | |||||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Quarterly dividends declared per share (USD per share) | $ / shares | $ 0.94 | ||||||||
Dividend increase percentage over dividend paid in prior quarter (as a percent) | 9% | ||||||||
2019 Program | |||||||||
Subsequent Event [Line Items] | |||||||||
Share repurchase program, authorized amount | $ | $ 5,000,000,000 | ||||||||
2022 Program | |||||||||
Subsequent Event [Line Items] | |||||||||
Share repurchase program, authorized amount | $ | $ 5,000,000,000 | ||||||||
Stock repurchase program, period in force | 3 years | ||||||||
Ordinary shares purchased (shares) | 2,000,000 | ||||||||
Stock repurchased (shares) | $ | $ 286,000,000 | ||||||||
Preferred A Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Preferred stock issued (shares) | 10,000 | 10,000 | |||||||
Preferred stock, par value (USD per share) | $ / shares | $ 1 | $ 1 | |||||||
Preferred stock authorized (shares) | 10,000 | 10,000 | |||||||
Preferred stock outstanding (shares) | 10,000 | 10,000 | |||||||
Serial Preferred | |||||||||
Subsequent Event [Line Items] | |||||||||
Preferred stock, par value (USD per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 | |||||||
Preferred stock outstanding (shares) | 0 | 0 |
EATON SHAREHOLDERS' EQUITY - Ot
EATON SHAREHOLDERS' EQUITY - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pre-tax | |||
Other Comprehensive Income (Loss), before Tax, Total | $ (17) | $ (205) | $ 735 |
After-tax | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | (49) | ||
Other Comprehensive Income (Loss), Net of Tax, Total | 39 | (313) | 562 |
Currency translation and related hedging instruments | |||
Pre-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, pre-tax | 252 | (632) | (335) |
Reclassification from AOCI, pre-tax | 0 | 0 | 369 |
Amortization of gains on net investment hedges (amount excluded from effectiveness testing) reclassified to earnings | (12) | 0 | 0 |
Other Comprehensive Income (Loss), before Tax, Total | 241 | (632) | 34 |
After-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, after-tax | 247 | (647) | (339) |
Amounts reclassified from Accumulated other comprehensive loss (income) | 0 | 0 | 369 |
Amortization of gains on net investment hedges (amount excluded from effectiveness testing) reclassified to earnings | (12) | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax, Total | 235 | (647) | 30 |
Pensions and other postretirement benefits | |||
Pre-tax | |||
Reclassification from AOCI, pre-tax | 32 | 116 | 183 |
Other Comprehensive Income (Loss), before Tax, Total | (243) | 226 | 654 |
After-tax | |||
Amounts reclassified from Accumulated other comprehensive loss (income) | 24 | 89 | 140 |
Other Comprehensive Income (Loss), Net of Tax, Total | (185) | 175 | 495 |
Prior service credit (cost) arising during the year | |||
Pre-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, pre-tax | 0 | 0 | (1) |
After-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, after-tax | 0 | 0 | (1) |
Net gain (loss) arising during the year | |||
Pre-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, pre-tax | (246) | 45 | 448 |
After-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, after-tax | (189) | 31 | 337 |
Currency translation | |||
Pre-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, pre-tax | (29) | 65 | 24 |
After-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, after-tax | (21) | 56 | 19 |
Cash flow hedges | |||
Pre-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, pre-tax | 63 | 210 | 50 |
Reclassification from AOCI, pre-tax | (78) | (9) | (3) |
Other Comprehensive Income (Loss), before Tax, Total | (14) | 201 | 47 |
After-tax | |||
Other comprehensive income (loss) arising during the year, before reclassifications, after-tax | 50 | 166 | 39 |
Amounts reclassified from Accumulated other comprehensive loss (income) | (61) | (7) | (2) |
Other Comprehensive Income (Loss), Net of Tax, Total | $ (11) | $ 159 | $ 37 |
EATON SHAREHOLDERS' EQUITY - Ac
EATON SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 17,075 | $ 16,451 | $ 14,973 |
Other comprehensive income (loss) before reclassifications | 88 | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | (49) | ||
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 39 | (313) | 562 |
Balance at end of period | 19,069 | 17,075 | 16,451 |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (3,946) | ||
Balance at end of period | (3,906) | (3,946) | |
Currency translation and related hedging instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (3,264) | ||
Other comprehensive income (loss) before reclassifications | 247 | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | (12) | ||
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 235 | ||
Balance at end of period | (3,029) | (3,264) | |
Pensions and other postretirement benefits | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (810) | ||
Other comprehensive income (loss) before reclassifications | (209) | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | 24 | 89 | 140 |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (185) | ||
Balance at end of period | (995) | (810) | |
Cash flow hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 129 | ||
Other comprehensive income (loss) before reclassifications | 50 | ||
Amounts reclassified from Accumulated other comprehensive loss (income) | (61) | (7) | $ (2) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | (11) | ||
Balance at end of period | $ 118 | $ 129 |
EATON SHAREHOLDERS' EQUITY - Re
EATON SHAREHOLDERS' EQUITY - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | $ 3,827 | $ 2,911 | $ 2,896 |
Income tax benefit (expense) | (604) | (445) | (750) |
Net income attributable to Eaton ordinary shareholders | 3,218 | $ 2,462 | $ 2,144 |
Reclassification out of Accumulated Other Comprehensive Loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net income attributable to Eaton ordinary shareholders | 49 | ||
Gains and (losses) on net investment hedges (amount excluded from effectiveness testing) | Reclassification out of Accumulated Other Comprehensive Loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | 12 | ||
Income tax benefit (expense) | 0 | ||
Net income attributable to Eaton ordinary shareholders | 12 | ||
Pensions and other postretirement benefits | Reclassification out of Accumulated Other Comprehensive Loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | (32) | ||
Income tax benefit (expense) | 8 | ||
Net income attributable to Eaton ordinary shareholders | (24) | ||
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income tax benefit (expense) | (16) | ||
Net income attributable to Eaton ordinary shareholders | 61 | ||
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Loss | Floating-to-fixed interest rate swaps | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | 13 | ||
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Loss | Currency exchange contracts | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | 64 | ||
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Loss | Commodity contracts | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | $ 1 |
EATON SHAREHOLDERS' EQUITY - Ne
EATON SHAREHOLDERS' EQUITY - Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||
Net income attributable to Eaton ordinary shareholders | $ 3,218 | $ 2,462 | $ 2,144 |
Weighted-average number of ordinary shares outstanding - diluted (in shares) | 401.1 | 400.8 | 401.6 |
Less: dilutive effect of equity-based compensation (in shares) | 2 | 2.1 | 2.9 |
Weighted-average number of ordinary shares outstanding - basic (in shares) | 399.1 | 398.7 | 398.7 |
Diluted (USD per share) | $ 8.02 | $ 6.14 | $ 5.34 |
Basic (USD per share) | $ 8.06 | $ 6.17 | $ 5.38 |
EQUITY-BASED COMPENSATION - Nar
EQUITY-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price (USD per share) | $ 240.82 | ||
Total compensation expense not yet recognized of stock options | $ 9.7 | ||
RSUs and RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation expense not yet recognized of equity instrument other than options | $ 84 | ||
Period for recognition of total compensation expense not yet recognized | 2 years 7 months 6 days | ||
Excess tax benefit | $ 4 | $ 5 | $ 5 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares received upon vesting (in shares) | 1 | ||
Vesting period | 3 years | ||
RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 10 years | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Total compensation expense not yet recognized of equity instrument other than options | $ 28 | ||
Period for recognition of total compensation expense not yet recognized | 1 year 8 months 12 days | ||
Excess tax benefit | $ 7 | $ 10 | $ 6 |
PSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rate | 0% | ||
PSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rate | 200% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Period for recognition of total compensation expense not yet recognized | 1 year 10 months 24 days | ||
Expiration date after date of grant | 10 years |
EQUITY-BASED COMPENSATION - Res
EQUITY-BASED COMPENSATION - Restricted Stock Units and Awards Activity (Details) - RSUs and RSAs shares in Millions | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of restricted stock units and awards | |
Non-vested at beginning of period (shares) | shares | 1 |
Granted (shares) | shares | 0.4 |
Vested (shares) | shares | (0.5) |
Forfeited (shares) | shares | 0 |
Non-vested at end of period (shares) | shares | 0.9 |
Weighted-average fair value per unit and award | |
Non-vested at beginning of period (USD per share) | $ / shares | $ 127.33 |
Granted (USD per share) | $ / shares | 173.72 |
Vested (USD per share) | $ / shares | 123.84 |
Forfeited (USD per share) | $ / shares | 157.61 |
Non-vested at end of period (USD per share) | $ / shares | $ 150.55 |
EQUITY-BASED COMPENSATION - Inf
EQUITY-BASED COMPENSATION - Information Related to Equity Awards other than Options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs and RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | $ 65 | $ 65 | $ 61 |
After-tax expense for stock options | 51 | 51 | 48 |
Fair value of vested equity awards | 84 | 98 | 92 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | 22 | 21 | 26 |
After-tax expense for stock options | $ 17 | $ 17 | $ 21 |
EQUITY-BASED COMPENSATION - Ass
EQUITY-BASED COMPENSATION - Assumptions of Market-Based Performance Share Units (Details) - PSUs - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 27% | 35% | 35% |
Risk-free interest rate | 4.35% | 1.71% | 0.20% |
Weighted-average fair value of PSUs granted (USD per share) | $ 203.18 | $ 171.63 | $ 159.74 |
EQUITY-BASED COMPENSATION - R_2
EQUITY-BASED COMPENSATION - Restricted Stock Units (Details) - PSUs - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent payout | 187% | 178% | 189% |
Shares vested (in shares) | 300,000 | 400,000 | 500,000 |
EQUITY-BASED COMPENSATION - Mar
EQUITY-BASED COMPENSATION - Market-Based Performance Share Units (Details) - PSUs - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of performance share units | |||
Non-vested at beginning of period (shares) | 0.3 | ||
Granted (shares) | 0.2 | ||
Adjustment for performance results achieved (shares) | 0.1 | ||
Vested (shares) | (0.3) | ||
Non-vested at end of period (shares) | 0.3 | 0.3 | |
Weighted-average fair value per unit | |||
Non-vested at beginning of period (USD per share) | $ 141.88 | ||
Granted (USD per share) | 203.18 | $ 171.63 | $ 159.74 |
Adjustment for performance results achieved (USD per share) | 159.74 | ||
Vested (USD per share) | 159.74 | ||
Non-vested at end of period (USD per share) | $ 162.67 | $ 141.88 |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock Options Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of stock options granted (USD per share) | $ 48.79 | $ 36.56 | $ 26.11 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 27% | 27% | 28% |
Expected option life in years | 6 years 3 months 18 days | 6 years 7 months 6 days | 6 years 6 months |
Expected dividend yield | 2% | 2% | 3% |
Risk-free interest rate, minimum | 4.10% | 0.30% | 0% |
Risk-free interest rate, maximum | 4.30% | 3% | 1.50% |
EQUITY-BASED COMPENSATION - S_2
EQUITY-BASED COMPENSATION - Stock Options Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-average exercise price per option | |||
Balance at beginning of period (USD per share) | $ 91.15 | ||
Granted (USD per share) | 173.26 | ||
Exercised (USD per share) | 80.23 | ||
Balance at end of period (USD per share) | 103.76 | $ 91.15 | |
Exercisable at end of period (USD per share) | $ 88.53 | ||
Options | |||
Outstanding at beginning of period (shares) | 3 | ||
Granted (shares) | 0.2 | ||
Exercised (shares) | (1) | (0.4) | (0.9) |
Outstanding at end of period (shares) | 2.2 | 3 | |
Exercisable at end of period (shares) | 1.7 | ||
Reserved for future grants at end of period (shares) | 19.3 | ||
Weighted-average remaining contractual life in years | |||
Outstanding at end of period | 5 years 7 months 6 days | ||
Exercisable at end of period | 4 years 8 months 12 days | ||
Aggregate intrinsic value | |||
Outstanding at end of period | $ 303.6 | ||
Exercisable at end of period | $ 260.6 |
EQUITY-BASED COMPENSATION - I_2
EQUITY-BASED COMPENSATION - Information Related to Stock Options (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from stock options exercised | $ 78 | $ 28 | $ 63 |
Income tax benefit related to stock options exercised | |||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | 22 | 6 | 13 |
Intrinsic value of stock options exercised | 116 | 29 | 69 |
Total fair value of stock options vested | $ 10 | $ 11 | $ 14 |
Stock options exercised (in shares) | 1 | 0.4 | 0.9 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax expense for stock options | $ 10 | $ 11 | $ 14 |
After-tax expense for stock options | 8 | 9 | 11 |
Proceeds from stock options exercised | $ 78 | $ 28 | $ 63 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | $ 488 | $ 294 |
Short-term investments | 2,121 | 261 |
Net derivative contracts | 11 | 29 |
Contingent future payments from acquisition of Green Motion | (18) | (44) |
Quoted prices in active markets for identical assets (Level 1) | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 488 | 294 |
Short-term investments | 2,121 | 261 |
Net derivative contracts | 0 | 0 |
Contingent future payments from acquisition of Green Motion | 0 | 0 |
Other observable inputs (Level 2) | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 11 | 29 |
Contingent future payments from acquisition of Green Motion | 0 | 0 |
Unobservable inputs (Level 3) | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 0 | 0 |
Contingent future payments from acquisition of Green Motion | $ (18) | $ (44) |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Long-term debt and current portion of long term debt, carrying value | $ 9,261 | $ 8,331 |
Long-term debt and current portion of long-term debt, fair value | $ 8,924 | $ 7,625 |
FAIR VALUE MEASUREMENTS - Short
FAIR VALUE MEASUREMENTS - Short-Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Time deposits and certificates of deposit with banks | $ 299 | $ 248 |
Money market investments | 1,822 | 13 |
Total short-term investments | $ 2,121 | $ 261 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Interest Rate Swaps Outstanding (Details) $ in Millions | Dec. 31, 2023 USD ($) |
3.01% Forward Starting Floating-to-Fixed Interest Rate Swap | |
Derivative [Line Items] | |
Notional amount | $ 55 |
Floating interest rate (as a percent) | 0% |
Fixed interest rate to be paid | 3.01% |
2.54% Forward Starting Floating-to-Fixed Interest Rate Swap | |
Derivative [Line Items] | |
Notional amount | $ 55 |
Floating interest rate (as a percent) | 0% |
Fixed interest rate to be paid | 2.54% |
2.32% Forward Starting Floating-to-Fixed Interest Rate Swap | |
Derivative [Line Items] | |
Notional amount | $ 55 |
Floating interest rate (as a percent) | 0% |
Fixed interest rate to be paid | 2.32% |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Financial Instrument Recognized in the Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivatives designated as hedges | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | $ 17 | $ 39 |
Derivatives designated as hedges | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 3 | 2 |
Derivatives designated as hedges | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 9 | 19 |
Derivatives designated as hedges | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 4 | 9 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 505 | 1,240 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 17 | 35 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 3 | 2 |
Derivatives designated as hedges | Cash flow hedging | Currency exchange contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 7 | 17 |
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 | 9 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 54 | 64 |
Derivatives designated as hedges | Cash flow hedging | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 1 | 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 | 1 | 2 |
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 designated as hedges | Cash flow hedging | Forward starting floating-to-fixed interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 165 | |
Derivative, remaining maturity | 8 years | |
Derivatives designated as hedges | Cash flow hedging | Forward starting floating-to-fixed interest rate swaps | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | $ 0 | |
Derivatives designated as hedges | Cash flow hedging | Forward starting floating-to-fixed interest rate swaps | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 0 | |
Derivatives designated as hedges | Cash flow hedging | Forward starting floating-to-fixed interest rate swaps | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | |
Derivatives designated as hedges | Cash flow hedging | Forward starting floating-to-fixed interest rate swaps | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 3 | |
Derivatives designated as hedges | Net Investment Hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 564 | |
Derivative, remaining maturity | 3 months | |
Derivatives designated as hedges | Net Investment Hedging | Currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | $ 0 | |
Derivatives designated as hedges | Net Investment Hedging | Currency exchange contracts | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset designated as hedging instrument | 0 | |
Derivatives designated as hedges | Net Investment Hedging | Currency exchange contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 1 | |
Derivatives designated as hedges | Net Investment Hedging | Currency exchange contracts | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability designated as hedging instrument | 0 | |
Derivatives not designated as Hedges | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 4,797 | 4,683 |
Derivatives not designated as Hedges | Currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset not designated as hedging instrument | 12 | 30 |
Derivatives not designated as Hedges | Currency exchange contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability not designated as hedging instrument | $ 8 | $ 14 |
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 | Cash flow hedging | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 25 months | 36 months |
Maximum | Derivatives designated as hedges | Cash flow hedging | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 12 months | 12 months |
Maximum | Derivatives not designated as Hedges | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, remaining maturity | 7 months | 12 months |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Proportion of intercompany balance sheet exposure (as a percent) | 100% | ||
Cash flow hedge gain (loss) to be reclassified within the next twelve months | $ 9 | ||
Non-derivative net investment hedge | |||
Derivative [Line Items] | |||
Foreign currency note payable, noncurrent, after-tax | 3,140 | $ 2,711 | |
Net Investment Hedging | Currency exchange contracts | Derivatives designated as hedges | Gain (loss) on sale of business | |||
Derivative [Line Items] | |||
Effective portion | 8 | 0 | $ 0 |
Net Investment Hedging | Currency exchange contracts | Derivatives designated as hedges | Interest expense - net | |||
Derivative [Line Items] | |||
Amount excluded from effectiveness testing | $ 15 | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Volume of Outstanding Commodity Contracts (Details) lb in Millions | 12 Months Ended |
Dec. 31, 2023 lb ozt | |
Aluminum | Commodity contracts | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | lb | 4 |
Aluminum | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Aluminum | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 11 months |
Copper | Commodity contracts | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | lb | 11 |
Copper | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Copper | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 12 months |
Gold | Commodity contracts | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | ozt | 1,611 |
Gold | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Gold | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 12 months |
Silver | Commodity contracts | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | ozt | 67,285 |
Silver | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Silver | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 10 months |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Balance Sheet Related to Fixed-to-Floating Interest Rate Swaps (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Carrying amount of the hedged assets (liabilities) | $ (713) | $ (713) |
Long-term debt | ||
Derivative [Line Items] | ||
Discontinued hedge, cumulative adjustment | (42) | (48) |
Long-term debt | Interest Rate Swap | ||
Derivative [Line Items] | ||
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) | $ (42) | $ (48) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivative on Consolidated Statement of Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Net Sales | $ 23,196 | $ 20,752 | $ 19,628 |
Cost of products sold | 14,762 | 13,865 | 13,293 |
Interest expense - net | 151 | 144 | 144 |
Cash flow hedging | Net Sales | Forward starting floating-to-fixed interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 0 | 0 | |
Gain (loss) on hedging instrument | 0 | 0 | |
Cash flow hedging | Net Sales | Currency exchange contracts | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | (2) | 17 | 6 |
Gain (loss) on hedging instrument | 2 | (17) | (6) |
Cash flow hedging | Net Sales | Commodity contracts | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 0 | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 | 0 |
Cash flow hedging | Interest expense - net | Forward starting floating-to-fixed interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | (13) | (4) | |
Gain (loss) on hedging instrument | 13 | 4 | |
Cash flow hedging | Interest expense - net | Currency exchange contracts | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 0 | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 | 0 |
Cash flow hedging | Interest expense - net | Commodity contracts | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 0 | 0 | 0 |
Gain (loss) on hedging instrument | 0 | 0 | 0 |
Cash flow hedging | Cost of products sold | Forward starting floating-to-fixed interest rate swaps | |||
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 | (58) | (26) | 0 |
Gain (loss) on hedging instrument | 58 | 26 | 0 |
Cash flow hedging | Cost of products sold | Commodity contracts | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | (1) | 4 | (9) |
Gain (loss) on hedging instrument | $ 1 | (4) | 9 |
Fair value hedging | Net Sales | Interest Rate Swap | |||
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 Swap | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 8 | 51 | |
Gain (loss) on hedging instrument | (8) | (51) | |
Fair value hedging | Cost of products sold | Interest Rate Swap | |||
Derivative [Line Items] | |||
Gain (loss) on hedged item | 0 | 0 | |
Gain (loss) on hedging instrument | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES- Impact of Derivatives Not Designated as Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | $ 57 | $ (71) | $ 11 |
Currency exchange contracts | Interest expense - net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | 57 | (56) | 0 |
Commodity contracts | Other expense (income) - net and Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | $ 0 | $ (15) | $ 11 |
DERIVATIVE FINANCIAL INSTRUM_10
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recognized in Other Comprehensive Income and Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Gain (loss) recognized in other comprehensive income (loss) | |||
Total | $ (24) | $ 381 | $ 290 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Total | 89 | 9 | 3 |
Gain (loss) on sale of business | Net Investment Hedging | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Non-derivative designated as net investment hedges | (110) | 171 | 240 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Non-derivative designated as net investment hedges | 0 | 0 | 0 |
Forward starting floating-to-fixed interest rate swaps | Interest expense - net | Cash flow hedging | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Derivatives designated as cash flow hedges | (2) | 202 | 50 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Derivatives designated as cash flow hedges | 13 | 4 | 0 |
Currency exchange contracts | Interest expense - net | Net Investment Hedging | Derivatives designated as hedges | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Amount excluded from effectiveness testing | 15 | 0 | 0 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Amount excluded from effectiveness testing | 12 | 0 | 0 |
Currency exchange contracts | Net sales and Cost of products sold | Cash flow hedging | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Derivatives designated as cash flow hedges | 66 | 13 | (6) |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Derivatives designated as cash flow hedges | 64 | 9 | (6) |
Currency exchange contracts | Gain (loss) on sale of business | Net Investment Hedging | Derivatives designated as hedges | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Effective portion | 8 | 0 | 0 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Effective portion | 0 | 0 | 0 |
Commodity contracts | Cost of products sold | Cash flow hedging | |||
Gain (loss) recognized in other comprehensive income (loss) | |||
Derivatives designated as cash flow hedges | 0 | (5) | 6 |
Gain (loss) reclassified from Accumulated other comprehensive loss | |||
Derivatives designated as cash flow hedges | $ 1 | $ (4) | $ 9 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | 45 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2023 | Feb. 01, 2024 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 57 | $ 33 | $ 78 | $ 214 | ||
Subsequent Event | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated charges | $ 375 | |||||
Workforce reductions | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 19 | (13) | 21 | 172 | ||
Workforce reductions | Subsequent Event | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated charges | 275 | |||||
Plant closing and other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 38 | $ 47 | $ 57 | $ 42 | ||
Plant closing and other | Subsequent Event | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated charges | $ 100 | |||||
COVID-19 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 382 |
RESTRUCTURING CHARGES - Restruc
RESTRUCTURING CHARGES - Restructuring Program Charges (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total before income taxes | $ 57 | $ 33 | $ 78 | $ 214 |
Income tax benefit | 11 | 4 | 18 | |
Total after income taxes | $ 46 | $ 29 | $ 60 | |
Per ordinary share - diluted (USD per share) | $ 0.11 | $ 0.07 | $ 0.15 | |
Workforce reductions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total before income taxes | $ 19 | $ (13) | $ 21 | 172 |
Plant closing and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total before income taxes | $ 38 | $ 47 | $ 57 | $ 42 |
RESTRUCTURING CHARGES - Restr_2
RESTRUCTURING CHARGES - Restructuring Program Charges Related to Segments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 57 | $ 33 | $ 78 | $ 214 |
Operating segments | Electrical Americas | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 5 | 17 | 14 | 18 |
Operating segments | Electrical Global | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 26 | 14 | 18 | 55 |
Operating segments | Aerospace | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 5 | 8 | 8 | 34 |
Operating segments | Vehicle | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 6 | (15) | 21 | 102 |
Operating segments | eMobility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 7 | 1 | 1 | 1 |
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 8 | $ 8 | $ 16 | $ 4 |
RESTRUCTURING CHARGES - Liabili
RESTRUCTURING CHARGES - Liabilities Related to Restructuring (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 41 | $ 104 | $ 142 | $ 0 |
Liability recognized, net | 57 | 33 | 78 | 214 |
Payments, utilization and translation | (57) | (96) | (116) | (72) |
Balance at end of period | 41 | 41 | 104 | 142 |
Restructuring liability adjustment | 30 | |||
Workforce reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 38 | 96 | 139 | 0 |
Liability recognized, net | 19 | (13) | 21 | 172 |
Payments, utilization and translation | (21) | (45) | (64) | (33) |
Balance at end of period | 35 | 38 | 96 | 139 |
Plant closing and other | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 4 | 8 | 3 | 0 |
Liability recognized, net | 38 | 47 | 57 | 42 |
Payments, utilization and translation | (36) | (51) | (52) | (39) |
Balance at end of period | $ 6 | $ 4 | $ 8 | $ 3 |
BUSINESS SEGMENT AND GEOGRAPH_3
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION - Business Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Segment Information | ||||
Net Sales | $ 23,196 | $ 20,752 | $ 19,628 | |
Intangible asset amortization expense | (432) | |||
Interest expense - net | (151) | (144) | (144) | |
Pension and other postretirement benefits income | (15) | (54) | (53) | |
Restructuring program charges (income) | (57) | (33) | (78) | $ (214) |
Income before income taxes | 3,827 | 2,911 | 2,896 | |
Income tax expense | 604 | 445 | 750 | |
Net income | 3,223 | 2,465 | 2,146 | |
Less net income for noncontrolling interests | (5) | (4) | (2) | |
Net income attributable to Eaton ordinary shareholders | 3,218 | 2,462 | 2,144 | |
Electrical Americas | ||||
Business Segment Information | ||||
Net Sales | 10,098 | 8,497 | 7,242 | |
Electrical Global | ||||
Business Segment Information | ||||
Net Sales | 6,084 | 5,848 | 5,516 | |
Hydraulics | ||||
Business Segment Information | ||||
Net Sales | 0 | 0 | 1,300 | |
Aerospace | ||||
Business Segment Information | ||||
Net Sales | 3,413 | 3,039 | 2,648 | |
Vehicle | ||||
Business Segment Information | ||||
Net Sales | 2,965 | 2,830 | 2,579 | |
eMobility | ||||
Business Segment Information | ||||
Net Sales | 636 | 538 | 343 | |
Operating segments | ||||
Business Segment Information | ||||
Net Sales | 23,196 | 20,752 | 19,628 | |
Segment operating profit (loss) | 5,093 | 4,196 | 3,706 | |
Operating segments | Electrical Americas | ||||
Business Segment Information | ||||
Net Sales | 10,098 | 8,497 | 7,242 | |
Segment operating profit (loss) | 2,675 | 1,913 | 1,495 | |
Restructuring program charges (income) | (5) | (17) | (14) | (18) |
Operating segments | Electrical Global | ||||
Business Segment Information | ||||
Net Sales | 6,084 | 5,848 | 5,516 | |
Segment operating profit (loss) | 1,176 | 1,134 | 1,034 | |
Restructuring program charges (income) | (26) | (14) | (18) | (55) |
Operating segments | Hydraulics | ||||
Business Segment Information | ||||
Net Sales | 0 | 0 | 1,300 | |
Segment operating profit (loss) | 0 | 0 | 177 | |
Operating segments | Aerospace | ||||
Business Segment Information | ||||
Net Sales | 3,413 | 3,039 | 2,648 | |
Segment operating profit (loss) | 780 | 705 | 580 | |
Restructuring program charges (income) | (5) | (8) | (8) | (34) |
Operating segments | Vehicle | ||||
Business Segment Information | ||||
Net Sales | 2,965 | 2,830 | 2,579 | |
Segment operating profit (loss) | 482 | 453 | 449 | |
Restructuring program charges (income) | (6) | 15 | (21) | (102) |
Operating segments | eMobility | ||||
Business Segment Information | ||||
Net Sales | 636 | 538 | 343 | |
Segment operating profit (loss) | (21) | (9) | (29) | |
Restructuring program charges (income) | (7) | (1) | (1) | (1) |
Corporate | ||||
Business Segment Information | ||||
Intangible asset amortization expense | (450) | (499) | (444) | |
Interest expense - net | (151) | (144) | (144) | |
Pension and other postretirement benefits income | 46 | 43 | 65 | |
Restructuring program charges (income) | (8) | (8) | (16) | $ (4) |
Other expense - net | $ (654) | $ (653) | $ (209) |
BUSINESS SEGMENT AND GEOGRAPH_4
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION - Identifiable Assets, Capital Expenditures for PPE, and Depreciation of PPE by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Total assets | $ 38,432 | $ 35,014 | $ 34,027 |
Goodwill | 14,977 | 14,796 | 14,751 |
Other intangible assets | 5,091 | 5,485 | 5,855 |
Total expenditures for property, plant and equipment | 757 | 598 | 575 |
Total depreciation of property, plant and equipment | 429 | 408 | 426 |
Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 12,121 | 10,804 | 9,515 |
Total expenditures for property, plant and equipment | 721 | 571 | 551 |
Total depreciation of property, plant and equipment | 386 | 364 | 374 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Total assets | 6,243 | 3,929 | 3,906 |
Total expenditures for property, plant and equipment | 36 | 28 | 24 |
Total depreciation of property, plant and equipment | 43 | 44 | 52 |
Electrical Americas | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 7,415 | 7,402 | 7,417 |
Electrical Americas | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 4,163 | 3,655 | 3,002 |
Total expenditures for property, plant and equipment | 309 | 181 | 180 |
Total depreciation of property, plant and equipment | 108 | 101 | 105 |
Electrical Global | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 4,038 | 3,929 | 4,183 |
Electrical Global | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,868 | 2,658 | 2,579 |
Total expenditures for property, plant and equipment | 142 | 151 | 120 |
Total depreciation of property, plant and equipment | 96 | 94 | 97 |
Hydraulics | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total expenditures for property, plant and equipment | 0 | 0 | 34 |
Aerospace | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 2,901 | 2,844 | 2,781 |
Aerospace | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,276 | 1,859 | 1,729 |
Total expenditures for property, plant and equipment | 97 | 92 | 78 |
Total depreciation of property, plant and equipment | 69 | 64 | 69 |
Vehicle | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 289 | 287 | 290 |
Vehicle | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,251 | 2,230 | 1,985 |
Total expenditures for property, plant and equipment | 96 | 95 | 112 |
Total depreciation of property, plant and equipment | 92 | 89 | 95 |
eMobility | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 334 | 334 | 80 |
eMobility | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 563 | 402 | 220 |
Total expenditures for property, plant and equipment | 76 | 52 | 27 |
Total depreciation of property, plant and equipment | $ 21 | $ 16 | $ 8 |
BUSINESS SEGMENT AND GEOGRAPH_5
BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION - Geographic Region Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | $ 23,196 | $ 20,752 | $ 19,628 |
Long-lived assets | 3,530 | 3,146 | 3,064 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 14,071 | 12,353 | 10,868 |
Long-lived assets | 1,773 | 1,567 | 1,593 |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 949 | 754 | 797 |
Long-lived assets | 31 | 25 | 25 |
Latin America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 1,549 | 1,504 | 1,160 |
Long-lived assets | 476 | 383 | 277 |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 4,339 | 3,957 | 4,276 |
Long-lived assets | 797 | 711 | 701 |
Asia Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 2,288 | 2,185 | 2,527 |
Long-lived assets | $ 453 | $ 460 | $ 468 |